Counterpoint Daily

Our daily insights on the most important breaking news stories. For press inquiries requiring data or specific analyst quotes, please get in touch with us directly at press(at)counterpointresearch.com

December Technology Insights

December 6,2021 | XR

WSJ | Apple’s iPhone Successor Comes Into Focus

Apple’s iPhone Successor Comes Into Focus

WSJ

If you thought the hullabaloo about Facebook, virtual reality, and the metaverse was a lot, wait till next year. Apple is expected to unveil in 2022 something at least as attention getting: a head-mounted device that has the potential to be the next biggest thing after the iPhone.

Meta Platforms, as Facebook’s parent is now known, is focused on an alternative to our current reality, one we can disappear into on our couch. Apple is raising the stakes with what analysts say are plans for a headset or smart glasses that will offer access to a layer of information, objects and data spread across our view of the real world like so much digital pixie dust—a so-called augmented reality, or AR.

Apple’s first AR device could be announced by the end of 2022. Apple, though, will bring some unique advantages to its alternate-reality play that could quickly vault it ahead of those who were earlier to market.

Analyst takeaways:

  • The entire industry is waiting for Apple to launch its first XR headset for that “iPhone moment” in XR segment. This will set the tone for the industry as Apple drives the in-built technologies, components, design approaches and form-factor at scale and setting a benchmark.
  • Obviously, the initial XR headset will likely be tethered to the most powerful compute devices – the iPhones / Macs – especially the Pro series. And, will also closely follow the Apple’s tight vertical stack optimization from its own chips to OS to app SDKs, services and cloud.
  • Apple Watch has been driving stickiness and pull for iPhones, similarly, the XR headset will aim to corner the gamers and/or creative professionals attached to the iPhone/Mac Pro series.

– Neil Shah


December 2,2021 | Components

Qualcomm | Qualcomm Announces Snapdragon 8cx Gen 3, 7c+ Gen 3 Compute Platforms to Catalyze Windows 11 on ARM laptop market

Qualcomm Announces Snapdragon 8cx Gen 3, 7c+ Gen 3 Compute Platforms to Catalyze Windows 11 on ARM laptop market

Qualcomm

At the Snapdragon Tech Summit on Day 2, Qualcomm announced the next-gen mobile compute platforms for Windows 11 laptops. First is the Snapdragon 7c+ Gen 3 platform designed for entry-level laptops. The second is a more powerful and premium Snapdragon 8cx Gen 3, which is also the world’s first 5nm compute platform for Windows 11 laptops.

Designed for always-on, always-connected laptops, significant upgrades on the compute platforms include faster AI and 5G connectivity, enhanced security, audio and camera improvements. Devices powered by the new chipsets are expected in H1 2022.

Analyst takeaways:

  • With the new Snapdragon 8cx and 7c+ gen 3 platforms, Qualcomm now has a very broad and highly differentiated portfolio of Windows on Snapdragon (ARM) chipsets easily addressing the majority of the laptops market and with unique features. We believe based on the configuration and target geography, the 8cx based laptops could span from $500 to $1200 laptop segments and 7c+ from $300 to $800 segments.
  • Most of the traditional PC laptop OEMs have committed to expanding their portfolio with the latest Snapdragon-based solution and with current awareness created by Arm-based MacBooks will further push these OEMs to dedicate more resources in marketing and channels to see the adoption of Snapdragon-based ACPCs.
  • Another big opportunity is where Qualcomm’s existing key customers the smartphone OEMs and operators which are racing to launch connected devices such as laptops can adopt these 3rd generation Qualcomm-based Windows laptops. This move should drive an inflection point for Qualcomm in this multi-billion-dollar segment in the near- to mid-term.

– Neil Shah


December 1,2021 | Components

Reuters | Qualcomm leans into cameras, gaming with new flagship smartphone chip

Qualcomm leans into cameras, gaming with new flagship smartphone chip

Reuters

Qualcomm Inc (QCOM.O) on Tuesday released its new top-tier smartphone chip aimed at premium-priced Android phones with features like sharper photos and graphics than handsets using chips from rivals.

The Snapdragon 8 Gen 1 chip released Tuesday will have similar computing cores to rivals like MediaTek, which this month announced a chip aimed at premium phones. But almost every other part of the chip are custom designed by Qualcomm, including those playing a role in the visual quality of photos and graphics-intensive apps like games.

Analyst takeaways:

  • 18-bit Triple ISP, a dedicated bokeh engine for 4K video capture, always-on camera, and 8K HDR are some key camera features that will differentiate Snapdragon 8 Gen 1 powered Android smartphones from the competition.
  • 4th gen Snapdragon X65 5G modem with support for mmWave with peak download speeds of up to 10Gbps, upload speeds of 3.5Gbps, and Sub-6GHz carrier aggregation are some of the key features to showcase 5G advancements Qualcomm is bringing to Android smartphones.
  • Support for CD Quality, 16-bit lossless audio streaming over Bluetooth will pave way for headphones and TWS earbuds to deliver music in its purest form, especially when listening on platforms like Apple Music and Amazon Music HD.

– Jeff Fieldhack


November Technology Insights

November 29,2021 | XR

Bloomberg | Apple’s Car and VR Headset Are Poised to Alter the Typical Product Rollout Strategy

Apple’s Car and VR Headset Are Poised to Alter the Typical Product Rollout Strategy

Bloomberg

Apple’s next major product categories—a virtual and augmented reality headset and a self-driving car—will likely mark a change in how the company rolls out new devices. In Apple Inc.’s ideal scenario, it surprises the world with a product announcement and then releases it in stores just days later. With the company’s next round of major product categories, that likely won’t be the case.

