Daniel Shen, Taipei; Steve Shen, DIGITIMES

Taiwan-based wearable device makers, including Mitac International, Papago, H o l u x Te c h n o l o g y a n d G l o b a l S a t Worldcom, have recently shifted their focus to develop smartwatches instead of smart bracelets as China-based rivals have strengthened their respective bracelet product lines, which has resulted in fierce price competition, according to sources in Taiwan’ s supply chain.

Differences among smart bracelets have become narrow. Bracelets perform mainly as a pedometer, sleep recorder and smart alarm clock, and prices range from US$50-100. However, the release of Xiaomi bracelets has triggered a steep fall in prices to as low as US$20-30.

To avoid cut-throat competition with

China-based suppliers, Taiwan’s makers have focused on GPS-enabled sports watches and sports bracelets, said the sources, adding that most sports watches integrate optical heart rate monitoring func t iona l i ty, and can a l so l ink to smartphones for notifications of incoming calls, e-mails and SMS messages.

While top-tier smartphone vendors including Apple, Samsung and Asustek Computer target the high-end smartwatch segment which stresses industrial design, Taiwan-based suppliers have paid more attention to sports watches with GPS technology, commented the sources.

Currently, standard GPS-enabled sports watches are priced between US$100-150, and those with optical heart rate monitors are available at US$150-300. However, since Asustek has set its new ZenWatch series products below US$200, the US$100-

200 segment is likely to become the main battlefield for smartwatches, said the sources. Meanwhile, some Taiwan-based makers are differentiating their products by adding additional functions. For example, Holux is cooperating with Chang Gung Memorial Hospital to integrate a fatigue detection algorithm into its sports watch.

Mitac is cooperating with National Taiwan University Hospital and Taiwan Veterans General Hospital to develop a medical-grade smart bracelet, which can be used as an auxiliary tool for clinical screening, indicated the sources, adding the device is expected to be released in the first quarter of 2016.

Additionally, Goyourlife, a subsidiary of Papago, is scheduled to launch in August its first smart glasses, which can be paired with smartphones and supports Android OS, GPS, Bluetooth and Wi-Fi.

www.digitimes.comTHURSDAY June 4, 2015

Tel:+886 2 8712-8866 Fax:+886 2 8712-3366 Advertising:editor@digitimes.com

Taiwan vendors know what time it is.Photo: Shih-min Fu

Taiwan wearable device makers shift production focus to smartwatches

Daniel Shen, Quiyang; Steve Shen, DIGITIMES

Taiwan could lag behind China in the development of Big Data related businesses as Taiwan makers are still focusing on hardware products such as servers and storage devices, while rivals in China have stepped up efforts to develop applications and ecosystems.

The recently concluded Quiyang International Big Data Expo 2015 was held in Quizhou province, a rather remote region in northwestern part of China, and yet the trade fair attracted nearly 400 companies to participate, including Foxconn Electronics, Alibaba, Huawei, ZTE,

Hewlett-Packard (HP) and Cisco Systems.

The fair also attracted over 80,000 visitors, including a number of industry heavyweights such as Foxconn chairman Terry Gou, Alibaba chairman Ma Yun, Xiaomi Technology chairman Lei Jun and Tencent chairman Ma Huateng.

The Guiyang c i ty began to develop its Big Data industry in 2013 and has so far solicited total investments of over CNY200 billion (US$32.27 billion) in nearly 200 projects. The investors include Foxconn, Alibaba, Tencent, Baidu, Digital China, IBM, Microsoft, China Mobile, China Unicom and China Telecom.

In addition to the installation of over two million servers in Guiyang, the local government has also stressed the developments of related basic infrastructure, system platforms and cloud applications, which now cover government administration, smart transportation, travel, food safety, e-commerce, envi ronmenta l protec t ion and industrial development.

The local government in Quiyang has also set up an exchange center, information credit center and asset evaluation center, respectively, for the engagement in related Big Data businesses.

In a stark contrast to China’s enthusiasm toward the development

of the Big Data business , the government and private sectors in Taiwan have been relatively slow in response to the emerging cloud computing and Big Data trends.

Based on what is seen in the marke t , Ta iwan make r s have

discussed more on servers, storage devices, networking equipment and terminal-end products, but less about platforms and applications, which normally could generate more business opportunities by integrating hardware and software products.

NEWS Thursday June 4, 20152

Big data is big businessPhoto: Shih-min Fu

Taiwan could lag China in developing Big Data businesses

Touch panel maker Cando looks to improve operations with new funding in 2H15Siu Han, Taipei; Steve Shen, DIGITIMES

Touch panel maker Cando, a subsidiary of TPK Holding, expects its efficiency to improve significantly in the second half of 2015 due to an influx of new capital as well as adjustments to its production lines, according to Michael Chiang, chairman of both Cando and TPK.

Cando will book an income of NT$1.27 billion (US$41.15 million) in the second half of 2015 due to the recent disposition of its old plant in Hsinchu. Additionally, Cando will also raise new funds through a capital expansion project in the second half, Chiang revealed.

The liquidation of its Hsinchu plant will allow the company to concentrate its production in two new plants in Taichung, central Taiwan, which will help improve its production efficiency, Chiang added.

Meanwhile, Cando has recently released a series of ultra thin sensor (UTS) products, which are comparable to GFF-based touch panels, according to the company. While the UTS products have not yet entered commercial production, the company hopes the new products will help improve its operations in the future.

However, Chiang warned that Taiwan-based touch panel makers will continue to face strong price competition from China-based counterparts in 2016 as China’s makers can now easily secure new capital due to booming securities markets in China.

With the availability of new funds, China’s touch panel suppliers are likely to wage price competition in 2016, affecting the performance of Taiwan’s makers, Chiang said.

However, the outlook of the touch panel industry is not entirely pessimistic as related touch technologies are evolving rapidly and force touch panels are likely to bring new business opportunities for the industry, Chiang commented.

Cage Chao, Taipei; Jessie Shen, DIGITIMES

MediaTek is set to substantially grow its 4G chip market share in China during the second half of 2015 so that the company is able to meet its target market share for the year, market sources have suggested.

MediaTek currently has about a 20% share of China’s 4G chip market, the sources estimate. MediaTek is expected to boost its 4G chip market share in China to more than 50% in the second half of 2015, according to its target market share for the year.

MediaTek president Hsieh Ching-chiang remarked recently that the company is aiming to reach a 40% share of China’s 4G chip solution market in 2015.

MediaTek has just released the P10 series of its Helio family for mid-range 4G smartphones. The Helio P10 is a

64-bit SoC based on eight Cortex-A53 cores and clocked at 2GHz, and will be available in the third quarter of 2015, according to the company.

MediaTek claims that because it is built using TSMC’s 28nm HPC+ process, the Helio P10 can save up to 30% more power compared to existing smartphone SoCs manufactured using a 28nm HPC process.

MediaTek previously announced its 10-core Helio X20 series, which integrates a multi-mode Cat 6 LTE modem. Earlier in 2015, the company unveiled the Helio family of SoC chips with the first offering dubbed X10.

In terms of shipments to the market, Digitimes Research forecasted in its first quarter China Smartphone AP Tracker that MediaTek will ship 28.9 million LTE-based application processors (AP) to the China market in the second quarter while Qualcomm will ship 21.3-million LTE-based units.

No other vendor will have significant LTE shipments compared to the two major players.

In the China market in second-quarter 2015, Qualcomm is likely to see more than 80% of its shipments be LTE solutions and its overall shipments will grow by 6.1% on quarter due to returning demand from customers. MediaTek is predicted to see LTE solutions account for 50% of its overall shipments and its overall shipments are likely to show a noticeable increase of 21.6% on quarter due to the launch of new products.

Digitimes Research noted that o v e r a l l C h i n a s m a r t p h o n e A P shipments in second-quarter 2015 will show annual growth due to the depletion of inventories in the first quarter of 2015 and new smartphone products being introduced which contains new AP solutions.

China market: MediaTek 4G chip market share likely to top 50% in 2H15

Drones are a hot item on the menu at Computex.Photo: Shih-min Fu

Jim Hsiao, DIGITIMES Research, Taipei

In 2008, when Intel first released its first Menlow processor, the

company had hopes that it would be able to make quick headway into the market for mobile devices such as tablets and smartphones, which were mostly powered by Android. Unfortunately for Intel, the company’s progress in the market proceeded at a snail’s pace and it was not able to gain major traction. Moreover, over the past few years the notebook market has been in a state of downturn, leading Intel to decide that it needed to become much more aggressive in the mobile market.

So in 2014, Intel pushed to expand R&D suppor t in the market, dropping its product p r i c i n g a n d p r o v i d i n g a n assortment of subsidies to mobile device makers. The company was thus able to attract vendors such as Asustek Computer and Lenovo - among others - to begin using Intel x86 processors in their Android devices. Intel also accelerated its industry cooperation program in China in the fourth quarter of 2013 by establishing a reference des ign fo r sma l l e r vendors and the related supply chain to uti l ize X86 processors, with products gradually emerging in the market in late 2014, as numerous white-box vendors launched Android tablets powered by Intel processors. Overall for 2014, Intel’s processor shipments used on Android mobile devices reached 21.38 million units.

I n 2 0 1 4 , M i c r o s o f t a l s o stepped up its commitment to the market as part of an effort to make Windows more widespread in the tablet market. Microsoft

implemented a strategy whereby i t began to significantly cut Windows l icensing fees and increased its efforts in the 2-in-1 market, using units such as the Surface Pro series to provide consumers with a balance between design, performance and pricing. This also prompted China-based white-box vendors in the fourth quarter of 2014 to launch new products. Overall in 2014, the Intel Windows tablet market reached shipments of 12.92 million units.

Issuing subsidies and establishing CTE

If we look at Intel’s product l ineup development and the mainstream mobile devices that are using their products, it can be seen that Intel has spent of its resources and effort developing the Atom SoC with the ultimate goal being to capitalize on the smartphone market. However, this goal was unrealistic in 2014 for a number of reasons, such as it lacked an integrated baseband solution for targeting smartphone vendors, the performance of its processors in terms of power consumption was lacking when compared to its ARM competitors a n d t h e c o m p a n y l a c k e d a supporting ecosystem due to its late arrival in the industry. So instead, Intel turned its attention to developing the Android tablet market, which at that point had a lot of potential and was viewed as a market that had similar characteristics to the PC and notebook markets, which was where Intel excelled.

Unfortunately for Intel, ARM-based AP players had already laid the groundwork for developing the tablet market and so had major advantages over Intel when it

came to building up the overall supply chain, integrating software and hardware and nurturing the ecosystem. Therefore, the only way for Intel to compete in the market was to throw money at it, which it did in the form of subsidies, especially to major key vendors that Intel wanted to help develop.

In terms of nurturing these brand partners, Intel provided various support mechanisms, including R&D support, reduced processor pr icing, subsidies for purchase of key peripheral c o m p o n e n t s a n d m a r k e t i n g subsidies to help vendors get their product accepted by the market. The goal was have x86-based tablet solutions priced competit ively with similarly performing ARM-based solutions. Intel’s commitment was not small. For example, Digitimes Research found that Intel provided Asustek Computer alone with US$200 million in subsidies in 2014.

As a result, in 2014 Intel’s penetration rate in the market improved. Asus, which was the number three ranked tablet vendor worldwide, used Atom processors in its tablets almost exclusively. Lenovo, which previously used MediaTek processor, chose to go with Intel’s Bay Trail-T solution based on Intel subsidies, while Acer and Hewlett-Packard (HP) also gradually transitioned their ARM-based products to the Intel platform. Intel in 2014 success fu l ly ob ta ined more than 10 million Android tablet shipments from its brand partners.

