Qualcomm aims to ramp up its penetration in the entry-level mobile device market by cooperating with Microsoft to launch low-cost Windows Mobile 10 products, while also cooperating with Allwinner Technology to launch 3G/4G solutions for connected tablets, according to Digitimes Research.Qualcomm accounted for about 80% of China's 4G LTE solution market in 2014, but has seen its share decline significantly since the beginning of 2015 due to the roll-outs of competitive models from MediaTek and Spreadtrum Communications, and also due to Qualcomm's own mishap in the deployment of mid-range and high-end solutions, Digitimes Research indicated.To maintain its market share, Qualcomm's cooperation with Microsoft aims to roll out Windows Mobile 10-based smartphones priced at about US$80 in the end-market, with the first wave of such models to be available in the fourth quarter of 2015.The low-cost Windows Mobile 10-based models will utilize Qualcomm's MSM8909 CPU, running on Windows Mobile platform but without the need of paying licensing fees to Microsoft, therefore, the overall cost of Windows Mobile10 smartphones will be comparable to entry-level Android phones.Meanwhile, Allwinner will develop and offer total system solutions to support the development of cost-effective 4G LTE-enabled connected tablets based on Qualcomm's Snapdragon family CPU products. Allwinner's 4G solutions are for production of high-end tablets for mature market in the US and Europe, while the 3G solutions are for tablets targeting emerging markets.

Taiwan large-size (9-inch and above) TFT LCD panel shipments totaled 57.93 million in the second quarter of 2015, down 3.7% on quarter and down 14.2% on year. The decline represents the third consecutive quarter where makers saw a sequential decline, according to Digitimes Research.The decline has been prompted by a decline in IT panel demand in addition to Korea makers increasing notebook panel shipments. The makers have also seen monitor panel demand drop due to weak end-market demand coupled with shifts in strategy to focus more on TV panel production.TV panel shipments were the only application that saw an on-quarter increase in the second quarter, rising 2.9%. The percentage is relatively low compared to before due to China makers strengthening TV panel production on 8.5G lines, said Digitimes Research.

Development of the smart lock market has become active in Japan recently. Led by the launch of the 'Akerun' smart lock by Japan-based Photosynth, other vendors including Sony and Denmark-based Poly-Control have also stepped into the segment. Since smart lock systems can also apply to commercial markets such as real estate and the household service sector, the smart lock market in Japan is expected to surpass JPY1 trillion (US$8.05 billion), according to Digitimes Research. Smart locks are automatic entrance/exit control systems utilizing smartphones or tablets to activate door locks. Most systems currently use Bluetooth for communications. The Akerun smart lock is gaining momentum since installation cost of the system is low, while its operation is simple, Digitimes Research noted. To cash in on the emerging trend, Sony has launched its 'Orio Smart Lock' system in cooperation with venture capital firm World Innovation Lab (WiL). The Orio will be more competitive than the Akerun in price since its price is only about half of the Akerun.

Panel makers in Greater China expect to see smartwatch panel shipments achieve a CAGR of 73.2% from 2014-2017 and a CAGR of 46.1% for smart wristbands as they further invest into developing the two applications, according to Digitimes Research.The makers' total shipments for the two segments will reach 52.89 million in 2017, up 287% compared with 2014, to represent a CAGR of 57% over the time period.The makers will benefit from new demand from the applications since they are relatively new to the market, but improvements related to technology and capacity expansion for technologies such as PMOLED and EPD will also make a difference.Digitimes Research also noted that Taiwan makers have plans to expand LTPS TFT LCD and AMOLED production but will remain relatively weak in the market in terms of flexible AMOLED display production, falling behind Korea makers at an estimated three years in developments.