When Apple releases the first version of a major, new product, however, consumers typically need to wait. Here are three recent examples:

  • Original iPhone: Introduced Jan. 9, 2007; released June 29, 2007 (171 days)
  • Original iPad: Introduced Jan. 27, 2010; released April 3, 2010 (66 days)
  • Original Apple Watch: Introduced Sept. 9, 2014; released April 24, 2015 (227 days)

Analyst takeaways:

  • Virtual reality is a relatively straightforward hardware development process. The supply chains exist and Apple can optimise them in its own unique way. The software ecosystem is more challenging and will require the release of an application framework and the participation of multiple third-party developers. This is not something that can be accomplished under any kind of secrecy.
  • Augmented reality is much more complicated. No company has yet cracked the multiple challenges, of which optics is the thorniest. Unlike with VR, there is no established hardware of software ecosystem that Apple can tap in to. It will have to be a true pioneer if it is to produce a product that a consumer can easily adopt into their everyday lifestyle.
  • Cars offer an altogether different set of challenges; not least being their low profitability compared to all of Apple’s other products. None of these products will be introduced shortly after launch because they mark departures from Apple’s current product realm of varying magnitudes.

– Peter Richardson


November 25,2021 | Components

WSJ | More Chips Will Be Made in America Amid a Global Spending Surge

More Chips Will Be Made in America Amid a Global Spending Surge

WSJ

Investment in U.S. chip production is on the rise. But so too, is semiconductor spending elsewhere. Samsung Electronics Co.’s planned $17 billion chip factory in Texas is expected to crank out top-end semiconductors that are essential to 5G cellular networks, self-driving cars and artificial intelligence. It follows hefty bets on U.S. soil by Intel Corp., Taiwan Semiconductor Manufacturing Co. and Texas Instruments Inc.

The new factories won’t be operational for years. But the investment promises to boost America’s production foothold in advanced chip making after decades of ceding ground to locations in Asia like Taiwan, South Korea and China. It comes at a time, though, when chip makers are investing heavily in these locations, too.

Analyst takeaways:

  • There is a discussion regarding whether recent huge investments from semiconductor manufacturing vendors would result in an oversupply. In my opinion, Yes, it will.
  • However, certain foundries with modest technological advancements will suffer more than the big vendors. It’s true that not all devices require 10nm or below technology. However, winners take all.
  • Companies that spend more and earlier capital (like TSMC and Samsung) must have lower costs and better quality.

– Brady Wang 


November 24,2021 | Smartphones

Bloomberg | Xiaomi’s Growth Withers After Chip Shortages, Rivals Hurt Sales

Xiaomi’s Growth Withers After Chip Shortages, Rivals Hurt Sales

Bloomberg

Xiaomi Corp.’s quarterly sales growth slowed markedly after the Chinese smartphone giant weathered a resurgent Apple Inc. and supply chain mayhem choked off the flow of vital components.

The Beijing-based company expects shortages of the chips that go into its devices and smart appliances to persist well into 2022 before easing around the second half of the year. Despite the supply crunch, which has walloped adjacent industries from cars to PCs, Xiaomi expects to ship roughly 190 million smartphones in 2021 — a rise of about 29% from last year.

Analyst takeaways:

  • The drop in Xiaomi’s smartphone shipment is bigger than the revenue of smartphones. This reflects that Xiaomi has made fair progress in selling higher-end products. Its ASPs have increased more than 7% YoY. Looking forward, the ASP will continue to rise as the company doubles down on premium products strategy. Also, components shortages will play out as well.
  • Internet Services revenue is a silver lining, reporting RMB7.2 billion which is a quarterly record high. Xiaomi’s management highlighted the service revenue from overseas markets, which reached almost 20% of the overall service revenue. The overseas part will continue to increase but Xiaomi needs to more to improve the efficiency in commercializing overseas data. ARPU has dropped to RMB15.1 for 5 quarters.
  • Looking forward, components shortages are huge uncertainties for Xiaomi. Its products are famous for low margins. If the company increased phone prices, will budget customers stay with it?

– Archie Zhang 


November 23,2021 | Automotive

Semiconductor Digest | Europe’s Urgent Need to Invest in a Leading Semiconductor Ecosystem

Europe’s Urgent Need to Invest in a Leading Semiconductor Ecosystem

Semiconductor Digest

Today’s chip shortage has put a spotlight on the degree to which the European economy depends on semiconductors. With limited local production capability and capacity, Europe risks its technological sovereignty and needs to correct course to maintain long-term competitiveness.

Analyst takeaways:

  • Most European semi-investment is focused in Germany. We saw Bosch recently open a factory in Dresden and Intel plans to spend $20bn in Europe, with Germany the leading contender.
  • The EU wants to double its global share of semis production by 2030, but it is chasing a moving target as demand grows rapidly.
  • Meanwhile, other markets like the US and South Korea are planning big semi-investments of their own, so it looks like Europe’s target is very ambitious.

– Jan Stryjak


November 22,2021 | Automotive

Bloomberg| Apple Accelerates Work on Car Project, Aiming for Fully Autonomous Vehicle

Apple Accelerates Work on Car Project, Aiming for Fully Autonomous Vehicle

Bloomberg

Apple Inc. is pushing to accelerate development of its electric car and is refocusing the project around full self-driving capabilities, according to people familiar with the matter, aiming to solve a technical challenge that has bedeviled the auto industry.