I n a d d i t i o n t o t h e s e partnerships, Intel saw great po ten t i a l in China’s whi te -box tablet industry, which had shipments of close to 100 million

tablets in 2013. However, this was a difficult industry to master, due to the complex structure of the white-box ecosystem, which was quite different from the tradition ODM/OEM supply chain ecosystem that Intel was used to.

Intel and the white-box tablet market

Intel chose to enter the white-box market through four different directions. The first way was that Intel fostered the white-box industry by becoming heavily involved in the China Technology Ecosystem (CTE), which was basically an Intel initiative to get more support in the China supply chain ecosystem through technology guidance, investments

and subsidies. T h e s e c o n d w a y w a s t o

increase its cooperation with local IDHs (Independent Design House), which served as a type of ODM function of the white-box supply, to launch x86 reference designs for the tablet market and also provide easy and quick shipment processes, which was similar to a process that ARM-based tablets enjoyed.

The third way was for Intel to simplify designs by eliminating components and reducing the overall BOM of the finished products. While the fourth method Intel adopted was its tried and true method of subsidizing its partners in the ecosystem.

ARTICLEThursday June 4, 2015 3

Continued on page 5...

Intel regroups in the mobile market for Android devices In this

RepoetProduct

typeExterior

design Definition

X NB

Clamshell� Can be pivoted to an angle

≤ 180°� Dual screen type

Convertible� Sliding cover type� Tilting type, can be pivoted to

an angle >180°

O Tablet PC

One piece

� One-piece type, keyboard can be added but is limited to text

input� 5” plus with no cellular voice

call functionality� 7” plus with cellular voice call

functionality

Detachable

� One-piece type with a detachable keyboard dock that adds additional features such as external ports, storage, batteries and even separate

processors

O Smartphone

� Includes touch panel and app store(s)

� Large size is defined as less than 7” with cellular voice call

functionality� Modular type, for example

where a dock or second screen can be added

XPortable media

players

� Includes touch and non-touch screens

� Screen size les than 5” for touchscreens

cons ide rab ly. The f i rm’s LTE solutions have been adopted by some firms but lack in cost competitiveness as the product is AP plus baseband.

2Q15 forecastMediaTek With multiple new products to be

introduced, MediaTek is expected to see its shipment share grow by 2pp to reach 48.4%.

QualcommQualcomm has yet to update its

solutions as quickly as MediaTek so the firm’s competitiveness has dropped . Al though the f i rm i s expected to see overall shipments to grow in the second quarter of 2015 but its shipment share is expected to drop by 2.3pp.

LeadcoreLeadcore’s shipment share will

grow to 5.7% due to strong shipments of its tri-mode LTE solutions.

HiSilicon HiSilicon’s product prices are a

bit higher so its shipment growth is milder. However, the firm is expected to see its shipment share increase by 0.5% in second-quarter 2015.

Shipments by architectureIn first-quarter 2015, Cortex-A53

became the mainstream architecture for China’s smartphone AP market, replacing Cortex-A7 that previously dominated the entry-level product market.

Qualcomm has been eager to promote Cortex-A57 and some customers have begun to use the product but actual shipments of end products will begin in the second quarter.

C o r t e x - A 1 5 a n d A 1 7 h a v e support from MediaTek’s MT6595 and Samsung Exynos 5430 but as end market shipments begin to slow down, the related market shares have been showing slight decreases.

2Q15 forecastI n s e c o n d - q u a r t e r 2 0 1 5 ,

Cortex-A53 will continue to dominate entry-level, mid-range, and high-end markets. The Cortex-A53 architecture shipment share is expected to grow by 7pp, reaching 43.1% in second-quarter 2015.

Cortex-A7 continues to spread among entry-level products but as the market mainstream shifts from 32-bit to 64-bit, the shipment share

is expected to fall to 29% in second-quarter 2015, a 3pp drop compared to the first quarter of 2015.

The Cortex-A15 and A17 shipment share is expected to fall to 10.2% as shipments of end products such as MediaTek’s MT6595 and Samsung Exynos 5430 begin to dwindle.

Supplier analysisMediaTekMediaTek saw overall shipments

drop by 24.2% on quarter due to the rapid cool down of 3G market demand, the firm’s lack of smooth transition between 3G and LTE platforms, and high inventories of end market customers.

MT6732 has been popular among customers while MT6752 has a power efficiency that is superior compared to Qulacomm’s products so both products saw their market share increase steadily. High-end MT6595 shipments began to slow down and many customers shifted their focus to MT6795. Shipments of entry-level 3G solution products saw a severe decline in first-quarter 2015 due to weak demand and strong price competition from Spreadtrum.

2Q15 forecastMediaTek will introduce new

products including LTE and 3G solutions in the second quarter aimed at Qualcomm and Spreadtrum. The firm is expected to regain market share.

Products such as MT6735 and MT6753 have been popular among China’s entry-level and mid-range products pushing overall shipments to grow.

MT6570 and MT6580 are low price 3G solutions that use Cortex-A7 t o e f f e c t i v e l y i m p r o v e p r i c e -performance ratio. These products are expected to gain popularity among low price end product manufacturers.

Baseband breakdownM e d i a Te k ’ s LT E p r o d u c t

shipments suffered a small decline due to falling overall shipments in first-quarter 2015 but the shipment share increased by 9.5% on quarter.

MediaTek’s 3G solutions faced compe t i t i on f rom Spread t rum plus weak demand, shipments fell considerably.

REPORT Thursday June 4, 20154

Continued on page 7...

DIGITIMES Research: China Smartphone AP Tracker – 1Q 2015

China smartphone AP shipmentsIntroduction

1Q15 reviewAccording to Digitimes Research,

smartphone AP shipments in China grew by 14% on year in the first quarter of 2015 but showed an on-quarter decrease of 19.5%. Market demand and production decreased in the first quarter as it is the traditional low season in China, along with the Lunar New Year holidays that shortened the number of working days. Also, due to the fact that many end market firms had been over-stocking in the previous quarter causing shipments in the first quarter of 2015 to show an on-quarter decrease close to 20%.

Most smartphone shipments in China in the first quarter of 2015 focused on LTE solutions, hence major AP firms have been increasing the percentage of LTE product shipments. This is most apparent for Qualcomm. Although Qualcomm increased its LTE product shipment share by 7 percentage points (pp) on quarter compared to other product shipments, competition from firms such as MediaTek meant to ta l product shipments showed an on-quarter decrease of 31.9%. MediaTek increased its LTE product share by 9.5%pp on quarter compared to other product shipments in the first quarter of 2015. MediaTek’s product has a superior price-performance ratio but due to the economy and rapid decrease in demand of 3G solutions, the firm saw overall shipments drop by 24.2% on quarter.

Spreadtrum has LTE baseband solutions but lacks SoC technology hence the chipmaker was not able to tap into China’s trend of switching from 3G to LTE solutions. However, the firm has been investing heavily into WCDMA solutions and with strong support from the government, the firm is able to engage in price wars with competitors and secure market share. The firm has also secured orders from international firms. Spreadtrum’s shipments to China-based customers in the first quarter of 2015 showed on-quarter growth of 12.5% and on-year growth of 71.4%.

Huawei introduced many products using HiSilicon solutions at the end of 2014 and has been seeing strong sales. Nevertheless, HiSilicon’s AP shipments slowed in the first quarter of 2015 with an on-quarter decrease in shipments of 23.1%. Leadcore saw

shipments fell dramatically in 2014 due to the rapid decline of the TD-SCDMA market. The firm introduced tri-mode LTE solutions at the end of 2014 and began cooperation with China-based smartphone maker Xiaomi. The solution has been used in the new low-price smartphone model that was launched in March, due to the fact that some AP products needed to be shipped early, this allowed Leadcore to see first-quarter 2015 on-quarter shipment growth reach 500%.

2Q15 forecastDigitimes Research predicts China

smartphone AP shipments in second-quarter 2015 will show annual growth due to the depletion of inventories in the first quarter of 2015 and new smartphone products being introduced which contains new AP solutions. The new product launches will help to warm up the market. Although the second quarter is a traditional low season, shipments are expected to show an on-quarter increase of 17.6% while on-year shipment growth will reach 18.4%, 4.4% higher than the on-year shipment growth in the first quarter of 2015.

I n s e c o n d - q u a r t e r 2 0 1 5 , Qualcomm is likely to see more than 80% of its shipments be LTE solutions and overall shipments will grow by 6.1% on quarter due to returning demand from customers. MediaTek is predicted to see LTE solutions account for 50% of overall shipments and overall shipments are likely to show a noticeable increase of 21.6% on quarter due to the launch of new products. Spreadtrum will continue to show strong competitiveness with its low price WCDMA products and although the market has been moving toward LTE solutions quickly, the firm will still be able to see 3G solution shipments increase. The firm’s second-quarter 2015 shipments are likely to reach 2.8% growth on quarter.

Since Leadcore began cooperation with Xiaomi, the firm’s tri-mode LTE solution shipments have been expanding rapidly and the second-quarter 2015 shipments are expected to show on-quarter growth of 133.3%. As HiSilicon begins shipments of mid-range and high-end products, including Kirin 930 and Kirin 620, to Huawei in the second quarter of 2015, the firm is expected to see shipments grow by 30% on quarter.

Key factors affecting China smartphone AP shipments

Two major factors affected China smartphone AP shipments in the first quarter of 2015.

Market effects: Due to government policies in

China, the popularity of LTE spread very quickly and in the first quarter, LTE solution products outnumbered 3G solution products.

MediaTek and Qualcomm have not seen a completely smooth transition from 3G to LTE products plus the low season caused demand to stagnate and shipments showed a significant decrease.

Chip vendor status: MediaTek’s LTE chips obtained

some customers that used to work with Qualcomm but MediaTek’s 3G solution customers also moved to Spreadtrum causing its overall shipments to show a decrease.

Spreadtrum focuses on low-price 3G solutions and successfully obtained customers that used to work with MediaTek and Qualcomm.

Qualcomm LTE solutions were unable to compete with MediaTek hence i t s sh ipments showed a noticeable decrease.

HiSilicon’s chips were adopted by Huawei in large quantities at the end of 2014 but as Huawei’s product sales stabilized in the first quarter of 2015, HiSilicon chip shipments showed a decrease.

Leadcore’s tri-mode LTE solution was favored by Xiaomi causing shipments to increase significantly.

2Q15 forecastTwo factors will influence China

smartphone AP shipments in the second quarter of 2015.

Market factors:LTE end products are expected

to continue to replace 3G products quickly in China but emerging markets still have strong demand for 3G solutions.

Shipments at the end of 2014 were exceedingly strong hence smartphone makers in the first quarter of 2015 slowed down in issuing orders. As the market has absorbed inventories plus the launch of new products that will require new solutions, orders in second-quarter 2015 are expected to revive.

Chipmaker status:M e d i a Te k w i l l c o n t i n u e t o

transition to LTE solutions and introduce new solutions such as MT6753, 6735 and entry- level MT6570 and 6580. The new products are expected to compete effectively with Qualcomm and Spreadtrum.

Spreadtrum’s low price WCDMA solutions will continue to be favored by large-size customers, but as MediaTek introduces comparable products, the firm’s shipment growth is expected to wane.

Qualcomm’s LTE solutions have been lacking competitiveness against MediaTek’s new products. The firm’s mid-range products are expected to be introduced by the end of 2015. So even though customer orders

are expected to return in second-quarter 2015, shipments are likely to be suppressed due to pressure from MediaTek’s products.

