W29 july2014

BUSINESS & TECHNOLOGY INNOVATION REPORT

Week 29

2014

Prepared by

Ferhat Ünlükal

7/20/2014

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BUSINESS & TECHNOLOGY INNOVATION REPORT Week 29

Headlines

Consumer Electronics (CE)

• Samsung Electronics Co Ltd said that it has temporarily halted business with a Chinese supplier.

• LG has promised that its flexible, curved, transparent 60-inch OLED TV.

• Vizio aims to sell one million Ultra HD TVs in 2014.

• The total connected living room market is expected to cross $357.24 billion.

ICT

• Apple is gearing up to launch a new product that will utilize its location-aware iBeacon technology.

• Production of the iPhone 6 has either just begun, or is days away from starting.

• Fuel cell firm Intelligent Energy may be partnering with Apple to introduce fuel cell technology.

• IBM will partner exclusively with Apple to sell iPhones and iPads.

• Foxconn Electronics has unveiled a green tunnel-like data center in Guiyang, southwestern China.

• China-based vendor TCL Communication Technology Holdings is expected to ship 35-40 million smartphones and tablets.

• Global notebook shipments dropped 4.9% in the second quarter of 2014.

• Big Data investments will account for nearly $30 Billion in 2014 alone.

Flat Panel Industry

• AU Optronics (AUO) will begin volume production of 43-inch (42.5-inch) LCD TV panels at its 7.5G and 8.5G factories.

• Global shipments of large-size panels reached 71.78 million units in June 2014.

• South Korea-based panel makers have been developing OLED TV panels with Ultra HD resolution.

• Improvements in production yields of AMOLED handset panels are closing the manufacturing cost gap between AMOLED and TFT LCD smartphone.

• Smartphones equipped with 2K (2560 by 1440) displays are starting to appear in the market.

Semiconductor Industry

• Broadcom has announced its latest portfolio of chips aimed at the emerging market of small-cell base stations.

• Intel said that it has created a customized version of its Xeon E7 x2 processor.

• Atmel Corp. is solidifying its SmartConnect wirelessportfolio with a $140 million deal to acquire Newport Media Inc.

• MediaTek has introduced the MT6795, the 64bit True Octa-core LTE smartphone SoC offering.

• MediaTek unveiled the latest technology that enables 120Hz display.

• Semiconductor Wireless Sensor Networks Markets at $2.7 billion in 2013 are forecast to reach $12 billion Worldwide by 2020.

Software Industry

• Nest Labs is leading the charge of tech companies launching a new wireless protocol for Internet of Things devices.

• Google is sending out Project Ara hardware to developers cooking up parts for the hotly-anticipated modular smartphone.


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• Microsoft Corp.'s new chief executive has signaled a new era for the company.

• Mozilla will launch a series of inexpensive Firefox OS smartphone models.

• LinkedIn’s has announced it has acquired Newsle.

Service Industry

• Turkcell announced Turkey’s first Connected Car Platform.

• European datacentre services market will see a growth of 16% up to 2018.

Retail and Payment Industry

• Twitter just announced it’s acquired CardSpring to enable “in-the-moment commerce experiences.”

• Powa Technologies has sealed partnerships with many of the world’s leading POS resellers, accelerating global access to next generation payments solutions.

• Paysera has developed a technology that will replace existing parking habits in parking lots all over the World.

• A federal judge declined to dismiss antitrust lawsuits filed against Visa Inc and MasterCard Inc by retailers who opted out of an estimated $5.7 billion.

Consumer Electronics (CE)

Samsung

Halted business with Chinese supplier

• Samsung Electronics Co Ltd said that it has temporarily halted business with a Chinese supplier after finding evidence of suspected child labor.

• Samsung Electronics, in a statement posted on its official blog site, said it would permanently end business with Dongguan Shinyang Electronics Co Ltd if the allegations that the firm used child labor are confirmed.

