Taiwan-based ODMs shipped a total of 2.3 million digital cameras in the first quarter of 2015, decreasing 42.4% on quarter and 13.6% on year, according to Digitimes Research.16-megapixel CMOS models accounted for 42.9% of shipments, 16-megapixel CCD 26.7%, 20-megapixel CCD 17.5%, 18-megapixel CMOS 5% and 20-megapixel CMOS ones 4.4%, Digitimes Research indicated.Nikon was the largest client accounting for 45.9% of shipments, followed by Sony with 17.6%, Fujifilm 13%, Casio 8.8%, Olympus 3.9%, Panasonic 2.9% and Samsung Electronics with 2.4%.Ability Enterprise was the largest ODM accounting for 71.7% of shipments, Altek 22.2%, Foxconn Electronics 3.9% and Asia Optical 2.2%.

Global notebook shipments not including detachable models reached less than 38 million units in the first quarter of 2015, down 4.7% on year and 19.4% sequentially, according to Digitimes Research's latest report about notebooks. The shipment drop was due to seasonality plus inventory left over from the fourth quarter of 2014. Microsoft's frequent adjustments in licensing fee subsidies also made the inventory issues worse in first-quarter 2015 compared to previous years.Among the global top-10 brand vendors, Hewlett-Packard (HP) had the sharpest sequential shipment drop in the quarter, down three million units from the fourth quarter of 2014. Meanwhile, Lenovo suffered an about two million unit drop; Apple and Asustek Computer both had about one million.However, compared to the same quarter a year ago, HP, Lenovo and Apple still enjoyed shipment growths. Lenovo had the highest growth at 16.2% thanks to demand from non-China markets, Digitimes Research's figures showed.On the other hand, Asustek saw its shipments drop 20.8% on year because of inventory problems, while the fierce fluctuations in the Euro exchange rate also prompted the Taiwan-based vendor to change its business strategy, to start raising product prices, stop pushing shipments, and focus on profitability. The strategy change is expected to have a significant influence to orders placed in the future.Taiwan ODMs saw their combined notebook shipments drop 21.4% sequentially in the first quarter, while compared to the same quarter a year ago, the volume also dropped 12.9%. Because of the decline, Taiwan's share in global notebook shipments fell to 78.1%.

Demand for all types of lighting products in the Japan market in 2015 is estimated at a total value of JPY646 billion (US$5.39 billion) and LED lighting will account for 78.6% (penetration), according to Digitimes Research.Viewing that growth in LED lighting demand in the Japan market will slow down as LED lighting penetration has been the highest around the world, leading Japan-based LED lighting vendors, as reflected in their business strategies and development plans for fiscal year 2015 (April 2015 to March 2016), will shift focus operations to commercial and market-niche segments, lighting system integration and high value-added applications to avoid price-cut competition, Digitimes Research indicated.Panasonic, the largest Japan-based vendor, will have LED lighting account for 100% of its residential lighting products and focus on HEMS (home energy management system) business in fiscal year 2015, with target revenues set at JPY200 billion.Toshiba and NEC Lighting will focus on marketing LED high bay lamps for industrial use, while Iris Ohyama will focus on LED light tubes with maximum luminous efficiency of 200lm/W and aims to sell four million units in fiscal 2015. Mitsubishi Electric will focus on LED light tubes and panels.

Average retail prices for 20- and 24-inch LCD monitors in the US, UK, Germany, China and Japan during April 2015 are expected to decrease 8.7% to US$116 and 6.5% to US$244, respectively, according to Digitimes Research.Average pricing for units sized 20-inch will be influenced from lower-priced units such as D-Sub Only interface monitors from LG Electronics coupled with rising demand for monitors sized 22-inch and above.Monitors sized 24-inch will see a larger decline compared to 22- and 23-inch units as many vendors drop pricing and because vendors such as Acer and LG will choose to push forth 23-inch units as their higher-end, higher-priced units.Digitimes Research also noted that LG has emphasized on products with mid-range pricing during the first half of 2015 and is using DVI/D-Sub Only interface technology to help drop retail pricing for 24- and 20-inch units.