HiSilicon’s Kirin 93x and Kirin 620 chips will ship in volume due to Huawei’s end market products.

This means HiSilicon is likely to see shipment grow.

Leadcore’s tri-mode LTE solutions will continue to be used by Xiaomi and the chipmaker is likely to obtain new clients; hence shipments are expected to continue growing.

Shipment breakdownSmartphone/Tablet share of AP market

Tablet and smartphone AP have been facing the same low season in which demand and shipments were weak in the first quarter of 2015. Tablet AP shipments have shown a larger decrease pushing AP firms to shift their shipment focus to smartphone APs in the first quarter of 2015.

Due to China’s Lunar New Year holidays that occurred in the first quarter of 2015, there were fewer working days for manufacturers. Also, market demand was slow causing overall AP shipments to show less satisfactory performances.

2Q15 forecastTablet and smartphone AP orders

are expected to revive in the second quarter of 2015 due to the depletion of inventories in the previous quarter. Tablet APs are likely to see a stronger revival of orders from international customers so related shipment growth is likely to exceed smartphone APs.

Despite the fact that second-quarter 2015 is still considered a low season but after the historic low season in the first quarter, market demand is set to rebound.

Smartphone AP shipments in China

China smartphone AP shipments in the first quarter of 2015 showed an on-quarter decrease of 19.5% due to factors such as the traditional low season, high inventory in the end market, and a wobbly transition of platforms by some firms.

M e d i a Te k , Q u a l c o m m a n d HiSilicon all saw shipments fall by more than 20% on quarter in the first quarter of 2015 with Qualcomm shipments falling by more than 30%.

MediaTek’s MT6732 and MT6752 experienced strong shipments causing the overall shipment decrease in the first quarter of 2015 to be smaller compared to that of Qualcomm.

With super low prices for 3G solutions, Spreadtrum was able to gain orders from customers that used to work with MediaTek and Qualcomm, hence the firm saw shipments grow in

the first quarter of 2015. L e a d c o r e b e n e f i t t e d f r o m

cooperating with Xiaomi and saw overall shipments grow significantly.

2Q15 forecastAs smartphone AP inventories in

China begin to deplete it will cause orders to revive in the second quarter of 2015, and on-quarter shipment growth is expected to reach 17.6% while on-year growth is likely to reach 18.4%, 4.4% higher than the on-year growth of first-quarter 2015.

MediaTek is expected to lead in shipment growth with many of its new LTE and entry-level to mid-range 3G products while Leadcore and HiSilicon are also expected to see noticeable shipment growth. Qualcomm and Spreadtrum are also expected to see shipment growth but milder compared to other firms.

Spreadtrum’s low price WCDMA solution will begin to feel pressure from MediaTek’s new low price 3G solutions so shipment growth is expected to be limited.

Shipments by supplierMediaTek MediaTek continued to see its

shipment share fall for the fourth consecutive quarter. The previous three quarters of falling market share was due to strong competition from LTE solutions from Qualcomm. In the first quarter of 2015, the firm again saw falling market share but it was due to the lack of smooth transition from 3G to LTE platforms, rising inventories, and losing some 3G solution customers to Spreadtrum.

Qualcomm Qualcomm saw a rising shipment

share for four consecutive quarters in 2014 due to strong demand of its LTE solutions. However, the firm saw its shipment share fall by 4.4pp on quarter in the first quarter of 2015 due to rising 3G solution inventories and as MediaTek began shipments of low price LTE platforms.

Spreadtrum Spreadtrum’s 3G solutions have

been favored by the market as customers continue to shift orders back to the firm, hence Spreadtrum saw its shipment share increase

China AP shipment share by application, 4Q13-2Q15

Source: Digitimes Research, April 2015

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2Q15(f)1Q15(e)4Q143Q142Q141Q144Q13Smartphone AP 80.5%81.1%79.0%77.6%76.6%76.7%74.0%Tablet AP 19.5%18.9%21.0%22.4%23.4%23.3%26.0%

China smartphone AP shipments, 4Q13-2Q15 (m units)

Source: Digitimes Research, April 2015

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

0

20

40

60

80

100

120

140

2Q15(f)1Q15(e)4Q143Q142Q141Q144Q13Shipments 122.0103.7128.8115.8101.191.393.8Q/Q 17.6%-19.5%11.2%14.5%10.7%-2.7%2.1%Y/Y 20.7%13.6%37.3%26.0%9.7%13.3%21.2%

Shipments by supplier, 4Q13-2Q15 (m units)

Source: Digitimes Research, April 2015

0

10

20

30

40

50

60

70

2Q15(f)1Q15(e)4Q143Q142Q141Q144Q13Mediatek 59.048.564.061.054.050.049.0Qualcomm 26.024.536.029.022.018.516.0Spreadtrum 18.518.016.013.510.010.515.0Hisilicon 6.55.06.56.05.53.03.5Leadcore 7.03.00.50.51.02.53.5Nvidia 0.50.52.52.02.53.03.5Marvell 3.53.02.02.54.52.01.2Broadcom 0.00.00.50.71.01.21.4Samsung 0.51.00.50.40.50.30.4TI 0.00.00.00.00.00.00.1Intel 0.50.20.30.20.10.30.2

Shipment share by supplier, 4Q13-2Q15

Source: Digitimes Research, April 2015

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2Q15(f)1Q15(e)4Q143Q142Q141Q144Q13Intel 0.4%0.2%0.2%0.2%0.1%0.3%0.2%TI 0.0%0.0%0.0%0.0%0.0%0.0%0.1%Samsung 0.4%1.0%0.4%0.3%0.5%0.3%0.4%Broadcom 0.0%0.0%0.4%0.6%1.0%1.3%1.5%Marvell 2.9%2.9%1.6%2.2%4.5%2.2%1.3%Nvidia 0.4%0.5%1.9%1.7%2.5%3.3%3.7%Leadcore 5.7%2.9%0.4%0.4%1.0%2.7%3.7%Hisilicon 5.3%4.8%5.0%5.2%5.4%3.3%3.7%Spreadtrum 15.2%17.4%12.4%11.7%9.9%11.5%16.0%Qualcomm 21.3%23.6%28.0%25.0%21.8%20.3%17.1%Mediatek 48.4%46.8%49.7%52.7%53.4%54.8%52.2%

A l l o f t h e s e s t r a t e g i e s combined to greatly reduce the threshold needed for white-box vendors to begin shipping x86-based tablets, and demand for Intel products increased dramatically starting in the second half of 2014.

It is worth noting that Intel entered into the white-box Android tablet market at an interesting point in time, one where the market was changing. At that point in market development Wi-Fi based inexpensive tablets had become quite popular among makers, but a lack of differentiation led to major price competition and falling profits.

On the other hand, inexpensive Android tab le ts wi th phone funct ional i ty were enjoying shipments that were increasing every quarter. This was a segment of the market that Intel was at a disadvantage due to the fact it lacked a competitive baseband solution.

Due to these market trends, a number of white-box players instead turned to Windows-based solutions to differentiate their products and increase profits.

Also worth mentioning is that Intel’s CMPC (Classmate PC) services in the education market had been running over the

past several years, and in 2014 a tablet program was launched. Intel received orders from Latin Amer ica , inc lud ing Mexico and Venezuela, and due to a collaboration with ECS, Education Ta b l e t s h i p m e n t s i n 2 0 1 4 amounted to 1.8 million units.

2014 Intel developments and Android handsets

In 2013 Intel released i ts 32-nanometer low-voltage Clover Trail+ but faced ARM platform competition from Qualcomm, Samsung and MediaTek , a s they moved into a more energy-efficient 28nm process, while having better LTE integration and supporting 64-bit architecture, which all-in-all created less-than-ideal circumstances for Intel.

H o w e v e r , t h e g l o b a l smartphone market in 2014 was still growing and Asia PC brands were optimistic about emerging market growth. In the third quarter, Xiaomi launched a sub-CNY1000 Hongmi smartphone that propelled the vendor to the top of the China market and prompted Asustek, which was still a small player at that time to turn to Intel to partner on releasing the inexpensive mid-range spec Zenphone.

O n e k e y r e a s o n f o r t h e Asustek-Intel partnership is the

fact that Asustek’s experience in x86 technology and managing a related supply chain made the vendor more comfortable in Intel’s camp rather than the unfamiliar ARM camp. Another key reason was that Intel was subsidizing and supporting Asustek.

The Zenphone s aw good results in Southeast Asia, Europe and Taiwan, reaching 7.55 million in shipments. Asustek’s success with Zenphone also benefitted Intel, as the chip giant was able to clear its CloverTrail+ inventory. However, Intel didn’t see much success outside of Asustek, as its cooperation with other vendors, including with Lenovo on the x86-based Android K800, saw minimal shipment growth in 2014. It should be noted that Lenovo did not shift all of its eggs to the Intel basket like Asustek did. Asustek had minimal Qualcomm-based smartphones (to support 4G) but Lenovo continued marketing MediaTek-based smartphones even as it deployed Intel-based models.

Windows tablets: The focus of Intel mobile AP shipments in 2014

Windows t ab le t s became a main part of Intel’s mobile app l i ca t ion p rocesso r (AP)

s h i p m e n t s i n 2 0 1 4 . F o r international vendors, Intel mobile APs were mainly used in 10-inch 2-in-1 detachable Windows tablets in the first half of 2014 and in the Surface Pro 3 in the second half of the year. China-based white-box tablet vendors significantly increased their adoption of Intel mobile APs in the fourth quarter as well when the China Tech Ecosystem (CTE) became mature and Microsoft started contributing resources.

Inexpensive 10-inch Windows tablets selling the best

The fair ly larger segment of inexpensive 10-inch 2-in-1 detachable Windows tablets e q u i p p e d w i t h B a y Tr a i l - T processors sold relatively very well in 2014. This was mainly because Mic roso f t l owered Windows and Office licensing charges, with Office sometimes bundled for free while Intel offered subsidies for Atom processors. This led to a reduction in sale pricing for such tablets from price levels that previously put them in the high-end and mid-range of the market but now had them competitively priced at below US$400. In addition, products bundled with free Office had significantly high performance-cost ratios and therefore replaced demand for some mid-range and entry-level consumer notebook models.

The Transformer Book T100 launched by Asustek in the fourth quarter of 2013 was the most successful inexpensive 2-in1 Windows tablet model in terms of sales performance in 2014, recording shipments of two million units in the first half of the year. However, the Transformer Book T100 witnessed declining sales in the second half of 2014 due to increased competition from vendors offering similar products.

With more vendors offering such products, Digitimes Research believes that it was very hard for

vendors to differentiate their 2-in-1 tablets in the market. Moreover, Microsoft cancelled free Office a n d r e d u c e d d i s c o u n t s o n Windows licensing in the second half of 2014 due to worries about the negative impact too much of a price discount would have on the sales of its Windows notebooks.

White-box vendors did not launch many 2-in-1 Windows tablets in 2014 mainly because of the significantly higher prices their related products would have compared with Android tablets. They also faced issues of more complicated designs due to the lack of a common reference design for use in the market. However, China-based white-box vendor Yifang launched a 10.1-inch 2-in-1 detachable Windows tablet, Nextbook, for sale at US$179 through Wal-Mart and recorded sales of nearly 300,000 units a quarter. The good sales performance for Nextbook was due to Yifang using the CTE supply chain to keep its production costs much lower than that of international vendors.

