Global notebook shipments are expected to drop 3.2% sequentially and 13.4% on year in the fourth quarter as brand vendors' new notebook models featuring entry-level/mid-range Haswell processors and Windows 8.1, were mostly shipped in September.China's National Day holidays, which reduced the available working days in October, and ODMs' decisions to shift some of their orders for October to September to satisfy demand for the holidays also impacted global fourth-quarter notebook shipments.Facing Lenovo raising its in-house notebook production rate to about 33%, up 10pp from the third quarter, Taiwan's notebook shipments are expected to drop 5.9% sequentially and 18.2% on year to only around 35 million units in the fourth quarter, Digitimes Research's figures showed.Hewlett-Packard (HP), the largest brand vendor in the third quarter, will be surpassed by Lenovo in the fourth quarter as its shipment growth will decelerate after having shipped strongly to the education market in the third quarter. Acer, Asustek Computer and Samsung Electronics will see their four-quarter shipments drop slightly on quarter. Acer and Asustek will mainly push entry-level large-size notebooks without touchscreen support for the notebook market, while Samsung has already abandoned the strategy of pushing entry-level models.Apple will focus on pushing its MacBook Pros in the fourth quarter and stop shipping previous-generation models in November. Apple is expected to ship at least three million MacBook Pros per quarter.Inventec will see a double-digit percentage shipment drop sequentially in the fourth quarter due to HP's dramatic order decline. Quanta Computer will also be impacted by HP's weak shipments, but Apple's orders are expected to help the company's fourth-quarter shipments stay flat on quarter.Compal Electronics and Pegatron Technology will both see sequential drops of less than 5% in the fourth quarter. Compal's orders from major clients will allow the company to offset completed orders from Asustek and Samsung, while Toshiba's increased orders will help Pegatron withstand Asustek's decreased orders.Despite Asustek's order increase, Wistron will still see a sequential drop of over 5% in fourth-quarter notebook shipments due to Lenovo's sharp drop in orders.

After researching existing smartwatch players' product strategies and technology maturity, Digitimes Research believes that the competition in the smartwatch industry in the next three years will mainly be between standalone and accessory models. The standalone models, which can operate independently without a smartphone, have better specifications and also higher prices, while the accessory models, which rely on smartphones for most of their operations, have inferior specifications and lower prices.For the smartwatch industry's future outlook, Digitimes Research believes the entry of Apple's "iWatch" will be the biggest driver to boost the market's overall shipments. If the iWatch is able to show up in the second half of 2014, smartwatch annual shipments should greatly benefit, while ASPs will also decline more slowly.Apple's strong marketing is expected to help stimulate overall demand for smartwatches, while the US vendor's brand power, which allows the company to price its products higher than the average, will help reduce the rate of decline of smartwatch ASPs.If Apple releases its iWatch in the second half of 2014, smartwatch annual shipments are estimated at 5.92 million units for 2014, 22.79 million for 2015 and 75.66 million for 2016. Without the iWatch, the estimated shipment volumes will reduce to 1.82 million, 6.19 million and 24.15 million from 2014-2016, respectively.

Taiwan's notebook shipments grew only 2.5% sequentially, and dropped 8.6% on year in the third quarter despite the fact that notebook ODMs have seen better-than-expected orders in September thanks to the launch of new products and demand from China's National Day holidays.Taiwan's proportion of global notebook shipments rose from 84.9% in the second quarter to 86.2% in the third because Samsung Electronics, which has most of its notebooks produced in house, significantly cut its entry-level model shipments and Lenovo failed to raise its in-house production rate as fast as expected.Hewlett-Packard (HP) had the strongest sequential shipment growth among first-tier vendors at 30% in the third quarter. HP also returned as the largest notebook vendor in the quarter with a market share of 20%, surpassing Lenovo's 18.9% thanks to orders from India's education market. Apple saw 20% sequential growth in the third quarter due to the release of its new MacBook Air and Pro.Samsung had a sequential shipment drop of over 30%, Asustek Computer around 20% and Acer 15% in the third quarter. Samsung's decline was because the company has turned its business strategy back to profit-oriented, and terminated most entry-level models planned for the second half. Acer and Asustek's drops were because the two have turned their focuses back to entry-level non-touchscreen models seeking to stabilize their performances, Digitimes Research figures showed.Among notebook ODMs, Inventec had an over 20% sequential shipment growth in the third quarter thanks to HP's strong orders. Impacted by Toshiba and Asustek's decreased orders, Pegatron Technology saw its shipments decline more than 10% sequentially in the third quarter.