Microsoft unveiled its third-generation own-brand tablet, the Surface 3 on March 31 with a size and industrial design similar to those of the previous-generation models, but instead of using an ARM-based platform and Windows RT operating system, the device has adopted Intel's Atom processor and Windows 8.1, which can be upgraded to Windows 10 at a later time.Currently, Microsoft is avoiding direct competition against brand vendor partners by setting its Surface products pricing higher than the average; however, Microsoft is expected to face weak sales for its Surface 3 since the device's target market segments see much fiercer competition than those for its Surface Pro 3.Following the Surface Pro 3's strong sales performance in the fourth quarter of 2014, Microsoft announced the Surface 3, looking to extend the momentum. The Surface 3 is priced over US$600 with keyboard and is expected to only have limited impact on other branded 2-in-1 products, which are priced below US$350 on average. The device is unlikely to significantly undermine vendors' Intel Core M-based models, which are priced at a similar range.Unlike the high-priced Surface Pro 3, which is in a market segment with mild competition, the Surface 3 is mainly targeting the education, niche application and second PC segments in mature markets, and these segments already see fierce competition among brand vendors.With Microsoft turning more aggressive on the Surface business and vendors less optimistic about Windows-based tablets' growth, Digitimes Research expects the Surface series shipments to account for almost 30% of worldwide Windows tablet shipments in 2015.

Philips originally planned to spin off its wholly-owned subsidiary Lumileds and automobile lighting business to make them an independent company by the end of the first half 2015. But on March 31, Philips announced a deal to sell a 80.1% stake in Lumileds to Go Scale Capital for an amount of US$2.8 billion, which is a rather nice price for a transaction in the LED industry.For Philips, the transaction will allow the company to gain more funding to invest in the high-gross-margin medical product business, which still has strong potential for growth. And as for Lumileds, adjusting business structure, reducing debts and improving operation will become the priority for the new owner after the takeover, and it will raise Lumileds' flexibility in the capital market and strategy deployment.After selling a major stake in the subsidiary, Philips will be able to focus more on its brand and medical product businesses, which are estimated to have a market output of around US$130 billion. It can now put much less effort on the not-so-profitable LED component and manufacturing businesses.According to Philips' financial report for 2014, the medical product business contributed 42.9% of the company's revenues, up 1.9pp from 2013, while the business' earnings before interest, taxes and amortization (EBITA) even accounted for as high as 56.7% of the overall amount.On the other hand, the lighting business including LED components and lighting products, only accounted for 32.1% of overall revenues, down 4pp from a year ago, while its EBITA share was only 31%, a lot less than that of the medical business.Lumileds is a company that mainly focuses on manufacturing high-power LED components; however, Philips has been increasing its purchasing of low- to medium-power LED components from Taiwan and China suppliers as the market's demand for these components is rising dramatically. The production apacity for these components from Asia has also been increasing, making their prices rather competitive.Based on Taiwan's and China's existing MOCVD machine capacity, Digitimes Research expects China's LED component capacity to account for 34.7% of the global overall volume in 2015 and Taiwan to account for 25.5%. Meanwhile, Lumileds' capacity is only expected to account for less than 3%, meaning that Asia suppliers will take the major roles of the LED industry in 2015.Philips has almost no advantage competing against suppliers in Asia in the manufacturing sector and its lighting business including Lumileds has a scale similar to those of the medical business in terms of production costs, but far weaker profits. The selling of the Lumileds stake is a big relief to Philips, which has been burdened with high costs and strong operating pressure.The transaction should also greatly improve Lumileds' business structure and operation to allow the company to have more choices on raising fund from the capital market, seeking partners and developing new business, as well as having flexibility on deploying new strategies.

According to Digitimes Research's latest findings from Taiwan's and China's smartphone/tablet upstream supply chain, in exchange for hardware players to pre-install its software applications such as Office, OneDrive or Skype onto their Android-based devices, Microsoft is offering them discounts on the patent licensing fees it charges their Android devices.On March 23, Microsoft announced it had reached an agreement with 11 hardware players including Samsung Electronics, Dell and Pegatron Technology, for them to pre-install Office programs such as Word, Excel, PowerPoint and OneNote, as well as OneDrive and Skype onto their Android devices.Based on Digitimes Research's understanding, these hardware players have all signed patent licensing agreements with Microsoft for their Android devices and need to pay fees for every Android-based product shipped.With Android devices' shipments rising, Microsoft's incomes from the patent licensing fees have grown to substantial levels. To expand the usage of its applications in mobile devices, Microsoft has now decided to return some of the incomes to hardware players in exchange for their pre-installing its applications onto their Android products.Google may find it difficult to ask its partners to reject the Microsoft policy, since price competition among Android devices is growing fierce, and profits from smartphones and tablets are shrinking gradually with some vendors even operating in losses. The market situation has made Microsoft's licensing fee discount a rather appealing offer for players that have been looking to cut down their costs to boost gross margins and the project is expected to attract more Android product vendors to join.

