Although white-box tablet shipments declined in the fourth quarter of 2014, global overall tablet shipments in the quarter still grew sequentiallyby 16.9% to reach 74.77 million units thanks to Apple and non-Apple first-tier vendors' strong performances, according to Digitimes Research's latest report on the global tablet industry.With inexpensive Android-based tablets offering almost no profit, many small white-box tablet players in Southeastern China have given up the market, while large ones have turned to sell Windows-based tablets or smartphones looking for better profits. White-box tablet shipments reached only 25.2 million units in the fourth quarter of 2014, down 4.9% sequentially and 10.3% on year, figures compiled by Digitimes Research show.Apple shipped 21.9 million tablets in the fourth quarter of 2014 because of its aggressive promotions and pricing. Apple was the largest tablet vendor worldwide in the quarter.Second-place Samsung Electronics did not launch new products in the second half of 2014 and its promotion efforts were also weaker than expected, causing its shipments in the fourth quarter to drop compared to a year ago.Amazon surpassed Lenovo to take third place in the fourth quarter of 2014 because of strong sales for its inexpensive tablets. Lenovo and Asustek Computer, ranked number four and five, respectively, both recorded weaker-than-expected shipments in the quarter.As for Taiwan ODMs' tablet shipments, Foxconn Electronics (Hon Hai Precision Industry) and Compal Electronics oth saw significant shipment growths in the fourth quarter of 2014. However, Pegatron Technology's shipments dropped in the quarter as Apple started gradually to shift its iPad mini orders from Pegatron to Compal.

Shipments of smartphones by China-based vendors declined 8.8% sequentially in the fourth quarter of 2014, affected by weaker than expected sales for some brand vendors, according to Digitimes Research.For the first quarter of 2015, China's overall smartphone shipments are expected to suffer a further sequential drop of over 20% due to the impact of seasonality in overseas markets. As a result, vendors which have a high ratio of export sales, may suffer a decline of over 30% sequentially in the quarter.Huawei shipped 16.7 million smartphones in the fourth quarter of 2014, recapturing the number one handset vendor title in the quarter, followed by TCL with shipments of 14.1 million units, while Lenovo and Xiaomi Technology co-shared the third title each shipping 13.8 million units.Meanwhile, ZTE saw its shipments decline over 15% in the fourth quarter of 2014, affected by its falling brand image and mounting competition from rival vendors including TCL and Huawei.Although Oppo has made headways in Southeast Asia, its shipments sank 7.2% sequentially in the fourth quarter of 2014 due to sluggish demand in the domestic market, which accounted for 80% of its total shipments, Digitimes Research noted.

Taiwan makers' shipments of large-size (9-inch and above) TFT LCD panels reached 66.99 million in the fourth quarter of 2014, down 1.4% on quarter but up 4.2% on year, according to Digitimes Research.The makers total large-size TFT LCD panel shipments for 2014 reached 264.6 million, up 4.4% on year, which was slightly higher than the global average of 3.6%.The overall on-year increase came as the global TFT LCD industry rebounded driven largely by demand for TV displays. The decline in the fourth quarter meanwhile was due to fluctuations in orders from Samsung Electronics and LG Electronics, and Taiwan makers did not make adjustments to their capacities.BOE, LG Display and Samsung Display on the other hand have opened new capacities at China-based 8.5G facilities, with BOE witnessing some of the largest capacity and yield increases at its Hefei-based fab. Such developments led to an over 15% sequential increase in large-size TFT LCD shipments, with TV, monitor and PC applications all increasing.China-based China Star Optoelectronics Technology (CSOT) meanwhile saw a 9% increase in TV panel shipments during the fourth quarter of 2014 driven by orders from the TCL Group, added Digitimes Research.

LG Chem exhibited a 320x320mm OLED lighting panel at the Lighting Japan 2015 taking place during January 14-16, with the panel having the highest lumen-price ratio of 5lm/US$ among all similar products at the show, according to Digitimes Research.LG Chem attained luminous efficiency of 100lm/W for its OLED lighting panels at the end of 2014 and aims to hike it to 120lm/W in 2015 and 130lm/W in 2016, Digitimes Research indicated.Japan-based Konica Minolta currently leads in OLED lighting luminous efficiency with 139lm/W and flexible OLED production capacity with a monthly level of one million panels. Konica Minolta adopts roll-to-roll process to produce flexible OLED panels, a process enabling low costs for equipment and material, and high yield rates.