Samsung’s stock performance

LG

Transparent 60 inch OLED TV

• LG has promised that its flexible, curved, transparent 60-inch OLED TV screen scheduled for 2017 will come out on time. However, "showing off or announcing a display and being able to have volume commercial production are two different things," cautioned Sweta Dash, director of display research and strategy at IHS. Still, at some point, "rollable flexible displays will be a big thing.”


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LG’s stock performance

Vizio

Ultra HD TV

• Vizio aims to sell one million Ultra HD TVs in 2014 largely driven by sales in the North America market during the second half of the year, according to industry sources.

• The panels used in the Vizio TVs are expected to come from AU Optronics (AUO) and Innolux while Amtran, Wistron, TPV and Foxconn Electronics will be responsible for assembly production.

• Vizio's sales goal comes as global shipments of Ultra HD TVs may reach as high as nearly 20 million units in 2014, with China expected to be the largest market for the technology. About three million Ultra HD TVs were sold in China during the first half of 2014 and sales are expected to reach around eight million in 2014.

CE Market

Connected Living Room Market

• The total connected living room market is expected to cross $357.24 billion by 2020 with a single digit growth rate. Currently, the market value is approximately $197.58 billion.

ICT Industry

Apple

iBeacon

• Apple is gearing up to launch a new

product that will utilize its location-aware iBeacon technology, according to a filing with the Federal Communications Commission.

• Apple’s iBeacon technology has recently made waves in the retail industry. The system enables apps to pin-point exactly where a user is located in relation to an iBeacon sensor, optimistically creating new opportunities for businesses to interact with customers in-store.

• Third-party companies have long offered iBeacon-powered hardware, but Apple has yet to debut its own device. Now, according to the filing below, Apple-branded hardware is on the way, but as 9to5Mac points out, it’s not yet clear how the new hardware will be marketed.

• The purpose of the device could vary greatly; it could serve as a replacement to the third-party sensors used in Apple stores since last December, it could be sold directly to retailers, or it could take the form of Apple’s first smart-home device.

Apple’s stock performance


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iPhone 6

• Production of the iPhone 6 has either just begun, or is days away from starting, according to a new report from Taiwan’s Economic Daily News.

• The newspaper claims that mass-production of the eagerly-anticipated next generation 4.7-inch iPhone 6 handset is set to begin during the third week of July – making it either this week or next – while production of the larger 5.5-inch “phablet” iPhone 6 will begin during the second week of August. No sources were cited for either of these reports.

• Production on the 5.5-inch iPhone 6 is said to have been plagued by issues related to the battery, display, and casting. Respected Apple analyst Ming-Chi Kuo of the Taiwanese firm KGI Securities has previously suggested that for this reason the handset could be delayed to 2015 — although if these new reports are to be believed, that may not be the case.

Partnering with Intelligent Energy for Fuel Cell

• Fuel cell firm Intelligent Energy may be partnering with Apple to introduce fuel cell technology into future MacBooks and other mobile devices claims a report in The Daily Mail. While the tabloid does not have a strong rumor track record, fuel cells have long been discussed as a possible energy source for portable electronics and there are a few interesting pieces of information linked to the report.

Cooperation with IBM

• IBM will partner exclusively with Apple to sell iPhones and iPads loaded with applications geared at enterprise clients this autumn, the company announced on Tuesday.

• The announcement, just two days before IBM releases its second quarter earnings, comes as the company

attempts to shift its focus to software and services as its hardware unit continues to slump, and follows a string of mobile software acquisitions. The company hopes software sales will contribute half of its total profit by 2015.

• The company will release more than 100 apps targeting industry specific issues in retail, healthcare, banking, travel, transportation and telecommunications IBM said.

Foxconn

Data Center

• Foxconn Electronics has unveiled a green tunnel-like data center in Guiyang, southwestern China, with architectural design taking into consideration of the local environment and climate to minimize energy consumption, according to the company.

• The data center is a fourth-generation containerized facility, with its servers produced by a joint venture set up by Foxconn and Hewlett-Packard (HP), Foxconn noted. The data center uses natural ventilation for cooling and does not need a cooling system, with average PUE (power usage effectiveness) reaching below 1.1, Foxconn indicated.

