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The (said to be) contra MediaTek play of Tsinghua Unigroup with attempted merger of Spreadtrum and RDA
锐迪科并购陷僵局：清华系基金与上海资本恩怨凸显 (RDA’s acquisition deadlock: Tsinghua University unit and Shanghai Capital Fund scores highlights) [April 15, 2014]
… In September of last year, Shanghai Pudong [上海浦东] branch cast M&A of RDA, then Unigroup stepped that up by paying higher prices. But because of “fait accompli”, procedurally irregular for National Development and Reform Commission, it was halted [by the commission]. …
According to the official website of Unigroup announced the news, Spreadtrum is expected to be over one billion U.S. dollars in 2013 sales revenue. But this order of magnitude, in the chip market waves of mobile terminals are likely to stir even afford. The first quarter of 2014, MediaTek revenues had reached $ 1.3 billion, more than a full year is expected to reach $ 4.5 billion, while the leader Qualcomm first-quarter revenue has exceeded $ 6.5 billion, the annual $ 20 billion is expected to be up above.
Leaving the above, rather raw translation by Google and Bing (with a little edit of mine besides the merger of two), it is better to give quotes from:
- Battle Over Spreadtrum/RDA Merger [EE Times, March 21, 2014]
… over the last few months, the proposed deal has triggered raw emotions and turmoil among RDA employees who object to it. Chairman and CEO Vincent Tai, who reportedly resisted the Tsinghua Unigroup’s acquisition plan, was fired by the RDA board late last year.
One senior executive at RDA told EE Times Thursday, “We want Vincent back.” Clearly, he isn’t alone with that sentiment.
Several sources in the industry — both inside and outside RDA — point out that the huge cultural differences between RDA and Spreadtrum will make it tough to run the merged company effectively. And they say that Tsinghua Unigroup, whose purpose in acquiring the two companies is to make money by quickly making the consolidated entity go public in China, should know better.
Compared to the more agile and free-spirited RDA, Spreadtrum is a much bigger corporation where engineers are known to be highly regimented, working in a modern “feeding” machine-like environment. RDA is China’s RF IC leader, while Spreadtrum has grown big by leading China’s home-grown TD-SCDMA baseband market.
Also brewing behind the scenes is an on-going feud between Shanghai and Beijing, according to several local sources. Shanghai, a much richer city than Beijing, pays a heavy tax levy to China’s central government.
It was originally the Shanghai Pudong Science and Technology Investment Co. that proposed, last September, to buy RDA. The deal, however, fizzled when Tsinghua Unigroup barged in and proposed to buy RDA at a higher price.
It was a huge blow to the Shanghai-based investment firm. It had to watch the Beijing-based company come into its own backyard to sweep up the two most successful fabless companies in Shanghai.
Several industry sources in Shanghai pointed out that Tsinghua Unigroup acquired RDA without a permit from China’s central government. More specifically, Tsinghua Unigroup, at this point, still lacks pre-clearance for the merger from the National Development and Reform Commission of China.
The RDA senior executive told EE Times, “Without pre-clearance from the government, this deal is not done.” He acknowledged that uncertainty about the future is doing damage to customers and to the morale of employees.
Merger Pits Mysterious Tsinghua Unigroup vs. MediaTek [EE Times, Nov 14, 2013]
Through Tsinghua Unigroup’s initiative to acquire the leading TD-SCDMA baseband chip vendor Spreadtrum Communications (announced in July) and now China’s RF IC leader RDA Microelectronics (disclosed earlier this week), hopes are running high in China that its domestic electronics industry might finally get a consolidated entity powerful enough to compete with Taiwan’s MediaTek, if not quite an equivalent to Qualcomm in the United States.
While many Chinese industry sources see the recent development positively, opinions differ about what comes next. Some Chinese executives view Tsinghua Unigroup’s move as “a pure financial play,” while others put more stock in a behind-the-scenes ploy by the Chinese government to strengthen China’s electronics industry. Others even go further, predicting a doomsday scenario for other Chinese fabless companies such as Allwinner and Rockchip.
Here are the basics. Tsinghua Unigroup is 51 percent owned by Tsinghua Holdings, a 100 percent state-owned limited liability corporation funded by Tsinghua University in China. Forty-nine percent of Tsinghua Unigroup is owned by private entity — Jiankun Investment Group Co., Ltd. — controlled by Zhao Weiguo.
Weiguo serves as Chairman and Chief Executive Officer of Tsinghua Unigroup.
According to one Chinese electronics industry executive, Weiguo is “playing the whole game by leveraging Tsinghua resources and getting enough bank loans for supporting this deal.” He called Weiguo “a real businessman and understands China economics/complicated politics and capital market very well.” In short, Weiguo is “somebody who can smell blood from thousands miles away.” He is set to make money investing in the high-tech sector, rather than the real-estate business, which isn’t looking good right now in China.
… Chinese industry source said, “The notable thing about Tsinghua Unigroup is that it has a market cap of $820 million, less than what they proposed to RDA.” He suspects that the real buyer of RDA is “not Unigroup, but a $2-$3 billion fund which is related to Unigroup.” He then added, “That’s the beauty of China’s state-owned public companies: there is nothing transparent.”
Those who see Tsinghua Unigroup’s acquisitions as “a pure financial play” pose a three-step scenario. First, the consolidation of China’s two leading fabless chip companies (Spreadtrum and RDA are currently both public companies traded in Nasdaq) will help them both survive before the two companies get clobbered by MediaTek. Second, by going private again under the umbrella of Tsinghua Unigroup, the two companies will gain more leeway in business development — in addition to access to the IP portfolio of Tsinghua Unigroup and Tsinghua University. Third, the new Spreadtrum, consolidated with RDA under Tsinghua Unigroup, will “go public in the near term,” the sources said. Tsinghua Unigroup won’t waste time making a big financial gain by doing so, they added.
Where everyone agrees is about the complementary roles RDA and Spreadtrum can play under the new structure.
One Chinese semiconductor industry observer explained, “Spreadtrum is weak in everything except TD-SCDMA, while RDA is strong in RF. Both are weak in application processors.” Further, he added, “Spreadtrum’s IC R&D is weak, but strong in software. Meanwhile, RDA is very strong in IC R&D, but has no real software development.” As a result, combining these two “means doomsday for Allwinner and Rockchip,” he noted, because Spreadtrum and RDA could ramp up tablet application processor efforts.
The Chinese industry’s expectation is that the final entity (new Spreadtrum-RDA) will focus more on new wireless technology R&D, while they will spend less time competing in a declining low-end market. As for the market in feature phones for GSM, the serious competition comes down to just MediaTek and Spreadtrum, they explained.
Asked about the latest shopping spree by Tsinghua Unigroup, Will Strauss, president of Forward Concepts (Tempe, Arizona), noted that he knows almost nothing about Tsinghua Unigroup. But he added, “Actually, if you wanted to create a China-based company that could (with a lot of work and a lot of money) someday rival Qualcomm, Spreadtrum and RDA are the two companies that I would pick.”
Facts lying behind such news:
- Tsinghua Unigroup [紫光集团] Completes Acquisition of Spreadtrum for US$31.00 per ADS [Spreadtrum Communications press release, Dec 23, 2013]
- Spreadtrum is to be acquired by a Chinese high-tech investment enterprise owned by the state and also belonging to the leading Tsinghua University with microelectronics research interests [‘Experiencing the Cloud’ Blog, June 26, 2013]
- Upcoming FireFox OS powered $25 smartphones with Spreadtrum SC6821 EDGE SoC having 128MB on chip RAM used via zRAM swap by the OS [‘Experiencing the Cloud’ Blog, March 3, 2014]
- RDA [與銳迪科] Microelectronics Enters Into Definitive Merger Agreement to be Acquired by Tsinghua Unigroup for US$18.50 Per ADS [press release, Nov 11, 2013]
- RDA Microelectronics Responds to Purported Third Party Offer [press release, Nov 11, 2013] from which it is worth to quote here:
2. During the course of today’s board meeting approving the entry of the merger agreement with Tsinghua, some of our directors and officers received an unusual and erroneously dated non-binding proposal. Such proposal was sent from a private QQ email account alleging to be from a PRC-incorporated 3rd party (the “PRC Party”). This PRC Party has never previously contacted our company before or during the evaluation process, nor has it engaged in a semiconductor business to our knowledge. Such proposal, strangely dated as of September 27, 2013 initially, stated a higher-than-US$18.50/ADS cash offer subject to unspecified combination of equity and debt financing. The proposal was signed but not sealed by the PRC Party, which suggests a deficiency in the formality of due execution by a PRC incorporated entity.
3. Our Board immediately instructed our advisors to reach out to the PRC Party, with the objective of seeking further information and verifying the intent and credibility of such party. The proposal from the PRC Party also refers to a highly confident letter that the PRC Party claimed it has obtained from several leading financial institutions. Our legal advisor promptly spoke with the sender of such proposal, who claimed he did not know anything about the proposal other than being instructed to send the proposal via his personal QQ email account. The sender also referred our legal advisor to the PRC Party’s in-house counsel. Our legal advisor then spoke with such in-house counsel, who was not able to provide contact information of any of their project team members, including the signatory of the proposal letter. Given that we were not able to obtain any credible information about the financial capability of the PRC Party, we have also conducted a public search which indicated that the PRC Party was incorporated in 2011 with a registered capital of RMB60 million (less than US$10 million).
4. Our Board has determined that based on the currently available information, we have no basis to believe that the unusual proposal from the PRC Party is credible.
- RDA [與銳迪科] Microelectronics Announces Receipt of Non-Binding Acquisition Proposal [press release, Sept 27, 2013]
… an unsolicited, preliminary non-binding proposal letter dated September 27, 2013 from Shanghai Pudong [上海浦东] Science and Technology Investment Co., Ltd. (“PDSTI” [浦东科]), a wholly state-owned limited liability company directly under Pudong New Area government of Shanghai, pursuant to which PDSTI proposes to acquire all of the outstanding ordinary shares of the Company (the “Shares) and American Depositary Shares of the Company (the “ADSs,” each ADS representing six Shares), in each case other than those Shares or ADSs owned by PDSTI and its affiliates, for US$2.5833 in cash per Share or US$15.50 per ADS. … The Company’s Board of Directors is reviewing and evaluating PDSTI’s proposal. …
- RDA Microelectronics Responds to Certain Media Reports on the Pending Merger With Tsinghua Unigroup [press release, Dec 4, 2013]
RDA Microelectronics (Nasdaq:RDA) (“we” or the “Company“), a fabless semiconductor company that designs, develops and markets wireless systems-on-chip and radio-frequency (RF) semiconductors for cellular, connectivity and broadcast applications, today provided the following comments regarding certain recent media reports:
It has come to our attention that there are certain media reports containing inaccurate information on our announced merger transaction (the “Merger“) with Tsinghua Unigroup Ltd. (“Tsinghua Unigroup“) which may be misleading to investors. We are providing the following clarifications in view of potential misinformation, and to re-assure the investors that our board of directors (the “Board“) has been acting, and will continue to act, in the best interests of our shareholders as a whole:
Before we entered into a definitive merger agreement (the “Merger Agreement“) with Tsinghua Unigroup on November 11, 2013, the Board conducted a robust, comprehensive and structured evaluation process of strategic alternatives. The Board considered a wide range of relevant factors, analysis and data points available, with a focus on the commercial terms and closing certainty of various available alternative. After such process, the Board determined that Tsinghua Unigroup’s proposal was clearly the most favorable and certain offer among all the proposals that we had received and therefore selected Tsinghua Unigroup as the preferred buyer over other bidders, including Shanghai Pudong Science and Technology Investment Co., Ltd. (“PDSTI“), on November 8, 2013. The Board further approved unanimously the entry into the Merger Agreement with Tsinghua Unigroup on November 11, 2013.
During the evaluation process, the Board informed all interested buyers that the Board would select the preferred buyer based on the commercial terms and the closing certainty of the received proposals. Until the Board approved the signing of the Merger Agreement with Tsinghua Unigroup, we had not entered into any definitive agreement with, or promised any signing schedule to, any person (including PDSTI) regarding a sale of the Company.
We have been maintaining close discussions with Tsinghua Unigroup regarding the regulatory approvals required to complete the Merger, and have provided Tsinghua Unigroup with assistance and information in such regard in compliance with the Merger Agreement. We and Tsinghua Unigroup will continue to cooperate with each other in obtaining the relevant approvals that are required for the consummation of the Merger. We also understand from Tsinghua Unigroup that it is on track to obtain the preclearance of the Merger from the National Development and Reform Commission of China.
About RDA Microelectronics
RDA Microelectronics is a fabless semiconductor company that designs, develops and markets wireless system-on-chip and radio-frequency semiconductors for cellular, connectivity and broadcast applications. The Company’s product portfolio currently includes baseband, radio-frequency front-end modules, power amplifiers, transceivers, Bluetooth system-on-chip, Wi-Fi, Bluetooth and FM combo chips, FM radio receivers, set-top box tuners, analog mobile television receivers, CMMB mobile television receivers, walkie-talkie transceivers and LNB satellite down converters. For additional information, please see the Company’s website at http://www.rdamicro.com.
- RDA Microelectronics’ Board Elects Shun Lam Steven Tang as the New Chairman and Appoints Shuran Wei as the New CEO and Liang Zhang as President [press release, Dec 17, 2013]
… Mr. Tang succeeds Mr. Vincent Tai, who will remain as a non-executive director until the next shareholders meeting. … Mr. Tang said, “On behalf of the Board, I want to thank Vincent Tai for his contribution to RDA during his term as the Chairman and Chief Executive Officer. …” …
Mr. Wei is a co-founder of the Company and has been the Company’s Chief Technology Officer since its inception in 2004 and a director since 2005. Mr. Wei has almost two decades of experience in CMOS radio-frequency integrated circuit design. Prior to co-founding RDA Microelectronics, he was a vice president of Analogix Semiconductor Inc. in the United States from 2002 to 2004. From 1998 to 2002, he was an integrated circuit design manager at Marvell Semiconductor Inc. in the United States, and from 1994 to 1998, he was an integrated circuit design engineer at LSI Corporation (formerly known as LSI Logic). Mr. Wei received a Bachelor of Science degree in physics from Peking University in China and a Master of Science degree in electrical engineering from the University of Minnesota in the United States.
- Tsinghua Unigroup and RDA Microelectronics Jointly Announce Amendment of Merger Agreement Due to Relaxation of Certain PRC Regulatory Approval Requirements [press release, Dec 20, 2013]
- RDA Microelectronics Announces the Receipt of Shareholder Approval for Acquisition by Tsinghua Unigroup Ltd. [press release, Dec 27, 2013]
… Completion of the Merger remains subject to the satisfaction or waiver of other customary closing conditions set forth in the Merger Agreement, including the receipt of the required regulatory approvals.
- RDA Microelectronics Launches WCDMA Baseband for Low-Cost Smartphones [press release, March 27, 2014]
… The RDA8860 integrates an RF transceiver, WCDMA modem, EDGE modem, application processor, power management unit, analog baseband, and 32kHz oscillator onto a single 40 nanometer die, significantly reducing the customer bill of materials. Built around a 1GHz ARM ® Cortex™-A5 processor with a 256KB L2 cache, the chip uses 400MHz 32-bit LPDDR2 memory, which supplies 3.2GB bandwidth to create a powerful platform for low-cost mobile devices. It supports WiFi, Bluetooth, and GPS connections through various peripheral interfaces and leverages a dedicated CPU, accelerator and memory for the WCDMA/EDGE modem sub-system to further improve performance of the application processor. The chip’s video processor supports 720p H.264 video playback at 30 frames per second combined with Vivante Corporation’s integrated 3D GPU for high-end graphic interface and gaming capabilities. The RDA8860 is designed for smartphone devices running on Android 4.0 operating system and above.
“We are pleased to launch our first WCDMA baseband solution, a fully integrated SoC that greatly increases our addressable market as well as our handset silicon value,” commented Shuran Wei, CEO of RDA Microelectronics. “Low-cost WCDMA smartphones are one of the largest growth drivers in emerging markets today as subscribers in markets such as China continue to transition from feature phones to more advanced devices. The 8860 uses similar production tools as our market-leading feature phone platform, enabling handset manufacturers to easily and quickly migrate to our WCDMA smartphone platform. By offering a fully integrated SoC solution with lowered bill of materials, RDA has once again positioned itself as a price performance leader in a robust growth market.”
RDA Microelectronics Announces Sampling of WiFi Combo Chip With GPS for Mobile Applications [press release, April 10, 2014]
… The RDA5992 single chip solution integrates an 802.11b/g/n MAC, PHY, 2.4Ghz radio, power amplifier and antenna switch with a GPS receiver featuring advanced RF design, a baseband signal processing engine and MIPS compatible XCPU processor to achieve superior positioning performance. The integrated WLAN, Bluetooth and FM capabilities can work simultaneously or independently at low power consumption levels to preserve battery life in mobile devices.
“By adding GPS functionality to our popular WiFi combo chip, RDA offers customers all of the necessary connectivity components on a single CMOS chip for handheld devices,” said Shuran Wei, CEO of RDA Microelectronics. “GPS positioning and location-based services are becoming increasingly prevalent across all mobile applications. The 5992 is the smallest chip of its kind and further demonstrates the strength of RDA’s integration capabilities. Manufacturers can quickly and easily integrate the chip into their designs to achieve rapid time to market at a reduced cost.”
MediaTek Quick to Market with Palladium [Cadence Design Systems YouTube channel, April 11, 2014]
MediaTek Gets a Jump Developing High-Quality Smart Devices [Cadence, April 10, 2014]
Taiwan-based fabless semiconductor company MediaTek is a leader in developing advanced systems on chip (SoCs) for wireless communications, HDTV, DVD, and Blu-ray, including ARM® -based systems such as the octa-core smartphone platform with LTE. The company’s corporate vice president, Andrew Chang, recently sat down with Cadence to talk about the development challenges of building advanced systems and how the company is using the Cadence® Palladium® XP II platform to help create today’s smart devices.
Cadence Expands ARMv7/v8-based system-to-silicon verification solutions [ARM SoC Implementation Blog, April 12, 2014]
Recently, Cadence Design Systems expanded its ARM-based design system verification solution in order to drive shorter time-to-market for mobile, networking and server applications. This expanded solution features several enhancements and speeds system design and early software development for ARM Cortex®-A processor series based systems including:
- New adaptable interconnect performance characterization test suite in the Cadence® Interconnect Workbench, along with AMBA Designer integration, that delivers a significant speed-up of performance analysis and verification of CoreLink CCI-400 system IP and NIC-400 design tool based systems.
