W31 july2014

BUSINESS & TECHNOLOGY INNOVATION REPORT

Week 3 1

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Prepared by

Ferhat Ünlükal

8/1/2014

! BUSINESS & TECHNOLOGY INNOVATION REPORT

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BUSINESS & TECHNOLOGY INNOVATION REPORT Week 31

Headlines

Consumer Electronics (CE)

• Samsung Electronics Co. reported a bigger-than-expected fall in second quarter profit.

• Sony Corp. reported a surprise eightfold jump in quarterly profit.

• Vestel ID Team has been honored with the Platinum A' Design Award in Digital and Electronic Devices Design Competition.

ICT

• Apple has been planning to introduce a new streaming box for live and on demand content,

• Apple is close to acquiring Swell, a personalized radio and podcast application.

• Samsung Electronics Co. said it is delaying sales of its first Tizen-powered smartphone.

• BlackBerry said that it will acquire Secusmart.

• Foxconn’ battery-making arm agreed to pour more than 2 billion yuan ($323 million) into Anqing to produce lithium batteries, a popular power source for electric cars.

• Taiwan ODMs Quanta Computer and Inventec for HP and Compal Electronics and Wistron for Dell are expected to see increased shipments in the second half of 2014.

• Notebook vendors have significantly reduced their orders for shipments to Latin America.

• Global flexible electronics market is expected to reach $13.23 Billion by 2020 at an estimated CAGR of 21.73%.

• The market for LED drivers, MCUs, sensors and other chips used in smart lighting will grow from around $67 million in 2014 to $1.05 billion in 2019.

• Worldwide shipments of communications nodes for smart city networks will grow from 16.3 million annually in 2014 to 54.8 million in 2020.

• TechNavio's analysts forecast the Global Interactive Whiteboard market by revenue will grow at a CAGR of 15.95 percent over the period 2014-2018.

Flat Panel Industry

• AUO expects its small- to medium-size TFT-LCD panel shipments to increase 5-8%.

• Sony Corp (6758.T), Panasonic Corp (6752.T) and Japan Display Inc (6740.T) said they would form a joint venture to develop organic light-emitting diode (OLED) displays.

• Corning has announced its results for the second quarter of 2014.

• Taiwan-based makers together shipped 351.4 million small- to medium-size TFT-LCD panels in the second quarter of 2014.

• Taiwan-based makers shipped 67.518 million large-size (9-inch and above) TFT-LCD panels in the second quarter of 2014, increasing by 8.5% on quarter and by 0.9% on year.

• The world's TV set makers planned to purchase 20 million 4K LCD TV panels this year.

Semiconductor Industry

• Broadcom is planning to cut 240 jobs at its Irvine headquarters, and 630 throughout California.

• Broadcom announced that its BCM7252 high-efficiency video codec (HEVC) H.265 system-on-chip (SoC) will power


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Tata Sky's first generation Ultra HD set-top boxes

• Intel is forging the future of its Haswell CPU in Vietnam.

• The Wireless Power Consortium (WPC) announced significant advances to the resonant extension of the Qi specification

• The central government also plans to set up a national industry investment fund of CNY120 billion (US$19.3 billion).

Service Industry

• Cukurova Holding said it paid Russia's Alfa Group $1.6 billion to recover a disputed stake in Turkcell.

• AirTies Wireless Networks and Octoshape, announced that Digiturk has selected the joint solution to deliver premium programming over-the-top OTT to its international customers.

Software Industry

• Amazon (AMZN, Tech30) is inching closer to with the launch this week of its 3-D Printing Store,

Retail and Payment Industry

• Square’s new reader will be compatible with microchip-enabled credit cards.

• PayByPhone and PayPoint, has announced its mobile parking payment app is available in the Amazon Appstore.

• The Central Bank decided to create its own, brand-new platform for Russia's national payment system.

Energy Industry

• A new mobile device technology looks set to revolutionize battery charging and smartphones equipped with it will be available in 2015

Consumer Electronics (CE)

Samsung

Financial

• Samsung Electronics Co. reported a bigger-than-expected fall in second quarter profit and said it was uncertain if earnings from its handset business would improve in the current quarter.

• Samsung warned earlier this month that the second quarter would be its worst in two years as rapid growth in smartphone sales had faded. The company particularly struggled to compete in cheap smartphones, currently the fastest growing part of the global smartphone business. Samsung shares dived 4 percent in Seoul.

• Its net income for the April-June quarter dropped 20 percent to 6.3 trillion won ($6.1 billion) from 7.8 trillion won a year earlier. That was the lowest since the second quarter of 2012. Analysts surveyed by FactSet forecast 6.5 trillion won income.

