Intel and Asustek Computer released dual OS tablets at CES 2014 that combine Windows and Android operating systems into one unit in an attempt to tackle a new segment in the tablet market. However, due to pressure from Google, Asustek has postponed plans to release its TD300 tablet that was presented at CES 2014. Digitimes Research believes dual system devices benefit Intel, PC vendors and Microsoft while Google will get the brunt of such developments due to a possible increase in the Windows penetration rate.Currently, only Intel's X86 chip can support dual operating systems, giving consumers an option to run either Android or Windows, but on a separate basis. From Intel's standpoint, tablets that have both Windows and Android dual OS is positive for its business model, and vendors can also increase brand value through dual-system products.For Asustek, it runs the risk of offending Google and Microsoft by releasing dual-system products but on the other hand it benefits Intel. Intel is one of Asustek's main partners for 2014 and is expected to give full support on Asustek's new product line during the year, in addition to price advantages and even marketing funding. Asustek tested the waters at CES 2014 and may later reconsider mass producing such devices.Although Microsoft's co-existence with Android may jeopardize the survival of Metro App, in the long run Microsoft is looking to expand the penetration rate of Windows in mobile devices, as it currently only has a 3% market penetration rate, so pairing up with Google should prove to be beneficial.In the short run, dual operating system devices will not become the mainstream and Google is trying hard to avoid its OS being combined with Windows. Windows also could pose challenges for Android-based large-size tablet products.Digitimes Research also added that other PC vendors now also have intentions to stop plans for producing products featuring dual operating system features.

The global top-five notebook brand vendors and top-three makers both suffered 0-3% of on-month shipment declines in February, a range similar to that a year ago. The decline in February was caused mainly by inventory adjustments in the month. As for March, brand vendors are taking a more conservative attitude which could result a 7% on-year drop in Taiwan's notebook shipments in the first quarter of 2014, according to Digitimes Research.Among brand vendors, Hewlett-Packard (HP) had the best performance in February with an on-month growth of over 30%, while others suffered on-month decreases. Asustek Computer had an over 10% on-month drop in February, but still maintained its shipments at 1.3 million units (excluding the T100, which is considered tablet), beating Acer for two consecutive quarters. Acer's monthly shipments were around one million units, a volume similar to that of Apple.Notebook ODMs were all impacted by on-month drops in February shipments. Although makers had similar on-month performances in February, their results in March are expected to be a lot different. Compal Electronics is expected to see shipment growth thanks to Lenovo's orders, while Inventec will suffer a shipment drop due to Toshiba shifting orders away from the maker.With Satya Nadella, who has no experience in Windows and hardware development taking the position as CEO of Microsoft, and the software giant activating licensing fee discounts for sub-US$300 notebooks, Digitimes Research believes the board at Microsoft is hoping Nadella, who carries no burden from the past, will be able to significantly reform the company.Sony abandoning its Vaio PC business indicates the vendor's differentiation strategy has failed to work. Sony has already stopped placing orders for notebook components and Taiwan's orders for Vaio notebooks in the second quarter may drop to less than 30% of the volume in the first quarter.

The Mobile World Congress (MWC) 2014 demonstrated some new trends of the tablet industry: tablets with phone functions are starting to catch attention from brand vendors; some major brand vendors are developing tablets for the niche market, a sign of their concerns over the future tablet market; and China-based brand vendors, apart from Lenovo, are also competitive in the tablet market.Expecting demand for smart communication devices from emerging markets to surge in 2014, brand vendors also showcased several tablets with phone functions during the show, in addition to their entry-level/mid-range smartphones. Asustek Computer, Hewlett-Packard (HP) and Huawei all released their new tablets with phone functions and provided 4G LTE or dual SIM support for differentiation, Digitimes Research found.For the conventional tablet segment, Samsung Electronics released its new high-end and entry-level devices in January, but other first-tier vendors did not unveil new tablets for the segment at the show. Instead, they focused on strengthening their existing product lines. Asustek is currently placing its focus on the Fonepad line as the Android on Bay Trail platform is still not yet available, while rumors about it receiving new Nexus tablet orders remain rumors. Lenovo did not release any new entry-level tablets during the show, but unveiled a higher-end Yoga Tablet. Sony turned even more conservative about its tablet strategy after quitting the PC business.Huawei released 7- and 8-inch tablets with specifications comparable to those from other first-tier vendors during the show. Although Huawei's in-house developed chips (Hisense) are still inferior to those of other major players in terms of compute performance, the player's ambition for the tablet market is obvious.