The global AMOLED panel industry saw an over 10% on-year decline in sales revenue during 2014 largely due to lagging sales from Samsung Display. Despite the decline, Korea makers LG Display and Samsung Display have prospects for the technology in 2015 and will expand accumulative production capacity by 36%, up from the 24% expansion the two makers achieved in 2014, according to Digitimes Research.In 2015, Samsung is eyeing opportunities in the AMOLED flexible display industry and will have a new 6G A3 line enter mass production in the first half of the year. Additionally, the line will produce a variety of curved and flexible AMOLED panels for used in handsets.Samsung Display is also shifting its strategy in 2015 by expanding its customer base. In 2014, 87% of the company's sales went to the Samsung Group (primarily Samsung Electronics), but that percentage is expected to drop to 55% in 2016 as Samsung Display aims to supply China vendors and other customers AMOLED panels.LG Display meanwhile will have its new M2 8G line enter mass production in the first half of 2015, which will focus on production of OLED TV panels as LG Electronics pushes forth OLED TVs in 2015 to compete against other technologies in the high-end TV segment.Despite efforts from panel makers outside of Korea such as AU Optronics (AUO) to produce AMOLED solutions for applications such as smartwatches, production capacity is limited and therefore Korea makers will remain the top AMOLED panel suppliers in 2015, added Digitimes Research.

Average retail pricing for 46- to 48-inch LCD TVs with 3D capability dropped from US$881 in January 2014 to US$561 in January 2015, down 36.2% on year, according to Digitimes Research.Additionally, entry-level units without Internet connectivity dropped 10.1% on year over the same period to US$240.In the Ultra HD 3D segment, average retail pricing for 65-inch units dropped 24.2% on year to US$3,322 in January 2015 as Vizio pushed competitive pricing. The drop represents the largest decline compared to other Ultra HD TV sizes.Digitimes Research also found the average retail pricing for 55-inch Ultra HD TVs dropped 31.4% as of January but is still on average US$5 more than 60-inch units.

Microsoft on January 21, 2015 announced Windows 10, but Digitimes Research believes the operating system, though falling in line with the software giant's Mobile First, Cloud First strategy, is unlikely to make any dramatic change to the competition between notebooks, tablets and smartphones in 2015.Shipments of smartphones using Microsoft's platforms are estimated to reach 45-55 million units in 2015 and tablets 18 million units. Microsoft is expected to continue dominating the notebook market, but will not be able to stop Chromebooks' aggressive penetration.The Windows 10 for Phone platform's biggest advantage is its Universal apps feature, which allows users to use the same applications and share files across their smartphones, tablets and PCs. Initially, the feature will only support applications such as Photo, Video, Music, Map, Contacts, Message, E-mail, Calendar as well as Microsoft's Office and a small amount of third-party applications, but such a feature will provide great benefits to enterprise users.However, for most consumers, the Universal apps feature is still not as attractive as other rich and quickly-updated third-party apps that are available on competitors' app stores. With the disadvantage, the Windows 10 for Phone platform is still unlikely to be able to catch up with Android and iOS in the near future.Digitimes Research expects shipments of smartphones using Microsoft's platforms to reach 45-55 million units in 2015, but whether the volume can hit the top end of the estimation will depend on how aggressive the firm subsidizes its China white-box and brand vendor partners.As for tablets, Digitimes Research believes Windows 10 will be a growth driver, and has raised its shipment forecast of Windows-based tablets for 2015 from 16.3 million units to 18 million units.Digitimes Research believes Windows 10 will greatly improve 2-in-1 devices' usage experience with its Universal apps and Continuum mode features.Windows 8.x's biggest complaint has been the coexistence of the traditional desktop interface and the new Metro App interface, which is interfering with each other during usage for most users.The Universal apps feature will unify applications' designs, allowing applications to share the same usage experience in either the traditional desktop interface or touchscreen mode. Meanwhile, the Continuum model will automatically switch Windows 10's interface to the most appropriate one for users depending on their usage mode. The two features are expected to greatly enhance the usage experience of 2-in-1 devices, which will be switched between notebook and tablet modes quite frequently.Adding Cortana support to tablet devices and allowing Xbox One games to be streamed on Windows 10-based tablets will also make Windows-based tablets more appealing to consumers.As for the notebook industry, because of Microsoft ending support for Windows XP - which triggered some replacement demand - and strong demand for sub-US$350 consumer models, global notebook shipments only declined 1.3% in 2014, a lot better than expected.However, despite Microsoft's release of Windows 10 and its strategy of continuing to push low-licensing-fee solutions, Digitimes Research expects Windows 10's effect on notebook demand to be far weaker than the replacement trend seen after Windows XP support termination in 2014, as the notebook market is already mature. Therefore, Digitimes Research expects global notebook shipments to decline 3% on year in 2015.Google's strategies to lower its Chromebook prices and expand new product lines are expected to help the device's shipments to grow 30% on year to reach nine million units in 2015.