Surface Pro 3: Key to Microsoft entry into larger screen market segment

There were not many larger than 10.8-inch Windows tablet models available for sale in 2014 mainly due to the high price levels and positioning that would bring such products in competition with notebooks. Microsoft, based on its experience developing the first two generations of Surface, launched Surface Pro 3, a high-end 2-in-1 Windows tablet, and attained shipments of 2.7 million units in 2014. In addition to slimness, Surface Pro featured a Core processor that was also used in Ultrabooks to meet user demand for both mobility and high performance. In addition, Mic ro so f t succeeded i n i t s marketing campaign by showing that the Surface Pro 3 tablet could replace the MacBook Air.

ARTICLEThursday June 4, 2015 5

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...Continued from page 3

2-in-1 device models

One Piece with K/B

Detachable

Convertible

Slider

2-in-1 device models covered in the report(keyboard can be separated)

2-in-1 device models not covered in the report(keyboard can’t be detached)

Press release

With “Beyond the Clouds” as the theme of demonstration at this year’s Computex, Leadtek will be focusing on visual computing and wireless communica t ion t echno log ie s for its product lineup at TWTC Exhibition Hall 1 (Booth no. A1124) to showcase its latest 3D visual computing, video surveillance, healthcare, indoor Beacon and outdoor GPS applications.

Integrating a comprehensive array of features including indoor Beacon, outdoor GPS, digital image surveillance, sensors, wireless physiological measurement devices for home use and real-time online hea l th consu l ta t ion se rv ices , Leadtek aims to deliver the most complete and real-time health cloud home care solution. With this solution, users will be able to use various devices such as an ECG Patch, blood pressure meter, blood glucose meter, weight scale and so forth and send various physiological data wirelessly to the amor H100 Cloud Gateway before the data is uploaded to the amorRunner Cloud health management platform via Wi-Fi or mobile data network. Should any physiological data turn out to be abnormal, the health consultant will receive a warning and notify the user.

For patients recovering at home after surgery, the solution also offers wearable medical devices that provides abilities to detect results of systol ic parameters

a n d a b n o r m a l h e a r t s o u n d s with the phonocardiogram and electrocardiogram coaxial analytical technique so physicians can provide remote care for patients when issues occure. In addition to physiological data measurement, Leadtek has also integrated positioning service and video surveillance technologies in the solution; once the alarm is triggered, the IP Camera, SIP NVR and CMS will automatically stream images from the location to the administrator’s mobile device. Coupled with the indoor Beacon and outdoor GPS services, the precise location of the event will be shown on the map to shorten response time and ensure none of the golden hour is wasted.

Leadtek believes that day-to-day health management is a better solution compared to treatment, and has therefore integrated core medical technologies for the development of its wearable device amor H1 Heart Rate and Activity Monitor. The device features precise measurement of the user’s heart rate and relevant HRV statistics. Coupled with the amor H1 APP that provides ANS activity indicators, users will not only be able to keep track of their workout results but also facilitate the activity of their ANS to achieve better physical fitness. Leadtek will also be featuring its amor YOUNG Far Infrared Wave Nano Band – the health product that features FIR technologies for the senior users. The product features nano-woven materials of rare metals such as

titanium, germanium and ceramic powder that release αfar infrared energy. The national patented product has been approved by the Ministry of Health and Welfare, US FDA and EU medical institutions. The frequency released by amor YOUNG is of the same wavelength of the absorption spectrum of the human body, and the product will help to increase the volume and flow of blood in the body to achieve the best resonating effect.

Through the integration of daily healthcare products and features s u c h a s p h y s i o l o g i c a l d a t a m e a s u r e m e n t , h o m e s a f e t y surveillance, physical exercise facilitation and a professional team of consultants, Leadtek has created a cloud service for health and safety care.

WinFast GS2020 GRID Server is a GPU-accelerated virtualization solution to deliver high-performance sharing of the GPU across multiple users. It supports up to 4 GRID GPU cards and 1TB ECC LRDIMM or 512GB ECC RDIMM, DDR4-2133MHz in 16 DIMM slots . The server optimizes hardware configuration and the break-through NVIDIA’s GRID techno logy. NVIDIA’s GRID cards feature NVIDIA Kepler-based GPUs and are specifically designed to enable rich, faster, interactive graphical experience to a variety of users in virtualized environments.

Furthermore, Leadtek leverages vir tual izat ion solut ions , such as VMware Horizon View, and

PCoIP zero clients to complete a consistent, fully interoperable system. PCoIP zero client enables all computing resources and data to be transferred to the centralized server in a secure data center and lowers support overheads for your

corporation. It does not have a general purpose CPU, local data storage or application operating system, resulting in an ultra-secure and easy to manage client device that does not require regular updates or patches.

Press release

P o s i f l e x A U R A - 6 9 0 6 W i s designed to provide convenient and straightforward receipt printing directly from a choice of mobile devices regardless the platform. Whether it is an Android-based smartphone or a tablet running by iOS or a Windows laptop, as long as where the HTTP communication is enabled, the receipt is on the way. No separate web server is required for printing, saving an extra cost for the users.

A s a k e y c o m p o n e n t i n Posiflex’s mobile product strategy, t h e A U R A - 6 9 0 6 W c o n n e c t s wirelessly with mobile devices providing users with the flexibility to not only print standard receipts, but also to potentially personalize them with additional offers or promotions. For example, it can be used to print orders; in a restaurant, where they can immedia te ly

be delivered to the kitchen. Or issue the reservation tickets at a fast speed, which indicate the approximate wait time/number of people in the queue.

This web printer is ideal for on-the-spot transactions. It saves the trips running back and forth between the mobile device and the workstation and allows the staff to hand the customer the receipt immediately before leaving the store. The scope of application includes retail, hospitality, banking, healthcare, government and more.

Press release

Brand new technology in data storage has emerged since the capacity of data has shifted from G i g a B y t e ( G B ) t o Te r a B y t e (TB). U-Reach, a data equipment expert, will showcase a series of data storage solutions with real applications at 2015 Computex.

Versatile solutions for HDDWith the new development and

various applications of hard drives, U-Reach will present complete s e r i e s o f H D D d a t a b a c k u p solutions. The server download HDD duplicator (SDL) enables operators to download the source file directly and finish duplication under the authorization. The rack mount

CRU HDD duplicator (KV Series) is flexible to expand HDD/SSD duplication with a high-end daisy-chain technology. The MT digital cinema series HDD duplicator can not only fit most digital cinema H D D s , b u t a l s o p r o v i d e s a n accurate data duplication with HDD enclosure housing for plug and play.

The popular Intelligent 9 Series provides quality testing and copying functions for flash media. The advanced series includes more functions such as durability testing, double source comparison and event log reporting for professional applications. Furthermore, the newly released CD-ROM USB duplicator offers high efficiency for the mass production of CD-ROM USB drives. U-Reach will also demonstrate the standalone eMMC duplicator and the achievement of automatic integration.

U-Reach is at Booth No.J0323a in Nangang Exhibition .

PRODUCT NEWS Thursday June 4, 20156Clientron exhibits latest thin client and POS solutions along with full product line Press release

Clientron, a world-leading supplier of thin client, POS and embedded systems, introduces its latest product innovations including thin client, zero client and POS solutions with the benefits of green technology, innovative design, and reliable quality at Computex Taipei 2015.

Its thin client and zero client products include ARM-based and X86-based platforms from entry to high-end levels. For flexible thin client series, Clientron offers B series thin client, designed with the next generation Intel Braswell & AMD Steppe Eagle system-on-chip (SoC) dual-core and quad-core CPUs, supporting dual displays and rich I/O expan¬sion options. Moreover, Clientron also highlights new entry-level thin client C800 (Intel Bay Trail platform) and DH20 (ARM-based platform) featuring energy-efficiency and high-performance with ultra-compact design.

In addition, Clientron debuts its new POS solutions including all-in-one (AIO) POS terminal Wing series, Ares series, Evo series and more. The AIO POS terminal Wing series delivers the features of ultra-compact and foldable dual-hinge design, supporting bezel-free 15-inch or 15.6-inch wide screen. The Wing series provides two platforms including the power-efficient Intel Bay Trail platform as well as cost-efficient ARM-based platform. The Ares series includes the features of panel PC style POS terminal with 15-inch ultra-slim system design, supporting high performance Intel Core i3 pro¬cessor and power-efficient Intel Bay Trail quad-core proces¬sor. For the 17-inch all-in-one POS terminal, Clientron offers Evo series panel PC style POS terminal, featuring bezel-free touch display and smart stand design. The Evo series platform offers from power-efficient Intel Bay Trail quad-core processor to high- performance Intel Core i3 processor, providing solutions for the retail and hospitality industry.

Clientron is at TWTC Nangang Exhibition Hall, Booth L1312.

Clientron exhibits its latest thin client and POS solutions at Computex Taipei 2015.

Leadtek makes forays into the cloud

Leadtek makes deeper forays into the cloud,showcasing its home health care, digital surveillance, indoor/outdoor positioning integrated service and ultra-powerful enterprise 3D visual computing solutions at Computex.

Posiflex AURA-6906W POS web printer

Posiflex AURA-6906W POS web printer

Experience innovation with the data equipment expert U-Reach

U-Reach’s versatile solutions for HDD

Hans Cheng, General Manager, AVEXIR Technologies, sums up that the company is winning industry recognition for its product performance, ability to innovate, and patented technologies, enabling numerous cross-industry partnership opportunities.

Sponsored content

Memory modules are practically s t a n d a r d i z e d p r o d u c t s t o

consumers among those produced by different key makers. However, AVEXIR Technologies has something unusual gaming products to showcase at 2015 Computex Taipei.

The company is established nine years ago, started its business from scratch, with no support from any powerful investor and no customer base. Cornered by strong competitors in the field, AVEXIR seemingly had no chance to succeed at all but it now stands as a global leading brand of high-end gaming memory products. One can’t help but wonder what has sharpened AVEXIR’s competitive edge.

Due to similarities of product features and appearances, memory module makers are often limited by product itself. Therefore, the memory module market has provided few sensational products that could attract attentions. However, in 2011, Avexir has launched Core Series, it proved that memory products could have

breakthroughs and could show up in a new form much like a boutique item.

AVEXIR core series surprised game players as i t was the f irs t memory module able to emit dazzling l ight through multiple colors of LEDs and light guide bar, allowing the memory to blink in a rhythm as if it were breathing. What enabled this unique feature was AVEXIR’s intelligence patented technology. Now in 2015, AVEXIR is launching the Raiden series with effects resembling lightning created by an unprecedented application of patented plasma tube technology, bringing gamers more exciting and true-to-life experiences.

As a matter of fact, the introduction of the AVEXIR core series not only kick-started the trend of “glowing memory” but also ignited a computer case modification (case modding) craze. People now seek dazzling cool effects, instead of efficiency, for their computer cases, graphics cards, and even motherboards. Take the casing for example, transparent side panels that al low consumers to see the lights as well as internal components including the motherboard, graphics

card, heat sinks, and memory modules are gaining popularity in recent years. Color coordination and exterior design are also appealing to consumers.

Computer case modification frenzy boosting red hot demand for AVEXIR memory

As a result of the modding frenzy, AVEXIR memory modules have emerged as a top choice for gamers. Furthermore, various AVEXIR patented strip lights have attracted a host of motherboard and computer peripheral makers to seek license from AVEXIR.

“AVEXIR’s brand awareness is rapidly rising not only to outstanding product performance but also to three major advantages – innovation, customization, and differentiation,” indicated by Hans Cheng, General Manager, AVEXIR Technologies. The company has created glowing, breathing, lightning-flashing memory modules with unsurpassed originality, which has enabled i t to win the Germany iF design award three years in a row. AVEXIR has continuously broken through the barriers and

limitations of memory module design and made undoubtedly remarkable achievements in product innovation.

