While QNX is currently used in the BlackBerry PlayBook tablet and is scheduled to be used in the company's smartphones in the future, replacing the BlackBerry OS to become Research in Motion's (RIM) mainstream platform, the company's current dismal performance is casting a cloud over the fate of the OS.RIM recently announced it shipped only 10.6 million BlackBerry smartphones in the second quarter, compared with expected shipments of 11.9 million, while tablet shipments were barely half the expected amount. The company shipped only 200,000 Playbook tablets, compared to expectations of 400,000-600,000, and the total represented a drop from 500,000 in the company's first quarter (from March to May).RIM's stumbles in the market are compounded by its high expectations. About 1.5 million BlackBerry Playbooks were manufactured through September, which means RIM still has nearly 800,000 units of inventory on hand, stated Digitimes Research analyst James Wang. There have already been reports of layoffs at both the vendor (2,000 jobs) and its ODM partner Quanta Computer (2,000 jobs), and it is unlikely that manufacturing of the product will continue through the fourth quarter, said Wang, while adding there has been no word about any next-generation successor of the product.QNX is supposed to replace the BlackBerry OS and become RIM's mainstream platform in the future, but so far the market has not been welcoming. Moreover, a quick look at the market landscape shows that it is becoming increasingly hard for niche operating systems to succeed under the fierce competition brought on by Android and iOS.Wang is the author of the Digitimes Research Special Report, "Expectations for the 2H 2011 tablet market."

When Apple sued HTC last year claiming the Taiwan smartphone vendor had violated twenty of its patents, Google noted that it would stand behind its Android OS and its hardware partners. With HTC now amending its own suit against Apple to include additional violations of patents it recently obtained from Google, it appears that Google can also walk the walk and is willing to show its loyalty to its partnersAccording to media reports, HTC has added nine more patents to the list of patents it claims Apple has violated, with the additional patents acquired from Google only last week. According to Reuters, HTC has also filed an additional suit against Apple alleging patent violations in iOS devices and Mac computers.Commenting on the news, Digitimes Research analyst James Wang noted that this was not simply an action in a proxy war against Apple but that a show of loyalty was perhaps needed. Wang explained that after its recent purchase of Motorola, Google needed to show its partners could trust the company. In addition, with HTC launching the HTC Salsa and HTC Chacha with Google's rival, Facebook, Google was able to make a show of good faith by helping on the patent claim and perhaps bring the second largest Android smartphone maker back to the Google fold.However, it was also about showing its loyal partners that Google has their back against Apple and that is something that vendors in China will be watching very closely as they move forward. In the China market, companies including Baidu and Alibaba have announced their own mobile operating systems, called Yi and Aliyun, respectively, that are based on Android but that do not have Google standing behind them in full support.Baidu is especially likely to be utilized by vendors looking for a free open OS strategy in China, but worries remain that vendors will be under attack for patent infringement with Apple and Microsoft, Wang pointed out. Google is showing its Android licensees that they will be protected by Google if they stick to the official version of Android, but perhaps not by Baidu and Alibaba if they adopt their respective platforms.Wang is the author of the Digitimes Research Special Report, "Expectations for the 2H 2011 tablet market."

Hewlett Packard's (HP) plan to launch "one last run" of TouchPad tablets comes only about a week after the vendor stated it would no longer be producing webOS devices. While the quick reversal can be explained by HP's need to clear out inventory in its manufacturing supply chain, the strong sales of the TouchPad once HP lowered the price to US$99 shows that HP is probably not too worried it will get stuck with product once it receives shipments from its suppliers.According to Digitimes, HP originally released orders for 900,000-1.1 million 9.7-inch TouchPads to Inventec and has taken delivery of 800,000-900,000 units. The shipped TouchPads were nearly all sold out after the vendor slashed the tablet's price to US$99. In an effort to mend its relationship with component suppliers and channel operators, HP decided to help them clear out inventories, including touch panels, batteries and chassis, equivalent to 100,000-200,000 units of 9.7-inch TouchPads.HP sold about 400,000 TouchPads in the two days after it slashed the price from US$499 to US$99, up from only 25,000 units in total at Bestbuy before August 17. Digitimes Research analyst James Wang pointed out that the lesson for the tablet market is that vendors can compete with Apple as long as product quality is good enough and the price is incredibly cheap.While the future of webOS remains up in the air, Wang believes that among potential buyers of WebOS, a list which includes vendors as varied as Apple, Facebook, Google, HTC, Microsoft, RIM, Samsung, and Sony Ericsson, only Facebook has any incentive to use webOS to build a platform that has potential to expand its market share. The idea would be to basically give away webOS at no charge, like Google does with Android.Other potential buyers would have more interest in the webOS patent portfolio rather than building a platform.Wang is the author of the Digitimes Research Special Report, "Expectations for the 2H 2011 tablet market."

