Competition in emerging markets continued to be the focus of the global smartphone industry in June 2014, according to Digitimes Research.In China, the race for price/performance ratios was keener for models sold through the Internet compared to those sold in physical retail stores where price reductions were limited in June.Huawei has continued to strengthen online sales of its Honor-brand smartphones with the release of upgraded versions of the Honor 3C and 3X as well as the high-end Honor 6, aiming to compete more effectively against rival Xiaomi Technology in terms of pricing and the pace of introducing new models, said Digitimes Research.While Microsoft has launched the Android-based Nokia X in order to shore up its dwindling market share, Google's launch of its Android One platform for low-cost smartphones with India-based vendors will dwarf the prospects for the Nokia X. Meanwhile, the new flagship models launched by vendors have fewer significant differences as compared to their previous generations, indicating that competition in differentiation for high-end smartphones will gradually be shifting to applications instead of hardware specifications, Digitimes Research commented.

June average retail price for 7W LED light bulbs (equivalent to 40W incandescent ones) in the China market decreased 7.8% on month to CNY34.50 (US$5.50), while 9W ones (equivalent to 60W incandescent models) saw their average price increase 2.6% to CNY47, according to Digitimes Research.Average retail prices for 7W and 9W LED light bulbs in the Japan market in June stood at JPY1,662 (US$16) and JPY2,694 respectively, the former remaining unchanged and the latter rising 11.2% sequentially, Digitimes Research indicated.June average retail prices for 7W and 9W LED light bulbs in other markets were: KRW12,520 (US$11.30, up 1.4% on month) and KRW14,972 (down 9.1%) in South Korea; US$19.20 (down 0.5%) and US$21.50 (down 2.3%) in the US; EUR13.40 (US$18.10, unchanged) and EUR13.70 (down 4.2%) in Europe.Osram's 7W and 9W LED light bulbs available in the South Korea market had the highest average lumen-price ratios of 75.3lm/US$ and 108.3lm/US$ respectively in June. In terms of luminous efficiency, Toshiba's 7W and 9W models for sale in the Japan market had the highest average levels of 74.6lm/W and 100.9lm/W respectively.

Hisilicon, an affiliate of Huawei, has been developing application processors for many years. The company's early products had issues that caused resulted in poor power consumption-performance ratio. But Huawei's strategic support and continuous R&D resource investments have helped improve Hisilicon's products.After releasing its first in-house-developed baseband-integrated AP, the Kirin 910 in 2013, Hisilicon has released the Kirin 920, the first SoC AP in the industry that supports the LTE Cat.6 standard, in 2014. With Cortex-A15 and Cortex-A7's big.LITTLE core combination, the AP's computing performance is rather strong, while its independent low-power-consumption core is able to monitor the working process while the system is in hibernation. The high quality audio processing unit is also a major feature of the AP.Digitimes Research believes the Kirin 920 will have a product lifecycle of about one year. Since Huawei is estimated to have over 20% of its shipments adopt in-house developed architectures in 2014, the Kirin 920's shipments are expected to reach 12 million units by mid-2015.Considering the R&D investment (almost US$200 million), as well as the production costs and expenses, the Kirin 920 is estimated to cost around US$20-25.Since purchasing high-end solutions from Qualcomm costs over US$40, Huawei will be able to enjoy extra profits from its high-end product lines compared to its competitors which are still acquiring high-end APs from the US-based vendor. The new business model will give Huawei strong advantages in controlling overall costs, Digitimes Research believes.

The amount of LCD TV panel surface area shipped in the second quarter of 2014 grew 14% on year largely due to an increase in average LCD TV size, according to Digitimes Research.Additionally, many panel makers are bumping up production of Ultra HD TV panels on 5G-7.5G lines, which is pushing down the supply of notebook panels and causing notebook panel pricing to increase.Digitimes Research also said that Samsung Electronics' recent move to release tablets featuring AMOLED panel technology was in effort to sustain AMOLED panel production, particularly as smartphone shipments have been lower than expected.

