On March 23 Pegatron (TPE: 4938) reported its yearly earnings which were double-digit gains over last year.

Pegatron, which shared responsibility for assembling the iPhone 6 with Hon Hai Precision Industry (TPE:2317), reported a 53.4% jump in profit year-over-year to $466.8 million. An earnings guidance recently released by Hon Hai shows that the company also expects a double-digit profit increase (it will report its earnings when the market closes on March 30).

But both Pegatron and Hon Hai (the parent company of Foxconn) — which compete in some sense — have an underlying problem: the double-digit growth that they have become accustomed to is based on the success of Apple (NASDAQ: APPL) products. Both companies have other lucrative contracts with other vendors, but no other vendor orders the sheer volume that Apple does.

Pegatron’s CEO acknowledges this. When Pegatron reported its earnings earlier this week it acknowledged that nearly 60% of its revenue came from Apple.

“It’s definitely not a good thing to be too concentrated on just a few clients. But you can’t avoid the fact that mobile phones have been fast sellers,” Chief Executive Jason Cheng is quoted as saying. “When good business comes your way, how can you not take it?”

Lessons from Hon Hai

Hon Hai was in a similar situation until last year, and has taken some steps to reduce its dependence on Apple. In 2012, 40% of Hon Hai’s revenue came from Apple as it had the sole responsibility to manufacture the iPhone 5 and the iPhone 5s.

Since then Hon Hai has acquired controlling shares in Taiwan’s Asia Pacific Telecom (TPE: 3682) and has made plays to expand into automotive. In late December it had publicly announced it had taken a 10.5% in China Harmony (HKG:3836), a major luxury car dealer in China. Recently it announced that it was partnering with Tencent (HKG:0700) to build electric vehicles that were connected to the Internet of Things. It says it can build electric vehicles for under $15,000 — a significant discount when compared to current models from major manufacturers.

Hon Hai hasn’t publicly stated how much of its overall revenue Apple accounted for, but it’s believed to be in the 25-30% range.

What can Pegatron do?

Hon Hai’s plans to diversify into electric vehicles is very ambitious, and comes at exactly the right time. Choked by smog, China is incentivizing the research and development and production of electric vehicles. Hon Hai already has considerable manufacturing infrastructure in China’s Guangdong province and in Taiwan, and the governments of both countries would be happy to provide subsidies to incentivize scaling up production and creating a supply chain.

But Pegatron lacks the scale of Hon Hai and cannot as easily scale and shift its manufacturing capacity. Instead, Pegatron should adopt just one of Hon Hai’s strategies and invest in allied firms in the same industry. Pegatron could make investments into mobile telecoms, and even finance companies: these are two things that would assist it in becoming a major IoT player. There are also dozens of wearables firms in Taiwan that Pegatron could take a stake in.

Apple will always make up a considerable amount of Hon Hai’s and Pegatron’s revenue. But both companies can become less dependent on Apple through a few smart investments.

The post How Can Taiwan Manufacturers Reduce Their Dependence on Apple? appeared first on VR World.

When it comes to marketing proneness, Taiwanese (and other Far Eastern) vendors often were afraid of their own shadow, not to interfere with lucrative OEM deals that western vendors utilized to the full extent: you may build your own stuff, but we contract you to build our stuff and you shall not interfere with that.

For good portion of it, the said mantra is true to this date, with Far Eastern industry giants still afraid to speak out, even though they now do almost everything for Western vendors such as Apple (NASDAQ: APPL) – without Foxconn (TPE: 2354) (iPhone, iPad, MacBook Pro), Pegatron (TPE: 4938) (iPhone), Asustek’s (TPE: 2357)  China facility, Flextronics (NASDAQ: FLEX) and Quanta (TPE: 2382) (MacBook an MacBook Air) – you would not be able to buy your favorite product from Cupertino (Designed in California, Made in China / Taiwan).

Not anymore – Asustek recently found balls of steel (that corporate move to Singapore seems to have helped) and decided to ditch the fear of the West and go for the jugular.

In two infographics, Asus attacked Apple’s products, pushing its design and manufacturing capabilities.

First ad attacks the MacBook and pitches its Zenbook:

ASUS North America tries to prove ZenBook is a thinner (and better) product than Apple MacBook. And 50% cheaper.