Digitimes Research considers ARM's new Cortex-A17 and existing Cortex-A12 processors to be basically the same based on their architectures, except for the Cortex-A17's support for big.LITTLE architecture. As to why ARM created the Cortex-A17, Digitimes Research believes the chip designer is trying to prompt its clients to adopt the platform while its 64-bit architecture becomes mature in order to provide consumers with an optimized usage experience. The Cortex-A17 is inferior to the Cortex-A15 in terms of compute performance, but the processor has a friendlier price and lower power consumption compared to the Cortex-A15.In addition, the release of the Cortex-A17 also marked the end of ARM's 32-bit product development. In the future, ARM will have the Cortex-A17 handle its mid-range and high-end 32-bit processor business and leave the Cortex-A7 in charge of the entry-level 32-bit processor business. Processors released prior to the Cortex-A15 will all gradually be phased out, with new processors being developed to natively use a 64-bit architecture.Although the Cortex-A17 is mainly looking to fill the Cortex-A12's missing big.LITTLE architecture with a slight compute performance improvement through enhancing some memory management systems, Digitimes Research still believes the Cortex-A17 will be the best solution before the arrival of the 64-bit Android era due to its advantages in power consumption and price/performance ratio despite its inferior in compute performance against the Cortex-A15.For ARM, even once 64-bit systems has become available, over 2-3 years will still be required before the 64-bit architecture becomes standardized and starts contributing benefits. Initially, besides the development of high-end 64-bit hardware, ARM is expected to spare some of its focus to the performance of 32-bit product lines and the release of the Cortex-A17 is meant to avoid the weak performance of its entry-level hardware such as the Cortex-A53 from affecting its competitiveness in the market.

Ultra HD TV demand is expected to reach over 12 million units in 2014, according to Digitimes Research.Ultra HD TV panel shipments meanwhile are expected to reach over 17.76 million units, with Innolux expected to ship 2.2 million units in the first half of the year, up 830% on year. Taiwan panel makers are expected to be responsible for more than 50% of Ultra HD TV panels in 2014.Digitimes Research also said global LCD TV demand is expected to grow 5% on year in 2014