• The data center will be initially used by affiliates of the Foxconn Group for data storage and computing/analysis and support Guixzhou province to become a cloud computing center in China, Foxconn said. Since China Mobile, China Telecom and China Unicom will set up respective data centers in Guizhou, Foxconn plans to cooperate with the three telecom carriers.


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Foxconn’s stock performance

TCL

Smartphone and Tablet Shipments

• China-based vendor TCL Communication Technology Holdings is expected to ship 35-40 million smartphones and tablets as well as 25 million feature phones in 2014, according to Taiwan-based supply chain makers.

• TCL Communication shipped nearly 30 million terminal devices, including 15.03 million smartphones and tablets, during the first half of 2014, with the China market accounting for 10% and all overseas markets for 90%, the sources pointed out.

• TCL Communication sells its products under the brand TCL in the China market and under another brand Alcatel OneTouch in overseas markets, the sources noted. TCL Communication has been among the three largest handset vendors in the Latin America market and has cooperated with AT&T and T-Mobile in the US market, the sources indicated.

• As TCL Communication has adopted chip solutions developed by Taiwan-based IC design house MediaTek for almost all of its handset models, MediaTek is expected to benefit from TCL Communication's sales growth, the sources pointed out. However, TCL Communication has set up a large factory with annual production capacity of 120 million handsets in southern China and therefore is unlikely to release orders to Taiwan-based handset ODMs, the sources indicated.

TCL’s stock performance

ICT Market

Notebook Shipments

• Global notebook shipments dropped 4.9% in the second quarter of 2014, according to Digitimes Research. Despite the end of Windows XP bringing about a surge of notebook orders, panels and some key components were in limited supply, and demand in China and South and Central America was down, resulting in the sequential decline.

• Despite the decline, Hewlett-Packard (HP) saw 19.1% on-year growth in the second quarter as it capped on business opportunities prior to the discontinuation of Windows XP coupled with aggressive strategies in gaining shipments in the education segment from as early as the second half of 2013. Acer meanwhile reported 31.3% sequential growth during the second quarter as retail partners adjusted their inventories and the vendor released new units.

• In terms of OEMs, the two largest makers held a 61% share in shipments. Additionally, Wistron saw 13.3% sequential growth while Inventec and Pegatron both saw less than three million units shipped each, added Digitimes Research.


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Big Data Investments

• Despite challenges relating to privacy concerns and organizational resistance, Big Data investments continue to gain momentum throughout the globe. SNS Research estimates that Big Data investments will account for nearly $30 Billion in 2014 alone. These investments are further expected to grow at a CAGR of 17% over the next 6 years.

Flat Panel Industry

AUO

43’’ LCD TV Panels

• Taiwan-based AU Optronics (AUO) will begin volume production of 43-inch (42.5-inch) LCD TV panels at its 7.5G and 8.5G factories in the third quarter of 2014 in order to evade intense competition for 39- to 42-inch models, according to industry sources in Taiwan.

• LCD TV panels sized 43-inch were actually introduced into the market back in 2011 from Samsung Display but did not carve a niche in the market due to low yields, leading Samsung to focus primarily on production of 40- and 48-inch panels.

• AUO now is hoping to popularize the panel technology as an alternative to 42-inch panels, which are likely to suffer in shipments due to Innolux's recent moves to produce 39.5- (40-inch) panels to combat 39- to 42-inch panels.

• Market observers believe that shipments of 39- to 42-inch TV panels are likely to reach around 70 million units in 2014, and that AUO's move could influence those numbers.

AUO’s stock performance


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Panel Market

Large Size Panels

• Global shipments of large-size panels reached 71.78 million units in June 2014, up 3.4% on month. TV panel shipments reached 20.95 million, up 0.6% on month, while monitor panels slipped 1.4% to 13.48 million largely because increased demand for TV products pushed down demand for monitors. Notebook panel shipments meanwhile reached 16.29 million, down 3% on month, and tablet panel shipments reached 21.05 million, up 16.2% on month, according to WitsView.