For the past several years, Apple’s car team had explored two simultaneous paths: creating a model with limited self-driving capabilities focused on steering and acceleration — similar to many current cars — or a version with full self-driving ability that doesn’t require human intervention.

Analyst takeaways:

  • Apple’s path to autonomous vehicles is going to be a marathon and not a spring and completely iterative as we have seen in iPhones until the autonomous technology, infrastructure, regulations are fully favorable for the “north star” experience.
  • Apple still can eye considerable opportunities where it could shape the future “smart car” from Apple-centric approach to design to electrification to bringing world-class cockpit, infotainment and safety-centric experiences than going fully autonomous and completing with Waymo or Cruise directly.
  • Foxconn’s expansion into EV+Autonomous manufacturing capabilities and its readiness is a leading indicator to Apple’s production roadmap and timeline, assuming Foxconn will be one of the EMS partners for Apple Auto.

– Neil Shah


November 19,2021 | Components

Anandtech| MediaTek Announces Dimensity 9000: Supercharged Flagship SoC on 4nm

MediaTek Announces Dimensity 9000: Supercharged Flagship SoC on 4nm

Anandtech

The Dimensity 9000 is MediaTek’s latest effort in creating a no-compromise flagship SoC, with the designers throwing in everything but the kitchen sink at it in terms of specifications, representing a lot of industry firsts, such as the first Armv9 SoC with Cortex-X2, A710’s and A510’s CPUs, a new Mali-G710 GPU, first LPDDR5X compatible SoC, astounding camera ISP claims, and the first outright publicly announced TSMC N4 silicon design in the industry. The list of features and capabilities is extensive, and the announcement today definitely represents MediaTek’s largest effort in generations and years.

Analyst takeaways:

  • With the Dimensity 9000 SoC, MediaTek seems to be making efforts in entering the competitive $600-$800 smartphone segment. Design wins will be key, possibly at least one model per vendor from realme, OPPO, vivo and Xiaomi in 2022. Could see decent adoption across emerging markets & parts of developed markets.
  • While it’s good to see MediaTek claiming lots of firsts with the new SoC, if shipping in late Q1 2022, competitor solutions might beat in some aspect on “1st” to actually ship devices before Dimensity 9000 in early Q1 2022.
  • The premium Dimensity 9 series has a real shot at “volumes” in the premium market (possibly) beyond 2nd gen & 2023 when (if) it comes with good mmWave support adopted by brands in key markets: US, JP, KR, etc. which contribute to majority of the premium volumes.

– Neil Shah


November 18,2021 | Smartphones

Bloomberg | Apple Will Sell Parts for Customers to Make Their Own Repairs

Apple Will Sell Parts for Customers to Make Their Own Repairs

Bloomberg

Apple Inc. will begin making parts and tools available for customers to fix their own devices, a significant shift in longstanding policies over who can make repairs to the costly gadgets.

The Self Service Repair program announced Wednesday will initially allow people to fix the display, battery and camera for their iPhone 12 and iPhone 13. Later, customers will be able to repair Mac computers with M1 chips. The service will only be available in the U.S. starting early next year but will expand to more countries throughout 2022.

Analyst takeaways:

  • Consumers only think of spending on repairs when the need arises, iPhone 12 and 13 series owners in US and other mature markets will have a choice to either buy the parts, tools and manuals or give it directly to the authorized service center. Either way, Apple stands to gain from sale of equipment or service charges.
  • The most valuable modules (Battery, display and camera) could be tricky for a lay person to handle even with manuals and tools. The lack of confidence and the need to carefully handle a premium smartphone might encourage the consumer to opt for an Apple authorized center.
  • This step is not really encouraging for independent repairers; it might just work for the consumers, but it definitely works for Apple. As of Q3 2021, iPhone 12 & 13 series phones make up almost 80% of Apple’s smartphone portfolio globally.

– Glen Cardoza


November 17,2021 | Components

Bloomberg | $8 Billion Takeover Offer Could Avert One of China's Biggest Potential Corporate Failures

$8 Billion Takeover Offer Could Avert One of China’s Biggest Potential Corporate Failures

Bloomberg

A consortium led by Alibaba Group Holding Ltd., has emerged as the frontrunner to take over Tsinghua Unigroup Co., a deal that could fetch more than 50 billion yuan ($7.8 billion) to help keep China’s indebted chip champion afloat.

The Chinese central government is leaning towards the Alibaba-led offer given the e-commerce giant’s financial heft and the potential synergies with its own cloud and semiconductor business, people familiar with the matter said. The consortium, which includes funds backed by the Zhejiang government, is edging out several competitors for Beijing-based Unigroup, several other people said, asking not to be identified as the information is private.

Analyst takeaways:

  • A successful deal potentially averts one of the biggest corporate failures in China, and given the economic slowdown and problems in the real estate sector, the government would be keen to boost some confidence in the market
  • The Unigroup assets are likely to contribute to 18 billion annual revenues should the deal go ahead. The main assets in the sale will include: Guoxin Micro (security chips, DRAM), YMTC (NAND) and Unisoc (mobile SoC). These are useful assets but limited in synergies with Alibaba’s semiconductor priorities, namely server chips.
  • However, regulators will potentially look at this deal more favorably than competing offers, due to Alibaba’s financial heft and innovative zeal, ensuring continued investment into the business. This would boost China’s semiconductor industry’s resilience and self-reliance, a key concern for the Chinese regulators.