Second picture goes for the Golden jugular, pardon, Apple:

Golden Apple (Watch) is not the solution. We (our ZenWatch) is.

Who knows, perhaps Asian tigers will start challenging its former and current customers on more fields than just the price. After all, the key to selling a product is something that Far East still has trouble understanding – it’s not about the physical product, it’s about the experience.

Still, a ballsy move Asus. Ballsy indeed.

The post Asus’ Balls of Steel vs. Apple’s Golden MacBook and Watch appeared first on VR World.

Xiaomi’s newly launched 5.7-inch flagship smartphone – Mi Note – seemed to help boost several Taiwanese contractors’ business.

On Jan. 15, Xiaomi unveiled the Mi Note flagship smartphone that features ultra-slim design, a more powerful processor, improved cameras and better display resolution.

Priced at US$412 for the Mi Note Pro and US$372 for the Mi Note in China, the former sports Qualcomm’s Snapdragon 810 chipset, 4GB of RAM, and a quad HD display, while the latter is equipped with the Qualcomm Snapdragon 801, 3GB of RAM, and a full HD display. The Chinese smartphone maker also touted the fact that unlike the iPhone 6 variants, the rear camera sits flush with the phone’s body, and does not protrude like the American flagship.

“The newly debuted flagship model is evidence of Xiaomi’s strategy to expand its product portfolio in 2015,” said Jasmine Lu (呂智穎), a Taipei-based analyst with Morgan Stanley. “Competition is intensifying in China and overseas expansion will take time to bear fruit, but we believe Xiaomi can still outgrow peers via a broader mix.”

Lu, meanwhile, estimated that Xiaomi will begin its mass production of the Mi Note sometime in February or March, with shipments forecast to total eight million to 10 million units during the whole product cycle.

Xiaomi sold a total of 61.12 million units of smartphones in 2014.

The analyst said that FIH Mobile (HKG: 2038), a unit for Taiwanese contract electronics maker Foxconn Technology Group (TPE: 2354) and one of Xiaomi’s suppliers, will benefit from a higher average selling price for casings and will gain about 50% of the assembly orders.

“This means that Xiaomi is expected to contribute around 13% of FIH’s total revenue in 2015 and more than 45% of its gross profits this year,” she said.

Lu also named FIH and Hong Kong-listed AAC Technologies Holdings Inc (HKG: 2018), the main sources of Xiaomi’s acoustic and RF solutions, as the top two picks in Xiaomi’s supply chain and maintained an “overweight” rating on both stocks.

One of the Mi Note’s highlights is its 13-megapixel rear camera equipped with Sony’s IMX214 sensor. The Note’s camera selection represents a potential boon to a lot of Taiwanese suppliers, including Sunnic Technology and Merchandise, a partnering distributor of Sony (TYO: 6758) parts and modules, camera lens maker Largan Precision (TPE: 3008), camera module makers Primax Electronics (TPE: 4915) and Lite-On Technology (TPE: 2301), and electronic manufacturing service provider Inventec (TPE: 2356).

Display panel suppliers Wintek (TPE: 2384) and TPK (TPE: 3673), however, will not be included in the list of Taiwanese companies set to benefit from Xiaomi’s phablet sales although these two screen and touch panel manufacturers have been Xiaomi’s partners since 2013, now that Xiaomi decided to commission Japanese competitors Japan Display (TYO: 6740) and Sharp (TYO: 6753) for the job.

In order to achieve the Mi Note’s 7-mm thickness, which is 0.1-mm thinner than the iPhone 6 Plus, Xiaomi had adopted the in-cell touch display technology made by the Japan Display and Sharp, over TPK’s touch-on-lens and Wintek’s on-glass-solution.

Xiaomi observed a sales drop during the fourth quarter last year. The sales drop was related to its then-supplier Wintek’s being beleaguered by ailing financial condition and is in the midst of a restructuring process. The Taiwan-based touch panel maker supplied touch panels for both Apple and Xiaomi. In an attempt to vie more orders, Wintek invested large sums of funds to increase its production yield. Much of the funds were used to build new facilities in Dongguan, China, and Vietnam. The much lower-than-expected demand for touch panels, combines with competition from Chinese rivals, however, caused Wintek great losses on assets. Wintek filed a petition to the court last October for seeking business restructuring.