The total production capacity of China-based TFT-LCD panel makers, including two 8.5G plants established by Samsung Display and LG Display, as a percentage of global capacity will rise from 13.4% in 2013 to 23.7% in 2016, according to Digitimes Research.China's annual production capacity of large-size TFT-LCD panels will increase from 21.599 million square meters in 2013 to 39.053 million square meters in 2016, with the corresponding global share rising 12.2% to 21%. For small- to medium-size panels, China's annual production capacity will expand from 5.597 million square meters in 2013 to 14.951 million square meters in 2016, with global share to rise from 21.2% to 35.7%, Digitimes Research indicated.As imports will account for as high as 69% of China-based LCD TV vendors' total demand for TV panels in 2013, China-based panel makers have been expanding or will expand production capacities, helped by government policies aimed at hiking the local sufficiency ratio. For TV panels, the target local sufficiency ratio for 2016 is 60%.

The digital home industry saw three major events in September 2013: Toshiba unveiled plans to reorganize its LCD TV business, Netflix entered the pay-TV service sector and the HDMI 2.0 was released.Toshiba is restructuring its LCD TV business that has suffered serious losses. The Japan-based vendor will close down two factories outside the country and put more emphasis on markets with potentials. The company will also simplify its product lines to avoid overinvestment.Digitimes Research believes that after Toshiba closes down its oversea factories, the company will expand its outsourcing. As a result, Toshiba's LCD TV orders to Taiwan makers may grow significantly in 2014. However since the vendor also announced plans to simplify its existing ODM partnerships, some of its existing suppliers in Taiwan may lose orders.Netflix's over-the-top (OTT) service will join the cable TV platform in the UK. UK Pay-TV service providers are changing their conventional business operation which has focused only on in-house VOD services. Now pay-TV service providers have started trying to increase their competitiveness by offering OTT content.The HDMI 2.0 has a bandwidth of 18Gps, allowing the transmission of ultra HD-quality images under 60Hz frequencies. The new technology is expected to stimulate related service providers' interest in providing ultra HD content. In 2014, ultra HD LCD TVs will gradually adopt the HDMI 2.0 as a standard specification, Digitimes Research believes.

Despite accepting an acquisition offer from its shareholder Fairfax Financial, the prospects of BlackBerry remain bleak as the hardware specifications and operating platforms of its smartphones are still lagging behind prevailing market trends, according to Digitimes Research.Meanwhile, Microsoft's acquisition of Nokia's Device and Services unit will help the software vendor fulfill its goal of integrating its operating systems with hardware devices, and the planned integration is likely to push Windows Phone into a closed mobile operating system.Sales of Apple's new models, the iPhone 5s and iPhone 5c, remain brisk even though Apple has maintained its policy of introducing new models with four-inch displays. But Apple is believed to still count on sales of old models in emerging markets since the price of the iPhone 5c, which is US$100 less than that of the iPhone 5s, is still too high for consumers in emerging markets, commented Digitimes Research.

Amazon recently announced three third-generation Kindle Fire tablets, one 8.9-inch and two 7-inch models. In addition to new hardware, Amazon also updated many of its apps and services, seeking to raise the tablets' overall value through richer content and services. Amazon is no long pushing price drops and is instead maintaining its core market through integrating appropriate hardware specifications with applications.Amazon's re-designed 7-inch Kindle Fire HD is selling for US$139, targeting the 7-inch entry-level tablet market. Although the tablet has no advantages against other similar-specification or white-box products in terms of hardware, Amazon's services will still allow it to see good demand.Amazon's 7-inch Kindle Fire HDX, which features a price point and specifications similar to the second-generation Nexus 7, and 8.9-inch Kindle Fire HDX 8.9, targeting to compete against iPad, are both meant to enhance the user experience, and are not for price competition.Compared to other similar-specification tablets from competitors, Amazon's new Kindle Fire tablets enjoy about US$20-30 additional value. Amazon's decision to halt the production of its previous-generation Kindle Fire instead of offering a price cut is partly due to the possibility that the old tablet does not support the new operating system. The decision also shows that Amazon has not interest in the sub-US$100 tablet market.Digitimes Research expects Amazon's Mayday service to become a tool that provides simple supporting services to average users in the short term and will expand to become an online customer service in the long term. Amazon has also been addressing complaints such as lack of apps and lack of differentiated digital content.Compared to its low-price strategy in the past few years, Amazon is no longer competing against other brand vendors directly over hardware, and is instead focusing on improving specifications and strengthening services to differentiate from others and increase its value. Although the new strategy is unlikely to help expand Amazon's user base in the short term, customer satisfaction is expected to bring long-term benefits to the brand vendor.