Following the launch of AVEXIR core series that made AVEXIR a well-known brand, AVEXIR then kicked off the AVEXIR DIRECT service, providing gamers around the world with choices of heat sink styles, capacities, specifications, and LED colors selectable online as well as name inscriptions on SPD and heat sinks. AVEXIR is able to offer powerful customization for gamers to build unique memory modules of their own.

In terms of differentiation, it is what enables AVEXIR to fuel the modding craze. Cheng states the AVEXIR core series offers six choices of color – blue, red, yellow, green, white, and orange – for mix-and-match with the motherboard look and color to create an optimum visual effect and distinctive style. In fact, AVEXIR and its partners have all noticed high-end gamers are seeking consistency in the style of their computers, and therefore are engaging in cross-industry partnership projects for joint marketing purposes.

Modeling trend raising AVEXIR worldwide brand awareness

REPORTThursday June 4, 2015 7

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MediaTek smartphone AP shipments, 4Q13-2Q15 (m units)

Source: Digitimes Research, April 2015

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2Q15(f)1Q15(e)4Q143Q142Q141Q144Q13Shipments 59.048.564.061.054.050.049.0Q/Q 21.6%-24.2%4.9%13.0%8.0%2.0%-3.9%Y/Y 9.3%-3.0%30.6%19.6%25.6%42.9%19.5%

2Q15 forecastMediaTek is expected to see

LTE products account for 49% of overall shipments in second-quarter 2015 due to the launch of new products.

MediaTek’s new WCDMA s o l u t i o n s a r e e x p e c t e d t o stimulate market demand but as LTE demand continues to rise, WCDMA shipments are going to see growth but shipment share is expected to fall to 29%.

Shipments by architectureM e d i a T e k ’ s M T 6 7 3 2 ,

6752, and high-end 6795 are C o r t e x - A 5 3 p r o d u c t s a n d shipments have risen steadily since their launch. This pushed the product share of Cortex-A53 to increase consecutively each quarter.

The Cortex-A15 (MT6595) shipment share showed a decline as end product shipments enter a mature stage.

Many table ts wi th phone features use MT65 series chips but the shipment share has been declining consecutively each quarter.

C o r t e x - A 7 r e m a i n s t h e most important architecture of MediaTek’s products and has been used mainly by 3G products. However, due to robust price war with Spreadtrum, shipments have

shown a noticeable decrease.2Q15 forecastC o r t e x - A 5 3 i s l i k e l y t o

account for 45% of MediaTek’s total shipment share due to the introduction of MT6735 and MT6753 in second-quarter 2015.

T h e s h i p m e n t s h a r e o f Cortex-A15 is expected to drop by 2% in second-quarter 2015 due to a shipment decline of end market products that use MT6595 which adopts the Cortex-A15 architecture.

T h e s h i p m e n t s h a r e o f C o r t e x - A 7 a r c h i t e c t u r e i s predicted to fall to 47%. Although s h i p m e n t s o f M T 6 5 7 0 a n d MT6580 which adopt Cortex-A7 architecture are expected to show growth but the market has higher demand for 64-bit products.

QualcommIn the first quarter of 2015

Qualcomm faced factors such as a weak economy and strong competition from peers causing shipments to decline rapidly. Shipments dropped by 31.9% on quarter.

LTE solu t ions have been facing strong competition from MediaTek and shipments have been decreasing. The 3G solution market has been dwindling fast which affected Qualcomm’s first-quarter 2015 shipments.

Qualcomm Snapdragon 410

continues to be the most popular LTE solution but demand has begun to decrease.

Qualcomm shipments saw 32.4% growth on year in first-quarter 2015 but this is mainly due to the low base in 2014.

2Q15 forecastQualcomm is expected to see

orders return in second-quarter 2015 but new mid-range products will not be introduced until the end of 2015. Hence, it would be hard for the firm to compete with MediaTek.

LT E s o l u t i o n p r o d u c t sh ipments wi l l con t inue to grow as customers introduce new products that carry the Snapdragon 410 and 600 series. However, the market share will continue to be small.

Qualcomm is likely to see

2015 shipment growth reach 18.2% on year, a 14.2pp drop compared to the on-year shipment growth in first-quarter 2015.

Shipments by basebandCompared with other products,

Q u a l c o m m ’s LT E p r o d u c t shipments showed decrease in first-quarter 2015 which was mainly due to weak demand and competition from MediaTek.

Q u a l c o m m 3 G p r o d u c t shipments faced low season and competition from Spreadtrum, hence showed a s igni f icant decrease.

2Q15 forecastIn s econd -qua r t e r 2015 ,

Q u a l c o m m ’s LT E p r o d u c t shipment share wil l show a considerable increase, reaching 82%, pushing overall shipments

to increase. Qua lcomm’s 3G p roduc t

s h i p m e n t s a r e e x p e c t e d t o continue falling. The firm’s 3G solution shipments to China-based customers are likely to account for only 18% of overall shipments.

Shipments by architectureQ u a l c o m m c o n t i n u e d t o

emphasize the Snapdragon 400 and 410 in first-quarter 2015 as the shipment share exceeded 60% compared to other products.

Snapdragon 600 series are not as competitive and has been overpowered by similar products from MediaTek. Shipments of Snapdragon 800 series products have been growing steadily and some customers have begun to use Snapdragon 810.

2Q15 forecastQualcomm will continue to

focus on Snapdragon 400 and 410 in second-quarter 2015 but as product sales begin to slow down, the overall shipment share will decrease by 4%.

Snapdragon 600 series has been favored by many customers and shipments are l ikely to increase but still cannot compare with competitors.

W i t h i n Q u a l c o m m ’ s Snapdragon 800 series , 801 shipments will begin to fall and be replaced by 810. However, shipment growth of 810 will not be able to make up for the fall of 801 shipments.

SpreadtrumS p r e a d t r u m i n t r o d u c e d

SC7731 in the first quarter of 2015 and due to its strong performance and cost competitiveness hence the product has been favored by many customers.

Spreadtrum’s new product has been welcomed by the market hence first-quarter 2015 shipment growth reached 12.5% on quarter and became one of the few AP firms to see shipments grow.

MediaTek shipment share by baseband type, 4Q13-2Q15

Source: Digitimes Research, April 2015

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2Q15(f)1Q15(e)4Q143Q142Q141Q144Q13LTE 49.0%41.5%32.0%15.0%1.2%0.5%0.0%CDMA 5.0%5.0%4.5%5.0%6.1%6.0%4.9%EDGE 12.0%14.5%15.5%16.0%17.7%15.5%17.3%TDSCDMA 5.0%7.0%12.0%23.0%27.0%32.0%28.8%WCDMA 29.0%32.0%36.0%41.0%48.0%46.0%49.0%

Qualcomm smartphone AP shipments, 4Q13-2Q15 (m units)

Source: Digitimes Research, April 2015

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2Q15(f)1Q15(e)4Q143Q142Q141Q144Q13Shipments 26.024.536.029.022.018.516.0Q/Q 6.1%-31.9%24.1%31.8%18.9%15.6%-20.0%Y/Y 18.2%32.4%125.0%45.0%2.3%-7.5%-27.3%

PRODUCT NEWS Thursday June 4, 20158

AZUL presents new global trend in UI/UX at COMPUTEXPress release

AZUL Design specializes in providing UI/UX design service solutions including initial use flow planning, visual interface design combining aesthetics, technical program porting and integration, and 3D interface technology. AZUL also offers a variety of digital media design services such as website construction and app development. Three leading chip makers including MediaTek, MStar, and Novatek have chosen AZUL to be their main partner.

The t rend and demand in UI/UX design have evolved from design thinking originally focusing on the product itself to being end-user oriented. Modern life is filled with devices such as

smartphones, tablets, and even motion sensing interaction gadgets that are more and more popular, attracting use for entertainment purposes and thereby increasing their values and prevalence. The interface models used by these products have deeply rooted in people’s lives and affected the surroundings. Therefore, how to design a new interaction model so that the products are easier to use and the applications market can turn a whole new look is what the industries are striving for.

At the COMPUTEXT this year, AZUL Design (Booth K0725a, 1st floor, Nangang Exhibition Hall) bases its UI/UX exhibits on three themes – designs combining aesthetics, diversifying demands by interactive applications, and

system porting and integration. AZUL’s design thinking centers on users, delivering intuitive and interactive interface designs that can attract all end device users. Not only can the designs make product features stand out but also enable different interfaces on panel displays, tablets, and smartphones, bringing users diverse experiences. If the various functions in the interface are to be imported or exported, AZUL’s technical team can create human-machine interfaces by applying its premium quality UI/UX designs to bring endless possibilities into reality.

A Z U L D e s i g n ( B o o t h K0725a, 1st f loor, Nangang Exhibition Hall) shares its years of experience in assisting partners

with services in user experience planning, user interface design, software architecture building, and middleware integration. The products co-exhibited with Qt this year include AOC smart TV UI design and middleware integration, Philips smart TV UI development and middleware integration, Chanson Water Ionizer UI/UX user experience design, Home Security user experience design and cross-platform/multi-screen solution, video phone UI/UX user experience design, and IOT smart vending machine UI/UX user exper ience design. These exhibits will allow more companies with needs for UI/UX design services to better understand the importance and technology of UI/UX.

AZUL Design, in cooperation with Digia, will showcase Qt-based embedded systems and cross-platform solutions at Computex 2015.

Press release

S o c i o n e x t h a s b e g u n s a m p l i n g i t s n e w MN2WS03101A, a single-chip IC for 4K/p60, HEVC and VP9 playback with built-in HDMI-Tx/Rx. The new device is compatible with HEVC Main 10 profile, and supports new copyright protection, HDR and wide color gamut.

As 4K resolution video becomes more popular and a wider variety of video content is available through the network, there is a high need for a playback capability for new video formats in addition to conventional full HD. HEVC, the new data compression technology is being adopted now for 4K Video, in particular. The market requires a compact, low-power chip that performs real-time decoding of HEVC-compressed 4K/p60 video, allowing output of high quality video with various image processing effects.

Socionext’s MN2WS03101A supports 4K/p60 video all the way through input, decoding to output. It can accommodate the high quality playback of 4K video such as HEVC, VP9 and H.264. It supports the up-conversion of Full HD videos with

the conventional codec standards, such as H264 or MPEG-2, to 4K, using super-resolution processing.

The new device is also capable of real-time, multi-channel transcoding (Four-channel Full HD videos to H.264 or to MPEG2) and 4X speed transcoding of Full HD one-channel video, which is applicable for media distribution equipment such as recoding instruments or home gateways.

Socionext plans to start volume production of MN2WS03101A in the second half of 2015, targeting it for next generation 4K video equipment.

Socionext is a new company established by the consolidation of the system LSI businesses of Fujitsu Limited and Panasonic Corporation. It has a track record of development and delivery of products for various video applications. Socionext is now sampling 4K HEVC real-time encoder MB86M31. Together with MN2WS03101A, the company will support total video solution for a wide range of applications.

Other MN2WS03101A features include: HDMI 2.0 Input (HDCP2.2), high quality and high definition video processing (HDR, BT. 2020) and stress-free special processing such as image compositing,

rotation, or deforming. It is available now in samples in FCBGA-1177 31mm x 31mm package.

Socionext will showcase MN2WS03101A at Computex Taipei 2015, from June 2 - 6, 2015 at Booth N0108, Nan gang Hall.