- Expanded and pre-verified support of hardware-accurate OS embedded software verification using Palladium XP II platform with ARMv8 64-bit Cortex processor family Fast Models, which are now available through Cadence.
- Verification IP supporting AMBA 5 Coherent Hub Interface (CHI) protocol is the same protocol as implemented in the ARM CoreLink CCN-508 system IP and silicon proven CoreLink CCN-504 Cache Coherent Networks as used in enterprise level applications. The new Verification IP runs on all industry simulators, plus Accelerated Verification IP for Palladium XP II platforms.
Spreadtrum Adopts Cadence Palladium XP II Platform for Mobile SoC and Hardware-Software Verification [Cadence press release, April 14, 2014]
Cadence Design Systems, Inc. (NASDAQ: CDNS), a leader in global electronic design innovation, today announced that Spreadtrum selected the Cadence® Palladium® XP II verification computing platform for system-on-chip (SoC) verification and system-level validation. Spreadtrum’s use of the Palladium XP II platform provides the opportunity to shorten time-to-market and improve verification productivity of its mobile chipset platforms for smartphones, feature phones and consumer electronic products.
“In the competitive mobile handset market, low power and time to market are critical,” said Robin Lu, VP of ASIC at Spreadtrum. “Spreadtrum was already using Cadence verification technologies including the Incisive platform. With the addition of the capabilities of the Palladium XP II platform, we now have an efficient tool to verify our low-power design, improve our overall verification productivity and shrink our development cycles.”
The Palladium XP II platform is part of Cadence’s System Development Suite, which significantly speeds up hardware and software verification. The Palladium XP II platform builds on the award-winning Palladium XP emulation technology by boosting verification performance by up to 50 percent and extending its industry-leading capacity to 2.3 billion gates. With reduced power and increased gate density, customers can now run larger payloads in a smaller footprint, reducing overall cost of ownership. For more information on the Palladium XP II platform, visit www.cadence.com/news/pxpII.
Cadence enables global electronic design innovation and plays an essential role in the creation of today’s integrated circuits and electronics. Customers use Cadence software, hardware, IP and services to design and verify advanced semiconductors, consumer electronics, networking and telecommunications equipment, and computer systems. The company is headquartered in San Jose, Calif., with sales offices, design centers and research facilities around the world to serve the global electronics industry. More information about the company, its products and services is available here.
Cadence’s Palladium XP — Creating a virtual platform for Automotive IP [Cadence Design Systems YouTube channel, March 17, 2014]
Cadence Launches Palladium XP II Verification Platform and Enhanced System Development [Cadence feature story article, Sept 10, 2013]
Shorten Time to Market By Up to Four Months
Cadence has unveiled its Palladium® XP II Verification Computing Platform, which delivers a 2X increase in verification productivity and up to four months faster time to market. The platform is a part of the enhanced Cadence® System Development Suite, which features expanded core system and system-on-chip (SoC) verification use models and new use models for hardware/software verification.
Patent-pending hybrid technology combines the Cadence Virtual System Platform with the Palladium XP series to deliver up to 60X speed-up for embedded OS verification and 10X performance increase in hardware/software verification.
According to Kent Goodin, executive vice president of engineering at Zenverge, “The Palladium XP II platform truly allows our software teams to develop production-worthy code prior to the IC’s mask release and arrival of the prototype. This has allowed Zenverge to engage with customers at least six months earlier than would be possible without the co-development aspects of the Palladium XP II emulation solution.”
The Palladium XP II platform supports design configurations with capacity of up to 2.3 billion gates, up to 512 concurrent users, and up to 50 percent performance improvement for SoC verification. What’s more, the platform extends the support of the Cadence Accelerated Verification Intellectual Property (AVIP) portfolio to include PCIe, SRIOV, Ethernet, AHB, APB, HDMI, DSI, CSI, I2C, SimCard, and Keypad. Coupled with the existing AVIP portfolio, the Palladium XP series further extends its support for applications such as mobile Internet devices, computing, networking, processors, and audio/video.
By facilitating the high-speed transfer of interface traffic through a design under test in the Palladium XP II platform, AVIP allows you and your team to gain a substantial boost in verification performance of designs at any integration level: IP, subsystem, SoC, and system.
Understanding the increasing need for early, fast, and accurate hardware/software verification, Cadence has expanded the capabilities of our System Development Suite centered around the Palladium XP platform. Benefit from:
- Patent-pending hybrid technology that combines the Cadence Virtual System Platform with the Palladium XP series to deliver up to 60X speed-up for embedded OS verification and 10X performance speed-up for hardware/software verification
- The embedded testbench for advanced virtualization of system environments, which lets you verify peripheral software drivers before tapeout, so you can achieve faster post-silicon bring-up
Bloomberg (Businessweek) legitimizes Allwinner and Rockchip as challengers to Intel and Qualcomm via the tablet space, as well as Spreadtrum in the smartphone space
Although the title is just:
- Qualcomm, Intel Threatened as Allwinner Nabs Tablet Share [Bloomberg, March 17, 2014]
- Qualcomm, Intel Threatened as Allwinner Gains Tablet Share: Tech [BloombergBusinessweek, March 17, 2014]
Note that for me there is nothing new about those titles as I introduced a whole new blog to the “Allwinner phenomenon” as evidenced with a specially designed banner on the right here:
And the first post of mine, “Hello world! Here is the Allwinner SoC and the ecosystem built around it”, was created 16 months ago, on November 26, 2012. For very well founded reasons which were explained in quite a detail in that post. Please read them as you will learn much more about the Allwinner case than from the whole Bloomberg (Businessweek) articles. Your interest will be more satisfied with quite a number of additional posts in January 2014, October 2013, September 2013, June 2013, April 2013, March 2013, January 2013 and December 2012.
Allwinner’s success is explained now in the Bloomberg (Businessweek) articles by the following quote:
Local chipmakers benefit from their proximity to the device manufacturers because it bolsters their ability to anticipate and react to new features that are in demand, said Ben El-Baz, head of U.S. marketing for Allwinner.
“Shenzhen is really the electronics hub for the world,” El-Baz said in a phone interview. “We are so close to the market that we’re able to come out with new solutions faster than our competitors. We can do it at lower cost.”
as well as the fact that:
The surge in cheaper devices hasn’t gone unnoticed by more established computer makers. Hewlett-Packard this year began selling the HP 8, a $170 tablet that runs on an Allwinner quad-core processor.
In , however, the internal text contains reference to Rockchip as well:
Note that this same blog of mine started to recognize Rockchip 2 years ago with MWC 2012: Fuzhou Rockchip Electronics post which was followed 10 months later with another one claiming no less than China’s HW engineering lead: The Rockchip RK292 series (RK2928 and RK2926) example. Under the Rockchip tag you could find even more recent ones.
Intel Corp. (INTC) and Qualcomm Inc. (QCOM), the two largest U.S. chipmakers, are under threat in the fastest-growing part of the tablet market from a band of upstarts with names like Allwinner Technology Co. and Fuzhou Rockchip Electronics Co. that are little known outside southern China.
Allwinner, based in Zhuhai near the manufacturing center of Shenzhen, became the No. 2 tablet-processor maker behind Apple Inc. in 2012 as demand for cheaper tablets stoked sales of its low-cost chips, according to IDC. Qualcomm ranks third, while Intel comes in at No. 6, following Rockchip.
Success at Allwinner, which was founded in 2007, and Rockchip, established in 2001, is being driven by increasing demand for inexpensive tablets in their home market, where some devices sell for as little as $50, and in other developing economies. Sales of tablets that retail for less than $150 and don’t carry a brand name will rise 36 percent this year, IDC estimates, driving a 22 percent increase in total tablet shipments. The market for tablet processors grew 32 percent in 2013 to $3.6 billion, according to Strategy Analytics.
Allwinner accounted for 18.2 million of the 88.3 million tablet processors shipped in the fourth quarter of 2013, IDC said. That was more than three times what Santa Clara, California-based Intel, the world’s largest chipmaker, shipped in the same period. Rockchip sold 9 million.
Rockchip representatives didn’t return messages for comment.
Update: China’s Parallel Universe [EE Times, March 26, 2014]
End of update
while both articles contain a whole paragraph devoted to Spreadtrum as well:
Note that this same blog of mine started to recognize Spreadtrum 27 months ago with World’s lowest cost, US$40-50 Android smartphones — sub-$100 retail — are enabled by Spreadtrum post which was followed 7 months later with another one claiming no less than Lowest H2’12 device cost SoCs from Spreadtrum will redefine the entry level smartphone and feature phone markets. Under the Spreadtrum tag you could find even more recent ones.
Like MediaTek, Shanghai-based Spreadtrum Communications Inc. is building on its relationship with handset makers serving the China market and exporting from there. The company, founded in 2001, supplies both processors and modems for smartphones that can retail for as little as $25, said Diana Jovin, a U.S.- based vice president at Spreadtrum.
Her company, which is owned by the Chinese government, has learned that quickly providing adaptable solutions is needed to succeed in a rapidly changing market, she said.
“A significant part of the mobile-handset ecosystem is centered in China,” Jovin said. “We’re the only vendor located in China serving those customers. We’ve expanded our portfolio quite rapidly and have the breadth and depth to compete effectively on a global basis.”
Spreadtrum, which has supplied chips used in Samsung’s Galaxy Star model and HTC Corp.’s Desire, is looking to build on its China base just as Qualcomm, the largest maker of semiconductors used in phones, is trying replicate its worldwide market dominance in that country, the biggest global mobile-phone market.
Regarding the question how the western chipmakers could meet these challenges:
Intel Chief Executive Officer Brian Krzanich — who has made catching up in mobile computing a priority since taking over the company in May — said he’s aiming to quadruple tablet-chip sales to 40 million this year and processors from his company will make their way into devices costing less than $100. To speed adoption, Intel will provide tablet makers with subsidies — what it calls “contra revenue” — to make the cost of its chips competitive. That will cut into profitability this year.
Kathy Gill, a spokeswoman for Intel, said the company is “absolutely accelerating” its roadmap for its Atom line of low-power, low-cost processors for phones, tablets and budget laptops.
Qualcomm has already responded to the demand for lower-cost devices made in China with new chips, said Cristiano Amon, the head of the company’s chip division.
The adoption of a faster wireless-data technology called long-term evolution, or LTE, particularly by No. 1 wireless carrier China Mobile Ltd., will open the door for Qualcomm, the San Diego-based company says. While other companies including Intel, MediaTek and Broadcom Corp. (BRCM) have announced LTE-capable chips, Qualcomm has been in the market for more than two years and has 100 percent market share in devices that have integrated modems, according to IDC.
Qualcomm’s advantage in LTE modem chips will be tough to beat. Unlike for stand-alone processors, there’s no source of off-the-shelf modem designs [there is, however, highly advanced semiconductor IP on the market with CEVA as the lead vendor in that space which is dating back to CEVA Introduces Low Power, Multi-Mode LTE-Advanced Reference Architecture for the New CEVA-XC4000 DSP Architecture Framework [press release, Feb 21, 2012] – you can find more about that in The future of the semiconductor IP ecosystem post of mine], and building one takes years of experience, testing and qualification work with phone-service providers, according to Will Strauss, an analyst at Mesa, Arizona-based Forward Concepts Co.
In processors, “everybody can get in, thanks to ARM and the ease of implementing your own applications processor. They’ve lowered the bar,” Strauss said. At the same time, “the barrier for entry for LTE modems is still very, very high.”
The articles end, however, with a kind of gloomy outlook for the leadiong Western chipmakers:
I would be much more sceptical about the Western SoC vendors’ capabilities to withstand the onslaught of Chinese SoC vendors (including MediaTek). Even the “lack of modem technology” argument given above applies only to a limited degree as:
See more in: Chinese smartphone brands to conquer the global market? [‘Experiencing the Cloud’, March 18, 2014]
Still, Chinese companies have created an obstacle that their more established rivals may struggle to overcome, said Jim McGregor, an analyst at Tirias Research. While the volumes are huge in China and emerging markets, the devices’ low prices leave little room for profits — particularly for companies like Qualcomm and Intel that have shareholders who are accustomed to wide margins, he said.
“We are not just talking about a billion here, but several billion units,” McGregor said. “It’s foolish to avoid that kind of market. The problem is with a publicly traded company, it’s against their instincts to go for it.”
Upcoming FireFox OS powered $25 smartphones with Spreadtrum SC6821 EDGE SoC having 128MB on chip RAM used via zRAM swap by the OS
Hands on with the $25 Smartphone running Firefox OS at MWC 2014 [TrustedReviews YouTube channel, Feb 24, 2014]
[0:15] “This is the newest … set that is running on ultra low-end memory which is 128MB RAM and 256MB ROM. So that’s why we call it the lowest [price] smartphone you probably can get on the market” [0:30]
From With Firefox OS, Mozilla begins the $25 smartphone push [CNET, Feb 23, 2014]
Mozilla doubled down on its bet that low-end smartphones will give Firefox OS a place in the crowded mobile market, announcing partnerships Sunday that will bring $25 smartphones to the large number of people who can’t afford high-end models like Apple’s iPhone 5S and Samsung’s Galaxy S5 that cost hundreds of dollars.
At the Mobile World Congress here, Mozilla announced a deal with Chinese chip designer Spreadtrum Communications that will mean Firefox OS smartphones will arrive in extremely cost-sensitive markets like India and Indonesia where people often buy phones from a bin in a store.
“We’re working with them to break through the
$50$25 barrier [should be corrected, obviously], which is hard,” Mozilla Chief Technology Officer Brendan Eich told CNET. “This is going to be for a set of [sales] channels in Asia that do not involve operators,” the carriers that in other parts of the world dominate distribution.
One company that plans to make and promote the phones is Indonesia-based Polytron. And Indonesian carriers Telkomsel and Indosat plan to sell the devices. Hands-on testing shows the cheap Firefox OS phones to be workable. “This is a price point currently out of the reach of Google and even the lowest-cost Android handset vendors. It pushes Firefox OS into feature-phone territory, potentially signaling the beginning of the end for the category,” said Ovum analyst Nick Dillon in a statement.
Mozilla has found a small niche in the mobile OS market by pursuing its low-end strategy, with the first phones debuting in countries such as Hungary, Venezuela, Colombia, Brazil, and Greece. Mozilla, a non-profit organization, hopes to use the browser-based operating system to lower the barriers that today keep people locked into ecosystems linking hardware, OS, app store, services, content, and apps.
Firefox OS takes on challenges
Today, Apple’s iOS and Google’s Android dominate the market for smartphones and tablets. Challengers like Microsoft’s Windows Phone, Ubuntu Touch, WebOS, BlackBerry OS, and Samsung’s Tizen have struggled to push these aside: it’s hard to compete against an incumbent that’s got millions of users, hundreds of thousands of apps, and few signs of the complacency that can open a door for challengers.
Firefox OS won’t have an easy time of it. There’s not as much money to be squeezed from low-end markets, so developers aren’t as likely to pursue it as avidly. The Spreadtrum chipset will support only 2.5G Edge mobile networks that, while common in poorer parts of the world, are too slow for a lot of modern apps. And Google is pushing toward lower-end phones, with Android 4.4 memory-saving techniques [“zRAM swap can increase the amount of memory available in the system by compressing memory pages and putting them in a dynamically allocated swap area of memory.”] that fit KitKat into phones with 512MB of RAM.
At the same time, though, Firefox is pushing, too. It uses the same ZRAM memory compression technique to halve its memory requirement to 128MB of memory, Eich said.
Getting down to $25 phones means Firefox OS will provide an alternative for people who’d otherwise buy a feature phone — a model with a few built-in apps but not much more.
So Firefox has a chance there. But in the long run, to succeed, Firefox OS will need to push up-market, and it’s not clear how Mozilla will succeed there with much stronger competition.
Think Big at #MWC14: Mozilla leadership discuss innovation and digital literacy [ThinkBigEurope YouTube channel, Feb 25, 2014]
Note: Think Big is a Telefonica initiative targeting young people in six European countries: Ireland, UK, Spain, Germany, Czech Republic and Slovakia (countries where Telefonica operates in Europe)
How good is the $25 smartphone from Mozilla – BBC News [BBC News YouTube channel, Feb 24, 2014]
Mozilla plans ‘$25 smartphone’ for emerging markets [BBC News, Feb 23, 2014]
Mozilla has shown off a prototype for a $25 (£15) smartphone that is aimed at the developing world.
The company, which is famed mostly for its Firefox browser, has partnered with Chinese low-cost chip maker Spreadtrum.
While not as powerful as more expensive models, the device will run apps and make use of mobile internet.
It would appeal to the sorts of people who currently buy cheap “feature” phones, analysts said.
Feature phones are highly popular in the developing world as a halfway point between “dumb” phones – just voice calls and other basic functions – and fully-fledged smartphones.
Mozilla hopes that it will capture an early lead in a market that is now being targeted by mobile device manufacturers who see the developing world as the remaining area for massive growth.
It will face stern competition from bigger, more established brands, however – with more announcements of this kind expected over the course of the next couple of days at the Mobile World Congress in Barcelona.
“These solutions expand the global accessibility of open web smartphones to first-time and entry-level smartphone buyers by reducing the time and cost required for handset makers to bring these devices to market,” said Spreadtrum in a press statement.
Mozilla said the phone “redefines” the entry-level phone market.
The concept of a cheap smartphone may seem likely to appeal to consumers in developed countries, particularly those who locked into long contracts in order to subsidise the cost of the likes of the Apple iPhone and Samsung Galaxy range.
But analyst Carolina Milanesi, from Kantar Worldpanel, said it should not be seen as a competitor.
“You’re not really talking about smartphone experience.
“You’re talking about a clumsy smartphone that’s a little bit better than a feature phone – still primarily for voice and text.”
The phone runs Mozilla’s own mobile operating system – something that could cause problems as competition in the cheap smartphone market steps up, Ms Milanesi added.
Mozilla also announced new high-end smartphones
In addition to the $25 smartphone, Mozilla also launched several high-end models, including devices from Huawei and ZTE.