Intel aims to ship 40 million application processors (APs) for tablets in 2014, up 400% from the volume in 2013, but most market watchers believe such a volume is quite a challenge. Digitimes Research expects the CPU giant to be able to ship 31.15 million APs in 2014, achieving about 80% of its goal, mainly thanks to its cooperation with PC brand vendors, which helped its platform to penetrate into the Android market that has been dominated by ARM.Asustek Computer has adopted Intel's solutions for a whole series of mobile products. Asustek ranks as the fourth-largest tablet brand vendor worldwide, and is expected to become the biggest partner for Intel's tablet APs.Since Intel's solutions are able to help both Android and Windows expand into the enterprise tablet market, and new high-price-performance-ratio 2-in-1 Windows-based tablets from vendors such as Lenovo, Acer, Hewlett-Packard (HP) and Dell will start becoming available in the second half, PC brand vendors are expected to become the growth driver of Intel's tablet AP shipments in 2014.As for the white-box market, with Intel providing subsidies and its China Technical Ecosystem (CTE) project to help develop reference designs for tablets and nurture a China-based supply chain to lower processor costs, Intel's tablet APs started gaining orders from some white-box players in China. However, development difficulties on x86-based tablets, shortages of components from Europe- and US-based makers, which Intel has partnerships with, and the limited longevity of the subsidies still concern most white-box players, Digitimes Research analyzed.

Global top-five brand vendors and top-three ODMs all enjoyed over 15% on-month shipment growth (not including detachable models) in June, buoyed by the release of new models and fresh demand for notebooks after Microsoft discontinued support for Windows XP, according to Digitimes Research.Hewlett-Packard (HP) led brand vendors with the highest 25% on-month shipment growth in June, while Compal Electronics outperformed other OEMs enjoying an over 20% sequential growth. Combined shipments of the top-three ODMs totaled over 10 million units in June, a previous record that they reached 18 months ago. The top-five brands also managed to maintain their shipments flat or continued growing for straight six months as compared to the same months a year earlier.However, Foxconn Electronics (Hon Hai Precision Industry) is expected to suspend notebook production at its plant in Chongqing in 2015 as the company is likely to phase out from the ODM notebook business and refit the Chongqing production base for other products.Meanwhile, Sony may resume marketing of its Vaio notebooks but will limit sales in Japan only. As a result, its shipment volumes will not be able to match to its previous records.As being highlighted at the recently concluded Computex Taipei 2014 and GoogleI/O 2014, Chromebooks are to be integrated with more Android applications, and therefore Chromebooks are expected to start enhancing their presence in the consumer market from the second half of 2014, Digitimes Research commented.

The total number of TD-LTE subscribers worldwide increased to 12.48 million at the end of the first quarter of 2014 and will increase to 70.4 million at the end of the year, according to Digitimes Research.Saudi Arabia-based Mobily accounted for 28.2% of the 12.48 million subscribers, followed by Japan-based SoftBank Mobile with 27.5%, China-based China Mobile with 22.4% and Saudi Arabia-based STC with 10.8%, Digitimes Research indicated.As of the end of the first quarter of 2014, 53% of TD-LTE networks around the world were TD-LTE/LTE-FDD dual-mode ones and many TD-LTE operators had transformed operations from WiMAX.In addition to Qualcomm and HiSilicon Technologies, Marvell, MediaTek and Intel will launch multi-mode, including TD-LTE-supporting, 4G chip solutions in the second half of 2014.The total number of TD-LTE subscribers will grow to 179.8 million at the end of 2015 and to 276.2 million at the end of 2016.

Panel makers need to take a more active role in developing technology and products that applications can be based around and not the other way around. Sharp's Free Form Display is an example of how new innovative panel applications can spur demand and help expand the maker's business model.In the case of Sharp, its Free Form Display has the ability to attract customers in the vehicle and home segments where demand is expected to increase the most over the next couple of years. The displays can be used in vehicles to fit a variety of different sizes, shapes and usage, which is something unique and at the same time brings value to customers.In the home segment, Free Form Display could be used all over ranging from bathroom, kitchen and garage facilities where many home builders are eyeing increased business opportunities to include smart home features. The displays could also be used in bedroom and living room arranagements where space may be uniquely set up and limited.In the business segement, such displays could be used to replace clocks, menus, calendars and many other devices that display information. The displays can be built into existing structures rarther than being placed on or added to existing peripherals, and would take up less space.All of these applications could also be connected through smart systems controlled through other display devices including tablets and smartphones, as they could include Wi-Fi and cellular options for increased access and mobility control. This would give an edge over other competitors in the smart home and connected device segments as well as solidify new business opportunities.Panel makers have the opportunity to take a more leading role in creating technology and implementing it into the market to create their own business opportunities rather than being subject to waiting for business opportunities to arise. On top of that, and perhaps more importantly, panel makers should treat their products as devices that can help or create convenience in peoples' lives and promote them differently in the form of devices either via in-house methods or in conjunction with other companies. This is an active apporach that makers should take in order to stay strong in the market, particularly as most panel applications are maturing quickly in the market.The bottom line is that there needs to be more thought into creating how new technology can take a leading role into developing new segments and applications rather than being subject to the changes. In the case of Taiwan makers who currently face competition in technology from Korea and Japan and disadvantages in pricing from China, considering such options could help rectify their business models and lead to more sustaining development.