Research In Motion (RIM) recently provided an inside look at its BBM Music app on its corporate blog, and while impressive, Digitimes Research believes the app further highlights the issues RIM has balancing its smartphone business with its interest in becoming a player in the tablet market, as highlighted in the recent Digitimes Research Special Report "Expectations for the 2H 2011 tablet market."According to RIM, BBM Music will be a BBM-connected social music service that allows BlackBerry users to share and discover music through a BBM contact. Customers will be able to build a music profile (from a catalog of millions of tracks), invite BBM contacts to join and then gain access to the music shared on the social network. The app is built using the same BBM SDKs used by the BlackBerry developer community and is expected to be available later this year for a monthly subscription fee of US$4.99.Digitimes Research believes BBM Music is a brilliant step by RIM to defend its current install base, as its competitors have yet to combine social features with their cloud based music services. However, BBM Music again highlighted the compatibility problem between BlackBerry OS on smartphones and QNX on tablets, and creates no help for its tablet sales this year.Digitimes Research analyst James Wang estimates RIM will ship two million PlayBook tablets in 2011.Wang is the author of the Digitimes Research Special Report, "Expectations for the 2H 2011 tablet market."

It is learned from China Mobile that TD mobile devices are growing more competitive and are more accepted by consumers. In future, the TD market will be further expanded. As of July 2011, there were 630 TD devices, 317 of which were mobile phones.Wu Weining, general manager of China Mobile terminal sales company, told reporters that the major terminal manufacturers at home and abroad would launch a variety of TD devices including the Samsung S2, the Moto 870, theNokia T7, the HTC Z710t, the BlackBerry 9788 in the second half of this year, and the new wave of devices is bound to create momentum in the market.With users paying more attention to mobile computing, such smart devices have become an important competitive factor. After experiencing many difficulties, TD-SCDMA, China's first 3G wireless communications international standards with homegrown intellectual property rights, has entered a golden era. The mobile computing market now features "three pillars."To cooperate with device manufacturersTD faced a bumpy road with only 8 initial devices. Fortunately, it now has entered an unprecedented "Golden Age."In 2008, China Mobile invested 600 million yuan in TD device R&D to encourage mobile phone manufacturers to produce TD handsets for different consumer groups, and this move achieved immediate results.According to statistics, in the first seven months of this year, more than 15.235 million units of TD devices have been sold nationwide and the number of users has exceeded 35 million. The figure will continue to grow in the second half of this year.The support of TD mobile phone manufacturers including Nokia, Samsung, LG, Motorola, HTC, Sony Ericsson, RIM, Lenovo, Yulong, ZTE, Huawei and other mainstream brands manufacturers has led to the growth.The Secretary General of the TD technology forum, Shi Guang, said that at present, China has 900 million mobile phone users and China Mobile accounts for 600 million. As users shift from 2G to 3G, TD devices have very good market prospects, an important reason why China Mobile can promote the rapid development of TD.The Chinese market will become an important battleground for global mobile phone manufacturers.Meng Pu, senior vice president of Motorola Mobile, said that with the energetic efforts of China Mobile, the market potential of TD cannot be ignored by any mobile phone manufacturers. He added that Motorola is pleased to cooperate with China Mobile.Motorola has released two TD mobile phones, the MT620 and MT870, sucessively, in the second half of this year, and Samsung will launch the world's thinnest dual-core smart phone, the GALAXY S2, later this month.The Blade U880 was the TD star launched by ZTE in June this year. The smartphone's monthly shipments have exceeded 200,000 units. ZTE's general manager of TD terminals department Wang Yong also expressed that the TD market has entered a flourishing period.To strengthen TD ChipsIn the beginning, TD devices were very lagging in performance and quality, and the TD-SCDMA standard was also only in the Chinese market. At that time, most international chip manufacturers were suspicious of China's standards and reluctant to invest in R&D. Dr. Li Tingwei, General Manager of Marvell China Business, pointed out, "China put forward its own 3G standard, which had a huge impact on the entire industry. Some chip manufacturers hesitate to invest in it as they found that there was a great conflict of interests between TD-SCDMA and other technology they strongly supported.However, chip support was crucial for the development of TD-SCDMA technology.After a great deal of research and effort, TD devices now have reached advanced levels in communication capabilities, stability, integration, power consumption, and technology. As of May 2011, TD chip shipments have exceeded 45 million units."Compared to WCDMA technology, TD has strong prospects and benefits. TD chips use TDD technology, consuming less power than WCDMA chips. Meanwhile, TD mobile phones are much cheaper than WCDMA devices," Ivan Lee, the global VP of Marvell R&D, said.TD-chip technology has improved significantly, and the world's thinnest handsets will also be listed.Steady progress of TD industryThe general industry consensus is that TD-SCDMA development largely depends on the devices.Vice President of China Mobile Li Huidi said that most operators regarded the device manufacturers as an important starting point in developing market and improving efficiency.Li also said that the current TD-SCDMA industry chain is still not perfect. On the one hand, a proper testing system has not yet been created; on the other hand, the product experience and marketing capabilities of TD devices need to be strengthened.2011 is bound to be a year of rapid development for TD-SCDMA devices. China Mobile's TD network has gradually improved, users have gained a deeper understanding, and the 3G industry chain has received the support of a variety of chips and devices, playing a significant role in enhancing the market competitiveness of TD devices.However, it does not mean that the TD product chain has become fully mature. Yang Hua, Secretary General of TD Industry Alliance, said, "It is undeniable that more work lies ahead. The importance of TD-SCDMA, as China's first homegrown international telecommunications standard, is self-evident.""In the future, China Mobile will continue its win-win cooperation to further enhance the confidence of the industrial chain, to actively promote the joint development of the TD industry, to strengthen the coverage of the TD network, to optimize network performance, and to enrich product resources to meet market needs," said Li."TD-SCDMA terminals will have a very strong market prospects."