Mozilla press conference about Firefox OS at MWC 2014 [firefoxchannel YouTube channel, Feb 23, 2014]
The $25 smartphone announcement comes at [15:30] with the following slides (note the 1Gb, i.e. 128MB LPDDR1 Embedded in the SoC!!):
From Firefox OS Unleashes the Future of Mobile [Mozilla Press Center, Feb 23, 2014]
Spreadtrum has announced WCDMA and EDGE turnkey reference designs for Firefox OS as well as the industry’s first chipset for US$25 smartphones, the SC6821, that redefines the entry level for smartphones in key growth markets. These solutions are already creating a stir, with global operators such as Telenor, Telkomsel and Indosat, and ecosystem partners such as Polytron, T2Mobile and Thundersoft expressing interest.
$25 Firefox Smartphone (MWC 2014) [ARMflix YouTube channel, Feb 25, 2014]
[0:33] “The key thing about this device is that this is only powered by 128MB of RAM. So this is only one half or one quarter of the existing entry level devices that we are seeing on the market.” [0:47]
Warning: This article does not take into account the SC6821 characteristics, especially its 128MB on chip RAM used via zRAM swap by the OS, as well as its EDGE only networking!
Is a US$25 smartphone possible? [DIGITIMES, Feb 25, 2014]
Mobile World Congress (MWC) kicked off with a bang, with Mozilla announcing a US$25 smartphone built around a turnkey solution that features silicon from China-based Spreadtrum and software from Firefox.
According to a Mozilla press release, Spreadtrum and Mozilla have now completed the integration of Firefox OS with several of Spreadtrum’s WCDMA and EDGE smartphone chipsets, including the SC6821, unveiled by Spreadtrum as the industry’s first chipset for a US$25 smartphone.
So the key to the solution is the SC6821, which Spreadtrum stated is “designed with a unique low memory configuration and high level of integration that dramatically reduces the total bill of materials required to develop low-end smartphones.” Mozilla added that with this chipset, handset makers will be able to bring to market smartphones with 3.5-inch HVGA [eg. 480×320] touchscreens, integrated Wi-Fi, Bluetooth, FM and camera functions, the advanced phone and browser features of Firefox OS, and access to an ecosystem of web and HTML5 applications.
With a clearer picture of the specs Mozilla envisions for a US$25 smartphone, I approached Digitimes Research Analyst Luke Lin to ask if he thought it was possible to deliver such a product to the market at this time. According to Lin, the simple answer is that it would be “impossible” to see a US$25 Firefox phone hit the shelves this year, unless operators are willing to provide subsidies.
Lin explained that currently, the absolute lowest smartphone BOM in China is estimated to be around US$22 (and most are significantly more than that) and that manufacturing costs are highly unlikely to go below US$20 this year, which would be the cost needed to deliver a US$25 smartphone to end users. The cost would need to get to US$15-20 FOB in order to get a selling price of US$25, Lin said.
In terms of Spreadtrum‘s claims it has produced a level of integration and memory requirements that can reduce the BOM cost significantly, Digitimes Research Analyst Anthony Chen commented that Spreadtrum’s solution is no more integrated than any other integrated solution on the market so there is no clear advantage there. And as for memory, the cheapest and smallest memory modules (ROM and mobile DRAM) for smartphones in China run about US$5 for a configuration of 256MB ROM and 256MB of mobile DRAM, and Chen highly doubts the Mozilla solution could run with a lesser configuration than that.
One other argument being offered as to why Spreadtrum could offer lower pricing than competitors is that the China government has a stake in the company. The logic is that an edge in pricing could help Spreadtrum better compete with Taiwan-based MediaTek and US-based Qualcomm.
Chen responded to the suggestion by pointing out that such a statement is not really an argument. It’s merely speculation. Moreover, Chen noted that Spreadtrum’s cheapest products currently sell in the US$3-4 range, and he doesn’t see much chance for the price to be reduced significantly, with subsidies or without.
While it is true that BOM costs are always falling, Lin and Chen agreed that component makers are much more likely to be squeezed in the higher-end segments, where they have margins. At the bottom of the market, the component makers are not really making any money. As a long term strategy for the low-end of the market, they would much prefer to provide improved specs at the same price rather than cut prices, Lin explained, while adding that it is unlikely that the BOM would drop much further at the bottom end of the market, as it is already close to US$20. Therefore, while prices may drop a little, Digitimes Research does not expect prices to drop all that much in the near future.
Another perspective was offered by Digitimes Research Analyst Jason Yang, who stated that if there is any component that could influence the low-end smartphone BOM at this point, it was the touch panel, not the application processor. Yang indicated that currently the touch panel module, with LCD display, accounts for the largest portion of the BOM, at around US$7-8 for the cheapest modules. Yang did state that he believes the price may drop this year, but not enough to bring the overall BOM cost of the cheapest phones to below US$20.
So, if ultimately the announcement was all about Mozilla driving the launch of a US$25 smartphone, Lin doubts that this will happen this year or anytime soon. Based on the current cost structure, Lin believes Firefox models priced in the US$60-80 are more likely to appear in 2014. Of course, users may be able to find spectacular deals and price cuts, but such a situation would more likely be inventory clearance or something similar, not a mainstream price point.
However, if this announcement is not about Mozilla driving the market to low-cost smartphones and is more about a trend where emerging markets will become flooded with cheap smartphones, then it should be noted that this is a process that is already underway.
Currently in China, entry-level smartphones – mostly white-box but even some brands – are already selling in the US$50 range. And these smartphones are not just being shipped to the domestic market. China vendors exported about 30% of their smartphones in 2013 and that proportion is forecast to rise in 2014. According to Digitimes Research data tracking smartphone shipments by vendor and the related market breakdown, the non top-10 segment (which is dominated by Greater China vendors and white-box players) accounted for 12% of global smartphone shipments in 2012, 21% of the global market in 2013, and Digitimes Research forecasts the share will rise to 25.6% in 2014.
So the flow of cheap smartphones from China going to emerging markets has already started and the shipments are steadily increasing, it’s just that the devices cost a bit more than US$25 and almost all of them feature Android as the OS.
Spreadtrum and Mozilla Take Aim at Global Smartphone Accessibility with Turnkey Solution for US$25 Smartphones [press release, BARCELONA, Spain, Feb. 23, 2014]
– Integration of Spreadtrum’s entry-level smartphone chipsets with turnkey reference designs for Firefox OS aims to bring Open Web Devices to an underserved audience of entry-level smartphone buyers around the world
– Spreadtrum unveils the SC6821, the industry’s first chipset for US$25 smartphones (retail), on Firefox OS
Today at Mobile World Congress, Spreadtrum Communications, Inc., a leading fabless semiconductor company in China with advanced technology in 2G, 3G and 4G wireless communications standards, and Mozilla, the mission-based organization dedicated to keeping the power of the Web in people’s hands, announced that they have teamed up to deliver turnkey Firefox OS reference designs with Spreadtrum’s entry-level smartphone chipsets. These solutions expand the global accessibility of open Web smartphones to first-time and entry-level smartphone buyers by reducing the time and cost required for handset makers to bring these devices to market. Spreadtrum and Mozilla have now completed the integration of Firefox OS with several of Spreadtrum’s WCDMA and EDGE smartphone chipsets, including the SC6821, unveiled today by Spreadtrum as the industry’s first chipset for US$25 smartphones. These smartphones are available for demos at Mozilla’s booth (3C30) at Mobile World Congress 2014 in Barcelona.
“The combination of Firefox OS with Spreadtrum’s entry-level smartphone platforms has the potential to dramatically extend the reach of smartphones and the Web globally,” said Dr. Li Gong, Mozilla Senior Vice President of Mobile Devices and President of Asia Operations. “Firefox OS delivers a customized, fun and intuitive experience for first-time smartphone buyers and our collaboration with Spreadtrum enables the industry to offer customers an extremely affordable way to get a smartphone and connect with Web apps.”
At Mobile World Congress, Spreadtrum unveiled the SC6821, its new smartphone chipset that redefines the entry level of the global smartphone market. The chipset is designed with a unique low memory configuration and high level of integration that dramatically reduces the total bill of materials required to develop low-end smartphones. With this chipset, handset makers will be able to bring to market smartphones with 3.5″ HVGA [e.g. 480×320] touchscreens, integrated WiFi, Bluetooth, FM and camera functions, the advanced phone and browser features of Firefox OS, and access to a rich ecosystem of web and HTML5 applications, at prices similar to much more minimally featured budget feature phones.
Spreadtrum’s turnkey reference design brings together this highly cost-effective chipset platform with the intuitive, easy-to-use experience and Web/HTML5 application ecosystem of Firefox OS. “Turnkey solutions benefit the vast majority of small handset makers by reducing the time and cost involved in bringing new devices to market,” said Stuart Robinson, analyst at Strategy Analytics. “This joint effort between Spreadtrum and Mozilla will help make Firefox OS more readily available to handset makers that focus on the needs of entry level smartphone buyers in emerging markets.”
Firefox OS smartphones are the first devices powered completely by Web technologies to deliver the performance, personalization and price users want in a smartphone with a beautiful, intuitive and easy-to-use experience that is unmatched by other phones. Firefox OS has all the things users need from a smartphone as well as the things they want like built-in social integration with Facebook and Twitter, HERE Maps with offline capabilities, much-loved features like the Firefox Web browser, the Firefox Marketplace for apps and more. Firefox OS features a brand new concept for smartphones – an adaptive app search that literally transforms the phone to meet a user’s needs and interests at any moment.
Firefox OS offers Mozilla-pioneered WebAPIs that unlock the power of the Web and enable developers to build fun and rich app experiences that were previously only available to proprietary native apps, which are fragmented by platform and not portable.
Xiaomao Xiao, Spreadtrum’s vice president of software development added, “By integrating Firefox OS support with our smartphone platforms, we are providing our customers with flexibility and choice in how they develop and design their smartphones as well as access to the increasingly rich base of HTML5 applications that are available on this platform. We are pleased to work with Mozilla to expand Firefox OS support to all of our smartphone platforms to provide the benefits of open web technologies to consumers around the world.”
Spreadtrum and Mozilla have completed the integration of Firefox OS with Spreadtrum’s SC6821 and SC7710 WCDMA smartphone chipsets, and expect to complete a turnkey reference design for the SC7715, Spreadtrum’s single-core WCDMA smartphone chipset with integrated connectivity, next month. Spreadtrum and Mozilla’s collaboration will extend across Spreadtrum’s full chipset portfolio.
About Spreadtrum Communications, Inc.
Spreadtrum Communications, Inc. is a fabless semiconductor company that develops mobile chipset platforms for smartphones, feature phones and other consumer electronics products, supporting 2G, 3G and 4G wireless communications standards. Spreadtrum’s solutions combine its highly integrated, power-efficient chipsets with customizable software and reference designs in a complete turnkey platform, enabling customers to achieve faster design cycles with a lower development cost. Spreadtrum’s customers include global and China-based manufacturers developing mobile products for consumers in China and emerging markets around the world. Spreadtrum is a privately held company headquartered in Shanghai and an affiliate of Tsinghua Unigroup, Ltd. For more information, visit www.spreadtrum.com.
Mozilla has been a pioneer and advocate for the Web for more than 15 years. We create and promote open standards that enable innovation and advance the Web as a platform for all. Today, half a billion people worldwide use Mozilla Firefox to discover, experience and connect to the Web on computers, tablets and mobile phones. For more information please visit https://www.mozilla.org/.
Firefox OS Expands to Higher-Performance Devices and Pushes the Boundaries of Entry-Level Smartphones [Mozilla Press Center, Feb 23, 2014]
Mozilla, the mission-based organization dedicated to keeping the power of the Web in people’s hands, today previewed the future of Firefox OS to show how the flexibility, scalability and powerful customization will empower users, developers and industry partners to create the exact mobile experience they want with relevant and innovative features, localized services and more.
Today, device partners ALCATEL ONETOUCH, Huawei, LG and ZTE are all using Firefox OS on a broad range of smartphones that are tailored for different types of consumers. The Firefox OS devices unveiled today showcase dual-core processors for better performance, higher screen resolution and more. The newest Firefox OS devices to join the family include the ZTE Open C and Open II, Alcatel ONETOUCH Fire C, Fire E, Fire S and Fire 7 tablet, all using Snapdragon™ processors from Qualcomm Technologies Inc., a leader in mobile communications.
In the few months since initial launch, Firefox OS smartphones are now available in 15 markets, with new operators and new markets around the globe announced today. Mozilla is working to create a level playing field with the openness of the Web. The ecosystem is catching fire and resulting in development of new form factors beyond the smartphone. For example, Panasonic announced they will make SmartTVs powered by Firefox OS, Foxconn and Via are making Firefox OS tablets, and Mozilla is working with suppliers to enable devices for all target user groups.
Significant growth is also happening with apps and content on Firefox OS, proving the Web has the potential to be the world’s largest marketplace. Firefox OS offers two ways to discover and utilize apps and content – the Firefox Marketplace and an adaptive app search that enables discovery and access to apps that users can instantly use once or download to keep. This innovative approach helps maximize data and storage usage.
The Firefox Marketplace has seen thousands of developers submitting apps and millions of downloads of popular global and relevant local apps. Top global apps include Cut the Rope, Disney’s Where’s My Water?, Facebook, EverNav, HERE, Line, Pinterest, SoundCloud, The Weather Channel, TimeOut, Twitter, Yelp and YouTube.
The ZTE Open C will offer the latest version of Firefox OS
in Venezuela and Uruguay in Q2 of 2014
The Firefox Marketplace makes it possible to create local and niche apps with relevant regional content by allowing developers to build on basic Web technologies, without gatekeepers. The top new local apps in the Firefox Marketplace include Despegar.com travel booking, Capp World Cup highlights, Captain Rogers game, Manana reading app, Napster, SurfTime and more.
Future of Firefox OS
At Mobile World Congress, Mozilla is showing off a preview of what to expect from Firefox OS in the coming year and what’s possible when the Web is the platform.
Firefox OS is made to change with each individual and adapt to his or her interests and needs with features like adaptive app search, offline use and cost control. New content can be enjoyed instantly with a simple search, making downloads virtually a thing of the past. Firefox OS offers deep levels of customization that are unmatched by any platform or device. This is possible because Firefox OS is built on the flexible technologies of the Web and the user interface is made of a modular architecture of building blocks that make it easy for anyone to customize.
Upcoming versions of Firefox OS will offer users fun and innovative new features and services including new and intuitive navigation, a powerful universal search feature, support for LTE networks and dual SIM cards, easy ways to share content, ability to create custom ringtones, replaceable home screens and Firefox Accounts.
New versions of Firefox OS have many performance improvements that dramatically improve the user experience including speedier launch times, smoother scrolling and improved keyboard accuracy.
Here are highlights on a few of the features coming next for Firefox OS:
- Deep customization options for operators and manufacturers, developers and users. This includes the ability to create custom ringtones and replaceable home screens, which were direct requests from Firefox OS users.
- A new universal search that will revolutionize how users discover content on their phones. The feature is available on any screen – simply swipe down from the top to find new apps, content or navigate to anything on the phone or the Web.
- New navigation features to make multitasking intuitive, fluid and smart, much like how users interact with the Web. Users can easily swipe from the left and right edges to seamlessly move between pages, content and apps in a fun way that saves time.
- Easy and direct sharing of content (and even software updates) in a secure way with NFC support, without the need for data or Wifi.
- LTE support to make the mobile experience even faster.
- Firefox OS will introduce Firefox Accounts and services. Firefox Accounts is a safe and easy way for users to create an account that enables them to sign in and take Firefox everywhere. With Firefox Accounts, Mozilla can better integrate services including Firefox Marketplace, Firefox Sync, backup, storage, or even a service to help locate, message or wipe a phone if it were lost or stolen.
As the platform evolves, Firefox OS will enable new technologies for the mobile industry. Mozilla is already leading the way in areas like gaming, privacy and security, WebRTC and other services. Firefox OS is a great platform for which partners can build additional services that meet the needs of their customers regionally and individually.
- Telefonica offers a very helpful cost control app for customers to manage their usage and top off their account.
- Deutsche Telekom just announced they are utilizing the deep levels of customization Firefox OS offers to develop new privacy features for the Future of Mobile Privacy project, a joint effort with Mozilla to create effective, user-driven privacy functionality for mobile devices.
- WebRTC is an open, standards-based technology that enables operators to offer services like real time chat, image and file sharing. With WebRTC, operators can let users make calls to any desktop or mobile device, regardless of platform or service provider.
“We’re pleased to see the Firefox OS ecosystem grow so quickly as users, developers and partners come together to experience and build the future of mobile experiences,” said Andreas Gal, Mozilla Vice President of Mobile. “Firefox OS will continue to evolve and add more features to offer choice and customization that is unmatched by any other smartphone. We’re excited to see what other features and services will result from an open platform being contributed to by developers, partners and community around the world.”
Mozilla has been a pioneer and advocate for the Web for more than 15 years. We create and promote open standards that enable innovation and advance the Web as a platform for all. Today, half a billion people worldwide use Mozilla Firefox to experience the Web on computers, tablets and mobile devices. With Firefox OS and
Firefox Marketplace, Mozilla is driving a mobile ecosystem built entirely on open Web standards, freeing mobile providers, manufacturers, developers and consumers from the limitations and restrictions imposed by proprietary platforms. For more information, visit http://www.mozilla.org.
For More information: https://blog.mozilla.org/press/kits/firefox-os/
New Developer Hardware and Tools Show Firefox OS Ecosystem Momentum [Mozilla Press Center, Feb 23, 2014]
Mozilla, the mission-based organization dedicated to keeping the power of the Web in people’s hands, today announced new developer reference hardware and tools that will continue to accelerate momentum around the Firefox OS ecosystem, making it cheaper, faster and easier for developers, operators and OEMs to deploy innovative Web apps and create personalized Firefox OS experiences.
Mozilla announced a 4.5” dual-core reference phone, enabling developers to test new Firefox OS features and apps against different memory configurations. It also expanded the Mozilla tablet program that helps developers test their apps and build out Firefox OS for tablets.
New Firefox OS developer tools and hardware demonstrate ecosystem momentum
New Firefox OS PhoneGap integration was also announced, allowing hundreds of thousands of PhoneGap developers to port their existing apps to Firefox OS in a matter of hours, while new WebAPIs will continue to narrow the gap between native and Web apps. At Mobile World Congress, Mozilla also launched developer tools that will allow OEMs and operators to easily customize Firefox OS for a variety of customer segments.