– Yang Wang


November 16,2021 | XR

The Verge | Meta’s Oculus Quest 2 has shipped 10 million units, according to Qualcomm

Meta’s Oculus Quest 2 has shipped 10 million units, according to Qualcomm

The Verge

At the company’s 2021 investor day, Qualcomm CEO Cristiano Amon mentioned that Meta has sold 10 million Oculus Quest 2 headsets. This gives the best benchmark yet for sales of Meta’s standalone VR platform since it launched last October. “Our technologies are the ticket to the metaverse,” Amon said, highlighting Qualcomm’s efforts to establish itself as a key player in VR and AR platforms, especially as the tech industry at large is so heavily emphasizing the metaverse concept.

Quest 2 relies on Qualcomm’s Snapdragon XR2 chipset to power its standalone VR hardware. The 10 million mark for the Quest 2 is also particularly significant given Meta’s goals for growing a comprehensive VR platform: back in 2019, Meta CEO Mark Zuckerberg commented alongside the launch of the original Quest headset that 10 million users was a key threshold before the “ecosystem will just explode.”

Analyst takeaways:

  • VR Standalone has become the device type of choice in the gaming segment driven primarily by the success of Oculus’s Quest 2.
  • Gaming is the biggest consumer use case currently with the presence of major players such as Sony and Meta-owned Oculus. While the gaming segment is mostly dominated by VR headsets, consumer use of AR has thus far largely been confined to smartphone displays via applications.
  • Technological advancement and consequently improving user experience are expected to continue driving growth of this segment.

– Karn Chauhan


November 15,2021 | Components

The Times | Nvidia £30 billion takeover of ARM faces national security inquiry

Nvidia £30 billion takeover of ARM faces national security inquiry

The Times

Ministers are poised to pull the trigger on a full-blown investigation into the sale of ARM, Britain’s biggest technology company, in a move that threatens to scupper the controversial $40 billion (£30 billion) deal. Nadine Dorries, digital and culture secretary, will this week order a “phase 2” probe into US chip giant Nvidia’s acquisition of the Cambridge-based semiconductor design company from Japan’s SoftBank. She will instruct the competition watchdog to carry out an in-depth inquiry into antitrust concerns, as well as scrutinise national security fears raised by the takeover, which was agreed in September 2020.

Arm is thought of as a UK company, but the reality is that it has been owned by, Softbank, a Japanese company, since 2016. Most of the concerns aroused by Nvidia’s proposed acquisition in the UK government’s initial review concerned the potential for Nvidia to disturb Arm’s existing relationships with its customers – many of which are Nvidia’s rivals. Nvidia has proposed methods for distancing itself from Arm’s business, but the UK government’s initial view is that the proposed methods are insufficient. It is therefore going to investigate in even more depth.

Analyst takeaways:

  • The UK Competition and Markets Authority is likely to be extremely thorough and if it’s not fully satisfied, it may well block the deal. The EU is also investigating based on similar concerns as the UK government.
  • Another issue causing a hindrance to the Nvidia takeover deal center on Arm’s China subsidiary that is developing its own technology and is seen by some as having ‘gone rogue’.
  • All-in-all, these regulatory and other issues are slowing the acquisition process against an already tight March 2022 deadline originally imposed by Nvidia. It is unlikely that deadline will be met, either forcing a revision to the acquisition timeline or an abandonment of the deal.

– Peter Richardson


November 12,2021 | Components

Bloomberg | China’s Top Chipmaker Loses Second Senior Executive

China’s Top Chipmaker Loses Second Senior Executive

Bloomberg

Semiconductor Manufacturing International Corp. said its Vice-Chairman Chiang Shang-Yi resigned less than a year after joining China’s biggest chipmaker, the second departure of a senior executive in two months.

Chiang, who is in his mid-70s, has left the Shanghai-based company to spend more time with his family, according to a company filing Thursday. The chip industry veteran joined SMIC in December last year, after having helped to turn Taiwan Semiconductor Manufacturing Corp. into the world’s most influential contract chip manufacturer more than a decade ago. The stock dropped as much as 4.5% on Friday in Hong Kong.

Analyst takeaways:

  • The impact of Vice Chairman Chiang’s resignation will be limited as the company’s development of 14nm (and below, N+1; N+2) nodes have been led by Dr. Laing for years. The major bottleneck of SMIC’s leading technology production is the equipment ban due to the political level under US-China tension.
  • With or without the ban, SMIC technology is chasing behind the first-tier foundry group (TSMC, Samsung, IFS) by at least 5 years to develop the most cutting-edge nodes. Current production scale on 14nm is still small in SMIC, as building the next phase technology is challenging. However, SMIC’s matured nodes are running well during 2020-2021, as the local market leader benefiting from strong consumer and automotive IC demand.
  • For SMIC, without EUV tools, migrating to 10nm below nodes is highly unlikely. Under the existing equipment, it is not economical to produce chips under many layers of lithography patterning. Local procurement of equipment looks still a long way to go in China. China IC design customers are SMIC’s focus clients, as the prospects on existing local products (CIS, MCU, embedded memory, connectivity) are still promising.

– Dale Gai


November 11,2021 | e-Commerce

NYT | A Chastened Alibaba Tones Down Its Singles Day Retail Bonanza

A Chastened Alibaba Tones Down Its Singles Day Retail Bonanza

NYT

This Singles Day, an annual Nov. 11 tradition, Chinese shoppers are still likely to buy a lot of stuff. But this year’s bash is looking a little more abashed. Beijing has not let up in its efforts to make internet companies behave less rapaciously. Regulators have told companies to stop blocking links to one another’s services. They have ordered e-commerce sites not to bombard users with marketing messages ahead of Singles Day.