As part of Toshiba, OCZ Storage Solutions is able to leverage Toshiba's NAND and combine it with its proprietary controllers, firmware and software. Toshiba's financial strength has also put OCZ in a better position to compete in the rapidly growing SSD market.The combination of OCZ and Toshiba is a win-win, said OCZ CMO Alex Mei in a recent interview with Digitimes. Mei also talked about the company's market position and direction after becoming a Toshiba subsidiary, and shared his views on the global SSD market.Q: Would you talk about the role of OCZ after being acquired by Toshiba?A: As a Toshiba group company, OCZ Storage Solutions is now a wholly-owned subsidiary that will continue to focus on developing best-in-class solid state drive solutions for both the client and enterprise markets. Toshiba will continue to develop, produce and market their own line of Toshiba-branded SSDs, while we will focus on selling OCZ-branded SSDs that leverage our in-house technology through our own well-established global channels.Q: What are the pros and cons of OCZ being a Toshiba subsidiary? And for Toshiba, what are the advantages of buying OCZ?A: Obviously when you are a standalone company, you have the ability to drive your own strategy when it comes to products and marketing. The good news is that when Toshiba acquired all of OCZ Technology Group's assets, they also kept all the SSD engineering and R&D teams fully intact, enabling the team to continue to operate autonomously and put even more focus and resources on developing next generation products.One of the biggest challenges that the previous organization faced was the lack of steady supply of NAND. This all changed once Toshiba acquired the company as we are now the only fully integrated solid state drive provider solely focused on SSD products. Together we have in-house controllers, firmware, application software, and as a Toshiba subsidiary, we now have direct access to NAND flash enabling superior optimization with early access to next-generation NAND technology, more competitive pricing and better overall product availability.For Toshiba, this acquisition means bringing key SSD technology in-house and the ability to address an even wider spectrum of client and enterprise customers with quality SSD solutions.Q: What changes have you made in your product roadmap and market focus after becoming part of Toshiba?A: Our product roadmap has remained consistent through this transition, but we are taking steps to accelerate development of next-generation controllers and application software with our newly-infused additional resources.The ability to get earlier access to next-generation NAND may also enable us to re-enter certain portions of the consumer market with more cost-effective products. In terms of market focus, we are firmly committed to supporting both the consumer and enterprise markets.Q: In terms of market applications, what would become a growth engine for OCZ in 2014?A: There continues to be explosive growth in the SSD market as end users continue to adopt solid state drives in everything from high-performance desktops to their mobile systems, and while we continue to cater to these key audiences we believe that storage acceleration and mass storage applications represent massive growth opportunities for OCZ Storage Solutions.Now that we are a Toshiba group company, we can once again be competitive in the client SSD space, which has been dominated by the NAND suppliers. In the enterprise segment, there are significant opportunities for OCZ Storage Solutions to capitalize on when it comes to the shift to SSDs in the data center and cloud storage environments.Q: Will you reorganize your product portfolio to satisfy demand from your parent company?A: While I believe it is critical for any subsidiary to align with the key strategy of the parent company, it is also equally important that the company be given the autonomy to meet the unique needs of the individual customer base. This is the case with our new organization as Toshiba has provided us with the financial strength and NAND technology to go ahead and develop products that will address the distinct storage challenges that our client and enterprise customers face.Q: Would you talk about OCZ's product focus for 2014?A: We have already made the transition to Toshiba 19nm NAND on our top-selling Vector and Vertex client SSD families, as well as the new Intrepid 3000 enterprise SATA drives designed for the mega data centers. We will soon be introducing a new Z-Drive PCIe solution, the 4500 Series, that also leverages Toshiba NAND.Moving to Toshiba NAND not only improves the cost structure for our customers, but also the availability of products, something which is critical in the enterprise market when large deployments require guaranteed supply. As we continue to focus on both the client and enterprise markets, our future products will continue to leverage our own in-house technology whenever and wherever possible so that we can offer our customers truly differentiated solutions. We are also making investments to introduce new PCIe SSDs beyond traditional edge cards, as well as M.2 SSDs that are both compact and extremely fast.Q: Competitionin the SSD market is becoming fierce. How would you differentiate yourself from fellow SSD companies?A: Competition has indeed heated up and the client and OEM market is already becoming dominated by the NAND providers. At the end of the day it all boils down to value for the customer. Can you deliver something that addresses their unique challenges, improves their application performance and delivers superior total cost of ownership? We believe that together with Toshiba we absolutely can.Q: As an entity, how would you and Toshiba compete against chip vendors which also manufacture SSDs, such as Samsung?A: Here is where the combination of OCZ and Toshiba really is a win-win. Together, OCZ Storage Solutions is now a fully integrated SSD provider with in-house controllers, firmware, application software and NAND. This enables us to develop and introduce compelling SSD products and total storage solutions that are cost competitive for consumers, OEMs and enterprise customers and provide plenty of added value.Q: Can you share your views about the outlook for SSD? What is your business outlook for 2014?A: As the flash storage market continues to mature, the consolidation among companies will continue to accelerate. The combination of Toshiba and OCZ is just one of the many combinations we have seen over the last year and a half, and as competition remains quite fierce in the SSD space the NAND suppliers are going to be in the best position to support customer price and supply requirements.At the same time, I think this is going to be a very exciting period for SSD innovation as manufactures will continue to push the envelope in bandwidth, I/O consistency and sheer density, as well as bring up new interfaces and form factors to meet customers' increasing performance and cost requirements. 2014 will be an exciting growth period for our new organization as we move full speed ahead with OCZ-branded SSDs in the client space as well as now have the opportunity to fully engage enterprise customers backed with Toshiba financial strength, NAND technology and supply. We are very excited about what this combination represents for our current and future product offerings, as well as what it means for our valued customers, as we are now in a better position than ever before to address their unique storage challenges moving forward.Alex Mei, CMO of OCZ Storage SolutionsPhoto: Company