While China Mobile has successfully promoted TD-LTE - a China-developed version of LTE (Long Term Evolution) - as an international standard, TD-LTE has lagged behind LTE FDD (frequency division multiplexing) in global development, according to Digitimes Research.As of the end of the second quarter of 2013, there were 194 LTE FDD mobile telecom carriers with more than 120 million subscribers in total around the world, but only 18 TD-LTE operators with fewer than four million subscribers, Digitimes Research cited statistics by Global mobile Suppliers Association (GSA) as indicating.A total of 948 models of LTE-enabled terminal devices were available as of the end of the second quarter, including 316 smartphones, as well as a number of routers and dongles.The US was the largest LTE market accounting for 53% of the global total of LTE subscribers, followed by South Korea (22%) and Japan (15%). Verizon Wireless was the globally largest LTE operator, followed by NTT DoCoMo, AT&T, SK Telecom and Sprint Nextel.

The average retail prices for LED light bulbs equivalent to 60W incandescent bulbs in the US, Europe, Japan and South Korea declined by 1.5-3.8% on month in September, Digitimes Research has found.September average retail price for 40W equivalent LED light bulbs stood at US$21 in the US market, down on month by 0.5%; at EUR14.5 (US$19.50) in Europe, up 3.6%; at JPY1,774 (US$18.20) in Japan, down 1.6%; and at KRW14,698 (US$13.70) in South Korea, up 0.3%, Digitimes Research indicated.For 60W equivalent LED light bulbs, September average retail price was US$26.70 in the US, slipping sequentially by 1.5%; EUR17.70 in Europe, down 3.8%; JPY2,564 in Japan, down 3.1%; and KRW14,941 in South Korea, down 3.2%.In the China market, the average retail prices for 7W and 9W LED light bulbs in September were, respectively, CNY43 (US$7, unchanged sequentially) and CNY55.6 (up 0.4%).Among international vendors, Osram's 40W and 60W equivalent bulbs for sale in South Korea had the highest lumen-price ratio of 69.2lm/US$ and 111.5lm/US$ respectively. In terms of average luminous efficiency, Sharp's 40W equivalent bulbs for sale in Japan ranked first with 75.6lm/W and Toshiba's 60W equivalent for sale in Japan was number one at 94.2lm/W.

Global top-five notebook brand vendors and top-three ODMs enjoyed on-month shipment growths of 13% and 9% in September, respectively. Among first-tier vendors, Hewlett-Packard (HP), Acer and Dell achieved better performance than the others. HP shipped 3.5 million notebooks in September, while Acer shipped over 1.5 million units due to the release of its new entry-level non-touchscreen notebooks. Dell achieved a double-digit percentage growth on month in September with the launch of new products.In September, Inventec and Wistron had better performance than their fellow competitors, enjoying on-month growth between 15-20%. Inventec's growth was mainly due to increased orders from HP, while Wistron benefited from orders from Dell and Lenovo. Compal had an on-month shipment growth of around 10% in September, but Pegatron saw its notebook shipments drop below one million units due to Asustek's orders.Intel's announcement of a series of entry-level products during the Intel Developer Forum (IDF) and Compal's decision to acquire smartphone ODM Compal Communications were two major events in September.Intel is expected to significantly reduce its Bay Trail processor prices to compete for more share in the mobile device market. Intel also announced that the IT market will be able to see US$99-199 Intel-based tablets, sub-US$350 2-in-1 devices and US$300 Haswell-based Chromebooks in the future, showing its conviction to breaking through bottlenecks.Although Taiwan ODMs are unlikely to be able to achieve further changes in the mobile device market in 2013, events such as Apple's strategy of separating its orders among several ODMs, Microsoft's acquisition of Nokia's mobile business, and HTC's difficulties created by its supply chain, are expected to provide some opportunities for ODMs.Digitimes Research believes that Compal's acquisition of Compal Communications will accelerate the evolution of the mobile device manufacturing industry.