The announcement surprised many of its clients, including Xiaomi, which was also forced to find a new touch panel supplier. With a new supplier, it also took more time for quality control and to increase capacity, which also affected Xiaomi’s smartphone shipments for the fourth quarter last year.

Xiaomi’s smartphone sales took a plunge by four million units during the fourth quarter last year following Wintek’s restructuring announcement in October.

The post Xiaomi’s Mi Note Helps Boost Taiwanese Suppliers’ Business appeared first on VR World.

Formosa Plastics Group co-founder Wang Yung-tsai dies at 93

Formosa Plastics Group’s (TPE: 1301) co-founder Wang Yung-tsai (王永在) passed away at 93 around 11:15am on Nov. 27.

Wang spent most of his time at the group’s Chang Gung Memorial Hospital in Linkuo due to health issues. He was escorted back to his Taipei home from the hospital earlier in the morning. His family members were around him while he died, the group said.

Wang was a younger brother of Wang Yung-ching (王永慶), the late founder of the group. He was called “the grand architect” of the group’s production site in Mailiao Township, Yunlin County, where encompasses the nation’s sixth naphtha cracker, an oil factory, a power plant and a harbor, due to his supervising the entire construction process of the campus that started in 1994.

Wang Yung-tsai was in charge of the group after Wang Yung-ching retired in 2002. In 2006, the younger Want retired himself as the vice chairman of the group and handed over the company to seven people, including group Chairman and his son William Wong (王文淵), vice chairwoman and Wang Yung-ching’s daughter Susan Wang (王瑞華), William Wang’s younger brother Wilfred Wang (王文潮) and Susan Wang’s younger sister Sandy Wang (王瑞瑜).

Apple may commission Foxconn for new displays

China Economic Weekly reported on Nov. 27 that Apple (NASDAQ: AAPL) has listed Hon Hai, or Foxconn Technology (TPE: 2354), as one of the potential partners to produce sapphire displays for its future mobile devices, while these devices have yet to be identified as of press time.

Foxconn is a contract manufacturer for iPhones.

Foxconn reportedly stands to make US$45 to US$52.5 per iPhone if the company can produce touch screens by itself. Since Foxconn’s establishing its manufacturing facility in Henan in 2011, it primarily assembled iPhones for export and produced 96.45 million iPhones and exported 84.46 million of them in 2013.

Taiwan’s dollar advances as Japanese Yen continues to rise

Taiwan’s dollar appreciates as Japanese Yen’s rise eased the nation’s export impacts, as the currency advanced to a one-week high on Nov. 28.

A Taipei-based economist said that the Japanese Yen did not continue weakening and the US dollar could not break upward, Taiwan’s dollar rose. But the currency may resume weakening for the rest of the year as the Japanese Yen declines, China eases policy and the greenback stays strong.

Hong Kong’s yuan usage surges in 2014

Hong Kong Monetary Authority said on Nov. 28 that the usage of the yuan in trades is up 73% from a year earlier in the first 10 months in 2014, totaling US$815 billion.

It continued Hong Kong’s status as the world’s largest offshore yuan hub, while China continues to promote the use of the yuan as an international currency. The Renminbi is, as of October, the seventh most used currency in global payments.

The daily average turnover of Hong Kong’s real-time yuan payments system has doubled to US$167 billion in October, from US$53 billion a day in 2013.

The post Cross-Strait News Daily Round-up For Nov. 28 appeared first on VR World.

Here’s a brief roundup of the top business stories in Taiwan, Hong Kong and China for Nov. 25, 2014.

TSMC is the winner of the battle with Samsung regarding Apple’s A9 processor: source

Quoting an anonymous source, Taiwan’s Economic Daily News reported on Nov. 24 that Taiwan Semiconductor Manufacturing Company (TSMC)(TPE: 2330) has won the competition against Samsung to secure 80% of contract manufacturing order volumes for Apple’s A9 processors.

The source said that Apple favored the stability of TSMC’s 16-nanometer FinFET fabrication technology more than Samsung’s 14-nanometer offering and chose TSMC to supply most of its A9 chips.

The source said that he is expecting 16-nanometer FinFET+ production capacity to reach 50,000 units monthly before the end of June 2015. About 17,000 will be fabricated by retrofitted 20-nanometer production lines, and 33,000 units will be made using new machinery funded by the US$5.6 billion in capital expenditure, which was recently approved by TSMC’s board of directors.