Developers have always been the key to driving innovation around the Web, and continue to enable it as a platform for app development and distribution. With these new reference devices, tools, and WebAPIs, Mozilla is catalyzing the growth of Web apps and continuing to break down the barriers and restrictions inflicted by other app ecosystems. The Web not only simplifies app development and reduces fragmentation, but allows developers to own the direct customer relationship with the option to host their own apps and or sell them through the Firefox Marketplace.
Vision Mobile recently published a report showing that developer interest for Firefox OS continues to grow, capturing 7% of developer mindshare in just six months. The report also highlighted that during Q1 2014, 52% of developers were already using HTML5 for mobile websites or Web apps with an additional 16% indicating their intention to join them.
A recent survey by Strategy Analytics found that the number of mobile app developers building for Firefox OS is expected to triple this year, showing the biggest rise in developer interest of any mobile platform.
This industry momentum is fueled by the fact that there are already millions of Web developers programming in HTML5 who are eager to target mobile without having to learn a new programming language, or pay engineers to target specific mobile platforms.
The following expanded reference hardware, tools, and WebAPIs, will continue to drive growth of the Firefox OS ecosystem and help prove why the Web is a powerful platform for app development and distribution:
New Reference Phone
At Mobile World Congress, Mozilla is showcasing its new developer reference phone, the Firefox OS Flame, enabling developers to test the capabilities of Firefox OS in a real environment with a mobile network and true hardware characteristics like the accelerometer, NFC and camera. Like the commercially available Firefox OS phones, the Flame developer reference phone is powered by a Qualcomm processor, in this instance a high powered 1.2GH dual core processor, so developers can test their more processor-intensive games and apps with ease. Developers looking to target their apps for specific Firefox OS phones with lower memory footprints also have the option to alter the RAM capacity of the Flame, from 1GB to 256MB, to see how their apps would perform on lower specked phones. The Flame also provides developers and early adopters with access to the latest Firefox OS builds to test nightly releases and contribute to the overall development platform.
Firefox OS Flame Specs (Reference device):
- Qualcomm MSM8210 Snapdragon, 1.2GHZ Dual core [Cortex-A7 with Qualcomm Adreno 302 GPU] processor
- 4.5” screen (FWVGA 854×480 pixels)
- Cameras: Rear: 5MP / Front: 2MP
- 3G UMTS quad-band (850/900/1900/2100)
- 8GB memory
- 256MB -1GB RAM (adjustable by developer)
- A-GPS, NFC
- Dual SIM support
- Battery capacity: 1,800 mAh
- WiFi: 802.11 b/g/n, Bluetooth, Micro USB
Hundreds of Thousands of PhoneGap Users Can Now Target Firefox OS
Firefox OS will be supported in the next release of PhoneGap, the leading developer tool for building apps across platforms. This builds on the recently announced Firefox OS integration with Cordova, a popular Apache Foundation open source project that allows HTML5 applications to be packaged as native apps.
App Manager Simplifies App Development with Live Prototyping and Debugging
App Manager brings the Firefox Web developer tools to mobile app developers. It shows how the power of the Web helps developers test, deploy and debug Web apps on Firefox OS phones directly from their desktop. The Firefox Web developer tools are already used by millions of Web developers for creating Web pages, and now the App Manager extends these capabilities to mobile app creation, with the same familiar workflow. There is no SDK to download, developers simply use the App Manager as part of the integrated developer tools in the Firefox browser.
Because the App Manager and Firefox OS both use open Web technologies, debugging, live editing and prototyping is straightforward. For example, an operator or OEM may want to prototype different branded homescreen themes for different audiences. Using the App Manager, they can code this on their desktop and in real-time see the changes appear on their connected Firefox OS phone, eliminating lengthy build times. To see how this is done, please see this MDN article.
New WebAPIs and Industry Adoption
There are now more than 30 Mozilla-pioneered WebAPIs with at least eight new APIs introduced in the last year, including WebNFC and Data Store API. These new APIs build more functionality and features into the Web for app development. There is increasing industry adoption as these APIs move towards standardization. Samsung added the Vibration API and Battery Status API to WebKit, while tools like Apache Cordova and Adobe’s PhoneGap now integrate six of the most popular WebAPIs into their products.
Foxconn and VIA Join Tablet Contribution Program
Mozilla recently introduced a tablet contribution program aimed at accelerating the build of Firefox OS for tablets and its supporting ecosystem, with Foxconn as the first hardware partner.
As part of the Firefox OS tablet contribution program, VIA is offering a 7” Vixen reference tablet for developers around the world to help the Mozilla community complete the build of Firefox OS for tablets. Developers can now apply to be a part of this program from this Mozilla Hacks post.
Developer Reference Tablet Specifications:
- 7’’ 1024×600 HD LCD screen
- 1.2 GHz Dual Core Cortex-A9 processor
- ARM Mali-400 Dual-Processor GPU
- 8GB storage
- 1GB RAM
- Cameras: Front 0.3 MP, Back 2.0 MP
- Wifi: 802.11 b/g/n
- 10” screen (1280 x 800 pixels, 24-bit color)
- [Allwinner] A31 (ARM Cortex A7) Quad-Core 1.0GHz w/ PowerVR SGX544MP2 GPU
- 16GB storage
- 2GB RAM
- Cameras: Rear 5MP/ Front 2MP
- Battery capacity: 7,000 mAh
- WiFi: 802.11 b/g/n, Bluetooth, Micro USB
“It’s clear that more and more developers are choosing the Web as their preferred development platform for mobile apps, as the technical gap between native and Web apps narrows,” said Brendan Eich, Mozilla CTO and SVP Engineering. “We listen to what developers are asking for to make the Web their primary development platform and think Mozilla and its partners have made significant progress with these new hardware, tools, and WebAPIs. It’ll be exciting to see what new mobile innovations come in 2014.”
Firefox OS Unleashes the Future of Mobile [Mozilla Press Center, Feb 23, 2014]
Mozilla, the mission-based organization dedicated to keeping the power of the Web in people’s hands, demonstrated the breadth and growth of its Firefox OS open mobile ecosystem at a press event on the eve of Mobile World Congress in Barcelona. The event introduced seven new commercial Firefox OS devices and highlighted advancements and partnerships that will enable the platform to scale up in 2014.
In the year since MWC 2013, Firefox OS devices have gone on sale in 15 markets with four global operators and handsets from three manufacturers. Firefox OS will be expanding into important new markets in 2014. Telefónica will build on the list of countries where it’s selling Firefox OS phones, with eight more launching this year: Argentina, Costa Rica, Ecuador, El Salvador, Germany, Guatemala, Nicaragua and Panama. Deutsche Telekom will also add four new markets: Croatia, the Czech Republic, Macedonia and Montenegro.
Operator support for Firefox OS also continues to expand, as Telkomsel and Indosat have joined the list of 21 key operators across the globe that support the open Web device initiative. That list also includes partners announced last year: América Móvil, China Unicom, Deutsche Telekom, Etisalat, Hutchison Three Group, KDDI, KT, MegaFon, Qtel, SingTel, Smart, Sprint, Telecom Italia Group, Telefónica, Telenor, Telstra, TMN and VimpelCom.
A new smartphone entry level
Spreadtrum has announced WCDMA and EDGE turnkey reference designs for Firefox OS as well as the industry’s first chipset for US$25 smartphones, the SC6821, that redefines the entry level for smartphones in key growth markets. These solutions are already creating a stir, with global operators such as Telenor, Telkomsel and Indosat, and ecosystem partners such as Polytron, T2Mobile and Thundersoft expressing interest.
“In six short months, Firefox OS has more than established itself in the very markets it aimed to address,” said John Jackson, VP of Mobility Research, IDC. “Today’s announcements underscore the platform’s rapid maturation and growing ecosystem benefits. New products, tools, categories, partners, features, and extraordinarily compelling price points will reinforce Firefox OS’s momentum into 2014. IDC expects year-on-year Firefox OS volumes will grow by a factor of six times in the smartphone category alone.”
Flexibility and customization
Firefox OS devices are the first devices built entirely to open Web standards, with every feature developed as an HTML5 application. Mozilla previewed the future of Firefox OS at its press event, demonstrating how its flexibility, scalability and powerful customization empower users, developers and industry partners to create the exact mobile experience they want. Carriers can easily and deeply customize the interface and develop localized services that match the unique needs of their customer base.
Deutsche Telekom is utilizing this customization to develop new Firefox OS features for the Future of Mobile Privacy project, a joint effort with Mozilla to bring data privacy closer to customers. The organizations’ privacy offices have been collaborating over the past year to conceptualize and develop new privacy features that are currently being tested for consideration in future Firefox OS releases.
Firefox OS is also expanding to additional form factors, as partners and contributors work to optimize the software for TVs, tablets and other devices. In January, Panasonic announced a partnership with Mozilla to release next-generation smart TVs powered by Firefox OS.
“Firefox OS is off to an amazing start. We launched our first smartphones in July, and have since expanded into fifteen markets,” said Jay Sullivan, chief operating officer of Mozilla. “People in Latin America and Eastern Europe have eagerly upgraded from their feature phones to Firefox OS smartphones and now have rich access to the Web and apps. Sales have far exceeded our targets. But 2013 was just the beginning. In 2014, we are differentiating our user experience and our partners are growing the portfolio of devices. We are also enabling a whole new category of smartphone, priced around $25, that will bring even more people around the world online.”
Streamlining the support process
Mozilla has received significant interest from mobile manufacturers looking to differentiate themselves by producing Firefox OS phones and tablets. To help service this demand and facilitate the next wave of device growth, Mozilla launched a new self– service partner portal to fast track manufacturers and streamline bringing devices to market. Manufacturers get all the resources and branding required to launch a Firefox OS device in one place.
In order to promote the success of this ecosystem, the Open Web Device Compliance Review Board (CRB) was formed by Mozilla and major global partners in late 2013. The CRB’s aim is to define and evolve the process of encouraging API compatibility and competitive performance for open Web devices.
Marieta Rivero, Global Chief Marketing Officer at Telefónica, said: “We started marketing Firefox OS less than eight months ago, commencing with Spain and expanding to several Latin American countries. In a number of these countries, Firefox OS has been a market leader in smartphone sales from the very start. We’re transforming the market, and will continue focusing our efforts on open environments that give clients more freedom, and prices that are better suited to their possibilities. 2014 will undoubtedly be a key year for all of this.”
“The continuing rollout across our European markets is tangible proof of our drive to push Firefox OS, together with Mozilla and bring an open operating system to all of our customers,” said Thomas Kiessling, Chief Product & Innovation Officer at Deutsche Telekom. “The introduction of an even more affordable handset on the one hand and a higher-end model on the other also show we are reaching more market segments.”
“Telenor and our operating businesses have seen great consumer satisfaction and a continued appetite in the market for quality, low-cost products based on Firefox OS,” said Holger Hussmann, VP Device and OS at Telenor. “We are supportive and welcoming of the efforts of enabling vendors and device partners focused on serving this great, underserved market opportunity.”
Alistair Johnston, Director of Marketing for Telkomsel, said: “Telkomsel will support Mozilla with its Spreadtrum turnkey solution and device partner as an attempt to bring the smartphone to the palm of every Indonesian and to perform Telkomsel strategy to speed up and enrich the DNA (Device – Network – Application) ecosystem in Indonesia.”
President Director & CEO of Indosat, Alexander Rusli, said: “Indosat as the leading communications provider in Indonesia is ready for Firefox OS smartphones based on the Spreadtrum solution. This is in line with our strategy in 2014 to provide the best experience to our customers and become the customer’s preferred choice for smartphones and smart device users.”
“Polytron is announcing the intention of supporting the manufacturing, distribution, and promotion of Firefox OS smartphones based on Spreadtrum’s latest solution,” said Mr. Hariono, CEO of Polytron, Indonesia’s leading mobile device brand. “T2Mobile specializes in offering our customers the ability to rapidly address the needs of its customers in every segment of the wireless ecosystem,” said Aaron Zhang, CEO, T2Mobile, a leading ODM specializing in Firefox OS-based mobile solutions. “The creation of new Firefox OS and open Web devices will be further accelerated by these solutions and we are pleased to support these new offerings.”
“We are excited by the new and highly affordable possibilities enabled by Firefox OS,” said Hongfei Zhao, CEO, Thundersoft, a leading global technology and solutions provider that helps OEMs’ accelerate high quality product development and achieve fast time to market. “We have expanded our services in new areas including support for Firefox OS, enabling new and unique offerings in the mobile Internet device industry and ecosystem.”
Please visit Mozilla and experience Firefox OS at stand 3C30 in Hall 3, at the Fira Gran Via, Barcelona from February 24-27, 2014.
For additional resources, such as high-resolution Firefox OS images and b-roll video, visit: https://blog.mozilla.org/press.
H2CY13: Upcoming next-gen Nexus 7, the ASUS MeMO Pad HD 7 “re-incarnation” at reduced by $50 price, dual/quad-core mid-range tablets from white-box vendors starting from $65
(while entry level will start from $40) … with that there would be tremendous pressure on low-volume tablet supliers (branded or white-box alike), as well as Samsung and Apple. Meanwhile China strengthens its position as the world leading PC Market.
Complementary post reminder:
Eight-core MT6592 for superphones and big.LITTLE MT8135 for tablets implemented in 28nm HKMG are coming from MediaTek to further disrupt the operations of Qualcomm and Samsung [‘Experiencing the Cloud’, July 20, 2013] from which the following excerpts I will include here as the ones directly related to the content given here as well:
At the end of July the launch of a tablet chip is expected: the MT8135, with 2xA15 +2xA7, still using an Imagination GPU, and mainly targeting the high-end tablet market. If Google OS will be closed and converged that will have a huge impact on us.
… We will use Windows as a second priority, while using Firefox [OS] and HTML5 as a secondary backup, by keeping track of them. Because we judge that the [Android] OS convergence from Google profitability point of view is very low, therefore our vote for these two emerging open OS’s is in the ‘not so urgent’ category, in addition to and outside of Android. The other focus is again on Windows Phone 8. For the moment, however, WP8 hardware configuration requirements are still higher (mainly memory), power consumption – after optimizing the gap with Android – is not too large.
End of the complementary post reminder
Rumor: New Nexus 7 specs, features and launch details mentioned in chat with Asus rep [Android Authority, June 30, 2013]
AE: The Tablet should be released before the ending of Q2
C: when exactly is before Q2?
AE: That will be before the ending of July
AE: There has not been confirmed specification as yet, but here is some basics specification , that you can look at:
7 inch LED with 1980*1200 resolution
Qualcomm Snapdragon 600 Quad Core CPU / Snapdragon APQ8064 CPU
2GB of RAM
32GB internal storage
5Mpx rear camera and 1.2Mpx front camera
Wifi a/b/g/n,Bluetooth 4.0 and NFC enabled
LTE / WCDMA / GSM support
This is not confirmed specifications but you can review it
vs. the first one: Nexus 7: Google wanted it in 4 months for $199/$245, ASUS delivered + Nexus Q (of Google’s own design and manufacturing) added for social streaming from Google Play to speakers and screen in home under Android device control [‘Experiencing the Cloud’, June 28, 2012] which already has an ASUS only “reincarnation:
Experience MeMO Pad HD 7 [asus YouTube channel, June 16, 2013]
- 7-inch HD [1280 x 800] tablet with a wide-view angle IPS display for stunning visuals
- Rear 5MP and front 1.2MP dual cameras to capture the moments
- Dual stereo speakers with Sonicmaster Technology for incredible sound effect.
- Ultra light, weighs only 302g
- Up to 10 hrs battery life to make it through your day
ASUS Announces MeMO Pad HD 7 and MeMO Pad FHD 10 Tablets [press release, June 3, 2013]
ASUS MeMO Pad™ HD 7 — the value tablet for mobile entertainment
ASUS MeMO Pad™ HD 7 has a quad-core processor and 1GB RAM for smooth and responsive performance with apps of all kinds. The 7-inch display has a 1280 x 800 native resolution for crisp text and images, and IPS technology for accurate, vibrant colors with 170-degree wide viewing angles. MeMO Pad™ HD 7 also features high-quality stereo speakers with enhanced sound, courtesy of ASUS SonicMaster audio technology.MeMO Pad™ HD 7 has a 1.2-megapixel front-facing HD camera that can capture 720p HD videos and models are also available with a rear 5-megapixel camera. Just 10.8mm thick and 302g, the feature-packed MeMO Pad™ HD 7 has a lithium polymer battery that lasts for up to 10 hours with 720p video playback. Models are available in four colors — black, white, pink and green.
MeMO Pad™ HD 7 has 16GB of storage and a MicroSD card slot, plus 16GB ASUS WebStorage free for one year. Together with the ASUS WebStorage Office, users can view, create, edit and share Microsoft Office documents online.
AVAILABILITY & PRICING
ASUS MeMO Pad™ HD 7 has an MSRP of US$129 for 8GB capacity and US$149 for 16GB [a “follow up” to the $199 Nexus 7 tablet developed jointly by Google and ASUS and announced a year ago], and will be available starting in July 2013.
Asustek and HP enter China tablet market with entry-level models [DIGITIMES, July 1, 2013]
Asustek Computer and Hewlett-Packard (HP) are both set to enter the China tablet market with new cheap tablet models: the Asustek 7-inch 8GB MeMO Pad HD 7, priced below CNY999 (US$163) and HP Slate 7, priced at CNY999 [$163], according to sources from channel retailers.
Asustek’s 8GB MeMO Pad HD 7 will be supplied to the China market exclusively and is expected to appear later in July.
Prior to Asustek and HP, Acer already offered its 7-inch Iconia B1-A71 tablet [1.2GHz dual-core MT8317T based] at CNY699 [$114], while Lenovo is pushing its A1000 for a price of CNY999 [$163].
Compared to first-tier vendors, most China-based white-box tablet players are offering their products at prices between CNY299-500[$49-81.5], giving them advantages in pricing, but first-tier vendors still outmatch white-box players in product quality, specifications and after-sales service, the sources said.
