Generally, the touchscreen technology used in a tablet is related to the device's specifications: high-end models usually adopt cutting-edge technologies, first-tier brand vendors' mid-range/entry-level models mostly adopt GFF-based touch panels, and white-box products normally use lower-end technologies. The traditional GG technology has been mostly left to gradually disappear from the sector.However, Digitimes Research has found that some Taiwan-based vendors have started looking back to GG-based touch panels for their entry-level tablets in order to keep up with the fierce price competition.Although the relationship between the touchscreen technology and product specifications is not as firmed for handset products as for tablets, Digitimes Research also has found GG technology's shipment proportion has been rising for handset products recently.Digitimes Research believes GG touch panels' revival is mainly due to its more friendly pricing thanks to excessive capacities and mature technology. Currently, a GG touch panel is about 20-25% cheaper than a mid-range GFF touch panel and its price is even lower than a GF1 touch panel.Another advantage of the GG technology is its low failure rate compared to those of GFF and OGS technologies. Overseas orders have become an important source of income for entry-level smartphone and tablet players. The time and resources needed to handle defective products returned to China from overseas clients can be a heavy burden for both suppliers and clients. Compared to GFF-based touch panels' about 1-2% failure rate, GG-based touch panels' 0.5-1% rate can significantly reduce the chance of products being returned.Acer's entry-level 7-inch and 7.85-inch tablets both tablets adopted GFF touch panels from Taiwan-based Shun On Electronic (SOE) in 2013. But amid fierce price competition, the two entry-level tablets will now change to GG touch panels from China-based Holitech.As for handsets, China-based ZTE and TCL, both of which focus heavily on overseas markets, and China-based CoolPad, which has just entered overseas markets, have adopted GG touch panels for most of their overseas models. Such moves benefit their upstream panel suppliers such as Success Electronics, Shenzhen Laibao Hi-Technology and Holitech.