Taiwan-based LED maker Epistar announced a merger with Formosa Epitaxy (Forepi) on June 30, 2014, with the former aiming to fully acquire the latter and become the surviving company. Epistar explained that the merger is meant to improve its strengths in competition for first-tier international lighting companies' LED orders.Epistar said demand from first-tier international lighting vendors has been strong, resulting in a 30% shortage in the high-end LED segment.Epistar's merger with Forepi will immediately resolve Epistar's capacity shortage problem and greatly improve Forepi's product mix and utilization rates. Prior to the merger, Forepi's LED epitaxial wafer production value per unit was 30.7% lower than that of Epistar, which shows that Forepi was receiving orders at prices lower than the market average.With Forepi starting to fulfill orders coming from Epistar in July, Forepi is expected to see improvements in profitability. With technological assistance from Epistar, Forepi's production capacity from its existing equipment can go up by 20-30% to reach a monthly output of over 400,000 units.The merger will also create the largest supplier in Taiwan and in the world. Digitimes Research's figures show that Epistar and Forepi's combined capacity accounted for 65.6% of Taiwan's blue LED segment in the second quarter of 2014.By the end of 2014, the number of Epistar and Forepi's InGaAlP and blue LED manufacturing equipment will reach 500 sets, double those of San'an Optoelectronics and accounting for 22.6% of global LED chip capacity.In addition, the merger is expected to have further influence on the LED industry in the future. Since Epistar and Forepi are pushing the strategy of "run as one company," their decision is expected to help stabilize the industry and minimize price competitions.

Global shipments of Ultra HD (4K resolution) TVs will increase from 1.5 million units in 2013 to 68.2 million TVs in 2017, representing a compound annual growth rate (CAGR) of 160%, according to the latest Digitimes Research Special Report. The report, titled "The transition to 4K TV - UHD TV market forecast, 2014-2017," forecasts that 26.6% of all TVs shipped in 2017 will be UHD TVs, while in the 55-inch segment, more than 90% of the LCD TVs to be shipped in 2017 will deliver UHD or higher resolutions.As with other new types of video services, UHD adoption will rely on compatible content and TVs to drive the market. While the current video industry environment in not ideal for UHD TV, Digitimes Research argues that the expected support of Blu-ray Disc (BD) for UHD content and increased user-created content will help demand take off in 2015. However, it will be active engagement from TV manufacturers that will ultimately be the primary driving force of UHD TV growth.Traditionally, new TV technologies, such as 3D and OLED have been driven from the top end of the market, in terms of both vendor support and price points. UHD technology, on the other hand, is being driven by panel makers in mainstream markets by a multitude of vendors, with the China market taking the lead. Based on this, leading global vendors such as Samsung and Sony may be forced to engage in UHD TV price competition earlier than they would like, meaning there is a chance for UHD TV to quickly become widespread in the overall TV market. Digitimes Research forecasts that in 2015 the penetration rate of UHD TVs in terms of the overall TV market will exceed 10% for the first time, with shipments reaching 30 million units.The Digitimes Research Special Report also looks at opportunities in the UHD TV market from various perspectives, including developing trends in supply chain dynamics and technology trends in the TV SoC and LCD panel industries. In addition, the report provides analysis of the competitive strategies for UHD TV deployment for vendors from South Korea, Japan, China, as well as regional TV vendors.About DIGITIMES ResearchDIGITIMES Research is the research arm of DIGITIMES Inc., Taiwan's leading high-tech media outlet. Operating as an independent business unit, DIGITIMES Research focuses on monitoring key high-tech industries, while also guiding clients toward suitable new businesses. Digitimes provides market intelligence and analysis to more than 1000 corporate customers worldwide. Research and consulting services including a full range of products, from in-depth Special Reports on industry trends in the flat panel display (FPD), LED, and semiconductor industries, to Tracker services that monitor the global mobile device supply chain on a quarterly basis.Media contact: Michael McManus (Michael.mcmanus@digitimes.com)