Semiconductor capital spending by Samsung Electronics is expected to reach an all-time high of US$15 billion in 2015, making the company's capex the world's highest in the semiconductor industry for the sixth straight year since 2010, according to an estimate of Digitimes Research. Meanwhile, SK Hynix's capex is expected to stay flat at US$5.1 billion in 2015 as compared to the previous year.Samsung's capex for system ICs in 2015 will reach US$4 billion compared to US$2.9 billion in the previous year, mainly to finance the commencement of its Line-17 fab in Hwaseong, Gyeonggi Province and a continued build-up of its 14nm production capacity at its plant in Austin, Texas.Samsung's and Hynix's capex for DRAM products will total US$6.4 billion and US$3.8 billion, respectively, in 2015. Samsung will focus on ramping up DRAM capacity at its Line-17 fab, while Hynix is expected to inaugurate its M14 fab in the second half of 2015 for expanding the production capacity of its 20nm chips. DRAM capex of the two Korea-based semiconductor firms will account for 75% of the global DRAM capex in 2015, said Digitimes Research.Additionally, Samsung will spend US$4.7 billion ramping up its NAND flash capacity, mainly the 3D NAND flash parts at its plant in Xian, China. Hynix will allocate US$1.3 billion to develop and produce its 10nm TLC (triple-level cell) NAND flash chips. Combined NAND flash capex by Samsung and Hynix will account for 64% of the global capex in the segment.Meanwhile, Samsung is also expected to begin construction of its semiconductor industry park in Pyeongtaek, Gyeonggi Province in 2015.The park will call for a total investment of up to KRW15.6 trillion (US$14.21billion) and is slated to begin commercial production in the second half of 2017.

Over the next five years the wearables industry will continue to develop applications ranging from smartwatches, smart wristbands and various facial applications, and will primarily rely on AMOLED technology for displays due to its flexible and energy-saving features, according to Digitimes Research.Wearable display shipments are expected to have a CAGR of 25% from 2015-2020 and AMOLED is expected to account for over 70% of displays used in smartwatches in 2015 largely due to Apple's move to incorporate the technology in the Apple Watch.Shipments for microdisplays that use LCoS and AMOLED technologies are also on the rise as headwear devices come down in pricing and are equipped with higher resolution, and because other vendors including Samsung Electronics and Sony move toward releasing new products in 2015.The smartwatch market is expected to reach 20 million units in 2015, up 500% on year, with most units sized between 1.3- to 1.8-inch, added Digitimes Research.

China panel makers BOE and Tianma Microelectronics are aiming to mass produce Full HD displays with in-cell LTPS TFT LCDs and TDDI (touch with display driver) technology for handsets but are currently unable to do so beyond displays equipped with HD resolution, according to Digitimes Research.The two makers have been cooperating with Synaptics to develop the technology and aim to mass produce it for major handset vendors in China. However, due to production issues both makers are currently halted at production for HD displays using the new touch technology and will resort to using two ICs instead of a single unit.Digitimes Research believes this will cause the makers to lose some of their competitive edge in the market and certain top-five ranked handset vendors in China are expected to seek other suppliers as a result.In terms of Full HD displays without touch panels, Tianma has an upper hand over BOE due to its LTPS TFT LCD technology and is also expected to supply 5-inch HD panels with in-cell technology to Motorola Mobility. Tianma and BOE are also aiming to reclaim orders for panels used in Xiaomi high-end handsets that were previously supplied from Korea and Japan makers, but there have yet to be finalized decisions. Tianma is a likely contender, however, which Digitimes Research said could greatly influence its position in the panel market as Tianma is pushing forth its LTPS Full HD displays to major customers, including Huawei Device, ZTE and Asustek.BOE meanwhile is expected to provide Xiaomi with displays equipped with a-Si TFT technology for use in mid-range Hongmi units as the maker's LTPS TFT LCD fab yields are still less than ideal, added Digitimes Research.