With demand for white-box tablets gradually shrinking and China's brand tablet shipments also performing weaker than expected, China-based touch panel and touch controller IC firms that used to focus on China's tablet market have mostly started shifting parts of their capacities to manufacturing smartphone touch applications or products for high-end industrial control and car electronics. However, it remains uncertain whether these players will be able to profit from the new product lines.Among these original white-box tablet supply chain players, DPT-Touch, after one year of transformation, is currently able to ship one million smartphone touch panels a month, almost the same as the volume for its monthly tablet touch panel shipments. The player's parent company Token Sciences also established a new subsidiary recently, looking to enter the before-market of the car electronics industry using the OGS technology.Silead, which used to focus on supplying touch panel ICs for white-box tablets, has seen its handset touch control IC shipments grow strongly from 3-4 million units a month in early 2015 to over five million units currently. Meanwhile, its tablet touch control IC shipments have slid from over eight million units a month previously to only about seven million units.With white-box tablets' production costs dropping sharply since the second quarter of 2014, most touch panel supply chain players that used to focus on the white-box tablet sector, such as DPT-Touch and Holitech, have stopped taking orders for tablet applications that offer overly low quotes and have turned to the higher-end brand and education tablet markets for orders.However, they have to compete against brand vendors' existing supply chain partners, and the education tablet market typically sees stable shipments but weak growth. This means these players also have to look for other touch panel applications with stronger growth potential.China's smartphone market is reaching saturation, with vendors facing rising pressure from the price competition. Their demand for touch panels has gradually turned from the mainstream GFF technology to the cheaper GG technology. This is prompting these touch panel suppliers to shift more of their capacities to producing smartphone touch applications, and white-box smartphone brand vendors have also become keener on adopting GG touch panels for their overseas shipments.As for the industrial control and car electronics application markets, clients typically have stringent requirements for the panels' durability in rough environments. Traditional resistive and GG touch panel are still competitive in these markets, giving incentives for these white-box touch panel suppliers.The handset, industrial control and car electronics markets may have their respective advantages in either economies of scale or potential for strong growth, but Digitimes Research believes these white-box supply chain players will see challenges trying to make profits quickly from these new product lines. After all, competition in the handset market is already fierce; the GG touch technology is only suitable for entry-level devices shipped to overseas markets; the car electronics market has a high entry barrier in terms of technology, and its suppliers also face high compensation costs for recalled products.

Industry rumors have stated Apple will go back to using G/G touch technology in iPhones due to ongoing production issues with In-Cell touch panels. If this were to occur, the earliest effect wound be in iPhones released in 2016, as the next iPhone, currently being referred to as iPhone 6S, will still use In-Cell technology, according to Digitimes Research.Market observers have recently noted that Apple is in discussions over whether to go back to G/G instead of In-Cell technology for future iPhone devices as the technology is currently struggling with various production bottlenecks that are preventing Apple from adding new features as well as increasing resolutions. As a result, touch panel makers are aiming to create G/G touch panels that would allow Apple to create smartphones similar in thickness to current iPhones equipped with In-Cell touch panels. G/G touch panels may also help Apple develop bezel-free smartphones as In-Cell touch panels reportedly are struggling with touch sensitivity on the edges. Additionally, In-cell touch panels also make it difficult for vendors to pursue higher resolutions including Ultra HD (4K) due to current bottlenecks, the observers said.Digitimes Research also found that TPK in particular is developing new solutions that use a G/G substrate and ITO thin film and has currently reached a thickness of 8.5mm. However, the company believes it can further decrease the size and bring it closer to a thickness of 7.1mm, making TPK a possible alternative candidate over current In-Cell provider Japan Display (JDI).If Apple were to make the move, JDI could potentially incur huge losses since it has been investing heavily into the technology. While it is still not 100% clear what Apple will decide, the company has been impressed with the AMOLED display and G/G touch panel sensitivity and features found in the Apple Watch. Supply chains also told Digitimes Research that Apple believes its supply chain could be more simplified if it were to use G/G panels, as it would cut down on overall production time.While Apple is now considering this new arrangement the company will not be able to use the G/G technology in the upcoming iPhone 6S since production plans for the device have already been established for quite some time, making 2016 a much more likely time-frame, added Digitimes Research.