A recent article from the state-run China Daily shows how the China government is touting the benefits of investing in the Chongqing economic zones, with the article basically providing a laundry list of the tax incentives and subsidies for companies investing in the region. It comes as no surprise that China is marketing the region through the state-run media, and a recent Digitimes Research report outlines the strategies China's government is using to encourage development of the electronics manufacturing bases in China's central and western regions.According to the China Daily article, companies that invest in the Chongqing Zone qualify for a favorable tax rate of 15%, compared to the standard 25%, while manufacturing and IT companies also qualify for land incentives, such as subsidies for land purchases, factories. The local government also offers a subsidy (equivalent to 25% of the annual interest rate) on bank loans. Hi-tech firms can also qualify for a grant of up to CNY3 million (US$469,000) after a year of operation.According to Digitimes Research, China's recently published 12th Five Year Plan clearly states the government's intention to address the neglect of the central and western regions, while expanding domestic markets and reforming the country's existing industrial strategy.Government initiatives are not limited to the tax breaks and subsidies listed in the article. Digitimes Research outlines how transport infrastructure is gradually being put in place and that central and western regions will be the most important manufacturing sites for the coming decade. The electronics industry has by no means been excluded from this trend, with some major notebook manufacturers already sourcing a significant proportion of their shipments from Chongqing and Chengdu, the major cities in the central and western regions.Moreover, the pace of development in these areas will only increase as time goes by and the regions are expected to claim three of China's 10 core cities for the ICT industry for the next 10 years.

Although Samsung Electronics has faced severe setbacks in its attempts to market its Galaxy Tab 10.1 tablet in Europe and Australia, Digitimes Research still expects the company to ship more than five million tablets in 2011.A German court has granted Apple an injunction against Samsung against distributing the Galaxy Tab 10.1 in the European Union except for the Netherlands, according to FOSS patents. The blog noted that the "preliminary injunction is all about a design-related intellectual property right, not about hardware or software patents." A separate lawsuit has also been filed in The Netherlands.The news comes one week after reports that pressure from Apple forced Samsung to delay the launch of the Galaxy Tab 10.1 in Australia.However, Digitimes Research analyst James Wang believes that these are just minor setbacks for Samsung and he does not think Digitimes Research will adjust its 2011 forecast for the year. Samsung should resolve this issue with Apple in the next few months and in the mean time, the vendor will focus its marketing efforts in other markets. Digitimes Research expects Samsung to trail only Apple in tablet shipments this year.Reuters is also reporting that Samsung's plans to launch its tablet in India and Australia would not be effected by the news out of Germany.