The source said that TSMC is poised to rally its partners in the company’s upcoming supplier conference and forum on Dec. 4, when TSMC Co-CEO Mark Liu (劉德音) is expected to announce the company’s resolve in overtaking the formidable Intel Co. (NASDAQ:INTC), fresh off its victory over the Korean competitor – Samsung.

Foxconn plans more plants for manufacturing iPhone 7’s touch-screen

State-run China Daily reported on Nov. 25 that Foxconn (TPE: 2354) is planning to launch a new factory in Zhengzhou, Henan Province, and will use it for manufacturing touch-screens for new iPhones.

Foxconn’s new plan was speculated that the new factory in Henan will also become the base to manufacture transparent body and sapphire screen for the new smartphones. Foxconn produced a total of 96.45 million iPhones and exported 84.46 millions of them in 2013.

Tencent to stream HBO in China

Tencent Holdings (HKG: 0700) said on Nov. 25 that the company has signed a contract with HBO to stream the network’s content in China.

Chinese Internet TV companies have spent more than US$1 billion on foreign content over the last two years in an attempt to draw more viewers but it has been met with increasingly stringent government regulations. The Chinese authorities ordered streaming services in May to take down the popular American shows “The Big Bang Theory,” “The Good Wife,” “NCIS” and “The Practice.” Tencent will not be the exclusive online provider in China for shows featuring much more gore and nudity, such as “Game of Thrones.”

Korea does not trust FTA with China: economist

Taiwan Institute of Economic Research’s Macroeconomic Forecasting Center Director Gordon Sun (孫明德) said on Nov. 25 that Korea may not be as happy as expected as the nation just recently signed its FTA with China.

During a press conference, Sun said that while Taiwan is “quite nervous” about being marginalized by the agreement between China and Korea, Korea, however, also appears to be “not as happy as we imagined” with the agreement because lower duties may not address the challenges Korea’s business is experiencing in China.

Sun said that Korean exports to China recorded zero growth in 2012 and negative growth last year, due to the rise of China’s domestic supply chain, a trend that has hurt sales of Korean producers of components or semi-finished goods, just as it has hurt Taiwanese steel and petrochemical suppliers. The rise of Chinese brand names also adversely affected sales of Korean consumer products, such as smartphones.

The post Cross-Strait News Daily Round-up For Nov. 26 appeared first on VR World.

Well, it appears that Nokia isn’t interested in letting the brand die after the company sold its mobile division to Microsoft (NASDAQ: MSFT) for a sum of $7.2 billion, which many called undervalued. What was left of Nokia is now known as NSN and now that Microsoft is killing the Nokia name brand for phones and simply calling them Microsoft Lumia phones, Nokia still has the rights and ownership of the Nokia brand name. As such, they’ve decided to do something with it and have been hinting for some time that they might make a device.

The 7.9″ Nokia N1 harkens back to the days of when Nokia had phones like the Nokia N8 and Nokia N9 before their genius management decided to go to Windows Phone and then sell the whole division to Microsoft. Anyways, the N1 may be a sign of the brand’s rebirth but not a complete rebirth, because the reality is that this device is a bizarre lovechild as a result of Foxconn (TPE:2354) and Nokia’s relationship. According to The Verge, this device’s design, user interface and brand name are licensed to Foxconn who then manufactures the device and probably takes in all the profits as well. So, it isn’t quite clear if this is really a Nokia device or a Foxconn device or some weird amalgamation of the two. Either way, the end result is an Apple iPad looking device that features an Intel Moorefield Z3580 SoC and USB Type-C connector which should allow for some awesome functionality thanks to DisplayPort and MHL Alt Mode which could theoretically be available on this device.

Additionally, the Nokia N1 has the Z Launcher from Nokia which is Nokia’s own take on the Android OS launcher and will ship with Android 5.0 Lollipop in addition to having USB Type-C reversible USB connector capability.

Nokia N1 Z Launcher

The Nokia N1 itself sports a 2048×1536 resolution on the 7.9″ display, which makes it quite competitive with other tablets and has an 8 megapixel main camera as well as a 5 megapixel front-facing camera. The main camera is only capable of 1080P video, meaning that the resolution of the tablet’s display is greater than the camera’s capability. Perhaps higher-end versions of Nokia’s tablets will have higher resolution displays (on larger models) and with better cameras, even though I personally don’t care much for tablet photography or videography.