• Sales fell 9 percent to 52.4 trillion won while operating profit sank 25 percent to 7.2 trillion won, in line with Samsung's guidance earlier this month.

Samsung’s stock performance


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Sony

Financial

• Sony Corp. reported a surprise eightfold jump in quarterly profit as sales got a perk from a cheap yen and its bottom line was helped by gains from selling buildings and its stake in a video-game maker.

• Sony's April-June profit soared to 26.8 billion yen ($261 million) from 3.1 billion yen a year earlier. Analysts surveyed by FactSet had forecast a loss. Quarterly sales climbed nearly 6 percent to 1.81 trillion yen ($17.6 billion).

• Sony said it had a 20.7 billion yen ($201 million) operating loss for the quarter related to exiting the PC business.

Sony’s stock performance

Vestel

Design Award for SmartPhone

• A' Design Award and Competition is pleased to announce that Vestel ID Team has been honored with the Platinum A' Design Award in Digital and Electronic Devices Design Competition.

• Vestel ID Team, the project leader of the award winning design Glasson Smart Phone said Glasson Smart Phone design which is aimed to make the life easier represents the mobile devices ideology of the Vestel company that has years of experience on consumer electronics in domestic market and international reputation on manufacturing. Glasson responds to the needs of users needs by following the

recent trends in mobile devices. The realization of the design is based on a highly collaborative process among industrial designers, UI designers and engineers. Glasson employs a sleek design with innovative materials and provide an ergonomic user experience.

• Glasson smart phone was developed by Elif Altay, Engin Akbaba, Ramazan Murat Erkan, Burak Emre Altinordu and VESTEL ID Team.


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ICT Industry

Apple

New Streaming Box

• Apple has been planning to introduce a new streaming box for live and on demand content, but those plans have stalled, according to a report from The Information.

• Cable companies are “dragging their heels” on Apple’s plans to incorporate their content into a set top box and have signaled their apprehension over Apple’s ambition for TV, according to the report.

• The cable companies and content creators think that Apple doesn’t have the licenses to distribute the wide range of content cable companies can provide.

Apple’s stock performance

Acquisition of Swell

• Apple is close to acquiring Swell, a personalized radio and podcast application, in a deal worth about $30 million. The news was first reported by Re/code.

Samsung

Delaying sales of Tizen powered Smartphone

• Samsung Electronics Co. said it is delaying sales of its first Tizen-powered smartphone in the latest setback to the company's ambition to create a mobile

platform to rival Google's Android or Apple's iOS.

• The South Korean company had planned to start selling the phone, the Samsung Z, in Russia this quarter. But Samsung indicated that more time is needed to expand Tizen's following of app developers and apps.

Blackberry

Acquisition of Secusmart

• BlackBerry said that it will acquire Secusmart, a German mobile security company. The purchase highlights how BlackBerry is doubling down on the enterprise as well as mobile security.

• The two companies have been partners since 2009. The plan is for Secusmart, known recently for its anti-eavesdropping software, is to become a core component of BlackBerry's security portfolio and enterprise mobility management pitch.

Blackberry’s stock performance

Foxconn

Lithium Battery

• Foxconn Technology Group is heading to inland Chinese cities in search of profit drivers as the Taiwan-based company looks beyond assembling iPhones and iPads for Apple Inc.

• As investors discussed the pros and cons of Foxconn's plant proposal in Bengbu, China's Anhui province, a new


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investment in the eastern province emerged.

• The world's largest electronics contract manufacturer's battery-making arm agreed to pour more than 2 billion yuan ($323 million) into Anqing to produce lithium batteries, a popular power source for electric cars.

Foxconn’s stock performance

ICT Market

Notebook Shipments in North America

• As Hewlett-Packard (HP) and Dell have seen good sales in the North America notebook market in July, Taiwan ODMs Quanta Computer and Inventec for HP and Compal Electronics and Wistron for Dell are expected to see increased shipments in the second half of 2014, according to Taiwan-based supply chain makers.

• Dell's shipments in July increased 10% on month.

• With strong demand in the second half, some supply chain players expect the notebook shipment ratio for the first and second halves of 2014 to reach 4:6.

• July and August mark the traditional slow season in Europe because of summer vacations, and demand is unlikely to pick up until close to September; therefore, the sources expect notebook shipments in Europe in the third quarter to stay flat or drop slightly on quarter. The sources also expect shipments in the fourth quarter to be the strongest in 2014.