Currently this is the best 7” quad-core offering from purely mainland China technology:
7” quad-core Allwinner A31s based Onda tablets for $65 (v701s) and $81 with IPS (v711s) in China, while for $89 and $99 outside [‘USD 99 Allwinner’, June 22, 2013] for which here is the Onda V711s Quad Core A31s 7″ IPS Tablet PC In-depth Review [dealsprime YouTube channel, June 24, 2013]
With and 1280×800 resolution Onda V712 quad-core version is available from April 8, 2013. The current price for Onda V712 Quad Core RAM 2GB 7 Inch IPS Screen Android Tablet 16GB outside China is $139 (699 yuan, $114 inside). It has 0.3MP front and 2MP back camera (vs. 1.2MP front and 5MP rear on ASUS MeMO Pad HD 7), but its video capability is 4K.
Meanwhile the cheapest dual-core mid-range tablet from white-box vendors is the new ICOO D70PR03 for 399 yuan i.e $65. This is with 1.2GHz Allwinner A20 SoC and 1024×600 IPS screen.
China white-box tablet players seeing success in landing government procurement orders [DIGITIMES, July 1, 2013]
China-based white-box players are gaining the upper hand in the competition with first-tier brand vendors for tablet procurement orders from Asia Pacific governments due to their advantages in pricing, while improved product quality and stability also helped the white-box players to narrow their gap with first-tier players, according to sources from tablet players.
The government in Thailand recently released procurement orders for 1.6 million education-purpose tablets which were mostly taken by a China-based white-box player, and first-tier vendors are having trouble competing due to considerations about profitability, the sources noted.
The sources pointed out that the white-box maker landed orders for a total of 800,000 tablets from the Thailand government worth NT$1.57 billion (US$52.35 million), equivalent to a price of NT$1,900-2,000 [US$63-67] for each device.
However, even with such a low price, the sources believe the white-box maker is still profiting from the orders.
Currently, an entry-level 7-inch tablet from a China white-box player is priced at about US$50 and can go up to US$70-90 in the retail channel, giving them strong advantages in price competition.
Although first-tier brand vendors are also aggressively trying to enter the entry-level tablet market, white-box players are still expected to achieve shipments of 120 and 170 million units in 2013 and 2014, respectively.
Surprise auction winners [Bangkok Post, June 29, 2013]
Dark horses Shenzhen Yitoa Intelligent Control Co of China and Supreme Distribution (Thailand) won yesterday’s bidding for the second phase of the One Tablet per Child scheme to supply 1.22 million tablets, beating out Shenzhen Scope Scientific Development.
The Chinese firm clinched the bid for the first and second zones, while the Thai company won the contract for the third zone.
The Office of the Basic Education Commission (Obec) held an e-auction for the tablets yesterday seeking bidding winners to supply 1.63 million tablets.
Education Minister Phongthep Thepkanchana said Shenzhen Yitoa won a bid to supply 431,105 tablets for Prathom 1 students worth 842 million baht for the first zone in central and southern provinces.
The company offered a price of 1,953.12 baht [$63] per tablet, 28.2% lower than the median price set at 2,720 baht each.
According to earlier information: “The tablet will have government specifications of a seven-inch display with a camera resolution of 1024×600 pixels, a minimum 1.5-gigahertz dual-core processor unit, one gigabyte of RAM, eight gigabytes of storage memory, 3,600 milliampere hours of lithium polymer battery life, and continuous Wi-Fi internet access for at least three hours.”
The Chinese firm also won the bid to supply 373,637 tablets for Prathom 1 students worth 786 million baht for the second zone in the northern and northeastern provinces.
The company offered 2,103.64 baht [$67.5] per unit, 22.7% below the median price.
Supreme Distribution, meanwhile, proposed the lowest price for tablets in the third zone, covering Mathayom 1 students in the central and southern provinces, at 2,908.24 baht [$93], down slightly from the median price of 2,920 baht.
The Thai computer assembly firm will supply 426,683 tablets worth 1.24 billion baht.
Obec postponed the bid for the fourth zone – covering some northern and northeastern provinces – to July, as Shenzhen Yitoa was the only bidder in the auction. The conditions require at least two bidders in competition.
Mr Phongthep said purchasing contracts are expected to be sealed in the week ahead. All winners are obliged to deliver their tablets within 90 days of signing contracts.
Panuwat Khantamoleekul, the managing director of Supreme Distribution, said the company could not offer a sharp rate cut since Mathayom 1 specifications are higher than those for Prathom 1.
He said his company will build its own factory in Thailand to assemble materials sourced from China.
It set up a local office here two decades ago and also won an earlier bid to supply tablets in Russia.
Shenzhen Yitoa Digital Appliance Co. Ltd [Global Sources, April 14, 2013]
Offering a Wide Range of Electronic Products
Shenzhen Yitoa Digital Appliance was founded in 2007, which is affiliated to Shenzhen Yitoa Intelligent Control Co., Ltd. We are a nationally known enterprise designing, developing, manufacturing and selling intelligent controllers of digital equipment. Our main products include e-book readers, MIDs, tablet PCs and other devices.
Releasing Three New Products Monthly
Every year, we invest $800,000 in our R&D department to innovate and renew users’ digital life. This gives our 100 experienced engineers the resources they need to add up to three new products a month. Simply send us your OEM/ODM requirements, and we’ll complete a sample for you in as fast as one week. Now our company cooperates with Aigo, Newsman, Skyworth and other national famous companies.
Recipient of International Certifications and Recognitions
With a 16,000-square-meter factory, 100 engineers, 1,600 workers and 25 assembly lines, our monthly capacity is over 1 million pieces. For your assurance, all of our products carry CE, CQC, CCC, UL and VED approvals, and are manufactured under ISO 9001:2000 and ISO 14001:2004 guidelines. Moreover, we have been recognized as a hi-tech enterprise in 2004, one of the top 100 Shenzhen Software Enterprises in 2005, and one of the top 20 Shenzhen Software Export Enterprises in 2006.
Leading Tablet PC Brands Reduce 2013 Targets [DisplaySearch blog, June 27, 2013]
We recently pointed out [Smaller Tablets to Get Even More Popular in the Second Half of 2013 [DisplaySearch blog, June 18, 2013]] that 2013 would be the year in which smaller tablet PC shipments (especially 7” and 8”) would surpass larger tablet PC shipments (such as 9.7” and 10.1”). Tablet PCs are starting to overlap with larger smart phones, as well as with ultra-slim notebook PCs.
Our latest forecast for the tablet PC market in the Quarterly Mobile PC Shipment and Forecast Report is for 67% Y/Y growth – from 153.6M in 2012 to 256.5M in 2013. Within this growing market, the share held by the top 12 brands, including Apple, HP, Acer, Dell, Lenovo, ASUS, Samsung, Toshiba, Sony, Amazon, Google, and Microsoft, is falling because the whitebox market [iPad-sized Tablets No Longer Driving Panel Growth Momentum [DisplaySearch blog, June 27, 2013]], especially in China, is growing faster. We estimate that the top brands, which shipped a combined 104.2M units in 2012, have reduced their 2013 shipment plans from 172M forecast in April to 167M forecast in June.
Apple’s iPad series accounted for 67M units in 2012 and remains the market leader, but is also the leading example of this trend. We estimate that Apple originally planned to ship 88M iPads in 2013, has reduced its target to 74M, including 31M iPads and 43M iPad minis.
We estimate that Samsung’s total tablet PC and phablet business plan is nearly 50M units in 2013, a big jump from 15.6M in 2012. Samsung plans include 39.5M tablet PCs, and 10M Galaxy Mega series (5.8” and 6.3”; while Samsung defines these as phablets, we classify them as smart phones).
Other tablet PC brands expect to grow their business in 2013. Among them, Lenovo, Microsoft, HP, and Acer are the most aggressive. Lenovo has two product lines for its tablet PC – X86 and ARM series. In 2013, Lenovo is planning for 3M X86 and 8M ARM.
Tablet PCs and Touch Adoption Expected to Drive Mobile PC Shipments Through 2017, According to NPD DisplaySearch [press release, May 6, 2013]
SANTA CLARA, CALIF., May 6, 2013—The mobile PC market is expected to increase from 367.6 million units shipped in 2012 to 762.7 million globally by 2017, driven by touch-enabled form factors, according to the NPD DisplaySearch Quarterly Mobile PC Shipment and Forecast Report. The majority of this shift will come as tablet PCs begin to replace notebook PCs this year as the dominant mobile PC form factor, and touch becomes a key feature in mobile PC adoption.
“The mobile PC industry is undergoing significant change this year,” said Richard Shim, senior analyst with NPD DisplaySearch. “The rapid rise and establishment of white box tablet PCs (tablets made by small local brands, mainly in China) is putting pressure on traditional notebook PCs. These low-cost tablets are reaching further into emerging regions where notebook PC penetration rates have remained low, resulting in cannibalization by tablet PCs.”
Tablet PC shipments are forecast to increase 67% Y/Y to 256.5 million in 2013, and reach 579.4 million by 2017. White box tablet PCs accounted for one-third of tablet PC shipments in 2012 and will maintain at that level for the next several years.
Notebook PC shipments are expected to decline 10% over the next four years, from 203.3 million in 2013 to 183.3 million in 2017, but there will be pockets of growth. Shipments of notebooks with touch capabilities are expected to grow 48% Y/Y in 2014. In the notebook category, touch will be used mainly in ultra-slim PCs, which includes Intel-specified Ultrabooks, the MacBook Air, and other slim form factor notebooks. Ultra-slims, which are at the premium end of the notebook market, are forecast to account for two-thirds of touch-enabled notebooks in 2013. By 2017, they will be 80%. Intel’s recent mandate that third-generation Ultrabooks (using the company’s next generation Haswell processors) must include touch will also help adoption.
Figure 1: Global Mobile PC Shipments, 2012-2017
Source: NPD DisplaySearch Quarterly Mobile PC Shipment and Forecast Report
New operating systems such as Windows 8 are unlikely to be a major driver of touch adoption. Rather, penetration of touch in notebook PCs will be driven by a reduction in cost and new form factors, such as hybrids, sliders, and convertibles.
“Thus far, Windows 8 has had a limited impact on driving touch adoption in notebook PCs, due to a lack of applications needing touch and the high cost of touch on notebook PCs,” added Shim. “Form factors aimed at differentiation from standard clamshell notebooks will help to drive consumer adoption of touch-enabled notebook PCs, starting in the second half of 2013.”
The NPD DisplaySearch Quarterly Mobile PC Shipment and Forecast Report covers the entire range of mobile PC products shipped worldwide and regionally. With analysis of global and regional brands, the Quarterly Mobile PC Shipment and Forecast Report provides an objective, expert view of the market with insight into historical shipments, revenues, forecasts, and more. For more information about the report, please contact Charles Camaroto at 1.888.436.7673 or 1.516.625.2452, e-mail firstname.lastname@example.org or contact your regional NPD DisplaySearch office in China, Japan, Korea or Taiwan for more information.
About NPD DisplaySearch
NPD DisplaySearch, part of The NPD Group, provides global market research and consulting specializing in the display supply chain, including trend information, forecasts and analyses developed by a global team of experienced analysts with extensive industry knowledge. NPD DisplaySearch supply chain expertise complements sell-through information from The NPD Group, thereby providing a true end-to-end view of the display supply chain from materials and components to shipments of electronic devices with displays to sales of major consumer and commercial channels. For more information, visit us at http://www.displaysearch.com/. Read our blog at http://www.displaysearchblog.com/ and follow us on Twitter at @DisplaySearch.
About The NPD Group, Inc.
The NPD Group provides global information and advisory services to drive better business decisions. By combining unique data assets with unmatched industry expertise, we help our clients track their markets, understand consumers, and drive profitable growth. Sectors covered include automotive, beauty, consumer electronics, entertainment, fashion, food/foodservice, home, luxury, mobile, office supplies, sports, technology, toys, and video games. For more information, visithttp://www.npd.com/ and npdgroupblog.com. Follow us on Twitter: @npdtech and @npdgroup.
China [branded] smartphone vendors to foray into tablet segment [DIGITIMES, July 1, 2013]
China-based smartphone vendors, including Huawei, ZTE, Lenovo and Xiaomi Technology, all will step up their efforts to penetrate the tablet market, according to industry sources.
Huawei plans to launch a new 7-inch tablet in the third quarter of 2013, and together with a 10.1-inch model released in early 2013, Huawei is sourcing about two million flat panels from China-based Truly Opto-electronics currently, the sources indicated.
Meanwhile, Huawei also purchases a portion of displays used in its new tablets from Innolux. However, the Taiwan-based flat panel maker declined to comment on orders from individual clients.
Lenovo also unveiled its Windows 8-based tablet, the Lenovo Miix10, recently. The Lenovo Miix, which is expected to hit the market in the third quarter, is equipped with a 10.1-inch 1366 by 768 IPS display and is power by an Intel dual-core Atom processor.
Xiaomi reportedly will step into the tablet segment by unveiling its first tablet in mid-August, the sources revealed, adding that Xiaomi will utilize tablet chipset solutions from MediaTek.
White-box vendors expected to lower prices for entry-level 7-inch tablets to US$40 in 2H13 [DIGITIMES, June 7, 2013]
The market for 7-inch tablets is seeing intense competition and white-box vendors are expected to further reduce prices for entry-level models to US$40 in the second half of 2013, according to Taiwan-based supply chain sources.
Entry-level white-box tablets are expected to continue selling well in markets such as China, and supply chains are able to increasingly decrease pricing for entry-level components, said the sources.
Meanwhile, Digitimes Research predicts that 254 million tablets will be sold in 2013, up 63.9% on year.
China-based white-box 2013 tablet shipments likely below forecasts [DIGITIMES, June 14, 2013]
China-based white-box tablet vendors’ shipments in 2013 were originally forecast at 120 million units, but actual shipments may fall short due to strong competition from inexpensive models launched by brand vendors, according to supply chain sources.
In addition to brand vendors, the white-box tablet vendors also face increasing competition from entry-level large-size smartphones, the sources said, adding that smartphones sized 5.7- to 6-inch are posing some of the biggest challenges.
Pricing for both the inexpensive brand models and entry-level large-size smartphones are becoming more similar to white-box tablet vendors’ products and that trend is expected to continue, causing the shipments to be less than expected in 2013, the sources added.
Digitimes Research: China mobile AP market to expand in 2013 [press release, June 14, 2013]
The China mobile application processor (AP) market will expand over 60% in 2013 to 506 million units, with smartphone-use APs accounting for 77.4% of total shipments, Digitimes Research said in its new report.
The market for smartphone APs in China climbed to 241.5 million units in 2012, up significantly from 69 million in 2011, according to Digitimes Research. The number will increase to 391.7 million units in 2013.
Shipments of China-made smartphone APs are forecast to account for 34% of the global smartphone AP market in 2013, compared to 26% in 2012 and around 10% in 2011, Digitimes Research noted.
As for China-made tablet APs, the market will reach a size of 115.2 million units in 2013, compared with a mere 10.5 million units [in 2011], Digitimes Research indicated.
Dual-core processors will overtake single-core chips to become the mainstream spec for tablets produced by China’s brand and white-box companies in the second half of 2013, while the penetration of quad-core powered tablets will also expand substantially, Digitimes Research pointed out.
China-based mobile AP vendors will ship a combined 506 million units in 2013, while the global mobile AP market will come to a size of 958 million units, Digitimes Research projected.
Prices of smartphone and tablet solutions to drop 10-20% in 2H13 [DIGITIMES, June 18, 2013]
Prices of chipset solutions for smartphones and tablets are expected to decline 10-20% sequentially in the second half of 2013 due to competition between MediaTek and Qualcomm, according to industry sources.
Qualcomm is scheduled to host its annual QRD (Qualcomm reference design) forum in Shenzhen on June 20, which is expected to attract participants from China-based branded as well as white-box smartphone and tablet vendors, the sources noted.
While showcasing its new solutions for the second half of the year, the forum also aims to grab smartphone and tablet solution orders from MediaTek, which has been prevailing in China’s solution market using a variety of reference designs, said the sources.
Qualcomm said earlier that over 40 OEMs have launched more than 200 new smartphones and tablets in 14 countries recently, mounting increasing pressure on MediaTek, said the sources.
China-based solution vendors such as Spreadtrum Communications have also joined the price competion, driving the unit price of quad-core smartphone solutions to below US$10 in China recently, the sources revealed.
China market: White-box tablet makers approaching MediaTek for quad-core solutions [DIGITIMES, May 27, 2013]
China-based white-box tablet makers are reportedly approaching MediaTek for the purchase of the chipmaker’s integrated MT8125 and [the upcoming] 8135 [to be based on A15 + A7 “big.LITTLE” architecture] quad-core application processors for tablets, according to industry sources.
The move by the white-box tablet makers comes after branded tablet vendors in China and Taiwan have begun using the MT8125 and 8135 solutions for tablets targeting the US99-149 segment, the sources noted.
White-box tablet makers currently purchase quad-core solutions mainly from China-based IC vendors including Allwinner Technology and Rockchip Technology, while buying Wi-Fi and Bluetooth chips from Realtek Semiconductor and RDA Microelectronics.
The 28nm quad-core solutions from Allwinner and Rockchip are priced at US$4-5, or about 50% lower than the comparable quad-core chips offered by MediaTek, since the chips offered by Allwinner or Rochchip do not support voice communications, said the sources.
In order to compete effectively in China and other emerging markets and differentiate products, white-box tablet makers have been forced to adopt MediaTek’s quad-core solutions, commented the sources.
MediaTek Introduces New Quad-Core Application Processor for Fast-Growing Tablet Market [pres release, May 29, 2013] used in ASUS MeMO Pad HD 7 shown earlier
TAIWAN, Hsinchu – 29 May, 2013 – MediaTek Inc., a leading fabless semiconductor company for wireless communications and digital multimedia solutions, today announced the availability of the new quad-core application processor – MT8125 designed for the fast growing global tablet markets. The new tablet platform is an extension of the company’s highly successful quad-core portfolio, it integrates a power-efficient quad-core Cortex™- A7 CPU subsystem with speed up to 1.5GHz, PowerVR™ Series5XT Graphics that delivers compelling multimedia features and sophisticated user experiences. To simplify product design and speed time-to-market, the MT8125 supports 3G HSPA+, 2G EDGE and Wi-Fi versions, all of which are pin-to-pin compatible, allowing device manufacturers to easily expand their portfolios with a full range of tablets by leveraging the existing or planned design requiring no additional rework.