• Moving into July 2014, large-size panel shipments are expected to drop 6-8% as various China-based vendors slow down procurement. This will lead to a 3-4% decline in overall TV panel shipments while monitor panel shipments will witness an 8-9% decline. Notebook panel shipments meanwhile will decline 10% in July and tablet panel shipments will see an on-month decline of 7%, added WitsView.

OLED TV Panels

• While Samsung Electronics is focusing on Ultra HD TVs instead of OLED TVs, South Korea-based panel makers have been developing OLED TV panels with Ultra HD resolution, according to Taiwan-based panel makers.

• Korea TV vendors anticipate growth for Ultra HD TVs in the high-end TV segment over OLED TVs due to price advantages and have since been developing a variety of UHD products ranging from 40- to 80-inch plus units that also come equipped with curved features.

• OLED TV shipments are expected to be limited in 2014 while Ultra HD TV shipments are expected to reach 17.83 million, up 475% on year, said Digitimes Research, adding that in 2017 global Ultra HD TV panel shipments will reach 72.5 million.

• Despite the increasing popularity for Ultra HD TVs, Korea panel makers still

anticipate growth for OLED TVs over the next few years, with shipments expected to see some of the biggest increases as of 2017 when OLED TV panel material costs are expected to decrease and yields increase.

AMOLED Panels

• Improvements in production yields of AMOLED handset panels are closing the manufacturing cost gap between AMOLED and TFT LCD smartphone displays. According to DisplaySearch, manufacturing costs for AMOLED panels are currently 10-20% higher than for TFT LCD displays; however, manufacturing costs for AMOLED handset displays are expected fall below costs for LCD handset displays within two years due to rapid improvement in AMOLED panel production yields.

• Early on, AMOLED panels were expected to cost less than LCD panels, because they do not require backlighting. Instead, production challenges kept AMOLED yields low, so costs remained higher than for equivalent LCDs. AMOLED became a high-end product, due to its high color gamut, good contrast, and slimness. Recent production yield improvements are expected to help AMOLED penetrate more broadly into smartphone panels, said the firm.

• "Until recently there have been few breakthroughs in the production of AMOLED displays, and the OLED industry seemed to be facing hard times," said Jimmy Kim, senior analyst of display materials and LED at DisplaySearch. "If AMOLED costs fall below LCDs, as expected, it would lead to more opportunities for the OLED display industry, greater competition with LCD, and more choices for consumers."

• For example, currently there is a 16% cost gap between 5-inch AMOLED and LCD 1920 by 1080 handset panels, but AMOLED panel costs are expected to fall below LCD panel costs when AMOLED production yields reach 90%, which is within sight. With cost


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reductions for OLED materials, the yield rate can be lower and still have a similar effect, added DisplaySearch.

2K Displays

• As smartphones equipped with 2K (2560 by 1440) displays are starting to appear in the market from vendors such as Vivo, more vendors are expected to launch 2K-smartphones in the second half of 2014, according to sources with Taiwan-based supply chain makers.

• Vivo launched its first smartphone equipped with a 6-inch 2K display, and Oppo and LG Electronics have followed suit by launching smartphones featuring 2K screens.

• Smartphones will increase resolutions and larger sizes are expected to be the focus of handset vendors' new products throughout the rest of 2014 into 2015 as competition increases and price wars intensify, the sources said.

• AU Optronics (AUO), JDI and Samsung Display are expected to be the main suppliers of 2K panel technology in the second half of 2014, the sources added.

• The sources also said vendors in China are expected to release various 4G smartphones with 2K panels in the second half due to 4G developments in the nation.

Semiconductor Industry

Broadcom

Small Cell Base Stations

• Broadcom has announced its latest portfolio of chips aimed at the emerging market of small-cell base stations. Geared for residential and enterprise systems, the company said its BCM617XX 3G and 4G LTE chips can compete with chip vendors more established in telecommunications macro cells.