Notebook Shipment to Latin America

• Notebook vendors have significantly reduced their orders for shipments to Latin America because sales have been impacted by recent strong demand for LCD TVs in the area, according to Taiwan-based supply chain makers.

• Due to the 2014 FIFA World Cup in Brazil, demand for LCD TVs in the Latin America market has increased by about 50%, and in turn undermined demand for notebooks, the sources indicated. Due to decreased demand, vendors' notebook inventories are high and therefore have reduced or temporarily stopped placing orders, the sources said.

• In the Latin America market, Acer was the largest notebook vendor in first-quarter 2014 and Lenovo was number one in the second quarter.

Flexible Electronics Market

• Global flexible electronics market is expected to reach $13.23 Billion by 2020 at an estimated CAGR of 21.73% with the number of applications using printing processes for flexible electronics forecast to grow at a good rate. Major market drivers for flexible electronics include the possibility to add new functionalities like conformability for OLED lighting (for the automotive industry), for OPV (energy harvesting), Robustness for small OLED displays (for smart phones & tablets) as well as feasibility to create new applications like wearable electronics.

Sensor and Chip used in Smart Lighting

• The market for LED drivers, MCUs, sensors and other chips used in smart lighting will grow from around $67 million in 2014 to $1.05 billion in 2019. This is according to a new report from industry analyst "The Markets for Smart Lighting Drivers, Controllers and Sensor Chips – 2014." Based on the broad acceptance of the Internet-of-Things (IoT), of which smart lighting is a part, Researcher has considerably upgraded


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its long-term forecasts for smart lighting compared with a previous report we issued in 2013.

Smart City Market

• Ubiquitous and embedded communication services lie at the heart of the innovations in energy, transportation, and the efficient delivery of public services associated with smart cities. Without the underlying communication infrastructure, the smart city vision cannot be realized. Click to tweet: According to a recent report from Navigant Research, worldwide shipments of communications nodes for smart city networks will grow from 16.3 million annually in 2014 to 54.8 million in 2020.

Interactive Whiteboard Market

• TechNavio's analysts forecast the Global Interactive Whiteboard market by revenue will grow at a CAGR of 15.95 percent over the period 2014-2018.

Flat Panel Industry

AUO

Small and Medium Size LCD Panels

• AU Optronics (AUO) expects its small- to medium-size TFT-LCD panel shipments to increase 5-8% sequentially, and its large-size panel shipments to remain unchanged or slightly decrease in third-quarter 2014.

• AUO shipped 347,200 square meters of small- to medium-size panels in the second quarter, hiking 47.62% sequentially mainly due to growing demand from China-based smartphone vendors, the company said.

• For small- to medium-size applications, AUO uses a-Si technology to produce HD panels and LTPS technology to produce Full HD, in-cell touch and WQHD panels.

• As AUO has reached a global market share of 30% for small- to medium-size HD panels, the company said it plans to use a-Si to produce entry-level Full HD panels in second-half 2014 while high-end Full HD panels will continue to be made using LTPS technology. AUO will begin production of 5.5-inch above 500ppi WQHD LTPS panels in the third quarter.

• For large-size applications, AUO said it offers Ultra HD, curved-surface, wide-color-gamut, above 50-inch TV panels to maintain international competitiveness.

• Global demand in 2014 is estimated to grow on year by 7-9% in terms of panel area, AUO said, adding as global supply will increase only 5-8%, supply will be tight this year.


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AUO’s stock performance

Innovation network Corp of Japan

OLED Display

• Sony Corp (6758.T), Panasonic Corp (6752.T) and Japan Display Inc (6740.T) said they would form a joint venture to develop organic light-emitting diode (OLED) displays, with the government-backed Innovation Network Corp of Japan (INCJ) taking a majority stake.

• The venture, bringing together all of Japan's OLED technology, would make small to mid-size panels for wearables, smartphones and tablets.

• The new company will be called JOLED Inc and is scheduled to be launched in January. The INCJ will hold 75 percent of the voting rights in JOLED, Japan Display will hold 15 percent, and Sony and Panasonic will each own 5 percent.

Corning

Financial

• Corning has announced its results for the second quarter of 2014, with core (non-GAPP) sales reaching US$2.6 billion (non-GAPP), up 28% on year. Net sales (GAAP) were US$2.5 billion, a 25% increase on a year-over-year basis.

• Core earnings for the second quarter came to US$527 million, up 12% on year. Core earnings per share were US$0.37 per share, a 16% improvement over a year ago, marking the seventh consecutive quarter of year-over-year core EPS growth,

Corning said. GAAP earnings per share were US$0.11.