Inheriting MediaTek’s technology breakthrough of quad-core SoC platform and high-end multimedia capabilities, the MT8125 incorporates premium multimedia features, supporting up to Full HD 1080p video playback and recording, 13MP camera with integrated ISP and Full HD (1920 x 1200) displays. The new tablet SoC also delivers ground breaking visual quality powered by the leading picture quality technology – MiraVisionTM, derived from MediaTek’s extensive experience in the Digital TV market.
The MT8125 includes full support for MediaTek’s leading 4-in-1 connectivity combo that converges Wi-Fi, Bluetooth 4.0, GPS and FM, bringing highly integrated, best-in-class wireless technologies and expanded functionality to high-performance multimedia tablets. The MT8125 also provides support for Wi-Fi certified Miracast™ which makes multimedia content sharing between devices easier.
“During the last two years, application processors used in tablets have taken a fast evolution from single-core 1GHz to quad cores, clocking over 1.5GHz. Competition will force chipset vendors to maintain pace – by implementing more advanced features while reducing the system cost by increasing the level of integration*,”said Gartner Research Director Roger Sheng.
“MediaTek’s team has worked closely with Lenovo to integrate their solutions into our design process, helping us accelerate the development and introduction of new, innovative tablets. In turn, this allows us to fulfill our commitment to delivering the outstanding user experience our customers demand. The tablet market is moving fast, and Lenovo aims to be at the forefront of tablet innovation. MediaTek helps us do that,” commented Wayne Chen, vice president and head of mobile business unit for Lenovo.
“We’re confident that our comprehensive reference designs will be the industry benchmark, particularly benefiting the mid-to-high-end tablet market. It is an innovative, cost-effective and definitely faster time-to-market solution.” said Joe Chen, GM of Home Entertainment Business Unit, MediaTek. “By taking advantage of our strengths in the multimedia field, mobile communications and multi-screen technologies, we offer a complete multi-core processor family for smartphones and tablets, enabling a significant difference in performance and power efficiency – all while ensuring seamless streaming performance across the array of devices when users are consuming entertainment and information. ”
The MediaTek quad core tablet SoC is now being widely adopted by MediaTek’s global customers including Lenovo IdeaTab S6000 series.
1. According to LinuxGizmos.com “It appears, however that Lenovo’s 10-inch, quad-core S6000 Android tablet uses a scaled down, 1.2GHz version of the MT8125 called the MT8389. … The MT8389 also appears to have a lesser PowerVR SGX GPU, according to All-RSS.com. As a result, the Lenovo S6000 has more limited 1280 x 800-pixel resolution and a 5-megapixel camera.”
2. Quad-core SoC competition in as per this:
MT8125 / 8389
Quad-Core Cortex-A7 1.5GHz + CPU Tablet Platform [May 29, 2013]
MT8125/8389 is an extension of MediaTek’s highly successful quad-core portfolio, it integrates a power-efficient quad-core Cortex™- A7 CPU subsystem with speed up to 1.5GHz, PowerVR™ Series5XT Graphics that delivers compelling multimedia features and sophisticated user experiences.
High-end Multimedia Capabilities
• Supporting up to Full HD 1080p video playback and recording, 13MP camera with integrated ISP and Full HD (1920 x 1200) displays
• Delivering ground breaking visual quality powered by the leading picture quality technology – MiraVisionTM, derived from MediaTek’s extensive experience in the Digital TV market.
Best-in-class Connectivity Technology
• Including full support for MediaTek’s leading 4-in-1 connectivity combo that converges Wi-Fi, Bluetooth 4.0, GPS and FM, bringing highly integrated, best-in-class wireless technologies to tablets
• Providing support for Wi-Fi certified Miracast™ which makes multimedia content sharing between devices easier
Supports 3G HSPA+, 2G EDGE and Wi-Fi
• MT8125/ 8389 supports 3G HSPA+, 2G EDGE and Wi-Fi versions, all of which are pin-to-pin compatible, allowing device manufacturers to easily expand their portfolios with a full range of tablets by leveraging the existing or planned design requiring no additional rework.
1 GHz Dual-Core Tablet Platform [May 29, 2013]
The MediaTek MT8377 features a dual 1GHz Cortex™-A9 application processor from ARM, a PowerVR™ Series5 SGX GPU from Imagination Technologies, MediaTek’s proven 3G/HSPA/Edge modem, and runs the Android 4.0 “Ice Cream Sandwich”. y integrating a dual-core application processor architecture widely deployed in the majority of today’s premium tablets, the MT8377 boosts application and browser performance by up to 40% compared to single-core platform.
Richest Multimedia Features
• Providing rich multimedia features including a 8MP camera and high-definition 1080p video playback
• Supporting high-resolution displays of up to HD720 (1280×720) resolution
• Integrating built-in stereo 3D panel support and DTV-grade display picture quality
Best-in-class Connectivity Technology
• Including full support for MediaTek’s leading 4-in-1 connectivity combo that converges Wi-Fi, Bluetooth 4.0, GPS and FM
MediaTek allocating more resources for development of tablet solutions [DIGITIMES, June 10, 2013]
MediaTek is relocating its tablet solution unit from its wireless communications group to the home entertainment group, meaning that the Taiwan-based top IC design house is looking to put more of its hardware and software resources into developing chips for tablet applications, according to industry sources.
The move echoes company president Hseih Ching-chiang’s statement that MediaTek aims to roll out new chips for tablet applications on a quarterly basis in the next few years.
The emphasis on the development of chips for tablets indicates that MediaTek believes that tablets will become the next-generation killer application and that the global tablet market is likely to continue to grow robustly in the coming years, commented the sources.
Meanwhile, MediaTek has adopted a strategy to push sales of its tablet solutions to non-Apple branded vendors in China and Taiwan, which have been focusing on promoting mid-range tablets for the US$99-199 segment, the sources indicated.
Given the high price/performance ratio and reliability of MediaTek’s chipset solutions, more and more entry-level tablet vendors in China are likely to queue up for table solutions from MediaTek, said the sources.
MediaTek is expected to ship a total of 20 million chipsets for tablets in 2013, accounting for 15% of the global non-iPad tablet market, estimated the sources.
MediaTek 2Q13 performance beats guidance [DIGITIMES, July 5, 2013]
MediaTek has reported consolidated revenues of NT$9.77 billion (US$323.52 million) for June, down 10.6% sequentially but up 24.6% on year.
MediaTek’s second-quarter revenues totaled NT$33.28 billion [US$1.1B], increasing 38.8% sequentially and surpassing the company’s guidance of NT$30-31.6 billion set for the quarter.
For the first half of 2013, revenues amounted to NT$57.25 billion [US$1.9B], up 33% from a year earlier.
Digitimes Research: China mobile AP shipments rise in 2Q13 [press release, June 24, 2013]
The China mobile application processor (AP) market is forecast to reach a total of 114.5 million units in the second quarter of 2013, up 9.6% sequentially and 88.6% from the 60.7 million units shipped a year ago, Digitimes Research said in its new report. Smartphone-use APs continued to account for the majority of total shipments.
The market for smartphone APs in China will amount to 92.3 million units in the second quarter, representing a 16% increase compared to 79.6 million units in the first quarter, whereas that for tablet-use APs declined 10.8% on quarter to 22.2 million units, according to Digitimes Research.
The China mobile AP market, which consists of smartphone- and tablet-use APs, is set to total 219 million units in the first half of 2013, said Digitimes Research. The top-5 suppliers – MediaTek, Qualcomm, Spreadtrum Communications, Allwinner Technology and Rockchip Electronics – contributed as high as 192 million units, or 87.7%, to the overall shipments, Digitimes Research indicated.
MediaTek has enjoyed robust growth in its SoC shipments for smartphones and tablets with shipments for the first half estimated at 84 million units, while Qualcomm‘s shipments to China’s mobile AP market are set to total about 42.7 million units, Digitimes Research predicted. Meanwhile, Spreadtrum with its low-price strategy is expected to ship 38 million units in the first half of 2013, Digitimes Research said.
Specializing in tablet-use SoCs, Allwinner and Rockchip will both report significant on-year growth in their shipments for the first half of 2013, Digitimes Research indicated. Allwinner‘s shipments will climb to 18 million chips in first-half 2013 from only 4.7 million units a year earlier, while Rockchip‘s shipments for the same period will reach 10 million chips compared with the 5.5 million units shipped in the first half of 2012.
Note: Out of 47.1 million units used in tablets for H1CY13 28 million came from Allwinner and Rockchip, which is almost 60%. 38% belongs to Allwinner, 21% to Rockchip.
Digitimes Research: TSMC expanding in China [press release, June 20, 2013]
Taiwan Semiconductor Manufacturing Company (TSMC) has significantly expanded its presence in China’s IC industry, as the foundry’s technology advantages and manufacturing capabilities help it ride the wave of smartphone and tablet growth in the local market, according to Digitimes Research.
TSMC has received a pull-in of orders from a number of China-based IC design houses, which specialize in mobile SoCs such as application processors and place a heavy emphasis on demand domestically. Their booming businesses have boosted TSMC’s sales coming from the China market, said Digitimes Research.
TSMC saw sales generated from the total orders placed by its China-based clients climbed to US$820 million in 2012 from US$510 million in 2011, an about 61% increase. Sales are set to rise further to top US$1.4 billion in 2013, Digitimes research forecast.
China-based Semiconductor Manufacturing International (SMIC) has also enjoyed growth in its sales coming from the local market, Digitimes Research indicated. Sales generated from orders placed by SMIC’s local China-based clients arrived at the highest quarterly level for a third consecutive quarter in the first quarter of 2013, Digitimes Research said.
In addition, Digitimes Research noted that China’s IC design sector has entered a new phase of development. The number of China-based IC design companies exceeded 500 in 2012 with their combined output value ranked third worldwide.
IHS Boosts Tablet Panel Shipment Forecast as White-Box Products Storm the Market [press release, July 2, 2013]
EL SEGUNDO, Calif.(July 2, 2013)—Boosted by orders from unbranded, white-box Chinese manufacturers, global demand for tablet panels is exceeding expectations, spurring IHS to increase its forecast for displays by 6 percent for 2013.
A total of 262 million displays for tablets are forecast to be shipped in 2013, compared to the previous forecast of 246 million, according to the May Edition of the “LCD Industry Tracker—Tablet” report from information and analytics provider IHS (NYSE: IHS). This will represent 69 percent growth from 155 million in 2012, as presented in figure 1 attached.
“Competitive dynamics in the tablet market have changed dramatically this year as Chinese white-box smartphone makers have entered the tablet market in droves,” said Ricky Park, senior manager for large-area displays at IHS. “These companies are producing massive quantities of low-end tablets that appeal to consumers in China and other developing economies. Because of this, the white-box manufacturers are driving up demand for tablet panels, particularly smaller displays using the older twisted nematic (TN) technology, rather than the newer screens using in-plane switching (IPS).”
Unbranded tablet makers purchased 40 percent of all tablet panels in April, up from just 17 percent in the first quarter of 2012, as presented in figure 2 attached.
Partly because of the rise of white-box makers, shipments of smaller 8- and 9-inch tablet displays will rise by nearly 200 percent in 2013. In contrast, larger displays in the 9-, 10- and 11-inch range will suffer a 5 percent decline.
The boom in white-box tablets is being driven the introduction of turnkey designs offered by processor makers. The designs make it easy for new, inexperienced market entrants to offer tablet products.
The Chinese white-box manufacturers hold certain advantages over the major incumbent tablet manufacturers. The white-box manufacturers are able to produce tablets at lower cost, more quickly and with greater flexibility in production. These companies also have the capability to manufacture both unbranded tablets, and make products for the major brands on a contract manufacturing basis.
Such white-box players also have been agile enough to take advantage of the current high availability and low-cost of tablet panels. Makers of displays for the shrinking PC market have switched over to the tablet market, spurring a glut that has depressed pricing. As prices have fallen, the white-box makers have demonstrated enough flexibility to boost production of low-cost tablets.
“Playing to their strengths, the white-box manufacturers are set to continue to increase their presence in tablets and propel the expansion of the overall tablet market,” Park said.
IHS believes the strong growth of tablet panel demand continued in the second quarter. The arrival of more turnkey tablet design solutions will drive up demand for 7- and 8-inch panels throughout the year.
The 8-inch panels are becoming an increasingly large segment of the tablet market, with a display area more appealing to users than the 7-inch size. In all, the 8-inch panels accounted for 11 percent of panel shipments in April, with Samsung and Acer having recently launched new tablets in that size. With more introductions likely coming in the third quarter, IHS expects a substantial market share for the 8-inch by the end of this year.
The market for larger-sized, 10-inch and bigger tablet panels may begin to enjoy a recovery in shipments with the launch of the new Intel Corp. Atom microprocessor, code-named Bay Trail. This new device could help reduce the cost of x86 microprocessor-based tablets and improve battery life. Bay Trail also could generate opportunities for hybrid-form tablets that include keyboards.
The x86 tablets, with Microsoft Corp.’s new Windows 8 operating system, would have functionality better suited to the needs of the commercial and business worlds than either the Google Android- or the Apple iOS-based tablets, which are designed with the consumer in mind.
About IHS (www.ihs.com)
IHS (NYSE: IHS) is the leading source of information, insight and analytics in critical areas that shape today’s business landscape. Businesses and governments in more than 165 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS is committed to sustainable, profitable growth and employs 6,700 people in 31 countries around the world.
Flexible Display Market to Reach Nearly 800 Million Unit Shipments by 2020 [IHS press release, June 5, 2013]
EL SEGUNDO, Calif. (June 5, 2013)—Demand for flexible displays is set to undergo massive growth during the next seven years, with a broad variety of applications—ranging from smartphones to giant screens mounted on buildings—driving a nearly 250 times expansion in shipments from 2013 through 2020.
Global shipments of flexible displays are projected to soar to 792 million units in 2020, up from 3.2 million in 2013, according to a new IHS report entitled “Flexible Display Technology and Market Forecast” . Market revenue will rise to $41.3 billion, up from just $100,000 during the same period, as presented in the attached figure.
“Flexible displays hold enormous potential, creating whole new classes of products and enabling exciting new applications that were impractical or impossible before,” said Vinita Jakhanwal, director for mobile and emerging displays and technology at IHS. “From smartphones with displays that curve around the sides, to smart watches with wraparound screens, to tablets and PCs with roll-out displays, to giant video advertisements on curved building walls, the potential uses for flexible displays will be limited only by the imagination of designers.”
IHS classifies flexible displays into four generations of technology. The first generation is the durable display panels that are now entering the market. These panels employ a flexible substrate to attain superior thinness and unbreakable ruggedness. However, these displays are flat and cannot be bent or rolled.
Second-generation flexible displays are bendable and conformable, and can be molded to curved surfaces, maximizing space on small form-factor products like smartphones.
The third generation consists of truly flexible and rollable displays that can be manipulated by end users. These displays will enable a new generation of devices that save space and blur the lines separating traditional product categories, such as smartphones and media tablets.
The fourth generation consists of disposable displays that cost so little that they can serve as a replacement for paper.
With their thin, light and unbreakable nature, flexible displays initially are expected to be used in smaller-sized products, such as mobile phones and MP3 players. However, once large-size displays are available, flexible technology will be used in bigger screen-size platforms, such as laptops, monitors and televisions.
The largest application for flexible displays during the next several years will be personal electronic devices. This segment will be led by smartphones, with shipments climbing to 351 million units by 2020, up from less than 2 million this year.
Flexible stars at SID
Flexible displays were a major topic at the Society for Information Display (SID) Display Week event in Vancouver in May.
During an SID keynote address, Kinam Kim, president and CEO of Samsung Display Co., discussed his company’s flexible organic light-emitting diode (OLED) display technology. Kim said that the technology will be suitable for wearable electronics devices like Google Glass.
Also at SID, LG Display showed a 5-inch OLED panel constructed out of plastic that was both flexible and unbreakable.
Furthermore, Corning at SID showed its Willow Glass, which can be used as with both OLEDs and liquid-crystal displays (LCD) in mobile devices such as smart phones, tablets and notebook PCs. Because of its thinness, strength and flexibility, Willow Glass could enable future displays to be wrapped around a device or a structure.
IHS predicts OLEDs will be the leading flexible display technology during every year for the foreseeable future, accounting for 64 percent of shipments in 2020.
How Intel Can Enable a Successful $200 PC in the Age of the Media Tablet [IHS press release, May 20, 2013]
Vancouver, British Columbia (May 20, 2013)—Can PC makers produce ultrathin, touch-screen PCs that are appealing to consumers—and that are priced at just $200?
The astounding answer seems yes—if microprocessor Intel Corp. is willing to cut the price of its semiconductor components to PC makers, according to a PC Dynamics Market Brief from information and analytics provider IHS (NYSE: IHS).
Speaking at the IHS/SID 2013 Business Conference, held May 20 in Vancouver, Canada, Zane Ball, Intel vice president and general manager, Global Ecosystem Development, is presenting his company’s plan to empower the PC industry to produce low-cost notebooks incorporating touch technology. Craig Stice, senior principal analyst for compute platforms at IHS, believes Intel has a shot at success.
“A price point that low seems far-fetched considering the mobile PC prices of today, with Ultrabooks and other ultrathins going as high as $1,000 or more,” Stice said. “However, the small laptops known as netbooks saw their prices reach down into the $200 range at the height of their popularity a few years ago, and a cost analysis of netbooks shows how such a low level of pricing can be used to support a no-frills type of ultrathin PC.”
The cost estimate for a standard netbook, based on the IHS Compute Systems Cost Analyzer that calculates the major components of a netbook on a third-quarter 2013 timeline, comes out to $207.82, as shown in the attached table.
“Hitting this kind of price point is not impossible for the PC industry, already a cutthroat market accustomed to razor-thin margins,” Stice said. “Such a possibility was stated by outgoing Intel CEO Paul Otellini, who during Intel’s first-quarter earnings call in April made the bold prediction that touch-enabled, ultrathin Intel-based notebooks using non-core processors could be available by the end of this year.”
Intel holds the cards
The key factor that could make this happen is Intel, which can control up to 33 percent of the total bill-of-materials cost for the PC through the central processing unit (CPU) and motherboard. If Intel decides to provide a price break for just these components, PC original equipment manufacturers could see their margins improve, allowing them to drive down prices for the retail market. With PC competition so fierce, it takes only one PC manufacturer to find a price point that sells—and others are bound to follow suit shortly afterward.
