Since January 2011, three events have occurred in China which have led some upstream component suppliers to believe there is a conspiracy by the China government to try to suppress Apple's supply chain. The moves are said to be counter attacks which are part of China's trade war with the US.In January, five non-governmental organizations (NGOs) in China published reports accusing Apple's supply chain partners in China of creating massive pollution in the country. This was followed up at the end of August, when the NGOs published a pollution map of China, mapping the upstream supply firms and linking them to claims of huge environmental pollution issues in the surrounding regions. The writers of the reports cited Apple's own 2011 supply partner responsibility report to highlight the firm control Apple maintains over its supply chain, in ordered to emphasize that Apple must take ultimate responsibility for any excess pollution caused by its upstream partners.On October 15, China Central Television (CCTV), a government-backed media outlet, broadcast a documentary titled "Another Side of Apple" (title translated from Chinese), which citied environmental organizations linking 27 of Apple's upstream suppliers including Foxconn Electronics (Hon Hai Precision Industry), Compeq and Unimicron with environmental pollution.After the TV program was broadcast, other media outlets in China jumped on the topic leading to widespread coverage of the issues and allegations.It is believed the controversy following the documentary's broadcast directly triggered the third event to hit Apple's supply chain, as on October 17, just days after the original air-date, Apple's upstream chassis supplier Catcher Technology was ordered by the Suzhou local government to halt production at its facilities in the district due to complaints by local residents that the plants were releasing noxious gasses into the surrounding area. The incident has generated massive speculation across the IT market in China, with some news organizations even speculating that other upstream suppliers, including Foxconn, TPK and Wintek, may also be forced to suspend operations in other parts of China.The incident involving Catcher (which has been dubbed "The Poison Apple") has significantly affected the stock prices of Apple's other upstream suppliers including Largan Precision, Genius Electronic Optical and TPK, to the extent that Taiwan's Minister of Economic Affairs, Shih Yen-Shiang, has needed to publicly downplay Catcher's troubles as an isolated incident.Speculation in the industry has linked the Catcher incident with the recent trade war between the US and China, rousing suspicions that the orders to disrupt Catcher's business came from the central government and were motived out of retaliation against the US government. Taiwan's ODMs are pawns caught in the cross-fire between the two economic giants.It is alleged that the China government has also had a hand in the disruption US-based Wal-Mart has been facing to its operations in China.

Taipei, Taiwan, October 13, 2011 - With China expecting slower growth in regional solar markets such as Europe over the next few years, the government has set out to increase domestic demand during its 12th Five Year Plan period (2011-2015), and installed solar PV system capacity is targeted to hit 10GWp by 2015, according to a recent Digitimes Research Special Report titled "The role of PV in China's energy policy through 2015." China is already the world's largest manufacturing center for solar power equipment. According to figures from Digitimes Research, production of silicon wafers and crystalline silicon (c-Si) solar cells will reach 14.8GWp and 15.1GWp respectively in 2011, accounting for more than 50% of total global production. Five of the world's ten largest solar cell factories are located in China, and China's GCL and Suntech are the two biggest players in the global PV silicon wafer and solar cell industries. As the cost of solar power systems continues to fall year on year, China-based manufacturers' market share will continue to increase, the report explains. China's solar power market has grown rapidly since taking off in 2009. In 2010, the newly added capacity of solar PV systems reached 522MWp, and will likely break through the 1.5GWp barrier in 2011. China's Development Plan for New Energy Source Industries gives China's targets for total installed capacity in solar PV systems as 10GWp by 2015, rising to 50GWp by 2020. The role of PV in China's energy policy through 2015 About DIGITIMES Research DIGITIMES 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)

Greater China is expected to account for 65.3% of the world's small- to medium-size TFT LCD panel and cell shipments in 2011, gaining 4.1 percentage points on-year, according to the latest data collected by Digitimes Research. China's enlarging handheld device market and international buyers' increased orders for Taiwan makers have driven up shipments to the region.Korean panel makers' purchase of LCD cells from fellow suppliers in the region is also on the rise, leading to Greater China's increased share of shipments.Demand for small- to medium-size TFT LCD panels began seeing significant growth in 2006 when mid-range feature phones began switching from STN LCD displays to TFT LCD and demand from China's white-box handset market surged.In China, demand for small- to medium-size panels has been growing fast from portable navigation devices (PND), portable media players, and others.

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.