Socionext sampling single-chip IC for 4K media playbackwith built-in HDMI Tx/Rx

MN2WS03101A

ThroughTek to showcase hardware/software integration with partner solutionsPress release

This year, hardware /sof tware in tegra t ion i s a ma jor focus , with much attention to market p e r s p e c t i v e s o n e n t e r p r i s e s leveraging IoT functionality to maximize business opportunities in the changing technological landscape. ThroughTek Co., Ltd., a leading IoT (Internet of Things) & M2M (Machine to Machine) total solution provider, showcases its partner solutions with Kalay Platform integrat ion for SoC, cloud service, and smart home applications.

Kalay Integration with chipset vendors for enabling connected d e v i c e s i n c l u d e : Q u a l c o m m , Broadcom, Texas Ins t rument , M e d i a Te k , N X P, A m b a r e l l a , Novatek, AiT and Mars.

Strategic partners featuring their solutions and opportunities with IoT:

IBM Softlayer for cloud server, Trend Micro and AllSeen Alliance

Smart home products using Kalay’s IoT solution for real-time control:

Sampo television, cooling system, and air purifier

With Kalay Apps, consumers can use real-time monitoring to control HVAC (heating, ventilation, and air conditioning), lighting, shades/blind/curtains, and audio/video systems using ThroughTek’s P2P (Peer to Peer) technology and VSaaS (Video Surveillance as a Service) solutions with logic engine rule settings for efficient home automation systems.

ThroughTek is at the Taipei World Trade Center (TWTC), Exhibition Hall 3, Booth G0250.

ARTICLEThursday June 4, 2015 9...Continued from page 5

In comparison with Surface Pro 3, ODMs were not successful in promoting larger than 10.8-inch high-end 2-in-1 tablets. Most ODM designs were based on the consideration of a lower sales price and dependent on Intel subsidies for Atom processors. They launched 11.6-inch tablets but saw unsatisfactory sales due to the fact the market saw little differentiation in this segment from the 10-inch segment. A few ODMs also launched 13.3-inch business-use tablets equipped with Core processors, but such models were not slim enough for market acceptance.

In the fourth quarter of 2014, Intel launched the Core M platform f e a t u r i n g w h a t w a s t o u t e d a s hav ing fea tures tha t de l ivered h i g h p e r f o r m a n c e , l o w p o w e r consumption and slimness. With a large reduction in PCBA dimensions and supporting finless designs, Core M helped improve the confidence of ODMs for developing high-end 2-in-1 tablets. However, because Core M was designed to be a fanless power-reducing platform, its overall performance was only 80% of the preceding generation and therefore the platform did not meet the needs of tablet users in the high-end of the market, resulting in sales that were not as good as expected for vendors using Core M in the mid-range and high-end of the market.

Windows tablets smaller than 9-inches: Weak sales in 2014

Windows tablets smaller than 9-inches launched by international vendors, despite having free Windows licensing beginning from the second quarter of 2014, did not sell well because small screen sizes were not suitable for desktop use and touch control was actually inferior to that of less expensive Android tablets.

White-box vendors suffered a large decrease in Android tablet shipments and thinning profitability and thus began to seek opportunities for product differentiation. In the fourth quarter of 2014, CTE-offered reference design for inexpensive Windows tablets and increased Intel subsidies specifically targeted to white-box vendors and they launched inexpensive Windows tablets smaller than 9-inches at the end of 2014.

The promotion strategy of large-scale subsidizing procurement of processors enabled Intel to attain target shipments of 46 million mobile APs in 2014. However, it is difficult to track white-box vendor shipments of tablets equipped with Intel mobile APs and some international vendors, such as Lenovo and Acer, had mobile device shipments that fell short of expectations, so Digitimes Research estimates that global shipments of mobile terminal devices (tablets and smartphones) with Intel mobile APs in 2014 totaled 36.2 million units.

Th i s came a t a cos t , a s t he subsidization and cost of establishing CTE had the In te l Mobi le and Communications Group (MCG) incurring a large loss of US$4.2 billion to in 2014. Moreover, due to the losses, Intel merged its PC Client Group (PCCG) and Mobile and Communications Group (MCG) to form the Client Computing Group (CCG).

Smartphones to be key driver behind Intel processor shipments for 2015

With the tablet market weakening, D i g i t i m e s R e s e a r c h b e l i e v e s smartphones can be a key driver for

Intel processor shipments for 2015. However, with the competitiveness of the Atom X3 being questioned, Intel will take an aggressive position with its white-box partners again this year. Overall, Digitimes Research expects Intel’s global mobile device shipments to reach 43.85 million, representing an increase of 21% from 36.2 million in 2014.

Factors contributing to shipment growth include shipments to Asustek Computer, which is expanding its smartphone market presence; the availability of the Atom x3 series for the entry-level market segment; and Intel’s efforts with China-based companies under the CTE (China Technical Ecosystem) program. Intel will also be actively strengthening i ts t ies with China’s white-box manufacturers.

In 2015, Asustek will continue to expand its brand awareness in Southeast Asia, India, Europe and the US. In China, Asustek with its sub-brand Pegasus is partnering with local telecom carriers. Asustek utilizes a strategy of launching cheap phones pegged with mid-range specs, so the company is expected to see its smartphone shipments exceed 10 million units in 2015 despite a more crowded marketplace. However, Digitimes Research is even more optimistic and forecasts that Asustek wi l l sh ip a to ta l of 15 mi l l ion smartphones in 2015, which will in turn have a positive influence on its supplier Intel.

Asustek launched the second generation ZenFone-series in the first quarter of 2015. The series was mainly powered by Intel processors.

In fact, Asustek has approached other processor suppliers due to Intel not increasing its subsidies. Intel was also unable to roll out its Atom x3-C3440 (SoFIA LTE) during the first half of 2015. As a result, shipments of Asustek’s ZenFone series utilizing Intel’s chips will total nine million units in 2015, representing growth of only 20% on year.

A s u s t e k h a s s t a r t e d t h e development of smartphones utilizing Q u a l c o m m ’s S n a p d r a g o n 6 1 5 processor in the second half of 2014, though the chip reportedly has an overheating problem.

I n t e l ’ s m i d - t o h i g h - e n d smartphone chips have several disadvantages, such as few options, h igh cos t s , and l e s s - e f f ec t i ve performance and power consumption compared with competitors. With the Atom x3-C3440 series s t i l l not arriving on the market, Intel’s offerings for smartphones remain incomplete. Even with attractive subsidies, brand vendors are more reluctant to use Intel solutions.

While not being able to market its smartphone chips successfully to brand vendors, Intel has turned its attention to white-box manufacturers. Since 2015, Intel has been seeking partnerships with white-box handset makers. China-based Waterworld Technology is among Intel’s partners drawing much attention. Waterworld managed to ship a total of 100 million handsets including feature phones and smartphones in 2014.

Waterworld is shipping devices to the local major distributors and mobile operators in emerging markets such as India, Latin America, Eastern Europe and Africa, and to China’s top-3 telecom carriers. In these markets, feature phones are still the majority of the number of phones sold.

Digitimes Research observes that about 90% of Waterworld’s 2014 shipments were feature phones. With

smartphones becoming cheap enough to replace feature phones, there is huge demand for smartphones in emerging markets outside of China, which will be a new engine of growth for Waterworld shipments.

Partnering with Intel will provide Waterworld three major benefits. First, with its large-scale shipments, Waterworld is able to receive more support and subsidies from Intel. Second, Intel with its Atom x3-C3440 and x3-C3230RK chips could be the ideal solutions for Waterworld’s 3G phone models targeted at emerging marke t s tha t a re undergo ing a transition from feature phones to smartphones. And finally, cooperating with Intel will give Waterworld more bargaining power when negotiating with ARM-based processor suppliers.

2015 will be the first year of Intel’s cooperation with China’s white-box manufacturers. Partnering with Waterworld and other white-box makers will bring Intel additional shipments of 3.3 mil l ion uni ts , Digitimes Research anticipates. Combining shipments to brand smartphone companies, Intel’s overall shipments for Android phones are forecast to reach 12.4 million units in 2015 representing a 62% increase compared to 2014.

Windows devices to replace Android ones as Intel’s shipment target tablets

Windows tablets will replace Android devices as a driving force behind Intel’s processor shipments in 2015, due to declining demand for Android tablets, the development of notebooks leaning toward 2-in-1 designs, the availability of Windows 10 on tablets, and more subsidies for Android phones than tablets.

For 2015, OEM brand and white-box vendors will focus on affordable 10-inch 2-in-1s. With the Surface Pro 3 being a success for Microsoft, OEM brand vendors will be more confident in their high-end 2-in-1 products sized larger than 10.8-inches. Smaller than 9-inch models will become the realm of white-box vendors using a dual-OS design for markets such as China and without having the watchful-eye and influence of Google, which does not approve of the dual-OS platform.

Digitimes Research anticipates that Intel processor shipments for Windows tablets will reach 19 million units in 2015, up 47% on year.

Surface 3 and white-box models find their own niche in the market for 10-inch 2-in-1s

The Asustek Transformer Book T100 helped drive the adoption of 10-inch Windows 2-in-1 tablets in 2014. The market for 10-inch 2-in-1s is set to expand significantly in 2015, Digitimes Research believes. The market growth will be driven by sales of Microsoft’s Surface 3 and models rolled out by white-box manufacturers, instead of products from OEM brand vendors.

B r a n d v e n d o r s r e p o r t e d disappointing shipments of their 2-in-1 products in 2014. And acknowledging a particularly weak first half of 2015 for notebooks and declining shipments of 2-in-1s during the period, vendors are pessimistic about their shipment outlook for all of 2015.

However, the upcoming Windows 10 OS scheduled for launch a t the end of July will improve the desktop experience, and it will have new features such as the Edge web browser, Continuum, Cortana and UI for Windows Universal to put an emphasis on touch and 2-in-1 exper iences . Compared wi th conventional notebooks, 2-in-1s running the Windows 10 will have more space to play.

In addi t ion, major brand PC vendors will launch their new 10-inch 2-in-1 models along with the Windows 10 release, due to the availability of Intel’s 14nm Atom x5 and x7 series (formerly known as Cherry Trail) and Microsoft’s preferential licensing fees for 10-inch models. Asustek has already introduced its second generation Transformer Book T100HA at Computex 2015.

Microsoft unveiled the Surface 3 in March, and started selling the series in early May. The Surface 3 has a similar design to the Surface Pro 3, which

turned out to be a successful tablet product from Microsoft.

The Microsoft Surface 3 runs the full version of Windows, instead of the Windows RT, and uses Intel Atom chips which are also being chosen by its OEM partners. Microsoft has differentiated its Surface 3 tablet from its OEM partners through a pricing difference.

The price-performance ratio of the Surface 3 is not high, and the device is not as attractive as the Surface Pro 3. Even with lower pricing, shipments of the Surface 3 are unlikely to substantially surpass those of the Surface Pro series. Digitimes Research estimates that monthly shipments of the Surface 3 will initially remain at almost 800,000 units, but will fall below 400,000 units in the third quarter. For all of 2015, shipments of the Surface 3 are forecast to total about 2.4 million units.

Shipments from white-box makers will be another driving force of the 10-inch 2-in-1 tablet market in 2015. With subsidies from Intel and Microsoft, and also being part of the CTE (China Technical Ecosystem), white-box makers have been actively involved in the Windows tablet market since the fourth quarter of 2014.

White-box makers stepped into the Windows tablet market with small-size models, and have expanded their offerings to include 2-in-1 devices featuring bigger screens.

In early 2015, white-box makers partnering with Intel released more 2-in-1 reference designs. In the beginning of the second quarter, China local brands such as Teclast, Onda and Ramos rolled out similar products.