Nokia N1 Battery

The tablet also has 2GB of RAM and 32 GB of storage standard, which makes it a great value at $249, which is the expected sale price when the Nokia N1 goes for sale next year around the Chinese New Year time frame. One thing that some people also may have missed is that Nokia and Foxconn actually opted for a higher quality audio processor with the Wolfson DAC, specifically the Wolfson WM8958E, independent audio codec. It does, however, have a fairly small 18.5 Wh (5300 mAh) rechargeable LiPo battery (3.7 V) which means that you probably can’t expect much battery life out of this thing compared to an iPad, unless Intel, Nokia and Foxconn have managed to do some power management wizardry. Not to mention, this is the highest clocked processor from Intel’s 22nm family of mobile SoCs, so nobody really expects fantastic battery life.

It will also, amazingly enough, have dual band MIMO 802.11/a/b/g/n/ac Wi-Fi connectivity, which would make it one of the better connected tablets out there, even though AC should really be the standard on all mobile devices nowadays. Oh yeah, and in true Nokia spirit, the whole body is made of anodized aluminum (yes, like the iPad). Honestly, the similarities between this tablet and the iPad are striking, but there’s also no doubt that a lot of people would happily buy an iPad clone that runs Android. Especially if it really does end up selling for $249.

The post Nokia Returns with Nokia N1 Tablet by Foxconn appeared first on VR World.

Last week ARM invited a group of journalists and analysts to Austin Texas to hear about their server, mobile, and wearable developments. ARM and their partners presented in-depth explanations of their version of the ARM architecture.

On the first day of the conference, HP’s Dwight Barron gave an overview of their Moonshot system.  They have been refining the specifications since its late 2009 inauguration.

Moonshot’s design differs from the traditional servers which have been the general-purpose workhorses of the data center. These boxes have proved to be jacks-of-all-trades, able to run operations for organizations of every shape and size. They started with proprietary operating systems and a warehouse sized room with less computing power than today’s smartphones. In the past, one could choose from several operating systems and server architectures. Today, operating system options are limited and most run on the Intel x86 architecture.

Barron explained that the cloud and mobile applications have changed the assumptions of traditional IT departments. Now IT has to balance rack space density, power consumption, thermal efficiency, and costs. Power is one of the major controlling factors in the data center.

The cloud uses more power than Japan.

The microserver SoC (System on a Chip) typically has a TDP (Thermal Design Power) of 15 to 20 Watts or below, compared to 90 plus Watts for a high-end server. The microserver chassis has the circuitry related to networking, storage, and cluster communications along with integrated cooling and power supply. Thus, the shared resources reduce the complexity of the overall design.

Barron showed a typical dual processor, HPC server motherboard versus the SoC based Server motherboard. The dual processor general purpose motherboard requires system RAM for the processors, dual GPU’s with their RAM as well as the overhead of a PCIe switch, storage controller, and NICs. Each of those separate chipsets consumes power and creates heat. The SoC server motherboard starts with an integrated die having all those features in silicon, which greatly reduces required power and significantly decreases heat. The SoC cartridge and the Moonshot integration will reduce the latency of the wires between the traditional HPC server’s sub-systems.

New era app focused silicon

To prove that Moonshot is a viable approach, HP put in a production configuration. At the HP.COM website there are approximately 100 applications for browsing and downloads. HP.COM’s website gets approximately 300 million hits per day. It was running on 46 HP legacy servers consuming just over 115,000 Watts per day. Replacing that legacy configuration with six Moonshot systems lowered the power consumption to 6,000 Watts and reduced the rack space usage by 89 percent.

HP 300m hits 94% less power

Barron gave a lengthy explanation of why mobile users and cloud services require application focused silicon for the servers. HP will offer server cartridges from multiple vendors – AMD, Applied Micro, Intel, and Texas Instruments. Applied Micro and Texas Instruments are based on the ARM architecture. This provides customers with the option of picking a server cartridge tailored for specific services, like High Performance Computing (HPC), gaming, telecommunications, finance, seismic imaging, Big Data analysis, web serving, and video analysis, to name a few.

