Microsoft has provided brand vendors its Windows 8.1 with Bing solution, offering low Windows licensing fees enabling them to sell notebooks at US$249 or lower. Following the initial release on June 1, 2014, Microsoft is set to release a new solution in February 2015.To prevent the product line from hurting its brand partners' profits, Microsoft will limit the solution to only 14-inch and below models in mature markets. But vendors will still be allowed to release 15-inch models using the solution in emerging markets.Although Microsoft's specification changes for Windows 8.1 with Bing are mainly in consideration of brand vendors' profitability, Digitimes Research believes vendors that have strong market influence, will still be unwilling to largely cooperate with Microsoft to adopt the solution in 2015 which will impact Microsoft's plans of using inexpensive notebooks to suppress Chromebook development.Microsoft started negotiating with notebook vendors about the Windows 8.1 with Bing solution in October 2013 and is charging a low licensing fee for notebooks that adopt the platform and are priced at US$249 or below, aiming to push vendors to release more Windows-based notebooks that have price points similar to those of Chromebooks.So far few vendors are aggressively pushing related products considering the market segment's maturity and low profits.The top-5 brand vendors' shipment targets for the product line by the end of 2014 range from 1-1.5 million units maximum to 500,000 units minimum and are expected to achieve shipments of 4.5 million units altogether in 2014.Meanwhile, Chromebook's on-year shipment growth is expected to maintain at 100% in 2014 and Microsoft's inexpensive solution will not yet create any pressure on Chromebook sales.

All of the 10 ASEAN (Association of Southeast Asian Nations) countries except Laos and Myanmar have started nationwide fixed-line broadband Internet-access networks and the total number of subscribers increased to 19.9 million at the end of 2013, with a 2003-2013 CAGR ate of 40%, double the global average for the same period, according to Digitimes Research.Despite the fast growth, broadband Internet user densities (divided by population) in all ASEAN countries except Singapore are lower than the global average of 37% and download speeds in 70% of ASEAN countries are below 6Mbps, Digitimes Research indicated.High charge to income ratios and little differentiation in services have negatively impacted development of broadband Internet services in ASEAN countries. In 2013, ratios of service charge rates to gross national income in ASEAN countries except Singapore stood at 5-15%, much higher than below 2% in most developed countries. In addition, value-added services for market differentiation are generally not available.In the future, population growth, high economic growth and growing OTT (over the top) demand are expected to support continued development of broadband access in ASEAN countries, but substitution by LTE mobile communications is likely to bring negative impact on the development.

The South Korea government aims to increase the South Korea market value for the Internet of Things (IoT) from KRW2.3 trillion in 2013 to KRW30 trillion (US$28.9 billion) in 2020, much larger than Machina Research and Stracorp's projected five-fold growth in global IoT market value from US$200 billion in 2013 to US$1 trillion in 2020, according to Digitimes Research.The South Korea government also aims at 350 small- to medium-size enterprises focusing on exports of IoT services/products with 30,000 employees, as well as a 30% hike in production efficiency for the enterprises that will have adopted IoT in 2020, Digitimes Research indicated.The South Korea government in May 2014 came up with an IoT development master plan for developing IoT services and products through setting up an open IoT ecosystem consisting of service, platform, network, device and IT security sectors, as well as collaboration among enterprises of varying sizes and in various industries.

The global proportion of small- to medium-size TFT LCD production capacity from China is expected to increase to 35% as of 2017, up from 15.5% in 2011, according to Digitimes Research. In terms of large-size TFT LCD applications, China's global share will increase from 5.3% in 2011 to 25.5% in 2017.The statistics include production from both China-based makers and international makers who have facilities in China.China-based makers will be responsible for 33% and 17% of the global shipments of small- to medium-size and large-size LCD panels, respectively, in 2017. Their shipments to the two segments are expected to reach 130 million and 970 million units in 2017, up 51% and 54% respectively compared to 2013.BOE will hold the largest flat panel display spot in China from 2014-2017, holding 38% of all revenues produced from panel makers in China in 2017. That percentage is expected to exceed 40% in 2018 following the company's developments of high-end technologies, including LTPS TFT LCD, AMOLED and Oxide TFT LCD.Digitimes Research also believes China makers will hold a 17.4% revenue proportion in the global TFT LCD industry in 2017, up from 11.4% in 2013.