• Corning's LCD glass volume grew more than expected due in part to stronger-than-expected retail TV sales in Europe and South America, likely driven by the FIFA World Cup, the company said.

Corning’s stock performance

Flat Panel Market

Taiwan Based Small and Medium Size Panel Shipments

• Taiwan-based makers together shipped 351.4 million small- to medium-size TFT-LCD panels in the second quarter of 2014, increasing 16.8% sequentially but decreasing 2.8% on year, according to Digitimes Research.

• In particular, shipments of panels for handsets rose 17.9% sequentially and took up 75.3% of total shipments, up 0.7ppt from the previous quarter, Digitimes Research indicated. Shipments of car-use panels also grew on quarter due to increased orders from Japan-based automakers.

• LTPS panels accounted for 11.5% of total shipments, up 0.5ppt on quarter.

• As Taiwan-based makers have modified large-size panel manufacturing equipment for producing small- to medium-size applications and have not added LTPS production capacities, they may face issues in making in mid-range and high-end panels.

• AU Optronics has reported staggering growth in net profit for the second quarter of 2014 on improved demand and rising LCD panel prices.


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Taiwan Based Large Panel Shipments

• Taiwan-based makers shipped 67.518 million large-size (9-inch and above) TFT-LCD panels in the second quarter of 2014, increasing by 8.5% on quarter and by 0.9% on year, according to Digitimes Research.

• Most of the major application saw double-digit growth in shipmnts in the second-quarter, Digitimes Research indicated.

• Global Ultra HD TV panel shipments grew 154% sequentially in the second quarter. The top-two suppliers, Taiwan-based Innolux and Korea-based LG Display, both shipped about 1.5 million UHD TV panels during the quarter.

4K LCD TV Panels

• The world's TV set makers planned to purchase 20 million 4K LCD TV panels this year, but the actual shipment of the product stood at 6.40 million pieces in the first half of 2014, the Monthly TFT LCD Shipment Database under NPD DisplaySearch showed.

• Besides, most panel suppliers including AU Optronics Corp, BOE Technology, and China Star Optoelectronics Technology Corporation had not fulfilled their shipment target in the first six months.

• China's six major TV set brands, namely TCL, Hisense, Haier, Changhong, Konka, and Skyworth, will buy 7.30 million panels, accounting for 36 percent of the world's total volume.

Semiconductor Industry

Broadcom

Cost Cutting

• Chip maker Broadcom is planning to

cut 240 jobs at its Irvine headquarters, and 630 throughout California, as the company winds down its cellular baseband business, according to layoff notices sent to the state.

Broadcom’s stock performance

Ultra HD STB solution for Tata Sky

• Broadcom Corporation (NASDAQ: BRCM), a global innovation leader in semiconductor solutions for wired and wireless communications, announced that its BCM7252 high-efficiency video codec (HEVC) H.265 system-on-chip (SoC) will power Tata Sky's first generation Ultra HD set-top boxes (STBs). Tata Sky, a leading Direct-to-Home (DTH) provider in India, and Technicolor, a worldwide technology leader in the media and entertainment sector, have teamed to design and deploy the region's first 4K STBs, planned for mass deployment throughout India in 2015. Broadcom's industry-leading HEVC-enabled chipsets provide the compression and higher throughput required by operators and OEMs to rapidly introduce Ultra HD subscriber hardware and content.


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Intel

Haswell CPU in Vietnam

• Intel is forging the future of its Haswell CPU in Vietnam with the successful launch of the first of such processor manufactured at Intel Products Vietnam's facility in the Saigon Hi-tech Park on Tuesday, according to a VietNamNet Bridge report.

• Haswell is the fourth generation of Intel core processors built using the 22nm technology. The chip giant was said to have spent more than $450 million on it.

• VNN also mentioned that the chip giant targets to establish the Vietnam facility as its CPU hub in the next six months, supporting the manufacture of 80 per cent of its desktop processors supplied worldwide.

• Covering 46,000m2, Intel opened the assembly and test facility in 2010, starting with chipsets for laptops and mobile devices. The facility was responsible for $2 billion of Ho Chi Minh City's export turnover in 2013, the same year Atom SoC was launched.

Intel’s stock performance

Wireless Power Consortium

Qi Specification

• The Wireless Power Consortium (WPC), the driving force and leader in the global adoption of wireless power technology, announced significant advances to the resonant extension of the Qi specification to offer even more options to the wireless charging industry.