Taiwan-based ODMs will ship an estimated 32.067 million notebooks (not including detachable hybrid models) during the third quarter of 2015, accounting for 81.6% of the global total and increasing 2.4% on quarter but decreasing 12.2% on year, according to Digitimes Research.There will be 39.288 million notebooks shipped globally in the third quarter, growing 2.5% on quarter but slipping 12% on year, Digitimes Research indicated.Of Taiwan-based ODMs' shipments in the third quarter, 16-inch and above models will account for 5.3%, 15-inch 42.1%, 14-inch 22.4%, 13-inch 15.5%, 12-inch 3.8% and below 12-inch 10.9%.Hewlett-Packard will be the largest client accounting for 25.6% of shipments, followed by Dell with 17%, Apple 14.3%, Asustek Computer 11.2%, Acer 10.9%, Lenovo 10.6% and Toshiba 4.4%.Quanta Computer will be the largest ODM accounting for 32.8% of shipments, followed by Compal Electronics 31.9%, Wistron 14.8%, Pegatron Technology 7.5% and Inventec 5.1%.

The July home electronics segment has seen several developments, namely new 29-inch monitor releases from LG Electronics and Lenovo, according to Digitimes Research.LG's 29-inch 29UM57-P is geared toward the gaming segment, and is a new move away from previous products sized in a similar category that were previously targeted at the home entertainment segment back in 2013-2014.Unlike previous 29-inch models that have dual HDMI/DisplayPort interfaces, the new 29UM57-P only has an HDMI interface and is equipped with Dynamic Action Sync (DAS) technology in addition to various gaming features.The LG device was released aimed at the US market while new Lenovo products equipped with IPS technology and 2560 by 1080 resolution target the UK market, said Digitimes Research.

According to a Wall Street Journal report on July 14, China's Tsinghua Unigroup is planning to spend US$23 billion (or US$21 per share) to acquire US-based Micron Technology. The amount is higher than the China government's China National Semiconductor Industry Investment Fund's scale of CNY120 billion (US$19.32 billion). However, Digitimes Research believes if the acquisition plan is real, the deal will still need to pass many obstacles such as Micron's board and US government regulations and therefore, the chance for the company to complete the acquisition is rather slim.However, if the company successfully completes the deal, while it may not immediately change the global memory market's current status, China's IC product lines will still be able to expand from the mobile communication market to the datacenter and cloud computing market, and may even create a China-based brand in the end-product market.Since China's eleventh five-year plan (2006-2010), the government has treated memory as a core objective for the development of its semiconductor industry and planned to have Semiconductor Manufacturing International (SMIC) and XMC to focus on NAND flash R&D and manufacturing and XMC to also work on next-generation RRAM and MRAM development, Digitimes Research explained.However, lacking memory-related silicon intellectual property (SIP) and patents, China's semiconductor industry's development pace is rather slow and therefore, the government established the China National Semiconductor Industry Investment Fund in the second half of 2014, looking to acquire DRAM-related technologies via acquisition of companies like Integrated Silicon Solution (ISSI).Micron has DRAM, NOR flash and NAND flash technologies and its product lines are rather complete, similar to Samsung and SK Hynix and in 2014, the US player's DRAM and NAND flash's revenues were the third and fourth largest worldwide, respectively.More importantly, observing the company's product lines by their applications, in addition to PC and mobile communication applications, Micron is also able to provide solutions for solid state drives (SSD), servers, car electronics, industrial applications and medical electronics, perfectly matching the direction of China's government Manufacturing 2025 plan for technology development.In fact, Micron's revenues from China and the related proportion of the company's overall revenues have been rising rapidly. In 2012, Micron's revenues from China were only US$2.94 billion, accounting for 35.7% of overall amount, but in 2014, the number from China grew strongly to US$6.72 billion and accounted for 41.1% of Micron's total revenues.If Tsinghua Unigroup is able to acquire Micron, the deal will help raise China's in-house production rate in the domestic IC market. In 2014, China's domestic IC market had a scale of US$98 billion and the acquisition will be able to raise the in-house production rate by 6.9% (Micron's revenues from China).Tsinghua Unigroup also acquired a 51% stake in H3C, a network equipment, server and storage subsidiary of Hewlett-Packard's (HP), in May 2014 and has also been looking to acquire Marvell to gain storage chip solution technology. Via these aggressively acquisitions, China is hoping to establish China-based brand vendors that are able to provide one-stop solutions and the targeting markets will also gradually switch from domestic demand to foreign countries.If Tsinghua Unigroup failed to acquire Micron, the company may try to form a partnership with Micron similar to that between Micron and Inotera Memories, but whether such a development will occur, still requires more observation.