China-based e-commerce operator Alibaba has strengthened its operations utilizing the use of mobile devices, with transactions concluded on its e-commerce platform through mobile devices accounting for 32% of its total online sales in the second quarter of 2014, according to Digitimes Research.With rival company Tencent expanding its business through the use of social networking software and its cooperation with online shopping operator JD.com, Alibaba has also been trying to further improve the traffic flows of its e-commerce through the launch its own social networking software and acquisitions of search engine and e-map operators.Alibaba has also strengthened its cooperation with physical stores, expanding its online-to-offline business model to also include offline-to-online model.Alibaba has also stepped up deployments in overseas markets, particularly in North America and committing investments in local companies. However, Alibaba will face some operating issues including the high consumer's loyalty toward the market leader Amazon for its high-quality and value-added services, different shopping behavior, and concerns over the storage of transaction data in a China-based firm.While Alibaba will see its online transaction values continue to expand in China, its business model that counts on advertisements and services will be difficult to transfer from terminal ends to mobile devices. As more online transactions are shifting to mobile devices, it will be difficult for Alibaba to ramp up its profits. But the massive consumer data that Alibaba has compiled from various segments of its e-commerce operations may be useful for its cloud data development.However, due to different consumer demand and cultural differences, it is also difficult for Alibaba to duplicate its successful business model it did in China to overseas markets, Digitimes Research commented.

Taiwan panel makers will continue to focus on production of a-Si panels for use in handsets to compete in the high-end smartphone panel segment, according to Digitimes Research.The makers will lack competition in terms of production capacity compared to China and Japan makers, with China makers expected to begin mass production on several new LTPS lines in 2015 into 2016.Chunghwa Picture Tubes (CPT) in particular plans to produce a-Si panels and will also allocate some production to IGZO TFT technology. Additionally, AU Optronics (AUO) will aim to use the technology for high-end handset panel orders while Innolux on the other hand is expected to promote the technology for entry-level and mid-range handsets.The Taiwan makers are also focusing on orders from China, with recent trends indicating that demand for high-resolution, low-priced units is still on the rise, making a-Si technology a competitive technology for Taiwan makers in the handset segment, Digitimes Research believes.

Japan TV vendors saw their proportion of 50-inch and above size Ultra HD TV sales drop throughout mid-2014 into the third quarter, according to Digitimes Research.Sharp in particular reported that its overall sales proportion of 55- and 58-inch Ultra HD TVs in April 2014 dropped from 64.8% to 46.1% in July.Other vendors who saw their proportion drop were China-based vendors, as local vendors pushed low-priced, mid-range units sized between 39- to 50-inch in order to expand their market shares.Digitimes Research added that in July 2014, 22% of TV sales in Japan were for Ultra HD TVs, largely driven by sporting events and increased 4K viewing options.Mitsubishi Electric meanwhile recently released Ultra HD TVs sized 58- and 65-inch that come equipped with the company's home energy management system (HEMS), and the Japan government is already initiating plans for 8K viewing services to occur as of 2018, noted Digitimes Research.

Seeing the lack of strong growth in the PC market and excess wafer capacity, Intel is looking to resolve its problems by pushing it mobile product business. However, ARM's dominance in the mobile industry is forcing Intel to rely on giving out subsidies to partners to increase its presence in the market which is impacting its profitability as well as its product positioning in the market.Intel is cooperating with China-based application processor designer Rockchip to start a new business model and will push new chip and solution design services. Through Rockchip's ecosystem in China, Intel is hoping to start up a wafer OEM business and will gradually turn to focus on customized x86 chip products to make price-friendly and competitive products that are more suitable for emerging markets.To accelerate the establishment of its ecosystem, in addition to subsidies, Intel is also cutting its chip prices, but most vendors still prefer ARM-based solutions as Intel's solutions still lack performance, offer less flexibility for components, and have a cost disadvantage.Intel mainly eyes Rockchip's software support and existing back-end component and channel relationships. As for why Rockchip decided to partner with Intel, Digitimes Research believes the fierce competition between ARM-based chip products which has caused profits to drop, is the main reason Rockchip decided to work with Intel.Intel's baseband solutions and x86 extensibility are also key factors behind the partnership in 2014.