Wearable devices have become a fast growing segment. Global technology pioneers are moving quickly to introduce new products such as smart glasses and smart watches. The first generation of connected wearable devices is paving the way for more sophisticated products and new applications. Top tech brands are not sitting idle while others seize the market. This booming new market has attracted attention with investments and growing resources to develop new products. The new era of wearables has only just begun!Like all digital electronic devices, wearable devices depend on clock timing signals that send electronic pulses to MCUs or other key components that enable functions within a system. The clock signal is in essence the digital device's heartbeat, serving to trigger and coordinate complex processes that occur in various digital electronics. This signal must be absolutely stable and steady. There are more and more mobile devices equipped with more than one clock signal, which brings increasing demands for timing components. According to a variety of research reports, the timing components market is 5 billion US dollars. This is a huge market and it is attracting companies that offer new technology. SiTime is the one of the companies offering new timing solutions that are dramatically better than legacy quartz products. SiTime, with it's recently introduced 32 kHz MEMS TCXO (temperature controlled oscillator), is ready to seize market share.The 32 kHz oscillator generates a frequency of 32768 Hz which can be divided by two 15 times to get 1. To make this 1-second counting period as accurate as possible, a precision 32 kHz oscillator is needed. The 32 kHz quartz timekeeper was developed in the early 1970s and its use was boosted by the popularity of quartz digital watches sales in the 1980s. Forty years have passed and most oscillators still use the common quartz crystal.Fast forward from yesterday's quartz watches to new emerging wearables. New wearables are a perfect application for a precision 32 kHz timing solution. The system design typically needs two 32 kHz reference clocks; one for the Bluetooth or BLE chip's sleep clock and one for the MCU's Real Time Clock (RTC). A sleep clock is the reference clock that runs while the rest of the system is idle, hibernating, or turned completely off. Most systems require a reference clock that's always running to drive the system's RTC so to track time. In systems that include some form of wireless connectivity, the 32 kHz sleep clock is used as the low‐power reference clock when the wireless subsystem (e.g., WiFi, BT, BLE) is not operating.The more accurate these reference clocks are, the longer wearables can stay in sleep mode to lengthen battery life. This is especially important in wearable applications which have a very small battery (e.g., 300mAHr capacity), do not have the same network connectivity requirement as a smartphone, and are extremely space limited. A MEMS TCXO is ideally suited for this application. Temperature compensation in the TCXO provides frequency stability that makes the clock much more accurate; and MEMS timing technology provides the small size and other benefits that fit the needs of wearables.Dr. Aaron Partridge, the founder and Chief Scientist of SiTime Corporation, recently revealed in an interview how his company, the leader in MEMS timing, is responding to new market opportunities with products that enable emerging wearables. With 80% market share and over 200 million devices shipped, SiTime is driving the electronics industry's transition from legacy quartz to silicon-based MEMS resonators (X), oscillators (XO) and TCXOs. The company's latest innovation is the new SiT1552 MEMS TCXO (http://www.sitime.com/products/32-khz-oscillators/sit1552), the smallest, lowest power 32 kHz TCXO.MEMS timing solutions leverage the benefits of high-volume semiconductor manufacturing processes and qualityMEMS timing components enjoy the benefits of high precision standard foundry manufacturing process, which provide economies of scale, better performance, lower cost, and greater scalability. As the semiconductor industry continually migrates to new process nodes, MEMS companies which use a fabless semiconductor model, leverage these investments to continually improve lead times, supply stability, product reliability. This allows MEMS companies the ability to offer the right combination of price and performance. These unique advantages will make wearable devices more affordable and allow wearable companies to be flexible and responsive to customer demands. This is a key successful factor for companies entering new emerging market segments such as wearables. Another benefit of silicon MEMS timing is quality and reliability. When comparing MEMS TCXOs with similar quartz TCXO components, the MEMS TXCO has 30 times higher shock resistance and 15 times higher reliability at 500 million hours MTBF.MEMS small form factor and power consumption, plus 5ppm frequency stability, beat traditional quartz timing componentsSiTime MEMS oscillators combine a MEMS resonator chip with a reliable controller IC in a multichip module. Using a separate MEMS resonator and oscillator IC allows for optimizing the MEMS and CMOS processes to offer higher performance and reliability. In the case of the SiT1552 TCXO, the MEMS resonator die is mounted to an analog oscillator IC within a 1.5 x 0.8 x 0.55H mm chip scale package (CSP), which is 20% smaller and 45% thinner compared with a quartz TCXO. The SiT1552 TCXO delivers 5 PPM frequency stability over -40 to +85 degrees C. In terms of power consumption, this MEMS TCXO consumes 50% of the power of comparable quartz devices, resulting in longer battery life of mobile devices and wearables.The first digital watch, the Pulsar by Hamilton, was introduced in the 1970s. Forty years ago, we witnessed the emergence of quartz digital watches which were a revolutionary change in the clock industry. Today, the wearable market is in its infancy and it is too early to predict all the promising new developments that will come. But we do know that MEMS timing solutions are the revolutionary change in today's timing market - providing new system architectures that offer higher performance, smaller size and longer battery life. This trend is gaining momentum and enabling huge changes within the industry.Comparison chart of SiTime MEMS TCXO and Japanese quartz TCXO

South Korea paid about KRW350 billion (US$342.81 million) in royalties to ARM for AP licensing in 2012, up significantly from KRW180 billion in 2008 and the fee is expected to rise to KRW900 billion by 2020 if the country does not have a home-grown AP architecture.Seeing the issue, the South Korea government has recently started planning a project to develop an AP architecture via its Ministry of Trade, Industry and Energy (MOTIE).At the end of the first quarter, the country already had R&D organizations successfully developing a few AP architectures, but they lacked performance and are still unable to be commercialized. Compared to ARM's high-performance highly-convenient AP architectures, South Korea's current home-grown developed architectures will have difficulties to attract vendors.However, for the short term, the South Korea government plans to pick the most suitable AP architecture developed and invest KRW35 billion to focus on commercializing the architecture from mid-2014 to mid-2019, pushing it into the mid-range mobile device market.As for the medium to long term, the government plans to enhance the existing AP architecture's performance from 2017-2022, raising its abilities to meet high-end standards. If successful, South Korea will be able to own a South Korea-developed high-performance AP architecture and join the high-end AP competition from 2020-2025.With China already starting to develop its own AP architecture, South Korea is expected to accelerate its pace on related development and the project is expected to save the country US$900 million in royalties each year after 2020, Digitimes Research observed.

MediaTek's open LinkIt platform developed for wearable devices may offer opportunities for hardware developers to come out with wearable devices with killer applications rather than general-purpose smartwatches being rolled out by vendors, according to Digitimes Research.Most wearable devices rolled out currently, such as smartglasses, smartwatches and smart activity trackers function as notification devices through connections with handsets, and therefore enable the displays of SMS, incoming calls, calendar as well as voice communications and search, but no killer applications.MediaTek's LinkIt platform integrates special application processors and sensors plus software development kits to enable developers to create new applications. As a result, more and more wearable device makers are likely to adopt the LinkIt platform, said Digitimes Research.