Analyst takeaways:

  • Marketing efforts are as usual, though SMS messages appear relative less than those in the previous years. Online ads, which are more important these days, are ubiquitous. Looking at major OEM’s social media accounts, they are promoting their sales activities almost every day.
  • We are still long on online-focus brands which mean Xiaomi, IQOO, realme and HONOR. realme just announced that it recorded 10 million units’ sales during this year’s Singles’ Day shopping season.
  • This year’s Singles’ Day sale is more important for Android OEMs as they have had a relatively quiet few months as the China smartphone market retreated marginally, and they were counting on sales to pick up towards the end of the year. While excitement around premium smartphones would be the priority, the iPhone 13 could spoil their party, as it is doing extremely well and capturing much mindshare.

– Archie Zhang & Yang Wang


November 10,2021 | Wearables

Bloomberg | Apple Adds Johnson & Johnson CEO to Board in Health Push

Apple Adds Johnson & Johnson CEO to Board in Health Push

Bloomberg

Apple Inc. named outgoing Johnson & Johnson Chief Executive Officer Alex Gorsky to its board, underscoring a push to become a bigger force in health services. Gorsky, 61, will become the ninth member of Apple’s board and the second new director named this year.

Gorsky, who has worked at Johnson & Johnson since 1988, is stepping down from the CEO job in January. He has overseen efforts to innovate in pharmaceuticals, medical devices and consumer health services — experience that could be useful to Cupertino, California-based Apple. The tech giant has increasingly made health products a central part of its offerings. That’s included adding health sensors to the Apple Watch and creating new health apps, research tools and fitness-related services.

“Gorsky will bring decades of experience in corporate leadership and health technologies, and a long track record of leading innovative and diverse teams around the world,” Apple said in a statement. Arthur Levinson, a longtime health executive and Apple’s board chairman, said that Gorsky’s “voice and vision will help Apple continue to make a positive impact on people’s lives through the power of technology.”

Analyst takeaways:

  • Health is the killer application for wearables like smartwatches. Chronic diseases are also a huge and growing issue in many countries. The biggest killers are heart disease, cancer, strokes, respiratory diseases, type-2 diabetes and more. All are to a greater or lesser extent lifestyle diseases – they can be controlled by the individual.
  • The modern healthcare industry does little to resolve chronic diseases; at best it allows people to manage the conditions but rarely solve them long term. This means it’s down to the individual to manage their own health.
  • Apple likely understands this and is building a franchise in the sector to help people, help themselves. An executive from the pharmaceutical industry should have a clear understanding of the shortcomings of the existing healthcare industry and can therefore help Apple navigate a successful path.

– Peter Richardson


November 9,2021 | Operators

Bloomberg | All Major Chipmakers Pledge to Give U.S. Requested Data

All Major Chipmakers Pledge to Give U.S. Requested Data

Bloomberg

Semiconductor supply has become a geo-political issue. The root causes of the current supply constraints go back several years, before COVID-19 and before a lot of the current East-West tensions arose. For example, lack of investment in more mature semiconductor nodes limited the total capacity of some critical components like PMICs and DDICs. This, combined with poor demand forecasts from some industry players through the initial period of the pandemic, has brought us to this point.

Now, according to Bloomberg report, “every major semiconductor company has pledged to comply with a U.S. request for information pertaining to the global chip shortage, Commerce Secretary Gina Raimondo said on the day of a deadline set by the government.”

Analyst takeaways:

  • While we have good supply of some components, other lower profile, but no less critical components, are in shortage. This lack of balance is causing different supply chain actors to behave rationally for themselves, but collectively in a way that can be seen to disrupt the overall industry.
  • It is doubtful whether the submissions made to the US government will clarify the situation, and they’re also unlikely to result in an easing of supply restrictions.
  • The risk is that trying to manipulate the comprehensive, interconnected web of supplier relationships could cause the entire fabric to unravel in unforeseen ways.

– Peter Richardson


November 8,2021 | Components

WSJ | What’s Harder to Find Than Microchips? The Equipment That Makes Them

What’s Harder to Find Than Microchips? The Equipment That Makes Them

WSJ

The great chip shortage of 2020 and 2021 has crimped the world’s ability to produce everything from automobiles to smartphones. And according to many analysts and semiconductor makers, the lack of secondhand equipment for making microchips is one reason the chip shortage has become so acute.

These [older types of] chips that use more mature technology go into cameras and other sensors in our phones and cars; power-handling electronics; the logic controllers of factory equipment; the chips that enable wireless communication. It’s a shortage of these chips that is at the root of shutdowns of automobile manufacturing and Apple’s inability to meet demand for the latest iPhone, alike.

While chipmakers look to ramp up manufacturing of chips to meet demand, expanding the fab capacity isn’t easy and takes months due to the complexity of the process. Thus, having control over supply chain is important here. But what does it mean for smartphone makers like Apple and Samsung with higher ASP expectations from their premium portfolio?

Analyst takeaways:

  • As the component shortage has affected everyone, there will be no winner among the original smartphone device manufacturers.
  • Apple is less affected since its profit margins are higher than those of other corporations. The benefit of Apple’s self-designed SoCs brings an unmatched position.
  • Apple also has a superior supply chain control over other firms, and its close and well-developed OS ecosystem can bring rising service income.