• The integration of resonant charging into the already present inductive technology within the Qi specification gives users the option to discreetly embed wireless chargers deeper in structures, like furniture and desktops, or utilize direct-contact, low cost, surface applications. Expanding the present Qi specification assures current Qi-compatible device owners that their devices will be supported even as the specification evolves and progresses.

Semiconductor Market

China Government Investment

• The central government also plans to set up a national industry investment fund of CNY120 billion (US$19.3 billion). The fund will mainly focus on investing the construction of advanced process capacity, semiconductor firm reorganization, and mergers.

• Digitimes Research believes through the investment fund support, China will increase its capabilities for advanced processes on 12-inch wafers. In addition, there will be more China-based semiconductor firms merging and more acquisitions of international firms by China-based firms. This Digitimes Special Report examines how the revised Central Government guidelines and various local government policy implementations will affect China's the semiconductor manufacturing, IC design, packaging & testing and materials industry.


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Service Industry

Turkcell

Loan agreement with Ziraat Bank

• Cukurova Holding said it paid Russia's Alfa Group $1.6 billion to recover a disputed stake in Turkcell, taking a major step towards regaining control of Turkey's biggest mobile phone operator after a seven-year battle.

• Istanbul-based Cukurova signed a loan agreement with state-run lender Ziraat Bank in connection with the Alfa Group payment, the company said in a statement to the Istanbul Stock Exchange.

Turkcell’s stock performance

Digiturk

OTT solution of AirTies

• AirTies Wireless Networks, a leading supplier of advanced technology to the broadcast and broadband industry, and Octoshape, an industry leader in cloud-based, over-the-top (OTT) stream acceleration and contribution technologies for broadcasters, enterprises and carriers, announced that Digiturk, Turkey’s leading satellite television provider, has selected the joint solution to deliver premium programming over-the-top OTT to its international customers.


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Software Industry

Amazon

3D printing

• That's the sci-fi scenario Amazon (AMZN, Tech30) is inching closer to with the launch this week of its 3-D Printing Store, which offers shoppers over 200 products, including toys, jewelry and home decorations.

• The items are produced via 3-D printer, and can be customized by size, color, material or with personal text and images. A "personalization widget" lets you play around with different designs and preview your purchase before you buy.

Amazon’s stock performance

Retail and Payment Industry

Square

EMV based payment

• The company, based in San Francisco, plans to introduce a new version of its credit card reader hardware next year, a device that the company hopes many small and medium-size businesses will quickly adopt.

• The reader will look much the same as the current one, about the size of a box of matches; it’s what’s inside that counts.

• Square’s new reader will be compatible with microchip-enabled credit cards. The microchip technology, commonly referred to as E.M.V. (short for Europay, Mastercard and Visa), communicates with payments processors to determine whether the card is counterfeit every time it is used to make a purchase.

PayByPhone

Mobile Parking Payment

• PayByPhone, a flagship product of leading international payment technology company, PayPoint, has announced its mobile parking payment app is available in the Amazon Appstore for Amazon’s new Fire phone, as well as Kindle Fire devices. The Fire phone’s NFC capability works seamlessly with PayByPhone’s parking meter stickers in Seattle and San Francisco, which feature a passive electronic chip that stores information such as the meter number. Users simply wave or tap their NFC-enabled phones over the sticker on the meter to automatically launch the PayByPhone app. The mobile payment system recognizes the user and identifies the exact parking location.


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Retail and Payment Market

National Payment system in Russia

• The Central Bank decided to create its own, brand-new platform for Russia's national payment system, rather than contracting a company to build the system as was expected, according to a statement on the regulator's website.

• The creation of a national payment system leapt to the top of the Russian government's list of priorities earlier this year after international payment systems Visa and MasterCard abruptly stopped servicing two Russian banks with connections to allies of President Vladimir Putin that had been blacklisted by the U.S. in response to Russia's annexation of Crimea.

Energy Industry

Qnovo

Battery Technology

• A new mobile device technology looks set to revolutionize battery charging and smartphones equipped with it will be available in 2015. We’ve seen news recently about battery technology potentially seeing large increases in capacity and life cycles. Specifically, researchers at Stanford University have made significant progress on the so-called holy grail of battery design – a pure lithium anode that could boost power capacity and extend battery life.

• Silicon Valley-based battery tech company Qnovo may well have the answer. Through extensive research and the combining of battery chemistry, electronics and software engineers under one roof, it has developed both software and hardware-based products that work with existing battery technology to cut charge times by up to 75% and also increase a battery’s overall life span too. Even better, the technology is already here, it’s non-intrusive and we’re likely to see it included in phones from the big manufacturers as early as 2015.


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References

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