China is “the new battlefield” for the global display industry, as Xin-Qing Liang, secretary general of the China Optics and Optoelectronics Manufacturers Association, put it during his keynote speech.
Display vendors from China, Taiwan, South Korea, and Japan are jostling for bigger market share in China’s smartphone market.
Many display suppliers, however, agree that establishing partnerships across national borders is a way to go, especially if they want to beat the Koreans. But they face unanswered questions, such as who can trust whom, who should team with whom in what ways, and what’s the ultimate gain from any such partnership.
During her keynote speech, Wei-Min Bai, vice president and secretary general of the China Video Industry Association, stressed the importance of “collaborations across the strait,” because China and Taiwan are both “facing global competition.”
Meanwhile, a representative from Taiwan Display Inc. — Japan Display Inc.’s 100 percent-owned subsidiary based in Taipei — talked of China’s smartphone “megatrends,” and how the Japan-Taiwan partnership plans to tackle them.
No-shows at the Touch Taiwan show — in terms of booth presence — are two Korean display behemoths, Samsung and LG.
Representatives from China pitched relentlessly, pitting themselves against the Koreans and Japanese. As for collaborations across the strait, Bai portrayed China as Taiwan’s best strategic partner. She told the audience, “For example, we’d like to know whether we [China] should get into the OLED business, or take a closer look at other technologies being developed by Taiwanese companies such as Auo.”
Her fellow Chinese representative Liang also explained that the partnership model between the two countries shouldn’t be limited to an existing model under which Taiwan supplies chips and components and China manufactures displays. “Instead, we should look for opportunities for cooperation by building the entire ‘upstream-downstream’ supply chain together.”
Among the keynote speakers on the opening day, Ting-Chen Hsu, chairman and CEO of Taiwan Display Inc. (TDI), proved to be the most dynamic and popular, judging from the huge crowd that followed him after his speech. Hsu, the former vice president of Taiwan’s Innolux, was handpicked by Japan Display Inc. (JDI), and was tasked last fall to establish a new subsidiary in Taiwan — Hsu’s home ground — to further Japanese expansion efforts.
Hsu started out noting that “the Chinese market we all knew is nothing like the Chinese market we know today.” In his slideshow, he illustrated a number of “megatrends” in China’s smartphone market.
Megatrend 1: High-end spec at low cost
Xiaomi ignited the trend of smartphone models with high-end specs at low cost, which has spread among top Chinese brands that include Coolpad, Huawei, ZTE, and Oppo. Note that every model shown in the slide comes with a 5-inch or larger display, and 4 to 8 cores integrated in its apps processor. All of these top-brand smartphones cost less than 2,000 RMB (US$325).
In essence, Hsu said, “These smartphones offer 1.36 times better resolution than that of iPhones and cost 50 percent of iPhones.”
Megatrend 2: China brands’ specs exceed those of global brands (e.g., Apple, Samsung)
Using Apple’s iPhone as the benchmark, Hsu noted that China brands today exceed iPhone’s spec in every aspect, including display size, resolution, PPI (pixels per inch), and device thickness. He also said the upcoming iPhone 6 — which is said to feature a 4.5-inch screen — is only slightly larger than the previous iPhone 5s, based on a 4-inch display.
Megatrend 3: Rise of ODM
Hsu explained that China’s brand names will focus only on high-spec flagship models, while their middle- to low-end models will be “outsourced” to ODMs. Tier 1s are focused on “branding,” he said.
Meanwhile, “The white box display spec is no longer accepted by China’s ODMs now.”
Production volume for each of the top 3 ODMs, including Longcheer and Wingtech, will reach more than 40 million units in 2014, exceeding Sony’s production by 10 million.
Many more ODMs will join the 40 million-club soon, Hsu predicted.
Megatrend 4: Brands of emerging markets rely on China ODMs
Emerging markets — specifically Africa and India — are relying on the South China supply chain.
Hsu asked the audience: “Have you ever heard of Tecno Mobile?” Tecno Mobile is the top African brand, owned by the Chinese. With expected sales of more than 50 million units this year, Tecno Mobile has an even larger market share than Samsung in Africa, Hsu noted.
Meanwhile, in India, Samsung remains the leader. But Micromax, an Indian brand already armed with a 20 to 25 percent share, is the third largest mobile handset vendor in India. Karbonn comes in fourth, followed by Lava, according to Hsu.
His point was clear: As the emerging markets rise, China ODMs will be supplying larger volumes, and getting even stronger.
Source: http://www.electronics-eetimes.com/en/forget-iphone-4-megatrends-in-china-s-smartphone-market.html?cmp_id=7&news_id=222922183&vID=209&page=0
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