– Brady Wang


November 5,2021 | Operators

Bloomberg | T-Mobile Seen Benefiting From AT&T, Verizon Delay on 5G

T-Mobile Seen Benefiting From AT&T, Verizon Delay on 5G

Bloomberg

T-Mobile US Inc. could benefit from a delay in rolling out 5G service announced Thursday by its chief competitors in response to concerns over interference with aviation equipment. AT&T Inc. and Verizon Communications Inc. said they would push back to Jan. 5 the debut of their 5G service on some airwaves after U.S. aviation regulators said it might interfere with aircraft electronics.

T-Mobile certainly has an advantage due to the acquisition of Sprint, and already having mid-band spectrum, which has helped the carrier in terms of 5G roll-out achievements. However, customers in the US are not that particular about having a 5G phone or not. T-Mobile will use this setback for ATT and Verizon to market their 5G network more aggressively over the holidays to create greater mindshare, which will help their customer satisfaction and retention.

Analyst takeaways:

  • This will not have a big overall effect on smartphone sales in the short term. Customers are buying devices out of necessity or because they are finding good upgrade deals.
  • In the low-end segment, 5G has not proliferated strongly enough yet to help move a large portion of the population over to 5G.
  • We are now seeing a handful of devices enter the market that are priced sub $300, but to truly get major adoption, full retail pricing of devices needs to hit sub $150.

– Maurice Klaehne


November 4,2021 | Components

CNBC | Qualcomm Shares Pop After Company Reports Earnings Beat, 56% Rise in Smartphone Chip Sales

Qualcomm Shares Pop After Company Reports Earnings Beat, 56% Rise in Smartphone Chip Sales

CNBC

Qualcomm’s earnings and revenue beat Wall Street expectations. Its chip sales for smartphones were up 56% year over year. The chipmaker also offered strong guidance for the current quarter, which ends in December. This suggests that Qualcomm is weathering the global chip shortage that has affected other chipmakers and customers. While global chip shortage might persist into 2022, especially in matured node products, Qualcomm should improve to manage the supply chain issues with more outsourcing partners

Qualcomm has noted the risks of Apple’s modem business, without forecasting it into long-term growth model. We believe Apple’s in-house modem might not be in mass production before H2 2023 as the earliest, and the impact to Qualcomm is manageable.

Analyst takeaways:

  • All major segments, including QCT, IoT and RF, delivered high YoY sales increase as both vertical expansions (in smartphones, from processors to RFFE) and horizontal diversification (tablets, IoT to automotive processors) bear the fruits in sales growth.
  • Qualcomm started to diversify its foundry sources for new products in H2, with more orders to TSMC in its 6nm and 5nm. We observed it regained market shares in China during current quarter, driven by some strong selling Android models.
  • Qualcomm continued to see mmWave on track, with all major Japan carriers adopting mmWave and China’s first steps in testing for Beijing Winter Olympics. It’s a good sign for Qualcomm’s dollar content increase on RF business.

– Dale Gai


November 3,2021 | Smartphones

WSJ | Apple Wants iPhones to Detect Car Crashes, Auto-Dial 911

Apple Wants iPhones to Detect Car Crashes, Auto-Dial 911

WSJ

Beginning next year, iPhone users who are in a car accident could have their phone dial 911 automatically. Apple plans next year to roll out a product feature called “crash detection” for iPhones and Apple Watches, according to documents reviewed by The Wall Street Journal and people familiar with the feature.

Crash detection uses data from sensors built into Apple devices including the accelerometer to detect car accidents as they occur, for instance by measuring a sudden spike in gravity, or “g,” forces on impact.

The feature would mark the latest move by Apple and its competitors to use motion-sensor technology to build safety functions into their devices. Apple introduced a fall-detection feature in its smartwatch several years ago that senses when wearers have taken a hard fall and dials 911 if they don’t respond to a notification asking if they are OK. The company this year added a feature to the newest version of its iPhone operating system that assesses the walking steadiness of users.

Analyst takeaways:

  • With a burgeoning installed base of more than a billion iPhones equipped with several advanced sensors, Apple is thus in a driver’s seat to unlock newer features by collecting data from these sensors.
  • The sensors on these devices are a window into what happens to you, and around you. Scaling the successful algorithms developed for Apple Watch to a broader environment will help Apple introduce differentiated features and experiences to further increase the overall value proposition for an Apple user.
  • Further, developing clever algorithms to leverage the data emanating from host of sensors across the Apple Watch, iPhone and in future Apple Glass including camera sensors and merging with technologies such as UWB, NFC, Bluetooth LE could take the feature and use-cases to the next level. These could offer benefits across better health, society and environment making the smart devices really “smart and useful.”

– Neil Shah


November 2,2021 | E-Commerce

Morning Brew | What We Know About Alibaba’s 11.11 Sales Bonanza So Far

What We Know About Alibaba’s 11.11 Sales Bonanza So Far

Morning Brew

By the numbers: In 2020, the event generated about $74.1 billion in gross merchandise volume for Alibaba from November 1 to 11. In comparison, US online sales for Thanksgiving, Black Friday, and Cyber Monday altogether totaled $25 billion last year.

Out of the 250,000 brands that participated in Alibaba’s Singles Day in 2020, about 31,000 were international; US–based companies emerged as the top sellers, after China. This year, with 290,000 brands—a new record—taking part, Tmall predicts 14+ million deals will be up for grabs for 900 million Chinese consumers. And like in 2020, Singles Day won’t be relegated to just one day, with Alibaba kicking off its official sales bonanza today.