In mature telecom markets, most carriers have faced saturation in customer bases and slow revenues growths in the past five years. The top-4 carriers in the US, Verizon, AT&T, Sprint and T-Mobile, together only achieved total revenues growth of US$24.4 billion from 2008-2012 with a CAGR of 2.28%, implying that increasing customer numbers should no longer be the focus of the mature telecom markets. The focus instead must be on increasing the value to be contributed by customers, according to Digitimes Research.The 4G LTE era has seen significant improvements to transmission speeds with the fee rates for related services also seeing structural changes. As mobile multimedia services are able to create high data transmission flows, the LTE broadcast business, which allows telecom carriers to be the main host of the services, has attracted much interest in the telecom sector.Digitimes Research believes the LTE broadcast business will have three major advantages in terms of development. First, it is 3GPP's evolved-multimedia broadcast multicast services (eMBMS) standard, which is able to enhance spectrum utilization and supports up to 20MHz.The second is that LTE broadcast services are able to optimize spectrum usage by distributing spectrum resources based on telecom network's loading. The third is the support of multimedia codecs such as HEVC and MPEG-Dash to help reduce loading on network bandwidths and strengthen usage experience.The fee rates for 4G services, which are based on the transmission volumes, should benefit from the surging data flow demand and start contributing revenues to carriers. As more countries will start commercial LTE network services, the potential the LTE broadcast business has started gaining much attention.Among the telecom carriers worldwide, only Korea Telecom (KT) started offering commercial LTE broadcast services in January 2014, while others are mostly still conducting pilot runs because such services require coordination between hardware, the mobile network, and content supply.Although equipment suppliers are aggressive about such a business opportunity, telecom carriers remain cautious. Therefore, Digitimes Research believes that for the LTE broadcast business to grow to a large-scale commercial sector it will still take some time. For many telecom carriers, it is in their medium- to long-term plans.

In the US tablet market, the lowest price point for a 7-inch brand tablet dropped to US$79 in June, according to Digitimes Research. With 7-inch tablet specifications gradually converging and prices declining, Samsung Electronics' 7-inch tablets, which are priced at a relatively higher level, are expected to face more and more pressure from price competition.Another noticeable trend in the tablet market is that prices of 8-inch tablets are showing signs of decline as Samsung, Lenovo, Asustek Computer and Acer have recently released 8-inch devices, heating up competition in the market.As for the 10-inch tablet market, Acer released the Switch 10 detachable Windows-based tablet to match Asustek's T100. However, the Switch 10's weak price-performance ratio is expected to increase the difficulty for Acer to catch up on its competitors' detachable tablet shipments, Digitimes Research estimated.

Taiwan-based PSS (patterned sapphire substrate) makers have been expanding production capacities, with total monthly capacity to increase from 2.19 million 2-inch-equivalent substrates in the first quarter of 2014 to 2.63 million units in the second, 3.55 million units in the third, and 4.27 million units in the fourth as demand has been growing from the LED sector, according to Digitimes Research.Rigidtech Microelectronics was the largest maker accounting for 23.3% of the total capacity in the first quarter, followed by Crystalwise Technology and Crystal Applied Technology each with 20.5%, Digitimes Research indicated. The three makers will remain the three largest to account for 28.1%, 23.4% and 14.1% of total capacity in the fourth quarter.Demand for 4-inch PSS is growing faster than that for 2-inch models. China- and Taiwan-based LED makers will have total demand for 6.257 million 4-inch PSS in 2014, while total supply will be 5.717 million units, mostly from Taiwan-based makers, 8.6% short of the demand, Digitimes Research pointed out.Prices for a 4-inch PSS will rise from US$51 in the first quarter of 2014 to US$51-53 in the second and further to US$55 in the second half, while those for a 2-inch PSS will increase from US$12.5 in the first quarter to US$12.7-13.0 in the second half.