Observing vendors' showcases at CES 2015, Digitimes Research believes first-tier notebook brand vendors' 2-in-1 devices are expected face fierce price competition from China's white-box products as well as other mobile devices including notebooks, tablets and smartphones. Meanwhile, China-based smartphone vendors are also expected to grow strong in overseas markets.Asustek Computer showcased three new Transformer Book Chi series 2-in-1 devices at the show with improved performance and attractive industrial designs, hoping to raise consumers' acceptance over their high prices.However, with most Windows-based 2-in-1 devices still being promoted for their low prices and high price/performance ratios, attracting consumers to purchase its mid-range/high-end 2-in-1 devices will be the major challenge for Asustek in 2015.China white-box vendors' Windows-based 2-in-1 devices, which are developed with help from Intel and Microsoft's China Technology Ecosystem (CTE) supply chain, are already able to achieve a price point more than US$100 cheaper than 2-in-1 products from first-tier brand vendors and are expected to create pressure for brand vendors and Taiwan-based ODMs, Digitimes Research analyzed.In addition to Lenovo, the fourth-largest smartphone vendor in China, TCL, has also turned aggressive about tablet development since the second half of 2014 and unveiled a 10-inch 64-bit tablet at CES 2015.

During visits to firms in China's smartphone supply chain in November and December 2014, Digitimes Research found that their shipments to the domestic market were weak in the fourth quarter of 2014. But their exports remained strong. Many China-based brand vendors and ODMs who had a strong focus on overseas markets were enjoying strong sales in emerging markets due to seasonal demand.Most of these vendors and ODMs saw their shipments in the fourth quarter of 2014 grow at least 10% sequentially, while players who focused mainly on the China market mostly suffered sequential shipment declines in the quarter.Digitimes Research estimates that the China smartphone industry will report an about 8.6% sequential increase in overall shipments for fourth-quarter 2014, but the volume in the first quarter of 2015 will drop 20% sequentially.To satisfy demand from China's National Day holidays in October and Single's Day promotions in November, China's smartphone vendors placed strong orders from late third-quarter to October 2014, with upstream independent design houses (IDHs) and ODMs achieving significant results in September and October.After mid-November, China's smartphone brand vendors saw their sales start weakening and inventories building up. To control the damage, they stopped taking delivery of finished goods they had ordered from their upstream suppliers. To offload these finished products, the IDHs and ODMs repackaged and relabeled them, and then shipped them abroad.TCL and Huawei, both of whom have high portions of exports, saw significant increases in demand from emerging markets outside of China in the fourth quarter of 2014, and they achieved overall shipment growth of over 15% sequentially.Shenzhen-based IDHs and ODMs who are mainly focusing on clients in non-China countries also saw shipments increase 10-25% sequentially in the fourth quarter of 2014.With the arrival of the low season in overses markets and the domestic market stilll digesting inventories, China-based smartphone players' shipments are expected to reach 100 million units in the first quarter of 2015, declining about 20% sequentially, Digitimes Research estimates.

Smartwatch vendors were exhibiting new prototypes and newly developed parts and components, mainly displays, watchbands and sensors, to test the market responses during the recently concluded CES 2015, according to Digitimes Research.A variety of materials have been utilized for digital displays, including E-ink, LCD and OLED, on wearable devices. With the exception of Samsung Electronics and other top-tier vendors which are able to access the supply of AMOLED screens, most of other vendors still preferred to use non-AMOLED displays.Additionally, some vendors were highlighting semi-transparent screens by laminating a transparent touchscreen on the glass cover of the smartwatch, while still keeping an analog display underneath. The dual displays enable delivering analog and digital information simultaneously.Since a normal 2-inch display is unable to satisfy the demand from hardware designers, some vendors are extending the hardware section to watchband for additional functionality. For example, Samsung Electronics' Simband platform includes NFC, battery and sensor modules. For sensors, the algorithms have been upgraded to enable measuring the parameters of human body. Other exhibits included proximity sensors, motion sensors, biological sensors and positioning sensors. The development of upstream parts and components will help enrich the diversity of smartwatches, enabling vendors to renew outer designs, hardware architectures and service contents of their smartwatches year by year in ways much like smartphone vendors and therefore, keeping the smartwatch market expand continuously, Digitimes Research commented.