Judging from the 2-in-1 products rolled out by white-box makers, they are not only cheap but also come with competitive specs and features. For instance, the mainstream 2-in-1 detachable devices from Teclast and Ramos both utilize 10.6-inch full-HD displays, have 2GB RAM and 64GB ROM, have phone functionality and have dual-OS support. Prices for the two models are both CNY1,299, w h i c h i s C N Y 6 0 0 l o w e r t h a n Asustek’s T100 2-in-1 featuring a 10.1-inch HD display.

Nevertheless, Windows tablet users are more concerned about after-sales service and quality because the devices carry higher prices than other tablets and should bring Windows-like productivity. Windows 2-in-1s products from white-box makers will be challenged in these areas, since they generally cut corners to make a cheaper product, and ignore after-sales service.

White-box makers will allocate more resources to their Windows 2-in-1 tablets and put less focus on tablets with small screens, and are forecast to ship 2.6 million 2-in-1s in 2015.

Large-size Surface Pro models will account for the largest share of overall

shipments in 2015.For Windows-based 2-in-1 device

sized over 10.8-inches, the Surface Pro will remain the leader of the segment in 2015 and Microsoft is also expected to release an even larger model in the fourth quarter, adopting Intel’s upcoming Skylake processor.

PC brand vendors are expected to follow suit and increase projects for high-end ultra-thin 2-in-1 devices. They will also try to develop unique innovations for the devices. Some white-box players are also expected to start trying to develop large-size 2-in-1s and use Core M-level processors in them.

Dig i t imes Resea rch expec t s shipments of Windows-based 2-in-1s sized larger than 10.8-inches to reach 5.2 million units in 2015.

Because of the Surface Pro 3’s strong sales, the fact that the device has sti l l not yet met an equally matched competitor and has avoided direct competition against the Surface 3, has led Microsoft to be in no hurry to release a fourth-generation Surface Pro product despite the fact the product has been in the market for almost a year. The fourth-generation Surface Pro is expected to enter production by the end of the third quarter for release in the fourth quarter.

Digitimes Research believes the fourth-generation Surface Pro was set to launch in the fourth quarter because Microsoft is waiting for the release of Intel’s sixth-generation Skylake-based Core and Core M processors and it aims to challenge Apple’s 12.85-inch iPad, which is supposedly scheduled also for the fourth quarter.

The Sky lake -Y a rch i t ec tu re will see close to 25% improvement in performance compared to the previous-generation Broadwell-Y, while Core M processors, which feature a fanless design, will be able to help players to create thinner and lighter products.

Dig i t imes Resea rch expec t s Microsoft to adopt the best of the Skylake-Y series processors for its entry-level version of the fourth-generation Surface Pro, similar to its strategy for the Surface 3, which has adopted the top-ranked Atom X7 processor.

As for the high-end version, Microsof t i s expected to use a Skylake-U processor, which i s better in performance than those of Skylake-Y. As for the size, since 12-inch is still rather small for some professional users, Microsoft is expected to offer the 14-inch display as an alternative choice for the new Surface Pro.

T h e a d o p t i o n o f a C o r e M processor and the increase in size will allow Microsoft to be able to offer at least one extra Surface Pro model for choice to consumers. Digitimes Research expects Surface Pro series

shipments to reach 3.3 million units in 2015, up from 2.65 million units in 2014 (most of the volume came from the second half, since the Surface Pro 3 was released in late-June 2014). The limited growth is expected to be caused by the late launch of the fourth-generation Surface Pro as well as impact over demand from the Surface 3 and the upcoming 12.85-inch iPad.

As for brand vendor products, Asus tek Compute r ’s 12 .5 - inch T300 Chi, featuring a Broadwell-Y processor and released in early 2014, although having a thin and light industrial design, has performance that does not justify a US$699 price tag and only about 30,000 units have shipped per month and it is unlikely that there will be any major improvement in shipments until the release of Skylake-Y processors.

In the second half of the year, vendors including Lenovo, Hewlett-Packard (HP) and Dell are planning to release new large-size 2-in-1s using Intel Core-level processors. These products are expected to have high pricing and mainly target the enterprise with limited shipments.

Digitimes Research expects PC brand vendors’ shipments of 2-in-1s sized larger than 10.8-inches to reach 1.5 million units in 2015.

White-box players will mainly play in the inexpensive 10-inch product segment, but a few players are expected to launch 2-in-1s sized larger than 10.8-inches, using Bay Trail-T or Core M processor. However, these type of products are usually priced at above CNY1,500 (US$242) and the Core M models can even go as high as over US$2,499, making them rather tough to sell for white-box players via their existing channels despite the quality issue. As a result, Digitimes Research expects the segment to only contribute about 400,000 units in 2015.

Sub-9-inch Windows tablets will see limited growth in 2015

Among all sized Wintel tablets, Sub-9-inch models are expected to see the least shipment growth in 2015 since their small sizes will prevent Windows from unleashing its full potential and the segment will see relatively limited demand.

Although several white-box players have adopted the dual-OS feature in their sub-9-inch tablets in early 2015 to attract demand, the feature is not practical as most of these tablets still require a reboot for switching opera t ing sys tems and the two operating systems are not able to share storage due to compatibility issues.

Furthermore, dual-OS tablets have almost no chance to succeed in markets outside of China due to Google’s restrictions.

Windows is also expected to impact sales of Intel-based small-size mobile products.

Intel Atom CPU’s key shipments drivers by product, 2015

Model Android Phone Windows Tablet Android Tablet Windows Tablet Windows Tablet CMPC Tablet

Size Size < 7" 10.8"<= Size > 9" Size >= 7" Size>10.8" Size<9" Size=10" or 7"

Atom X5/X7

& Bay

Trail

Push by brand vendors

market growth

subsidies to brand vendors

Contributed mainly by brand vendors’ 2-in-1s

White-box players

pushing and try out new segment

inexpensive Surface Windows 10 stimulate

demand

Advanced functions

entry of white-box players

Subsidies to white-box players

push by

white-box players

Dual-OS feature

Education tablet shipments expanding in emerging markets

Atom X3 (SoFIA)

Growth in emerging markets

entry of white-box

players

subsidy to white-box players

3G/4G low-price

solution available

Subsidies to brand vendors

Rockchip pushes

into the segment

Baseband SoC prices reached

sweet spot

Intel Core series processor key shipment drivers by product, 2015

Model Android Phone Windows Tablet Android

Tablet Windows Tablet Windows Tablet CMPC Tablet

Size Size < 7" 10.8"<= Size > 9" Size >= 7" Size>10.8" Size<9" Size=10" or 7"

Core

Push by Surface Pro

OEM/ODM turning from NB to tablet

Windows 10 stimulate demand

Core M

Lighter weight Surface Pro

Core M performance improvement

Windows 10 stimulate demand

Intel mobile processor shipment estimate by product, 2015 (m units)

Source: Digitimes, June 2015

12.4

10 9.4

5.2

3.8

3

0.2 Android Phone

Windows Tablet(Mid)

Android Tablet

Windows Tablet(Large)

Windows Tablet(Small)

CMPC Tablet

Chromebook

Joseph Tsai, DIGITIMES, Taipei

Competition in the graphics card market has grown fierce

as demand for graphics cards from the gaming market continues to grow. To stay competitive in the market, Gigabyte Technology has invested heavily into technology R&D and achieved good results from the efforts.

The company has created a top-tier series for its graphics cards so users are able to acquire the top of the line products offered by Gigabyte. The company has also been aggressively looking to enter into new product lines such as chassis to boost the business unit’s overall performance.

Digitimes recently sat down with Eddie Lin, associate vice president of Gigabyte Gaming Product Business Unit to talk about Gigabyte’s new innovations and future strategy.

Q: What new innovations is Gigabyte showcasing during Computex 2015?

A: We have prepared several new graphics cards for Computex and are also showcasing graphics ca rds us ing Nv id ia ’s l a t e s t GTX980 Ti GPU.

We also added the G1 Gaming series product line for our top-end graphics cards so consumers know that they have picked the best card that Gigabyte has to offer for the specific price tier.

In addition to new products, we have greatly enhanced the industrial design for our graphics cards and integrated several unique innovations and technologies to strengthen our competitiveness.

Our new WindForce solution has several new tweaks to the fan

design to allow more air intake to help maintain the graphics card’s temperature at around 65-degrees Celsius during full workloads. The design also keeps noise generated to a minimal.

We also added a warning s y s t e m t o t h e s i d e o f t h e WindForce solution. When the graphics card does not need cooling, Gigabyte’s technology stops the fans from spinning to cu t down no i se , and the warning system will light up to inform users that the fans are not malfunctioning.

Gigabyte Flex Display is our newly developed technology. G r a p h i c s c a r d s w i t h t h e technology can output to four displays via a combination of two DVI ports, three Display ports and one HDMI port. The technology automatically detects which ports are being used and shifts the connection to the ports.

We a l s o i m p r o v e d o u r WaterForce liquid cooling solution with a better pipe line layout and a new control system.

Q: What is the G1 Gaming series? What can consumers expect from the series’ products?

A: The G1 Gaming series is the top-tier family of our graphics card products. For example, w e h a v e s e v e r a l G T X 9 8 0 -based graphics cards, but the GTX980 graphics card under the G1 Gaming series has the best performance, specifications and cooling among its counterparts.

Buying G1 Gaming series products means consumers have purchased the best graphics card Gigabyte can offer for the segment. Creating a new series is also a good way for consumers to determine Gigabyte’s top-of-the-

line products.In addition, graphics cards

under the G1 Gaming series feature unique designs such as a special metal back plate for better cooling.

Q: How was the graphics card market in 2014? As competition is growing fierce, is Gigabyte taking any measures to help it stay competitive?

A: Ever since Bitcoin miners turned to other cheaper solutions, graphics card shipments have not seen any major growth. However, despite the fact that graphics card shipments have slightly dropped, our product ASPs have been rising.

In the past few years, most consumers were satisfied with Full HD resolution gaming, but with Ultra HD resolution gaming growing popular, demand for high-end graphics cards has been rising, which of course has benefited product ASPs.

We have been aggressively developing new innovations and technologies to maintain our advantages in the market, and we believe this is the way to stay competitive.

Q: What is the demand for Gigabyte’s WaterForce solution? Has Gigabyte added any new technology or innovations for 2015?

A: Our WaterForce cooling system has achieved better-than-expected sales and we see demand from markets such as the US, Europe and China.

We h a v e r e d e s i g n e d t h e solution’s control system and added a function so that users can press a button to make the three SLI-connected graphics cards reach the same temperature. The

new design also makes the cooling system easier to install. The OLED display of the control system also provides clearer information on the graphics cards’ status.

Q : I s G i g a b y t e ’s V G A department showcasing new products for the Aorus brand?

A: We are showcasing the K7 keyboard and M7 mouse during Computex 2015 and will continue

to develop new Aorus branded accessories.

We will soon start developing chassis for gaming and expect the new chassis business to see good demand from the gaming market.

Vir tua l rea l i ty i s a l so an emerging application that we are closely monitoring and we believe the industry is filled with business opportunities.

INTERVIEW Thursday June 4, 201510

Eddie Lin, Associate Vice President of Gigabyte Gaming Product Business Unit

Q&A with Eddie Lin, associate vice president of Gaming Product Business Unit

Gigabyte to stay competitive in VGA market with new technology:

Gigabyte G1 series N980TG1-6GD graphics card featuring Nvidia GTX 980 Ti GPU

product is expected to be quite competitive hence MediaTek’s market share may be challenged.