China smartphone vendors' shipments started weakening in mid-May with the upstream supply chain also seeing orders turning week despite the fact that several China-based smartphone players are still able to deliver over 10 million units each quarter, according to Digitimes Research.Among the players, those with tighter relationships with China-based telecom carriers are seeing their 3G smartphone inventories rising rapidly as carriers have been reducing and canceling their subsidies for 3G models and turning to subsidize 4G models.China vendors' new sub-brand smartphones released between the end of the first quarter and the beginning of the second, for the online channel, boosted the China smartphone supply chain's sales to a new high in April, which also helped smartphone vendors' sales do the same in early May. However, these devices were only able to compete over price and lacked differentiation from each other, and support only 3G, significantly reducing their lifecycle.The high cost of 4G service, unsatisfactory communication quality during the initial period, and the limited availability of 4G entry-level smartphones have caused consumers in China to be unwilling to upgrade their services to 4G. In addition, as carriers just stopped providing subsidies for entry-level/mid-range 3G smartphones in May and started turning to subsidize 4G models in June, some consumers have delayed their plans to purchase a new smartphone for the second quarter.Digitimes Research believes that vendors will gradually digest their 3G inventories in the third quarter, and 4G smartphones priced below CNY1,000 (US$161) will start to appear in July, pumping up China's domestic smartphone shipments. However, China's smartphone shipments are unlikely to break 400 million units as originally expected due to 4G smartphones' failure to become popular in China in the first half.

Observing Japan's mobile consumer electronics market in the second quarter of 2014, Digitimes Research found several key factors such as mirrorless interchangeable-lens cameras (MILC) are seeing better shipments than DSLR cameras; Japan-based DSC vendors' total shipments for fiscal 2014 (April 2014-March 2015) are estimated to fall 22.7% on year; Windows-based tablets accounted for almost 20% of Japan's total tablet sales; and NTT DoCoMo is pushing a wearable sport bracelet.As the global DSC market continues to shrink, demand for DSLR cameras has also been affected; however, MILC models have become a new star of the DSC market with worldwide shipments reaching 266,000 units in April 2014, up 3.9% on year, performing a lot better than DSLR camera's 29.6% on-year drop.MILC shipments in Japan suffered an on-year decline of 29.6% in April because of the country's consumption tax raise, but the drop was offset by the combined growth of 16.2% in other regions.Japan's DSC vendors have estimated their combined shipments for fiscal 2014 to drop. Canon and Nikon are expected to see slight drops, but Sony and Fujifilm will see serious declines. The trend is also expected to boost Canon and Nikon's combined share of global DSC shipments to 66.6% in fiscal 2014, up from 60.3% in fiscal 2013.After successfully achieving a sales share above 10% in December 2013, Windows-based tablets have seen stable sales in Japan's retail channel, and accounted for almost 20% of total tablet sales in the first quarter of 2014.Windows-based tablets are raising demand for 8-inch and above tablets in Japan and taking market share from Android and iOS models, especially iOS-based ones. The trend shows that Apple's influence in Japan's tablet industry is not as strong as in the smartphone industry.Japan-based telecom carrier NTT DoCoMo announced the Move Band 2 on June 4, while its competitors Softbank and KDDI also launched similar products recently. These wearable devices are capable of connecting to smartphones through apps and support several cloud services.Since wearable device prices are not very high, paid cloud services are likely to become the focus of the telecom carriers, Digitimes Research analyzed.

China-based Spreadtrum's application processor (AP) shipments have been dropping since China Mobile began subsidizing dual-core smartphones, as opposed to single-core models, in June 2013, and the company so far is showing no signs of recovery. Spreadtrum's parent company Tsinghua Unigroup's acquisition of China-based communication chipmaker RDA Microelectronics did not provide much benefit to Spreadtrum's operation and instead caused issues over their merging process and delayed Spreadtrum's product planning due to internal struggles.Spreadtrum's smartphone AP shipments have been mostly TD-SCDMA chips in the first half of 2014, with processors having more than dual cores accounting for almost 50% of the volume. The company's shipment share of WCDMA chips have also risen slightly.Spreadtrum's SC7715 and SC7730 APs both have competitive pricing, but are unlikely to start shipping until the second half of the year due to software issues. Although Spreadtrum has said it has plans to release LTE products in 2014, the company may only be able to maintain its revenues through its existing products since Digitimes Research believes the chipmaker is unlikely to release any actual LTE products until 2015.On the other hand, the lower technological threshold required in the feature phone business, combined with the company's competitive pricing, has driven Spreadtrum's chip shipments to reach over 20 million units per month, about the same level as Taiwan's MediaTek. Because of strong feature phone demand, related chips may suffer from shortages at the end of second quarter.Since Spreadtrum's product lineups for the mid-range and high-end segments are clearly less competitive compared to its competitors, Digitimes Research believes that if Tsinghua Unigroup is unable to resolve issues over internal management and the acquisition of RDA Microelectronics, the company may quickly lose its competitiveness in the smartphone AP market in the future, especially if Spreadtrum is unable to significantly improve its technology.