Intel could also be instrumental in introducing an even more powerful ultrathin-type mobile PC than netbooks, which have now been overtaken by media tablets and are on their way out of the market altogether.
Intel’s next-generation Atom processor, called Bay Trail, has the potential to deliver a performance boost that will clearly separate the traditional netbooks of old from the new generation of mobile and ultrathin PCs.
Avoiding netbooks’ fate
While netbooks had limited computing power and were regarded more as devices for content consumption, the new and much more economical ultathins, in contrast, would possess considerably more power and be categorized as content-creation devices. Such a perceptible enhancement could increase their chances of survival in the marketplace, unlike the short-lived netbooks.
Much depends on Bay Trail, which Intel says will move from two processing cores to four to provide beefed-up performance. Along with Bay Trail, Intel’s own high-definition embedded graphics and an extended battery life for improved power will yield a processor bearing similar performance to the chipmaker’s renowned family of Core processors. All these traits could be part of the new, less expensive ultrathin being projected.
What PC manufacturers also must do
What these developments portend for the PC industry is significant. If the PC industry is able to get down to the $200 price point, and Intel’s Bay Trail processor delivers what it claims to do, then the PC market will have its much-needed shot in the arm. Such a turn of events could then spark the mobile PC market, which has been losing steam to flashier rivals like smartphones and tablets.
Besides Intel’s willingness to cut its own price point to make chips available at a lower cost to customers, a second important factor involves the PC makers themselves. For their part, PC manufacturers also need to find a way of getting to the magic price point of $200—and possibly sacrifice even more margin in exchange for the greater amount of volume that they seek.
All told, the scenario above—merely hypothetical at this point—is not entirely out of reach. A strong second half is already being forecast for PCs this year: add in the potential for lower-priced next-generation ultrathin systems, and the PC industry may finally have a valid competitor to lower-priced media tablets.
China Becomes World’s Leading PC Market in 2012 [IHS press release, April 29, 2013]
EL SEGUNDO, Calif. (April 29, 2013)—China rose to the top of the PC market for the first time ever on an annual basis last year, relegating the United States to second place with a lead of more than 3 million units, according to an IHS iSuppli PC Dynamics Market Brief from information and analytics provider IHS (NYSE: IHS).
PC shipments in 2012 to China amounted to 69 million units, exceeding the 66 million total reached by the United States. Only a year earlier in 2011, the United States was the leading global destination for PCs.
Beyond its large size, China’s PC market exhibits distinct characteristics that set it apart from the computer trade elsewhere, possessing a vast untapped rural market and unique consumer-purchasing patterns. While desktop PC shipments lagged notebooks around the world, the two PC segments were on par in China in 2012, with an even 50-50 split, as shown in the attached table.
“The equal share of shipments for desktops and notebooks in China is unusual, since consumers in most regions today tend to prefer more agile mobile PCs, rather than the bulky, stationary desktops,” said Peter Lin, senior analyst for compute platforms at IHS. “The relatively large percentage of desktop PC shipments in China is due to huge demand in the country’s rural areas, which account for a major segment of the country’s 1.34 billion citizens. These consumers tend to prefer the desktop form factor.”
The market will change gradually as desktop PCs face rising competition from the high value proposition presented by notebooks. Notebooks will then surpass desktops in the country by 2014, tracking more closely with the worldwide desktop-to-notebook PC ratio of 36 to 64 percent.
The desktop vs. notebook pattern of consumption in China is only one example of the distinctive hallmarks of the country’s dynamic PC market. In another indicator, China also has approximately a 50-50 proportion in consumer vs. commercial PCs, compared to the 65-35 percent ratio for the rest of the world.
A third pattern unique to the China PC market is the preferred notebook display size of 14 inches, which accounts for more than 70 percent of notebook PC shipments in the country. For the rest of the world, the 14-inch makes up less than 30 percent.
A fourth pattern of note is the attach rate of PCs with a pre-installed operating system, especially for notebooks. While mature PC markets in other parts of the world claim a 90 percent attach rate, the proportion for China comes out to lower than 50 percent, with the ratio even lower in the desktop PC market.
Despite such exclusive behavior, the China PC space shares one common trait with the worldwide PC market. Like the rest of the world, demand in China remains weak as consumers migrate to using mobile devices like cellphones. China’s PC market is projected to grow only by 3 to 4 percent this year.
Even so, a vast market opportunity continues to exist for PCs in the country, in the form of potential first-time buyers mostly residing in the countryside. The government already plans this year to invest some 40 trillion yuan—equivalent to some $6.4 trillion—to build rural infrastructure in the next 10 years, and PC original equipment manufacturers can take advantage of the initiative to build out and expand from the cities, IHS believes.
China is also on track to retain its position as the largest PC market in the world for the foreseeable future unchallenged and alone—further providing PC brands a rare opportunity for expansion, counter to the myriad travails they face in the rest of the world.
Spreadtrum is to be acquired by a Chinese high-tech investment enterprise owned by the state and also belonging to the leading Tsinghua University with microelectronics research interests
The top 10 SoC design enterprises of Mainland China had US$3.8B revenue in 2012. Out of that Spreadtrum had US$725.2M which is not less than 19%. On the ‘Experiencing the Cloud’ I’d reported extensively on the reasons:
- Lowest H2’12 device cost SoCs from Spreadtrum will redefine the entry level smartphone and feature phone markets [July 26 – Aug 16, 2012]
- $48 Mogu M0 “peoplephone”, i.e. an Android smartphone for everybody to hit the Chinese market on November 15 [Nov 9, 2012]
- China: Entry-level dual core IPS WVGA (480×800) smartphones $65+ now, quad-core $70+ in June [April 29, 2013]
It is also notable that this (together with MediaTek offerings) lead to Qualcomm’s SoC business future is questioned first time [May 1, 2013].
Update: TrendForce: Mediatek and Spreadtrum Advance in China Market while Qualcomm’s Chip Usage Declines [press release, June 27, 2013]
Mediatek has been making an impressive run lately; not only is the Taiwan-based chip manufacturer commanding its way in the mid-to-high end smartphone space, it has also successfully penetrated the 4G mobile market thanks to its recently announced 4G chip. According to the latest statistical data compiled by TrendForce, a global market research firm, Mediatek’s processors have been used by over 50% of China’s branded smartphones since the MT6575 chip was introduced in 2012. Due in large part to factors such as high pricing and the lack of hardware and software compatibility with various Chinese-made devices, Qualcomm’s chip usage rate has been gradually declining in China, and shrunk to as low as 33% in 2013. With Qualcomm and Mediatek both devoting their attention towards the mid to high end smartphone consumer segment, much of the low-end smartphone space has been left to Spreadtrum, which has recently unveiled a processor intended for low end hardware devices. In 2013, Spreadtrum’s chip usage rate in the Chinese market grew to approximately 11%.
Figure-1 2013 Smartphone processor market share in China’s smartphone market
Source: DRAMeXchange, June, 2013 Despite being an indisputable leader in the high end smartphone market, Qualcomm’s MSM8X30, MSM8X26, and MSM8X25Q processors are still facing a lot of stiff competition in the low-to-mid end mobile sectors. A way Qualcomm may reverse its struggles in China is by taking advantage of the country’s rapidly growing 4G/LTE developments. The company will have a good chance of emerging as a major LTE market leader should China’s 4G business opportunities appear early next year.
Although Mediatek has generally been known to promote two new items on an annual basis, this year the Taiwan-based company has chosen to break away from tradition by announcing a total of four different products. The first –the MT6589– was announced during 1H13, and is intended for the mid-to-high end smartphone market; the remaining three products—all of which are smartphone chips—are expected to be introduced at some point during 2H13. Among the new processors, the duo core, Cortex A7-based MT6572 chip stood out as particularly noteworthy given its potential to exert a lot of impact on the low end smartphone market. The said chip is unique in that it supports China’s TD SCDMA system, is priced in a notably affordable range, and sports a good degree of compatibility with various low cost components (which could help push manufacturing costs down to as low as $US 40). All in all, this chip provides a perfect opportunity for Mediatek to compete against the low-end smartphone chips that are designed by Spreadtrum. The MT6575 is expected to become popular within the mid-to-low end smartphone market and should help Mediatek cement its position within the low end sector.
Following the release of the MT6589 chip, which is expected to open up new opportunities in the mid-to-low end market, Mediatek aims to introduce the quad core MT6580 and MT6582 in 2H13. MT6582 is considered a more affordable version of MT6589, and supports both qHD resolution and 8MP camera. These features are expected to help the company redefine the boundaries of a mid-end smartphone as well as increase its overall consumer appeal. The MT6580, on the other hand, is intended to be a viable alternative to a Qualcomm chip. Other than supporting 1.5Ghz speed, HD resolution, and 13MP camera, the chip is able to work with the kinds of high-quality hardware that are typically compatible with Qualcomm processors. According to TrendForce, if Mediatek is indeed successful in enhancing its presence in the high end market, a price war involving high-end processors is likely to ensue. Should this happen, both consumers and smartphone manufacturers will benefit, and the boundaries among high end smartphone devices will become less and less clear.
With China’s recent plans to expand the TD-LTE coverage for its 500 million users by 2020, and with the 4G industry growing at a tremendously rapid pace, the LTE ecosystem in China is set to become more and more mature in the foreseeable future. Qualcomm is very likely to benefit from such a trend given its priority on the 4G/LTE business. Following the high end chip pricing war, the 4G/LTE market will likely become next battlefield for chip makers.
End of the update
Tsinghua University investment arm makes buyout offer for Spreadtrum [Asian Venture Capital Journal, June 24, 2013]
Spreadtrum [展讯] Communications [处在], a Chinese mobile chip manufacturer backed by NEA, has received a [non-binding] buyout offer from a unit of Tsinghua Holdings, an investment entity controlled by Beijing-based Tsinghua University. The offer values Spreadtrum at $1.35 billion.
According to a regulatory filing, Tsinghua Unigroup will pay $28.50 in cash for all outstanding American Depository Shares – a 20% premium on the stock’s previous closing price. Spreadtrum’s stock jumped more than 16% in response to the announcement, closing Friday at $25.91.
As of year-end 2012, NEA owned 10.4% of the company, having initially participated in the $19.8 million Series B round in 2002. Spreadtrum went public on NASDAQ in 2007, raising $124.6 million. Silver Lake bought a 13% stake for $40 million in 2010 but exited the following year.
In 2011, Spreadtrum also came under fire from short-seller research firm Muddy Waters over alleged accounting discrepancies. The company denied any wrongdoing.
“We believe that an Acquisition by Tsinghua Unigroup [紫光集团有限公司], which is majority-owned by Tsinghua University, a central player in China’s technology and R&D sectors, would provide compelling strategic synergies and position the company for additional value creation in key wireless communications markets in China and elsewhere going forward,” Unigroup CEO Weiguo Zhao said in a letter to shareholders.
Tsinghua Holdings has committed to guarantee full equity or debt funding up to the total purchase price of $1.5 billion.
Spreadtrum was founded in 2001 and develops mobile chipset platforms for 2G, 3G and 4G wireless communication standards. Customers include handset manufacturers selling into China and other emerging markets. The company posted a net income of $92.4 million for 2012, down from $134 million the previous year, although revenues jumped 7.6% to $725.2 million.
Tsinghua Holdings is a state-owned company responsible for managing the majority of Tsinghua University’s commercial assets. As of year-end 2012, Tsinghua Holdings had approximately RMB70.4 billion ($11.5 billion) in assets and a net income of RMB1.45 billion. Unigroup focuses on high-tech, biotech, real estate and urban infrastructure investments.
Tsinghua Science Park Venture Capital, which also ultimately falls under the control of Tsinghua Holdings, participated in Spreadtrum’s Series A and B rounds.
Note that this shows the strong determination by the Chineses State because:
我国大陆IC产业发展面临三大障碍 Mainland China IC industry is facing three major obstacles [Hexun.com, June 22, 2013] as translated by Google and Bing with manual edits
What are the essential elements in the development of the IC industry or power? The industry generally believes that strong government support, pragmatic policies and systems, building good infrastructure and abundant human resources, are the key elements how the IC industry in developing countries and regions may come from behind.
The operating efficiency of the Innovation Alliance, of the official mechanisms for collaboration, research, and industry R&D is not high, which is one of the significant factors restricting the rapid development of mainland China’s IC industry.
Mainland China’s IC industry in recent years gained rapid development, and some of the advantages of the competitiveness of enterprises began to appear. Taking the fastest-growing design industry as an example, in 2011 the overall IC design industry sales continued to maintain a high growth rate, reaching 47.374 billion yuan [US$7.7B], an increase of 30.2% year on year. In 2012, total sales for the top 10 design enterprises in China reached 23.117 billion yuan [US$3.8B], an increase of 2.97 billion yuan [US$484M] over the previous year. 10 companies accounted for 33.97% of total industry sales, 2.21% increase over the 31.76% in the previous year. First business sales reached $ 1.183 billion.
Spreadtrum Communications [展讯通信], RDA [锐迪科], HiSilicon [海思], Zhuhai Allwinner [珠海全志] and so on, i.e. the SoC enterprises have made great achievements in the field. But compared with Taiwanese and Korean enterprises there is still relatively slow development, the products are low-tech, and the competitiveness of the enterprises is weak. Price is also the company’s main business strategy, “design” is still not a mainstream, the situation of slow building of the base capability had not improved. Industry-wide sales may also be less than the sum of the sales of the world’s top-ranked design firms.
Note that out of the US$3.8B revenue of the top 10 design enterprises in 2012 Spreadtrum had US$725.2M which is not less than 19%. This data alone shows how important is the Spreadtrum acquisition in order to speed up the further development of the IC industry by putting the company together with the Tsinghua University which has a Research Institute of Circuits And Systems as well as an Institute of Microelectronics (IMETU), see here and here:
IMETU, the Institute of Microelectronics of Tsinghua University, was founded in 1980 on the basis of the Semiconductor Research Division, which was a research division of the Department of Electronic Engineering established in 1957. The mission of IMETU is to educate top level professionals and deliver scientific innovations in the domain Micro/Nano-electronics. During the past 30 years, IMETU has made significant contributions and key achievements for the development of China’s semiconductor and integrated circuit industry. Its faculty members and students won 8 national awards, more than 20 province or ministry level awards, as well as 136 granted patents. The institute consists of four divisions, Solid-State Devices and Integration Technologies, IC & System Design, Micro/Nano Devices and Systems, and CAD Technology. Up until March 2012, IMETU has 94 faculty and staff members, among which there are 14 professors and 46 associate professors. After 30 years of development, IMETU has been China’s leading research and education base in the area of Micro/Nano electronics. It has established a high-quality research infrastructure for microelectronics comprising of two major research directions, Micro/Nano electronics and IC & System Design. Meanwhile, alumni of IMETU have become the backbone of China microelectronic industry.
which is also the premier university partner of The Institute of Microelectronics of Chinese Academy of Sciences.
Major shareholders of Spreadtrum (with more than 5%): source Annual Reports
March 15, 2008
March 15, 2009
March 31, 2010
Feb 28, 2011
Feb 29, 2012
Feb 28, 2013
Scott Sandell [also includes New Enterprise Associates 11, Limited Partnership shares]
Entities affiliated with New Enterprise Associates 11, Limited Partnership
Entities affiliated with Fortune Venture Investment Group
Entities affiliated with Pacific Venture Partners
Entities affiliated with Silver Lake Partners
The Bank of New York Mellon Corporation
FMR LLC and Edward C. Johnson 3d
Waddell & Reed Group
Tsinghua Unigroup Announces Offer to Buy Spreadtrum Communications [press release, June 21, 2013]
BEIJING–(Marketwired – Jun 21, 2013) – Tsinghua Unigroup Ltd. (“Unigroup”) today confirmed that it has made a non-binding offer to acquire Spreadtrum Communications, Inc. (NASDAQ: SPRD) (“Spreadtrum” or the “Company”) for $28.50 in cash per American Depositary Share (the “Transaction”). Spreadtrum is a leading fabless semiconductor provider in China with advanced technology in 2G, 3G and 4G wireless communications standards. The offer represents a premium of 20.1% over the closing price of the Company’s shares on June 19, 2013, the day preceding the delivery of the offer and 44.3% over the volume weighted closing price of the Company’s shares for the 30 trading days preceding the delivery of the offer.
Unigroup is an operating subsidiary of Tsinghua Holdings Co. Ltd., a solely state-owned limited liability corporation funded by Tsinghua University, one of the most prestigious universities in the world. Tsinghua Holdings owns and manages a substantial majority of the commercial assets of Tsinghua University. As of December 31st, 2012, Tsinghua Holdings had total assets of approximately 70.4 billion RMB [$11.45B], EBITDA of approximately 4.07 billion RMB, and net income of approximately 1.45 billion RMB for fiscal year 2012. Tsinghua Holdings’ corporate credit rating is AA+ according to CCXI, the Chinese domestic JV partner of Moody’s and the leading credit rating agency in China. Additional information about Tsinghua Holdings can be found at (http://www.thholding.com.cn/english/simpleindex.aspx).
According to the preliminary non-binding proposal letter, Tsinghua Holdings has committed to guaranteeing the aggregate purchase price, which may be funded through a combination of equity and debt financing.
Unigroup is excited about the proposed acquisition of Spreadtrum and the strategic opportunity this Transaction provides given the strength of this leading China-based business. Mr. Zhao Weiguo, the Chairman and CEO of Unigroup, commented, “We are enthusiastic about Spreadtrum’s business and market position globally and here in China, and we see Spreadtrum as an excellent strategic fit with Unigroup’s overall commercial objectives. We look forward to working together on the details of our proposed acquisition.”
Unigroup’s proposal is non-binding and is subject to, among other things, satisfactory due diligence with respect to Spreadtrum and the execution of acceptable definitive agreements. There can be no assurance that Spreadtrum will support the Transaction, that any definitive binding offer will be made by Unigroup with respect to the Transaction, that any agreement with respect to the Transaction will be executed, that any conditions, including with respect to regulatory approval, will be satisfied, or that this Transaction or any other transaction, on the proposed terms or on any other terms, will be approved or consummated. Unigroup does not undertake any obligation to provide any updates with respect to this Transaction or any other transaction, except as required under applicable law.
About Tsinghua Unigroup Ltd.