• The SoCs claim to deliver data rates up to 300Mb/s, support LTE carrier aggregation and have a digital RF front end. They pack a dual core, quad-threaded Broadcom Zephyr processor that can autonomously configure WiFi, provision the cell and listen to traffic to mitigate interference, noted Broadcom.

Broadcom’s stock performance

Intel

Customized chip for Oracle

• Intel said that it has created a customized version of its Xeon E7 x2 processor that is tailored to work with Oracle software. The new chip will supposedly allow for better performing Oracle applications that can handle more tasks than they could previously handle.


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Intel’s stock performance

Atmel

Acquisition of Newport Media

• Atmel Corp. is solidifying its SmartConnect wirelessportfolio with a $140 million deal to acquire Newport Media Inc. (NMI), another key investment to advance itsIoT strategy.

Atmel’s stock performance

Mediatek

2K display in Smartphone

• MediaTek has introduced the MT6795, the 64bit True Octa-core LTE smartphone SoC offering what the company says is the world's first 2K display support. According to MediaTek the SoC is geared to empower high-end device makers to leap into the Android 64bit era.

• The MT6795 is set to be the first 64bit, LTE, True Octa-core SoC targeting the premium segment, with speed of up to 2.2GHz, to hit the market. The device

features MediaTek's CorePilot technology providing advanced multi-processor performance and thermal control, as well as dual-channel LPDDR3 clocked at 933MHz for top-end memory bandwidth in a smartphone, noted the company.

Mediatek’s stock performance

120 Hz Display on Mobile devices

• MediaTek unveiled the latest technology that enables 120Hz display on mobile devices, revolutionizing the high-end mobile experience. The breakthrough is made possible by combining Japan Display's leading panel technology with MediaTek System on Chip's (SoC) processing capabilities, resulting in a vastly superior mobile experience than ever before.

• Breaking the barriers of the 60Hz refresh rate to which smartphones have been limited to date, MediaTek and Japan Display havepushed the display's refresh rate to 120Hz, promising smooth scrolling and crystal clear view relative to a common 60Hz display. Capable of rendering content at 120 frames per second (fps), the MT6595 and MT6795 also enable the ultimate display clarity and motion fluency on 120Hz displays, improving all aspects of mobile experiences – from camera recording, video playback, and gaming, to the entire user interface (UI) experience.


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Semiconductor Market

Wireless Sensor Market

• Semiconductor Wireless Sensor Networks Markets at $2.7 billion in 2013 are forecast to reach $12 billion Worldwide by 2020. Wild growth, frequently measured as penetration rates is a result of the change out of wired sensor networks for wireless ones. In addition, the wireless networks have a broader reach than the wired ones did, spurring market extensions in a variety of applications, some not even thought of so far.

Software Industry

Google

New Wireless Protocol

• Nest Labs, the connected thermostat upstart acquired by Google for $3.2bn, is leading the charge of tech companies launching a new wireless protocol for Internet of Things devices.

• The Google-owned Internet of Things biz has, in effect, turned up the heat on a standards war.

• The major difference between the new low-power Thread networking protocol that Google wants to see take root and Bluetooth Smart (aka Bluetooth Low Energy, BLE or Bluetooth 4.0) – and still called BLE by everyone – is that Thread is IPv6-based while BLE is not.

• The model for BLE is that the phone (or any other device) sits on the edge of IP network and Bluetooth connects to it. This, however, is expected to change, according to Bluetooth SIG member and leading expert in the world of connecting devices with minimal power Nick Hunn.

Google’s stock performance

Project Ara – Modular Smartphone

• Google is sending out Project Ara hardware to developers cooking up parts for the hotly-anticipated modular smartphone.


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• Project Ara is a plan for a modular smartphone from the bods at Google's Advanced Technology and Projects group, the California-based search engine's research and development brain trust. You'll build your phone from modules you choose, each module a square of varying size that attaches to the phone with electro-permanent magnets.

Microsoft

Cost Cutting

• Microsoft Corp.'s new chief executive has signaled a new era for the company with a heavy finger on the delete key, erasing 18,000 jobs — 14% of the workforce.