Taiwan-based panel makers had conservative developments in expanding production capacity for LTPS TFT LCD technology in 2013 amid increased competition from Japan-, Korea- and China-based makers. However, from 2014 to 2016 Taiwan makers are expected to increase production capacity on 6.5G and 4.5G, according to Digitimes Research.AU Optronics (AUO) in particular has a 6G line that is expected to expand production while other makers have 4.5G lines that are expected to expand production by more than four times going into 2016.Taiwan panel makers are also bumping up R&D of IGZO panel technology in order to compete with Sharp, noted Digitimes Research.

On December 17, 2013, China-based touch panel maker Truly Optoelectronics announced that it had entered a joint venture with the Huizhou City Government to invest in a 4.5G AMOLED line that will go into production in the second half of 2015 and have a production capacity of about 15,000 substrates a month. This marks the fifth AMOLED line to be built in China, following on plans by China-based Tianma, BOE, Visionox and EDO to establish plants, as well as developments for future plans by Century and China Star Optoelectronics Technology (CSOT) to invest in AMOLED production in the future. As such developments unfold, from 2016 onwards China's handset vendors are likely to use AMOLED panels from local makers, according to Digitimes Research.There are three main issues related to China developing AMOLED panels, namely capital, technology and applications. Since China implemented its twelfth 5-year plan, there has been no shortage of funding from both local governments and the central government. The makers have close relations with smartphone vendors such as Huawei Device and Lenovo, which are continuing to produce high-end models in addition to expanding their influence outside of China. The makers also have close connections with touch panel makers yielding better supply chain integration and exports, so solidifying applications will not be a concern. However, achieving high yields for the technology will be the biggest challenge for China-based panel makers.Taiwan-based panel makers such as AU Optronics (AUO) are struggling to increase yields for AMOLED panels, with limited supplies going to HTC. Innolux meanwhile is supposed to supply to Nokia, but shipments were suspended due to Nokia's limited sales as a result of certain Microsoft's policies. Therefore, it is uncertain how much further Taiwan's AMOLED panel industry will develop in the near future.Additionally, China makers are heavily reliant on recruiting talent from Taiwan to develop AMOLED panels, which poses challenges for Taiwan's panel industry, as top engineers are continuing to transfer to companies in China. Moreover, Taiwan's panel makers face yield issues and lack enough resources to make sufficient profits from the segment, which are obstacles that expected to remain standing in the way. As AMOLED panel demand in China grows, however, China's smartphone vendors will turn to the local panel industry, making AMOLED makers in China the main suppliers of the technology to smartphone vendors by 2016, added Digitimes Research.