Tsinghua Unigroup Ltd. (“Unigroup”) is an operating subsidiary of Tsinghua Holdings Co. Ltd., a solely state-owned limited liability corporation funded by Tsinghua University in China. Tsinghua Holdings Co. Ltd. is the controlling shareholder of Unigroup. Unigroup’s business lines include high-technology, bio-technology, science park development, and urban infrastructure construction.
About Spreadtrum Communications, Inc.
Spreadtrum Communications, Inc. (NASDAQ: SPRD) (“Spreadtrum”) is a fabless semiconductor company that develops mobile chipset platforms for smartphones, feature phones and other consumer electronics products, supporting 2G, 3G and 4G wireless communications standards. Spreadtrum’s solutions combine its highly integrated, power-efficient chipsets with customizable software and reference designs in a complete turnkey platform, enabling customers to achieve faster design cycles with a lower development cost. Spreadtrum’s customers include global and China-based manufacturers developing mobile products for consumers in China and emerging markets around the world. For more information, visit www.Spreadtrum.com.
This press release does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any security, nor is it a solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of the securities referred to in this press release in any jurisdiction in contravention of applicable law.
Note that with June 27, 2007 Spreadtrum IPO on Nasdaq the company had $125.9M initial market capitalization which a year later became $209.41M; the quarterly revenue at IPO time was US$38.6M:
Data is in US$
Spreadtrum Closes $35.2 Million Series C funding [press release, June 4, 2004]
Sunnyvale, California – June 4, 2004 – Spreadtrum Communications Inc., a leading fabless semiconductor company developing and marketing innovative digital wireless communications products, today announced the completion of $35.2 million Series C financing led by New Enterprise Associates (NEA) with additional participation from existing investors, Fortunetech Investment Fund, Pacific Venture Group, Vertex, Legend Capital, HuaHong International and more.
“Proceeds from this financing will be used primarily to expand operations and to develop new product offerings,” said Dr. Ping Wu, President of Spreadtrum. ‘Spreadtrum has gained customers acceptances in the GSM/GPRS markets and is now gaining traction in the 3G area. We are very pleased to be working with these experienced venture capital firms. With their industry knowledge and resources, we are confident we will expand our global reach.
“Spreadtrum has all the components we look for when making an investment,” said Scott Sandell, NEA general partner and Spreadtrum board member. “With its experienced management team and superior technology, Spreadtrum is poised to emerge as one of the world-class fabless semiconductor companies. They continue to demonstrate their ability to develop and market their products while gaining traction in this large, explosive market.”
Spreadtrum is currently shipping GSM/GPRS baseband chipset SC6600 families and GSM/GPRS module SM5100 families. The SC6600 is a highly integrated GSM/GPRS single baseband mixed signal chip containing all digital and analog functionality for a GSM/GPRS wireless phone. The SM5100 provides both voice and data functions, and can be used in GSM/GPRS tri-band cell phones, data modems and other mobile terminal devices. Reference designs for a complete GSM/GPRS handset terminal are available. Spreadtrum also has single and dual CPU solutions for various market demands. More information about Spreadtrum products is available via email at email@example.com.
New Enterprise Associates Participates in $20 Million Series D for Spreadtrum Communications [Baltimore Citybizlist. Oct 31, 2006]
Spreadtrum Communications Inc., a Sunnyvale, Calif.-based maker of wireless chipsets, has secured $10 million of a $20 million Series D round, according to a regulatory filing. Return backers include Fortune Venture Group and New Enterprise Associates. The company has several offices in China. www.spreadtrum.com
Spreadtrum Communications was founded in 2001 by a group of innovative entrepreneurs with determination to face any challenge in the future. Under Dr. Ping Wu’s leadership, Spreadtrum successfully set up offices in Silicon Valley and several different cities in China. It grew rapidly within the past a few years and became a raising star in the IC and wireless communications industry. Spreadtrum’s products became the choice of many Chinese and international clients. Spreadtrum focuses on the development and sales of the new generation wireless IC, provides fast-to-market, cost-effective and high-performance solutions for wireless terminal manufactures and design houses.
Our core competitive products are:
2G/2.5G/3G baseband IC: High integration, high performance, great functionalities
Communication software: validity, stability, customizability
Wireless platform: differentiated value-added open platform, reduced development time, increased product competitive edge
Wireless module: Customizable, flexibility, high quality
Spreadtrum not only has complete wireless terminal core chip series and related software and platform solutions that cover from high-end to low-end handset markets, but also has successfully developed world’s first single TD-SCDMA/GSM/GPRS(3G/2.5G) dual mode baseband chip as well as world’s first single integrated multimedia GSM/GPRS baseband chip. By utilizing Spreadtrumer’ expertise and newest design methodology in the industry, Spreadtrum single chips solution possesses the characteristics of higher integration, smaller size, lower power consumption and higher performance and therefore greatly reduces system BOM cost. Spreadtrum is the first IC designs company to develop its own software protocols. Its open platform allows customers to customize their products in order to differentiate themselves among competitors. Spreadtrum provides its customers with warm-hearted support and fast response time to reduce their development cycle and shorten their time-to-market.
Based in Sunnyvale, Calif., with most of its engineering operations in China, Spreadtrum Communications is developing chips for China’s large and rapidly growing domestic cellular market. The company is developing single-chip solutions for GSM/GPRS and TD-SCDMA/GSM/GPRS mobile devices, and has integrated all of the analog, digital and power-management functions as well as a full set of multimedia features and interfaces into the chips.
Founded only five years ago, Spreadtrum has already grown to 450 employees. CEO Ping Wu and CTO Datong Chen founded Spreadtrum with Renyong Fan (VP of operations) and Jin Ji in July 2001. The company raised $6.5 million in Series A funding at the time of founding, followed by a $20 million Series B round in Nov. 2002 and a $35 million Series C round in April 2004. The company has more than 30 investors, with the largest including New Enterprise Associates (NEA), Fortunetech Investment Fund, Pacific Venture Group, Vertex, Legend Capital and HuaHong International.
Spreadtrum offers three chip products:
SC6600M GSM/GPRS baseband chip – In addition to baseband functionality, the 6600 also supports a number of functions typically implemented separately on different chips. These include support for a 1.3-megapixel digital camera with video recording and playback, 64-polyphonics with stereo sound, MP3 player, USB interface and USB removable memory. Analog I/F features include a wide-range RF interface and power management on chip.
Spreadtrum began volume shipments of the SC6600 in June 2003, primarily to domestic handset makers including TCL, Ningbo Bird, Amoi Electronics, Hisense and Putian Capitel.
SC8800 Single-chip TD-SCDMA/GSM/GPRS dual-mode baseband chip – Powered by the CEVA-Teak DSP core, the SC8800 enables dual-mode 2G/3G phones that operate transparently over China’s TD-SCDMA and GSM networks. As with the SC6600, the chip integrates analog, digital and power management functions on a single chip.
SC6800 GSM/GPRS multimedia baseband IC – The SC6800 integrates an ARM9 processor and TeaKLite DSP, 5-megapixel camera controllers, auto-focus controllers, MPEG4 accelerator and MP3 player, and supports TV out and other multimedia application-processing functionalities.
Spreadtrum also offers a wireless module, the SM5100B, which incorporates the baseband chip, RF chipset, combo flash and software. Intended for applications such as wireless desktop phones, mobile phones, remote monitoring and remote meter reading, the module provides all the required functionality for full-featured GSM/GPRS terminals.
Spreadtrum provides its customers with IP and application software, and developed its own protocol stack software. The open platform enables customers to perform high-level development to implement their own IP and value-added features.
Compared with the Europe-initiated WCDMA and U.S.-backed CDMA 2000 3G standards, China’s homegrown 3G standard, TD-SCDMA, arrived late to the game. We even heard that Chinese telecom operators were reluctant to use TD-SCDMA due to that fact. Nevertheless, the Chinese Ministry of Information Industry formally approved TD-SCDMA on Jan. 20, 2006, as the national technology standard for 3G mobile communications.
Spreadtrum projects that shipments of 3G mobile phones in China will grow to 9.5 million units by 2007, up from 3.3 million units in 2004. The Industrial Technology Information Services (ITIS), a unit of Taiwan’s Ministry of Economic Affairs (MOEA), projects subscriptions for 3G services in China will increase from 15 million in 2006 to 80 million by 2008.
However, according to market research firm ABI Research, the establishment of a national 3G network will not greatly change the existing mobile landscape. The Chinese government will provide strong policy support to help TD-SCDMA operators gain time and establish a price lead over other 3G technologies, says ABI, but GSM will continue to be the dominant technology in China over the next five to eight years.
China is conducting its final TD-SCDMA trials in select cities between March and June. These latest trials follow three earlier rounds of tests, and should be the last before commercial use.
Spreadtrum will be competing with fellow TD-SCDMA chipmakers such as Commit (a joint venture involving Nokia, Texas Instruments, LG, Putian, DBTEL and Datang), Chongyou Information Technology, T3G (a joint venture of Datang, Philips and Samsung), Analog Devices and others.
The number of Chinese IC startups has been rapidly growing over the last few years, although many appear to have relatively simple technology, few people, little cash and fairly modest expectations. But a few – such as Spreadtrum – have set their sights higher and are establishing themselves as significant technology companies. We are impressed with Spreadtrum’s high level of integration in its products, as well as its ability to attract major investors and the early establishment of a global presence. We believe the company has a good chance for continued growth and success in China’s telecom market.
Spreadtrum Communications Announces Receipt of Acquisition Proposal [press release, June 21, 2013]
SHANGHAI, June 21, 2013 /PRNewswire-FirstCall/ — Spreadtrum Communications, Inc. (NASDAQ: SPRD; “Spreadtrum” or the “Company“), a leading fabless semiconductor provider in China with advanced technology in 2G, 3G and 4G wireless communications standards, today announced that its Board of Directors has received a preliminary non-binding proposal letter, dated June 20, 2013, from Tsinghua Unigroup Ltd. (“Unigroup“), an operating subsidiary of Tsinghua Holdings Co. Ltd., a solely state-owned limited liability corporation funded byTsinghua University in China, pursuant to which Unigroup proposes to acquire the Company (the “Transaction“) for S$28.50 in cash per American Depositary Share (each American Depositary Share represents three ordinary shares of the Company). A copy of the proposal letter is attached hereto as Appendix 1.
The Company’s Board of Directors is reviewing and evaluating Unigroup’s proposal and cautions the Company’s shareholders and others considering trading in its securities that the Board of Directors has just received the Unigroup proposal, and has not yet made any decisions with respect to the proposed Transaction, or the Company’s response to the proposed Transaction. There can be no assurance that any definitive offer will be made, that any agreement will be executed or that this or any other transaction will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to this or any other transaction, except as required under applicable law.
About Spreadtrum Communications, Inc.
Spreadtrum Communications, Inc. (NASDAQ: SPRD; “Spreadtrum“) is a fabless semiconductor company that develops mobile chipset platforms for smartphones, feature phones and other consumer electronics products, supporting 2G, 3G and 4G wireless communications standards. Spreadtrum’s solutions combine its highly integrated, power-efficient chipsets with customizable software and reference designs in a complete turnkey platform, enabling customers to achieve faster design cycles with a lower development cost. Spreadtrum’s customers include global and China-based manufacturers developing mobile products for consumers in China and emerging markets around the world. For more information, visit www.spreadtrum.com.
Acquisition Proposal Letter
June 20, 2013
The Board of Directors
Spreadtrum Communications, Inc.
Spreadtrum Center, Building No. 1
Lane 2288, Zuchongzhi Road
Zhangjiang, Shanghai 201203
People’s Republic of China
Ladies and Gentlemen:
Tsinghua University, through its subsidiary Tsinghua Unigroup Ltd. (“Unigroup“) is pleased to submit this preliminary non-binding proposal to acquire Spreadtrum Communications, Inc. (the “Company,” and such transaction the “Acquisition“).
We believe that our proposal as outlined below will provide a very attractive alternative to the Company’s shareholders. Our proposal represents a premium of 20.10% to the Company’s closing price on June 19, 2013 and a premium of 44.3% to the volume-weighted average closing price during the last 30 trading days.
In addition to the premium that our proposal would deliver to Spreadtrum shareholders, we believe that an Acquisition by Tsinghua Unigroup Ltd., which is majority owned by Tsinghua University, a central player in China’stechnology and R&D sectors would provide compelling strategic synergies and position the Company for additional value creation in key wireless communications markets in China and elsewhere going forward.
The terms and conditions upon which we are prepared to pursue the Acquisition are set forth below. We are confident in our ability to consummate an Acquisition as described in this letter.
1. Purchase Price. The consideration payable for each American Depositary Share of the Company (“ADS,” each representing three (3) ordinary shares) will be U.S. $28.50 in cash.
2. Financing. We may finance a portion of the aggregate purchase price with debt. Tsinghua Holdings Co. Ltd., our controlling shareholder, has provided us with a Letter of Support, dated June 20, 2013, a copy of which is attached hereto as Exhibit A, pursuant to which Tsinghua Holdings has committed to guarantee full funding for any equity or debt financing that may be required for the Acquisition, as set forth therein. For the avoidance of doubt, while we may seek to finance a portion of the acquisition with debt financing, Tsinghua Holdings has agreed to provide equity funding up to the total purchase price of $1.5 billion if satisfactory debt financing is not available.
3. Due Diligence. We will be in a position to commence our due diligence for the Acquisition immediately upon receiving access to the relevant materials.
4. Definitive Agreements. We are prepared to negotiate and finalize definitive agreements (the “Definitive Agreements“) concurrently with our due diligence review. This proposal is subject to execution of Definitive Agreements. These documents will provide for representations, warranties, covenants and conditions customary for transactions of this type.
5. Confidentiality. Other than the announcement of this offer letter, we are confident you will agree with us that we have a shared interest in proceeding in an otherwise confidential manner, unless otherwise required by law, until we have executed Definitive Agreements or terminated our discussions.
7. Further Information About Tsinghua Holdings and Tsinghua Unigroup. Unigroup is an operating subsidiary ofTsinghua Holdings, a solely state-owned limited liability corporation funded by Tsinghua University that is responsible for managing a substantial majority of Tsinghua University’s commercial assets. As of December 31st, 2012, Tsinghua Holding’s total assets approximated 70.4 billion RMB and Tsinghua had EBITDA of approximately4.07 billion RMB and net income of approximately 1.45 billion RMB for fiscal 2012. Tsinghua Holdings’s corporate credit rating is AA+ according to CCXI, the Chinese domestic JV partner of Moody’s and the leading credit rating agency in China. Additional information about Tsinghua Holdings can be found at (http://www.thholding.com.cn/english/simpleindex.aspx). Other shareholders include Beijing Jiankun Investment Group Co. Ltd. and Beijing Tourism Group. Unigroup’s business lines include high-technology generally, bio-technology, real estate and urban infrastructure construction.
8. No Binding Commitment. This letter constitutes only a preliminary indication of our interest, and does not constitute any binding commitment with respect to an Acquisition. Such a commitment will arise only upon execution of Definitive Agreements, and in such case will be on the terms provided in such documentation.
In closing, we would like to personally express our commitment to working together in bringing this Acquisition to a successful and timely conclusion. We look forward to hearing from you regarding our proposal at your earlier convenience and kindly request that you notify us by June 28, 2013 should you desire to engage in further discussions about our proposal.
Very truly yours,
Tsinghua Unigroup Ltd.
By: /s/ Zhao Weiguo
Name: Zhao, Weiguo
Title: Chairman and President
TSINGHUA HOLDINGS LETTER
Tsinghua Holdings Co., Ltd.
25F, Building A, S.P Tower
Tsinghua Science Park
Beijing 100084, P.R. China
June 20th, 2013
Chairman Zhao Weiguo of Tsinghua Unigroup Ltd.
10/F, Unis Plaza, Tsinghua Science Park
Beijing, 100084, P.R. China
Subject: Tsinghua Holdings Co. Letter of Support and Agreement to Guarantee Full Funding for the Acquisition ofSpreadtrum Communications, Inc. by Tsinghua Unigroup Ltd.
Dear Mr. Zhao,
This letter (our “Letter of Support“) is to confirm our official endorsement and commitment to support Tsinghua Unigroup Ltd (“You“) in your bid to acquire Spreadtrum Communications, Inc. (NASD: SPRD) (the “Target” and such transaction, the “Project“) at the price of U.S. $28.5 per ADS for up to USD $1.5 billion (the “Support Amount“) and to guarantee any equity or debt financing that may be required for the Project.
As you know, we own and manage a substantial majority of the commercial assets of Tsinghua University, one of the most prestigious universities in the World. As of December 31st, 2012, our total assets approximated 70.4 billion RMB with 2012 EBITDA of approximately 4.07 billion RMB and 2012 net income of approximately 1.45 billion RMB. Tsinghua Holdings Co.’s corporate credit rating is AA+ according to CCXI, the Chinese domestic JV partner ofMoody’s and the leading credit rating agency in China. Our corporate website contains further background information about Tsinghua Holdings, and can be found at (http://www.thholding.com.cn/english/simpleindex.aspx).
As the manager of the commercial affairs of the University, we are the parent company to Tsinghua Unigroup Ltd and own 51% of its outstanding capital shares. We have officially approved the Project and have decided to fully support the Project to facilitate its rapid completion. Although we have sufficient resources to fund the Project up to the full Support Amount from our own balance sheet, we understand that You may elect to utilize debt financing to fund a portion of the purchase price for the Target. In any such case, we intend to assist You in obtaining any such debt financing on favourable terms. In furtherance thereof, we will provide a corporate parent guarantee of such financing up to the Support Amount minus the amount of any equity contribution for the Project (and subject to any applicable government approvals). In furtherance thereof, we will execute any bank or third-party guarantees and other related documents requested by you in form and substance reasonably acceptable to us and to any lender providing such funding.
At your discretion, this Letter of Support can be shared with parties with whom you are discussing the Project.
This Letter of Support and our agreement to provide a guarantee is a commitment of our broad financial enterprise, and credit support for purposes of the Project.
Tsinghua Holdings Co., Ltd.
By: /s/ Xu Jinghong
Print Name: Xu, Jinghong
Title: Chairman of Tsinghua Holdings Co., Ltd.
To see a full copy of the signed version of these letters, click here:
http://www.prnasia.com/sa/attachment/2013/06/20130621172830287567.2 – Acquisition Offer Letter and Funding Support Letter.pdf
SOURCE Spreadtrum Communications, Inc.
Diana Jovin, firstname.lastname@example.org, +1 650-308-8148