During China's 12th Five Year Plan (FYP), the State Council has set out six policies to further the development of the software and semiconductor industries: strengthening investment and financing, expanding support for research and development, implementing tax incentives, improving measures to train and attract talent, strict enforcement of protections for IP rights, and market regulation to maintain order, says a new DIGITIMES Research Special Report titled "Expectations for China's semiconductor industry during the 12th Five Year Plan."While the local semiconductor industry has received long-term support as one of China's strategic industries since the 9th Five Year Plan (FYP) in 1996, it was expected to receive less attention when it was specifically included in the seven new strategic industries in State Council Rule 32 (2010) only as one part of the infrastructure for the next generation IT industry. This was a warning sign that its importance to China's development and economic growth may be declining. However, the Executive Meeting of the State Council convened on January 12, 2011 concluded that the software and semiconductor industries were new national strategic industries, as well as vital foundations for the creation of an information-based society in China, the report explains.Analyzing the various measures in the six policy areas, DIGITIMES Research finds that all the measures relating to fund raising for semiconductor firms, including the direct investment of funds by the central government, support for major state projects, and tax breaks on business tax and corporate income tax, involve direct funding or tax support from the government, or even the creation of venture capital funds for investing in the semiconductor industry and promoting mergers between companies; it is also evident that the government is investing its own resources through both direct and indirect methods. All this shows that promoting mergers between firms in the China semiconductor industry is a key direction for government policy.For more information about the report, visit Digitimes Research. State Council's six major measures to develop the software and semiconductor industries, announced on January 12, 2011 Policy Details Strengthen investment fund raising support (1) Investment from central government budgets in eligible semiconductor firms and technology R&D (2) Support corporate restructuring and mergers (3) Establish equity or venture capital investment funds (4) Promote the use of IP rights and other intangible assets as loan collateral in order to expand financing channels for companies Strengthen support for research and development (1) Use major national projects to support key technology R&D for the semiconductor industry (2) Set up strategic alliances involving cooperation between academia and industry Put tax incentives in place (1) Give business tax and corporate income tax incentives to eligible businesses Enhance measures to develop and recruit talent (1) Improve the bonus system for researchers (2) Encourage eligible higher education institutions and semiconductor firms to jointly establish semiconductor research institutions (3) Expedite the recruitment of high-level talent from overseas Strictly implement measures to protect IP rights (1) Crack down on all forms of IP violations in accordance with the law (2) Support companies that submit patent applications overseas in accordance with the law Strengthen regulations to maintain market order (1) Strengthen anti-monopoly measures (2) Improve import/export support policies Source: Digitimes Research, July 2011About 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 business as well. Market intelligence and analysis is provided to more than 1,000 corporate customers worldwide. Research and consulting services cover a full range of industries, including information and communications technology (ICT), flat panel display (FPD), renewable energy and semiconductor design and manufacturing.ContactsMichael McManus (Michael.mcmanus@digitimes.com)Shannen Yang (Shannen.yang@digitmes.com)

Taipei, Taiwan, August 4, 2011 – This year, approximately 65.2 million tablets will be shipped from manufacturers to major brand vendors. While Apple is expected to continue dominating the market with 40 million shipments and a 61% share for its iPad device, other vendors will provide consumers with more choice for operating system, product features and screen size, according to a recent DIGITIMES Research Special Report titled "Expectations for the 2H 2011 tablet market."Tablet shipments were up more than 420% from one year earlier in the first half of 2010 and the market will continue with its positive momentum in the second half of the year, with shipments expected to be up more than 150% from one earlier. Apple's iPad shipments in the second half of 2011 will reach 25.5 million units, up 76% compared to the first half of the year.While Apple remains the dominant player with its iPad line, other major vendors have been looking to gain traction in this booming market. The non-iPad group's shipments in the second half are expected to reach 15.65 million units, up 65% compared to the first half of the year and accounting for 39% of total shipments, the report stated.Outside of the iPad, all eyes will be Android develop mens, as the platform has been extending its reach in the tablet sector even more rapidly than it did in the smartphone sector, with a penetration rate reaching more than 30%.In terms of core application processors, Apple again will dominate that market in 2011. And while Nvidia's Tegra series has been widely supported by brands other than Apple, shipment figures from Digitimes Research suggest that Texas Instruments (TI) is likely to be the firm to beat out for second place in the market.However, tablet shipments in the second half of 2011 still face uncertainties and the key quarter for 2011 will be the fourth quarter, as a number of brand vendors have yet to firm up their strategies for the last quarter of the year.The DIGITIMES Research Special Report "Expectations for the 2H 2011 tablet market" provides a breakdown of expected tablet shipments by vendor for the second half of the year, as well as providing analysis of the semiconductor, software, processor technology and Taiwan manufacturing ecosystem shaping the market.Click here for more information about the report.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 business as well. Market intelligence and analysis is provided to more than 1,000 corporate customers worldwide. Research and consulting services cover a full range of industries, including information and communications technology (ICT), flat panel display (FPD), renewable energy and semiconductor design and manufacturing.Contacts:Michael McManus (Michael.mcmanus@digitimes.com)Shannen Yang (Shannen.yang@digitmes.com)

Shipments of small- to medium-size TFT LCD panels by Taiwan makers are expected to top 340 million units in the third quarter of 2011, showing a sequential growth of 4.2%, the lowest on-quarter growth for the third quarter since 2005, according to data collected by Digitimes Research.Since the fourth quarter is traditionally an off-peak season for panel makers, Taiwan's shipments of small- to medium-size flat panels are likely to drop to 320 million units in the fourth quarter, down a 4.4% from a year earlier.For 2011, shipments of small- to medium-size flat panels by Taiwan makers will post an on-year growth of 9.6%, the first annual growth rate of below 10% since 2005.