Shipments by architecture

Spreadt rum cont inued to increase the Cortex-A7 shipment share in first-quarter 2015. The figure surpassed 70%.

Spread t rum con t inues to provide Cortex-A5 products for super low price end market products but the quantity has been falling. The shipment share of Cortex-A5 fell to 26% in first-quarter 2015.

2Q15 forecastSpreadtrum is expected to see

the Cortex-A7 shipment share exceed 80% in second-quarter 2015.

Sp read t rum’s Cor t ex -A5 architecture is mainly used in

EDGE and TD-SCDMA products and as the latter market has been in tranquility, the shipment share of Cortex-A5 is expected to fall to 19% in second-quarter 2015.

HiSiliconHiSilicon has benefitted from

the end product success of the firm’s only customer Huawei and saw 2014 shipments rise consecutively each quarter. Total shipments in 2014 exceeded 20 million units.

Sales of Huawei’s products that adopted HiSilicon solutions have entered stabilization in the first quarter of 2015 hence AP shipments have slowed down.

HiSilicon’s Kirin 930 began shipments in first-quarter 2015 and is the core of Huawei’s P8 product. Due to the fact that Kirin 930 has eight Cortex-A53 cores,

even though it has been labeled as a mid-range chip, the overall performance is strong. However, shipments of Kirin 930 will not be significant until the second quarter of 2015.

2Q15 forecastHiSi l i con i s expec ted to

see shipments grow by 30% in second-quarter 2015 due to existing shipments of Kirin 92x and as Huawei begins shipments of its P8 series which carry Kirin 93x and Kirin 620.

HiSilicon is expected to focus on Kirin 930 and Kirin 935 for the second quarter of 2015. The two products differ in clock rate and although both are considered mid-range the end market product are set at the high-end due to the functionalities. In addition, Kirin 620 has been considered an entry-level to mid-range product and is comparable in functionality with MediaTek’s MT6732.

LeadcoreAt the end of 2014, Leadcore

began cooperation with Xiaomi to introduce a new generation of low price Hongmi smartphone model that mainly uses LC1860C tri-mode chip.

H o n g m i , w h i c h a d o p t s LC1860C, is expected to see shipments reach one million uni ts . In the second half of second-quarter 2015, demand for Leadcore chips is likely to reach 1.5 million units.

2Q15 forecastShipments of the low price tri-

mode 4G smartphone by Xiaomi and Leadcore wi l l begin in second-quarter 2015 and this will help Leadcore to see smartphone APs grow steadily.

Just like Spreadtrum, Leadcore saw shipments decline due to the sudden freeze of the TD-SCDMA market in 2014. In 2015, the firm is expected to see a complete difference and second-quarter 2015 shipment growth is expected to show on-year growth of 6,900%.

2Q15 forecastSpreadtrum is expected to see

low price WCDMA shipments continue to thrive in second-quarter 2015 but facing pressure f rom MediaTek, the growth magnitude is predicted to wane.

Spreadtrum’s 2015 shipment growth is predicted to reach 85%, a considerable difference compared to 2014 when the firm saw weak shipments due to rapid demand fall of TD-SCDMA.

Shipments by baseband Shipments of Spreadtrum’s

WCDMA products continued to increase as the new product has been favored by the market in the first quarter of 2015.

S p r e a d t r u m ’s W C D M A products have been enjoyed by China local customers and international brands such as S a m s u n g a n d I n d i a - b a s e d Micromax.

The f i rm does have LTE products but currently it is a combination of AP plus baseband which is not cost competitive.

2Q15 forecastW C D M A p r o d u c t s w i l l

cont inue to be the focus of Spreadtrum as the product’s shipment share continues to grow in second-quarter 2015. EDGE product shipment share is also expected to reach a certain level.

Spreadtrum’s s ingle-chip LTE solution may be introduced by the second half of 2015. The

REPORTThursday June 4, 2015 11...Continued from page 7

0%10%20%30%40%50%60%70%80%90%

100%

2Q15(f)1Q15(e)4Q143Q142Q141Q144Q13LTE 82.0%75.0%67.0%37.0%22.0%12.0%1.3%CDMA 9.0%10.0%14.0%21.0%25.0%34.5%43.6%TDSCDMA 2.0%3.0%4.0%13.0%13.0%9.5%6.3%WCDMA 7.0%12.0%15.0%29.0%40.0%44.0%48.8%

Qualcomm shipment share by baseband type, 4Q13-2Q15

Source: Digitimes Research, April 2015

Spreadtrum smartphone AP shipments, 4Q13-2Q15 (m units)

Source: Digitimes Research, April 2015

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

0

2

4

6

8

10

12

14

16

18

20

2Q15(f)1Q15(e)4Q143Q142Q141Q144Q13Shipments 18.518.016.013.510.010.515.0Q/Q 2.8%12.5%18.5%35.0%-4.8%-30.0%25.0%Y/Y 85.0%71.4%6.7%12.5%-52.4%-46.2%66.7%

Spreadtrum shipments by baseband type, 4Q13-2Q15 (m units)

Source: Digitimes Research, April 2015

0

2

4

6

8

10

12

2Q15(f)1Q15(e)4Q143Q142Q141Q144Q13WCDMA 11.110.38.65.80.80.60.5TDSCDMA 0.40.50.82.34.45.08.5EDGE 5.25.65.34.74.54.86.0LTE 1.91.61.30.70.30.00.0

-500%

0%

500%

1000%

1500%

2000%

2500%

0

1

2

3

4

5

6

7

2Q15(f)1Q15(e)4Q143Q142Q141Q144Q13Shipments 6.55.06.56.05.53.03.5Q/Q 30.0%-23.1%8.3%9.1%83.3%-14.3%75.0%Y/Y 18.2%66.7%85.7%200.0%450.0%500.0%2233.3%

HiSilicon smartphone AP shipments, 4Q13-2Q15 (m units)

Source: Digitimes Research, April 2015

Press release

C h e n b r o i s s h o w c a s i n g f o u r categories of products this year – high density storage solutions, hyperscale datacenter solutions, appliance server solutions, and enterprise edge server and storage solutions – at its booth in the systems exhibition area at booth L0628, Nangang Exhibition Hall 4F. These products demonstrate combinations and applications o f C h e n b r o ’s p r o f e s s i o n a l t echnolog ica l capab i l i t i e s in mechanics, electronics, software simulation, and system validation.

High density storage solutions are a new line of Chenbro products including 4U 48-bay, 60-bay, 72-bay models with top-load hot-swap hard drive design, differentiating from regular horizontal mounted hard drives to allow maximum

storage capacity per space unit. However, the high density design introduces challenges in terms of heat dissipation, vibration, weight reduction, structure strength, and energy saving. Chenbro has been investing in verification equipment, system simulation, and electrical R&D in recent years, which has enabled Chenbro to solve these problems and win business and recognition from leading datacenter suppliers.

S e r v e r s f o r h y p e r s c a l e datacenters (over 9,000 racks) are very different from enterprise servers in both specifications and appearances. Normally, regular 1U enterprise servers support four 3.5” hot-swap hard drives, EEB (12”x13”) mainboard, and RAID data protection. Hyperscale datacenters, on the other hand, demand a lot more hard drives,

commonly 12-bay or 16-bay, and mainboards larger than 12”x13”. These specification requirements impose new challenges such as sag and bow of the bottom when the chassis depth is increased, heat dissipation difficulty as the air flow path becomes longer, and reduction of installation time due to increased number of hard drives. Chenbro has mature and reliable solutions to help customers resolve these worries. Furthermore, as datacenter servers usually have a lifecycle of 18 months, the quantity demand fluctuates widely and specification requirements change frequently, testing suppliers’ abilities to cope with changes and adjustments. Chenbro, with a 32-year history in the mechanical design business, has developed core competence – flexibility and agility enabling it to capture rising opportunities.

Intel CPU performance and multi-core technology are sufficient to most appl icat ions, thereby allowing server dimensions to shrink. Eying this trend, Chenbro has launched a series of chassis for special-purpose and entry-l e v e l s e r v e r s . T h e p r o d u c t s feature compact design but still offer adequate computing power and storage capacity required by applications, and on top of that , compelling CP ratio and customization flexibility.

Enterprises remain the target

market of servers. However, with c loud comput ing on the r i se , businesses are changing the way they evaluate IT investments. In terms of strategies for its enterprise servers, Chenbro looks to enhance functions that businesses are most concerned about and eliminate designs that are less in use so that companies receive maximum returns for their investments. Furthermore, Chenbro is also joining forces with industry partners to co-develop the best products and integrated solutions for business customers.

PRODUCT NEWS Thursday June 4, 201512

CAYIN to release video wall solution at Computex Taipei 2015

Cayin SMP-8000 digital signage player has 4 built-in display outputs, allowing flexible multi-display modes as many displays as 4x1, 2x2, or 1x3.

HED seeking worldwide partners for Beidou in China marketPress release

The Beidou, one of four global satell i te navigation systems, is included in national strategy plans by China government. The navigation market size in China is over RMB40 billion by 2020. The GNSS market penetration rate of Beidou in China will reach 60%. In recent years, IoT and wearable device market is boosting. The potential opportunities are obvious and attractive.

CEC Huada Electronic Design (HED), a leading IC design house from China, is also notable in global market. In 2013, HED entered the navigation field, aiming at IoT. Due to the advantages of its Beidou technology and unique GNSS eco-system, HED has introduced a series of Beidou/GNSS chip solutions which provide small size and low power consumption, and wishes to create a fruitful win-win business together with partners.

In a Digitimes interview, Sun Zhong Liang (general manager of HED GNSS Business Unit) showed strong interests in cooperation with worldwide and local companies, looking forward to further communication. HED has already successfully established partnerships with module design houses and system manufacturers. HED’s Computex booth is located at I1201, 1st floor, Nangang Exhibition Hall.

Beidou/GNSS: HED launches GNSS Solution for IoT and wearable applications.

Press release

D i g i t a l s i g n a g e s o l u t i o n developer, Cayin Technology, is at Computex 2015. CAYIN is introducing SMP-8000, the newest addition to its digital s i g n a g e p l a y e r c o l l e c t i o n , a longside showcases of the flexible contents it can carry at Booth K0929a.

By integrating technologies including cloud services, sensors, live streaming and more, the SMP-8000 shows promises to enrich the Full HD experience. It not only provides the solutions for users with various needs, whether it’s an interactive campaign or digital menu board, but also has the ability to directly connect with video walls. The latest model

has 4 built-in display outputs, allowing flexible multi-display modes as many displays as 4x1 or 2x2. Each output supports Full HD display resolution and up to 4K if in Single display mode to present crystal clear images to audiences.

The SMP player is preloaded with user-friendly managing software, which gives users adequate access to utilize various visualizations. The ready-to-use web-based Skin Edi tor accommodates c l ients f rom experts to computer novices, as it requires only drag-and-drop to create templates and achieve professional appearances. With very few l imi ta t ions , users c a n u s e H T M L 5 t o d e s i g n web applications from scratch

and even create proprietary management tools via Cayin’s SDK (software development kit).

To illustrate one of the many solutions its SMP players are capable to implement, attendees are encouraged to engage in the Sensor Demo Experience held at Cayin’s Computex booth. The showcase is set to demonstrate the integration between optical sensors, video camera, and touch screen, as well as the possibility to utilize digital signage as a powerful element of social media campaigns.

Cayin expects to elevate the digital signage experience by offering higher visual quality and simplifying the equipment to satisfy the needs of flexible multi-display functions like video walls.

Chenbro showcases high density storage and datacenter server series

Chenbro high density storage and enterprise edge server product family.