TI  has developed hybrid ARM processors that mix anywhere from one to four Cortex-A15 (32-bit) cores with one to eight TMS320C66x digital signal processors into a single SoC. These combinations in the Moonshot can be used in application specific work such as pure cloud infrastructure workloads – servers, switches, routers, network control planes, and telecommunication switches with applications such as VoIP and LTE.

Applied Micro’s X-Gene 1 eight core SoC with ECC (error-correcting code) memory. The platform is capable of running a full LAMP (Linux, Apache, MySQL and PHP) software stack. The X-Gene implements the ARMv8 ISA which is a full 64-bit architecture that is backwards compatible with 32-bit ARMv7. The CPU features hardware virtualization acceleration, MMU virtualization, and advanced SIMD instructions.

Barron said that ARM architecture and HP’s Moonshot will bring new performance levels and reduced power consumption to the data centers.

There was an interesting announcement in last Friday’s Digitimes. “Foxconn Electronics (Hon Hai Precision Industry) and Hewlett-Packard (HP) will establish a joint venture specifically for producing servers for cloud computing and offering related supporting services, according to Foxconn.”
“The partnership reflects innovation in HP’s server business model through combining Foxconn’s R&D capability and manufacturing expertise, with HP’s market leadership in cloud computing products and related services to enable both companies to offer cloud computing solutions which will change existing market game-playing rules, HP CEO Meg Whitman said.”

Paul Teich, CTO and Senior Analyst, Moor Insights & Strategy, said, “HP and Foxconn’s partnership should help both of them address substantial challenges in continuing cloud computing R&D investment in spite of purchasing pressures that might lead to a ‘race to the bottom’ for prices and margins.”

BSN is planning a hands-on evaluation of the performance of an HP Moonshot with the Applied Micro X-gene cartridge. We will let you know the results as we did with our May 2011 comparison of ARM to x86.

The post HP Moonshot Using ARM 64-bit SoC appeared first on VR World.

According to the guys at Teardown.com the very hot Google Glass wearable computer from Google only carries a bill of materials of $80, which is about of of what we were expecting. It doesn’t really come as much of a surprise though, because Google Glass itself is incredibly old technology in terms of mobile and wearables and it really doesn’t provide much technological innovation. In fact, most people will be shocked to know that the SoC powering the Google Glass is in fact the same SoC that powers the failed Blackberry Playbook which was released more than 3 years ago with the same SoC. At the time of the Google Glass’ release, about a year ago, it was already running on 2 year old technology and was still being billed by the company as bleeding edge tech. The real truth of the matter is that Google Glass is being promoted as bleeding-edge when in reality we’re being sold technology that is at least 2-3 years old, which would be absolutely unforgivable in the smartphone industry. Imagine if someone tried to sell you a Blackberry Playbook for the same price as an iPad Air and convince to you pay way more on top of it.

Teardown.com’s Teardown of Google Glass

Sure, there was some research and development involved with the creation of the Google Glass, and the reality is that it doesn’t really have any comparable competitors. That’s why Google is able to effectively charge $1,500 for a device they could sell for $320 and still make a hefty profit. The software on the Google Glass is really where Google has put in the most effort with the device considering that a lot of its design and hardware was designed by another firm and acquired by Foxconn and then subsequently acquired by Google from Foxconn. In fact, Google recently bought more communications patents from Foxconn, which may indicate that perhaps Google needs an even stronger mobile patent portfolio than they already have. Or, they didn’t get all of the patents they needed to make Google Glass go mainstream.

Either way, Google Glass is grossly overpriced and underperforms in almost every way, mainly because of the old hardware. The battery life isn’t too great, it gets pretty hot, it isn’t very responsive and on top of all that, it looks pretty damn ugly. And when it doesn’t look ugly, it looks douchey, which is almost worse. Google Glass has a long way to go, no doubt, but it definitely gets people excited about wearables and wearable computing and hopefully there will be more actually useful apps for it soon. Oh, and Google needs to do a REAL Google Glass 2.0 hardware revision, not the one that they did late last year where they got rid of bone induction sound and added some optics adjustments and prescription glasses. Google needs to properly update Google Glass with newer hardware that gets better performance while consuming less power, they have plenty of low-power choices and it will be interesting to see whom they pick for the new SoC, if they ever do update the damn thing.

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