Mobile World Congress (MWC) kicked off with a bang, with Mozilla announcing a US$25 smartphone built around a turnkey solution that features silicon from China-based Spreadtrum and software from Firefox.According to a Mozilla press release, Spreadtrum and Mozilla have now completed the integration of Firefox OS with several of Spreadtrum's WCDMA and EDGE smartphone chipsets, including the SC6821, unveiled by Spreadtrum as the industry's first chipset for a US$25 smartphone.So the key to the solution is the SC6821, which Spreadtrum stated is "designed with a unique low memory configuration and high level of integration that dramatically reduces the total bill of materials required to develop low-end smartphones." Mozilla added that with this chipset, handset makers will be able to bring to market smartphones with 3.5-inch HVGA touchscreens, integrated Wi-Fi, Bluetooth, FM and camera functions, the advanced phone and browser features of Firefox OS, and access to an ecosystem of web and HTML5 applications.With a clearer picture of the specs Mozilla envisions for a US$25 smartphone, I approached Digitimes Research Analyst Luke Lin to ask if he thought it was possible to deliver such a product to the market at this time. According to Lin, the simple answer is that it would be "impossible" to see a US$25 Firefox phone hit the shelves this year, unless operators are willing to provide subsidies.Lin explained that currently, the absolute lowest smartphone BOM in China is estimated to be around US$22 (and most are significantly more than that) and that manufacturing costs are highly unlikely to go below US$20 this year, which would be the cost needed to deliver a US$25 smartphone to end users. The cost would need to get to US$15-20 FOB in order to get a selling price of US$25, Lin said.In terms of Spreadtrum's claims it has produced a level of integration and memory requirements that can reduce the BOM cost significantly, Digitimes Research Analyst Anthony Chen commented that Spreadtrum's solution is no more integrated than any other integrated solution on the market so there is no clear advantage there. And as for memory, the cheapest and smallest memory modules (ROM and mobile DRAM) for smartphones in China run about US$5 for a configuration of 256MB ROM and 256MB of mobile DRAM, and Chen highly doubts the Mozilla solution could run with a lesser configuration than that.One other argument being offered as to why Spreadtrum could offer lower pricing than competitors is that the China government has a stake in the company. The logic is that an edge in pricing could help Spreadtrum better compete with Taiwan-based MediaTek and US-based Qualcomm.Chen responded to the suggestion by pointing out that such a statement is not really an argument. It's merely speculation. Moreover, Chen noted that Spreadtrum's cheapest products currently sell in the US$3-4 range, and he doesn't see much chance for the price to be reduced significantly, with subsidies or without.While it is true that BOM costs are always falling, Lin and Chen agreed that component makers are much more likely to be squeezed in the higher-end segments, where they have margins. At the bottom of the market, the component makers are not really making any money. As a long term strategy for the low-end of the market, they would much prefer to provide improved specs at the same price rather than cut prices, Lin explained, while adding that it is unlikely that the BOM would drop much further at the bottom end of the market, as it is already close to US$20. Therefore, while prices may drop a little, Digitimes Research does not expect prices to drop all that much in the near future.Another perspective was offered by Digitimes Research Analyst Jason Yang, who stated that if there is any component that could influence the low-end smartphone BOM at this point, it was the touch panel, not the application processor. Yang indicated that currently the touch panel module, with LCD display, accounts for the largest portion of the BOM, at around US$7-8 for the cheapest modules. Yang did state that he believes the price may drop this year, but not enough to bring the overall BOM cost of the cheapest phones to below US$20.So, if ultimately the announcement was all about Mozilla driving the launch of a US$25 smartphone, Lin doubts that this will happen this year or anytime soon. Based on the current cost structure, Lin believes Firefox models priced in the US$60-80 are more likely to appear in 2014. Of course, users may be able to find spectacular deals and price cuts, but such a situation would more likely be inventory clearance or something similar, not a mainstream price point.However, if this announcement is not about Mozilla driving the market to low-cost smartphones and is more about a trend where emerging markets will become flooded with cheap smartphones, then it should be noted that this is a process that is already underway.Currently in China, entry-level smartphones - mostly white-box but even some brands - are already selling in the US$50 range. And these smartphones are not just being shipped to the domestic market. China vendors exported about 30% of their smartphones in 2013 and that proportion is forecast to rise in 2014. According to Digitimes Research data tracking smartphone shipments by vendor and the related market breakdown, the non top-10 segment (which is dominated by Greater China vendors and white-box players) accounted for 12% of global smartphone shipments in 2012, 21% of the global market in 2013, and Digitimes Research forecasts the share will rise to 25.6% in 2014.So the flow of cheap smartphones from China going to emerging markets has already started and the shipments are steadily increasing, it's just that the devices cost a bit more than US$25 and almost all of them feature Android as the OS.

Pay TV subscriptions in the US reached 84.5 million in the third quarter of 2013, with cable TV users making up 47.2%, while 40.3% were direct broadcast satellite users ,and 12.5% IPTV users. Since 2011, the number of cable TV users has dropped by 2.5 million while companies such as Verizon and AT&T have seen their IPTV users increase about 13% and 21% a year, respectively, indicating that the market is not declining but rather customer demand is changing, according to Digitimes Research.Companies such as Comcast and Time Warner meanwhile are continuing to see success in their services through service differentiation strategies rather than solely focusing on user amounts, added Digitimes Research.