Analyst takeaways:

  • No surprise most e-commerce centric brands pledging huge subsidies with Xiaomi offering the biggest price cuts.
  • HONOR, which has been a game-changer in the domestic market this year, budging the least on price.
  • With even lower iPhone prices during the sales period, all competitor premium models may see sluggish sales this year.

– Archie Zhang

October Technology Insights

October 29,2021 | Smartphones

Bloomberg | Samsung Tops Profit Estimates After Chip Crunch Lifts Prices

Samsung Tops Profit Estimates After Chip Crunch Lifts Prices

Bloomberg

Samsung Electronics Co. said the tight supply of chips that’s hurting industries worldwide is set to persist through next year, as it reported quarterly profit boosted by rising prices at its semiconductor business. The South Korean giant, both a major producer and consumer of chips that go into computers and mobile devices, said net income rose to 12.06 trillion won ($10.3 billion) in the three months ended September.

The world’s biggest maker of memory chips and smartphones has benefited from strong demand as the global economy recovers from the Covid-19 pandemic, with a resulting shortage boosting semiconductor prices. While Samsung and its chipmaker rivals are spending more to add production capacity, the crunch isn’t abating soon as consumers and companies continue to invest in technology. Samsung is preparing for a major technology shift to so-called DDR5 memory chips that are faster than the previous generation while improving power efficiency.

Analyst takeaways:

  • The cost of DDR5 is higher than that of DDR4.
  • The success of Intel’s new chipsets, I believe, will determine the migration from DDR4 to DDR5.
  • If demand is great, the transition from DDR4 to DDR5 will be accelerated.

– Brady Wang


October 28,2021 | Smartphones

ET Telecom |Sundar Pichai sees JioPhone Next as crucial to Google’s India business

Sundar Pichai sees JioPhone Next as crucial to Google’s India business

ET Telecom

During an earnings call, CEO Sundar Pichai mentioned that Alphabet Inc. sees demand in India coming from users who are looking to upgrade from feature phones to smartphones. Pichai added saying the Reliance Jio partnership is exciting as the telco is investing beyond English to add support for more local languages for regional users to take advantage of the smartphone. The JioPhone Next smartphone is set to launch in India during Diwali festival on November 4.

Analyst takeaways:

  • The JioPhone Next aims to connect the unconnected and upgrade the 2G subscriber base to the 4G network, mostly consisting of users from Tier 3/4 towns and rural areas. This smartphone launch will further strengthen Google’s focus on the India market and is in line with its India Digitization Fund. With its investment in Jio Platforms, Google is in prime position to expand its Android user base in the rural parts of the country.
  • With Pragati OS, Google aims to add new users and penetrate the regional language consumer base. Also, with right subsidies and attractive data options, the JioPhone Next can be a pivotal point in the India smartphone growth story. User interface and experience will be the critical factors for the JioPhone Next success.
  • As per our estimates, India has 320 million feature phone users which the JioPhone Next is targeting. Google is eyeing this high feature phone user base as well as the unconnected India to bolster its Android user base.

– Prachir Singh


October 27,2021 | Automotive

Reuters | Tesla surpassed $1 Trillion Market Capital from Orders Placed by Hertz

Tesla surpassed $1 Trillion Market Capital from Orders Placed by Hertz

Reuters

Hertz, one of the largest car rental companies placed an order of 100,000 Tesla Model 3 which will be available for rental service from early November 2021 in both Europe and the USA. The completion of delivery will happen by end of 2022. For this Hertz has paid Tesla nearly a trillion USD. Hertz also mention this order is an initial order pointing that more EVs either from Tesla or other players will be available in the company’s folio for rental.

Analyst takeaways:

  • It is a good initiative from car rentals and cab sharing companies that will push the EV penetration.
  • With this order, it is expected that 20% of global rental vehicles will be EVs by end of 2023.
  • Before getting the complete delivery of 1,00,000 Tesla Model 3, Hertz will develop a composite charging infrastructure which will be a big boost to break the chicken-egg problem [EV Chargers to Cars problem].
  • With so many people using Tesla (Model 3 bring the most sold vehicle in Europe in September), Tesla might redesign or open up its proprietary charging gun design so that more vehicles are sold.

– Abhik Mukherjee


October 26,2021 | Smartphones

GSM Arena | Sony Xperia Pro-I Brings 1.0-inch Sensor and Variable f/2.0-4.0 Aperture

Sony Xperia Pro-I Brings 1.0-inch Sensor and Variable f/2.0-4.0 Aperture

GSM Arena

Sony has launched a new $1800 Xperia Pro-I smartphone (where ‘I’ stands for ‘Imaging’) is the first phone outside Japan delivering a 1.0-inch camera sensor along with phase-detection autofocus. That 1.0-inch type sensor is taken straight from the company’s RX100 VII compact camera and has been ‘optimized for a smartphone’. The Xperia Pro-I uses a big chunk of that sensor (but not all of it) to produce 12MP images with a 2.4µm pixel pitch – which is about 20% larger than the iPhone 13 Pro Max’ pixels. It is also the same size as those from the Galaxy S21 Ultra’s 108MP main camera, after binning. Despite not using the full 1.0-inch sensor area, the Xperia Pro-I do end up with a huge sensor only really bested by the Xiaomi Mi 11 Ultra and its 2.8µm binned pixels.