Intel's cooperation with Fossil to develop smartwatches equipped with Android Wear will help Intel expand its influence in the wearables market as well as extend Google's influence in the market.Samsung Electronics, Motorola, LG Electronics and Asustek Computer have already unveiled Android Wear-based smartwatches all adopting Qualcomm chips. Fossil is the first vendor to decide to adopt an Intel processor for its Android Wear smartwatch.Among Google's 11 Android Wear partners, five are chip players and six are system vendors. High Tech Computer (HTC) is currently the only one that still has not yet unveiled the processor it is using for its smartwatches.Motorola's Android Wear smartwatch adopts a Texas Instruments chip, while Sony announced its entry into Android Wear development and unveiled its SmartWatch 3 during IFA 2014, but the smartwatch's processor is currently still unknown, said Digitimes Research.

Rumors that Intel is considering investing in China-based Spreadtrum have been circulating in China's IT industry recently and Digitimes Research believes the rumors can explain why Spreadtrum's product development completely stopped recently. Spreadtrum may enter a partnership with Intel to start developing x86-based products in-house.If Spreadtrum enters the x86 ecosystem, the vendor may outsource its chip manufacturing to Intel. The cooperation would allow Spreadtrum to gain advantages from Intel's advanced manufacturing processes to effectively reduce costs, while Intel will also be able to fill some of its empty capacity, Digitimes Research said.Unlike Rockchip, Spreadtrum has its own baseband technologies and the company does not seem to have a reason to cooperate with Intel; however, Spreadtrum's products are mainly focused on the entry-level segment and emerging markets, areas that still have business opportunities, but are unlikely to contribute high profits due to fierce competition.Although the China-based chip designer is looking to push its products to higher-end markets, the company is unlikely to do so as it is unlikely to be able to create unique innovations out of existing ARM-based products.In addition, for an IC designer that mainly focuses on ARM-based products, the wafer industry's insufficient available capacity is limiting the order volumes Spreadtrum can place. Even Taiwan Semiconductor Manufacturing Company (TSMC), which has the best yield rates in the industry, has always been unable to satisfy all its clients' capacity needs. Placing orders with TSMC also creates higher costs.Meanwhile, other wafer foundry houses are unable to match TSMC in terms of advanced manufacturing processes and are usually chip designers' second choice for mass production.Although Spreadtrum is backed by the China government and has been receiving subsidies for creating masks, the company's spending is still rather high. To expand its market reach and further lower its production costs, seeking help from Intel would be a reasonable move.The x86 architecture is currently still a minority in mobile applications, but the leader in the PC computing market. With Intel's aggressive investment and planning, the PC architecture has started to enter the tablet market and joining the x86 camp would be an excellent choice for Spreadtrum.Intel also has an enormous empty capacity that needs to be filled. Intel's plan to push into the Android-based tablet market is not only for expanding new applications, the CPU giant is also looking to pump up its x86 chip OEM business. Through cooperation with Rockchip and Spreadtrum, Intel is expected to be able to expand the market's scale and create bigger opportunities for its OEM business.Despite Intel having been trying to expand its chip OEM business, Intel is only achieving limited results from entering the ARM-based chip industry because the manufacturing process of x86-based chips is not compatible with ARM-based chips and conducting adjustments to make the process compatible is rather difficult.However, if Intel is able to turn existing chip designers to adopt the x86 architecture, they will be able to directly place their orders with Intel's wafer foundries, helping to resolve Intel's empty capacity issues, while chip designers can also benefit from Intel's advanced processes to create differentiation with its competitors.