Microsoft’s stock performance

Mozilla

Inexpensive Firefox OS Smartphone

• Mozilla will launch a series of inexpensive Firefox OS smartphone models in the Indian market this month, at prices of up to US$50 or around Rs 3,000, company COO and Mozilla Taiwan CEO Gong Li reported to Digitimes.

• When launched in Latin America and some European markets in July 2013, Firefox OS smartphones sold only about one million units, Gong said. Mozilla could partner with only one or two telecom operators in these countries which brought a relatively lukewarm response towards these ultra-cheap smartphones. However, it expects to meet a different fate in India as Mozilla

is seeking cooperation with more than 10 retail chains here.

Linkedin

Acquisition of Newsle

• LinkedIn’s has announced it has acquired Newsle, a service that lets you import your contacts from Facebook or LinkedIn and scans the Web to alerts you whether anyone in your network has been mentioned on the Web.


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Service Industry

Turkcell

Connected Car Platform

• Turkcell, Turkey’s leading telecommunications and technology company, announced Turkey’s first Connected Car Platform. The platform connects the car and its driver to mobile internet and essential location-based services, enriching the driving experience.

• Turkcell’s Connected Car Platform, which will be available in select Subaru and Volvo models in Turkey as of August 1st, offers an infotainment screen that works online.

Turkcell’s stock performance

Service Market

Datacenter Services Market

• European datacentre services market will see a growth of 16% up to 2018, thanks to the growth in enterprise cloud computing, content-heavy applications, and machine-to-machine (M2M) connectivity – which forms the basis for the Internet of Things (IoT).

• In addition, the cost advantage of outsourcing as companies look for ways to process an escalating amount of data without the hassle of managing an in-house datacentre is also pushing the uptake of managed datacentres in Europe, according to an analysis from research firm Frost & Sullivan.

Retail and Payment Industry

Twitter

Acquisition of CardSpring

• Twitter just announced it’s acquired CardSpring to enable “in-the-moment commerce experiences.” CardSpring is an application platform that lets developers build card-linked offers electronic coupons, loyalty cards, and virtual currencies that work with credit cards and other types of payments. Twitter will keep the service open.

Twitter’s stock performance

PowaPOS

Mobile and Tablet POS platform

• In just two months since the launch of PowaPOS, the first fully integrated, mobile and tablet-based POS platform, Powa Technologies has sealed partnerships with many of the world’s leading POS resellers, accelerating global access to next generation payments solutions. To further support the growing demand for these solutions, Powa Technolgies announces the completion of its Alpha program and rollout of its advanced PowaPOS Software Developer Program to independent software vendors (ISVs) globally. Developers can access the Developer Portal today, via the PowaPOS website.


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• “The PowaPOS SDK came with clear documentation and an easy to use, informative developer portal. Exactly what our developers need to deliver quick integration”

• The PowaPOS Software Developer Program features the PowaPOS SDK and online Developer Portal that, together, simplify app integration with PowaPOS point-of-sale hardware and services, including PowaTag, the company’s fast-growing mobile commerce solution that has more than 500 brand partners around the world. PowaTag’s global expansion was recently enhanced with the acquisition of Hong Kong-based MPayMe.

Paysera

Parking System

• Paysera, a global payment system, has developed a technology that will replace existing parking habits in parking lots all over the world. The new technology links the vehicle registration plate with an e-wallet and ensures that the driver can pay for parking without leaving the vehicle.

Retail and Payment Market

Antitrust Lawsuits

• A federal judge declined to dismiss antitrust lawsuits filed against Visa Inc and MasterCard Inc by retailers who opted out of an estimated $5.7 billion class action settlement in 2012 over transaction fees.

• Retailers such as Target Corp and Amazon.com Inc have accused Visa and MasterCard of fixing the fees charged to merchants each time their customers used credit or debit cards. They also alleged the two companies prevented merchants from steering customers to cheaper forms of payment.

References

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W29 july2014