Analyst takeaways:

  • The main camera with a 1-inch CMOS image sensor, featuring 12 megapixels and 2.4µm pixel size enables much greater light sensitivity and larger dynamic range, making the camera a better fit for low-light environments.
  • The customized wide-angle (24mm focus length), 1G5P lens module, and adoption of Zeiss Tessar Optics T* should help to eliminate the distortion around the view corners. It also supports two optical aperture options: where wider f/2.0 can be helpful in clicking brighter low-light photos, whereas the narrower f/4.0 aperture can come handy when clicking day-light photos with a good dynamic range.
  • In terms of image processing, Sony has applied the mobile edition of BIONZ X image processor in the new design, which should bring some impressive computing performance in continuous AF (auto focus) and AE (auto exposure), real-time object tracking, and 4K video recording.

– Ethan Qi


October 22,2021 | Smartphones

Xiaomi Announces Restructured Product Portfolio on Investor Day

Xiaomi Announces Restructured Product Portfolio on Investor Day

At Xiaomi’s Investor Day event, the company announced a restructured product portfolio where the MIX series will be focusing on tech-savvy and premium customers. There is a new Digit series that will aim at high-end customers, whereas the newly added CIVI series will mostly target female users, and directly compete with OPPO’s Reno Series. Then there is Redmi K series for budget techy customers, the Redmi G series for mobile gaming users, and finally Redmi Note series for students.

Analyst takeaways:

  • The restructuring covers more price bands especially premium and luxurious. Xiaomi re-confirmed that the MIX series will resume regular product launches. The series will strengthen the company’s position in price above $1000.
  • Xiaomi will keep making chip-related investments but didn’t directly answer the question of whether it would make its own chipsets. But Xiaomi did confirm that this investment will be related to bringing improved camera performance. This could likely be ISP (image signal processor) chips, just like vivo has V1 on the X70 Pro Plus to enhance low-light performance.
  • Xiaomi believes that smartphone innovations to focus on should be fast charging, smartphone appearance (foldable, rollable etc.), and the camera performance.

– Archie Zhang


October 21,2021| Components

Why Big Tech Companies are Designing Chips In-house

Why Big Tech Companies are Designing Chips In-house

Google announced the Pixel 6 and Pixel 6 Pro smartphones that come with big improvements over the previous generation. From new industrial design to high-resolution primary camera and a telephoto lens with periscope style zoom camera on the Pixel 6 Pro, there are lots of interesting things that the new Pixels bring. But one of the biggest highlights is the custom Tensor SoC that powers the smartphones. With Samsung already designing its Exynos chipsets, and OPPO reportedly working on its own chipset, should incumbents like Qualcomm be worried?

Analyst takeaways:

  • Designing own chipset gives full control to the smartphone makers like Samsung and Google to add their own customizations while reducing dependency on chipmakers.
  • Through Tensor, Google aims to have full control of the entire stack from chip to OS to middleware to cloud.
  • Google knows Android OS better than others, and as smartphone users demand cutting edge features, Google is trying to leverage on-device AI and ML to meet the expectations while also unlocking new experiences for Pixel users.
  • These AI and ML based features helps Google differentiate its Pixel offering compared to competitors, while also showcasing full capabilities of the platform.

– Tarun Pathak


October 20,2021 | IoT

Apple HomePod mini now comes in striking new colors

Apple HomePod mini now comes in striking new colors

Apple’s entry-level Siri smart speakers will now come in three new colors – Blue, Orange and Yellow. This is in addition to the existing White and Space Gray options. There is no change in the pricing, and you can buy one for $99.

Apple also debuted a new “Voice Plan” at $4.99 per month. The ad-free subscription plan is aimed towards HomePod users where they will be able to access the Apple Music library and play songs with their voice commands. Users will get access to playlists based on activities, moods, genre, and more. They will simply have to say, “Hey Siri, start Apple Music Voice.” How well the voice commands work in playing a specific song, playlist, artist, or genre of your choice will be interesting to see.

Analyst takeaways:

  • Apple’s new HomePod Mini will certainly appeal to the masses considering its competitive price point of $99 and attractive colors.
  • Apple is going to utilize its growing smartphones user base to convert them into more frequent smart speaker users.
  • Adding the voice plan will help to increase sales considering that the Siri assistant now supports a lot of smart home devices as well.
  • With the new plan, Apple will be able to drive more revenues from its subscription-based model.

– Anshika Jain


October 19,2021 | Policy

ET Telecom | Regulation to Prevent Handset Snooping in India

Regulation to Prevent Handset Snooping in India

ET Telecom

Skepticism towards all things tech from one particular market continues to grow. During the same time last year, we witnessed banning of over 200 apps on the lines of safe guarding privacy of its users in the country. In the light of ongoing situation around PLI Scheme, 5G trials running in the country, ongoing discussion for PDP Bill 2019 in the Parliament and overall sentiment of becoming ‘self reliant India’ – such a regulation can be crucial.

Analyst takeaways:

  • The Indian government is expected to come out with a regulation that may mandate teardown or in-depth testing of handsets to ensure that devices and installed apps are not snooping on the citizens.
  • Government is compiling a list of trusted sources and companies for telecom equipment and networking products to check alleged cyber snooping.
  • The regulation is focused on keeping Chinese players such as Huawei and ZTE out of critical areas of telecom networks.
  • Under this investigation, companies are even being asked to show their bill of materials along with thorough analysis is being done on where the components are being sourced for the devices. Even preinstalled apps on the phones are said to be under radar.

– Priya Joseph