According to Digitimes Research's findings, Qualcomm's development in the high-end market is not stable in 2015 and facing MediaTek and Spreadtrum's fierce competition in the mid-range and entry-level segments, the chip supplier's shipment performance in China has been weakening, causing some of its application processors (APs) to see inventory buildup.To digest the inventory and maintain its market share, Qualcomm has cooperated with Microsoft closely over the Windows Mobile 10 platform and is planning to release a solution for the fourth quarter, designed specifically for US$80 or even cheaper smartphones. Qualcomm also partnered with China-based Allwinner Technology to release a solution for the tablet with phone functionality, targeting Europe, the US and emerging markets and to enter mass production in the third quarter, Digitimes Research's findings showed.China's 4G LTE market had surging growth in 2014. Qualcomm's solutions, thanks to their maturity and the company's well-managed roadmap, had strong demand from China vendors in the year and acquired close to 80% share in China's 4G market at the peak.However, MediaTek and Spreadtrum's competitive 4G solutions plus the company's misoperation in the mid-range and high-end product lines have both caused Qualcomm to see declining market share since the beginning of 2015 despite the company's aggressive promotions on its advanced technologies such as carrier aggregation.To maintain its market share, Qualcomm has aggressively cooperated with Allwinner to push Windows Mobile 10-based entry-level smartphones and tablets with phone functionality, looking to improve its shipment performance by expanding its market base via more broad partnerships over platforms.Qualcomm is planning to use its MSM8909 entry-level solution for the Windows Mobile 10 platform and since vendors do not need to pay any licensing fees to Microsoft for using the operating system, the overall costs for the combination will be much more competitive compared to Android-based entry-level solutions and for the entry-level smartphone market that is gradually seeing less profitability, such a solution is rather attractive to vendors.As for Qualcomm's partnership with Allwinner, Allwinner has currently decided to release several tablet with phone functionality solutions using Qualcomm's 4G/3G products. The high-end 4G solutions will target Europe and the US markets and in addition to white-box orders, the China-based player will also look to sell its solutions to telecom carriers.The 3G solutions will target emerging markets. Since most emerging markets were still slow in establishing 4G stations, most consumers in the markets still mainly use 3G or even 2G networks. Allwinner is planning to compete against MediaTek and Spreadtrum for these markets with help from Qualcomm's products.However, Qualcomm's strategies still have some potential risks. Windows Mobile 10 is a brand new operating system and consumers have no knowledge about it. Although the operating system features a runtime allowing it to operate Android-based apps, whether the system's interface is able to satisfy consumers' demand is still uncertain and need more time to observe.As for Allwinner, since the China-based chip supplier had left the tablet with phone functionality market for a while after losing to MediaTek, the company will need to re-nurture its partnerships with clients and supply chain players in order to return to the market. Since Qualcomm also has some clients using its solutions for their tablet with phone functionality products, how to avoid competition between its clients and Allwinner's clients and jointly compete against MediaTek is also a major task for the two.