4Q’14 Global Electronics Growth by Sector (Update)
Most key companies in our global electron sector composites have now reported their calendar 4Q’14 results. Here are some updates:
- Global electronic equipment sales are now estimated to have declined 0.7% in 4Q’14 vs. the same quarter in 2013 (Chart 1). Hewlett-Packard’s disappointing fourth quarter revenues (Chart 2) negatively impacted total global electronic equipment growth.
- Growth in the current business cycle peaked in mid-2014 (Chart 3).
- Chart 4 summarizes 4Q’14 vs. 4Q’13 growth of the global electronics supply chain.
Source: Company financial reports with Custer Consulting Group analysis
U.S. January Electronics Shipments, Orders and Inventories
The U.S. “Durable Goods” report was just released for January.
- The electronic equipment book/bill declined slightly to 1.045 on a 3-month average basis (Chart 5).
- Electronic equipment order growth improved while shipment growth slowed. However both order and shipment growth remained positive (3/12 >1) per Chart 6. Orders remained above shipments (Chart 7).
- Electronic equipment inventories relative to sales eased slightly (Chart 8).
- Defense capital goods orders declined (Chart 9).
- Aircraft & Parts shipments increased driven by the non-defense sector (Chart 10) as total aircraft and parts orders rose (Chart 11).
- Both computer (Chart 12) and communication (Chart 13) equipment orders and shipments showed little change.
Global tablet shipments are forecast to decrease 11.9% y/y to 221.4 million units in 2015
There will be 221.4 million tablets shipped globally in 2015, slipping by 11.9% on year, according to a Digitimes Research Special Report.
Leading the market will be Apple, with iPad shipments of 54.2 million units, representing a decrease on year by 16.6%, the report, titled 2015 global tablet demand forecast notes. Other leading international vendors will combine to ship 90.7 million units, growing by 0.1%. The white-box market will show the biggest decrease, with shipments falling 20.0% to 76.5 million, Digitimes Research indicated.
Apple will account for 24.5% of total shipments, Samsung Electronics for 16.3%, China-based Lenovo for 5.3%, Taiwan-based Asustek Computer for 4.2%, Google for 1.7%, Taiwan-based Acer for 1.7% and Amazon for 1.6%.
Mobile DRAM Industry Valued Over US$3.6 Billion in 4Q’14 Due to Strong Smartphone Shipments (Charts 14-16)
Worldwide mobile DRAM revenue totaled US$3.607 billion in the fourth quarter of 2014, representing a 27.8% of DRAM industry value and a 4.2% quarterly increase.
DRAMeXchange’s Assistant Vice President Avril Wu noted that mobile DRAM made up nearly 40% of all DRAM shipments, more than ever before. Although mobile memory’s average selling price fell slightly by 5% in the fourth quarter, bit shipment volume rose due to sustained smartphone demand growth driven by iPhone 6/6 Plus. This in turn contributed to the continuing growth of the mobile DRAM revenue worldwide.
Wu added that even though the first quarter of 2015 is an off-peak season, mobile DRAM prices during this period will be more stable than the prior quarter with an estimated decline of only 3%. “Mobile DRAM prices are unlikely to fall in 2015 because the next generation iPhone is expected to increase its memory to 2GB,” said Wu, “and in fact, prices may rise in the third quarter.”
The highlight of mobile memory industry for 2015 will be the next-gen LPDDR4. Currently, Qualcomm’s 810 is the first chip to support the new technology, and a few flagship smartphones with LPDDR4 will arrive in the second quarter.
Android & iOS were 96.3% of all Smartphone Shipments, up from 95.6% in 4Q’13 and from 93.8% in CY’13 (Charts 17-18)
Android and iOS inched closer to total domination of the worldwide smartphone market in both the fourth quarter (4Q’14) and the calendar year 2014 (CY14). According to International Data Corporation, Android and iOS accounted for 96.3% of all smartphone shipments, up slightly from 95.6% in 4Q’13 and from 93.8% in CY13. In terms of year-over-year shipment growth, Android outpaced the overall smartphone market for CY14 (32.0% vs 27.7%, respectively) while iOS beat the market in 4Q’14 (46.1% vs 29.2%, respectively).
"Many of the same drivers were in play for Android and iOS to tighten their grip on the market," said Ramon Llamas, Research Manager with IDC's Mobile Phone team. "A combination of strong end-user demand, refreshed product portfolios, and the availability of low-cost devices – particularly for Android – drove volumes higher.
"What will bear close observation is how the two operating systems fare in 2015 and beyond," added Llamas. "Now that Apple has entered the phablet market, there are few new opportunities for the company to address. Meanwhile, Samsung experienced flat growth in 2014, forcing Android to rely more heavily on smaller vendors to drive volumes higher."
"Instead of a battle for the third ecosystem after Android and iOS, 2014 instead yielded skirmishes, with Windows Phone edging out BlackBerry, Firefox, Sailfish and the rest, but without any of these platforms making the kind of gains needed to challenge the top two," said Melissa Chau, Senior Research Manager with IDC's Worldwide Quarterly Mobile Phone Tracker.
"This isn't to say that vendors aren't making moves, especially for the growth segments – the low-end markets," continued Chau. "With Microsoft bringing ever-cheaper Lumia into play and Tizen finally getting launched to India early this year, there is still a hunger to chip away at Android's dominance."
Smartphone and Automotive Display Revenue Swelled in 2014, as Demand for Other Small/Medium Display Categories Stalled
As smartphones cannibalized product sales in other small/medium flat-panel-display (FPD) categories in 2014, automotive display revenues rose to become the second-highest growth category, according to IHS. In 2014, the automotive display revenues (not including aftermarket displays) increased 26% year over year, to reach $848 million. The mobile phone display market increased 4%, reaching $1.2 billion, while multi-function printer displays rose 148% to reach $85 million.
U.S. GDP Expanded at 2.2% Rate in 4Q’14 (Chart 19)
U.S. Gross domestic product grew 2.2% in 4Q’14, revised down from the 2.6% estimated in December, the Commerce Department reported. GDP grew at a 5% rate in 3Q’14.
Panasonic Automotive Business Targets Revenues of JPY2 trillion (US$16.7 billion) for its fiscal 2018 (April 2018-March 2019)
Panasonic has put emphasis on automotive applications to drive mid-term business growth with target revenues of JPY2 trillion (US$16.7 billion) for its fiscal 2018 (April 2018-March 2019). Current focus is on automotive batteries through deep cooperation with US-based electric vehicle vendor Tesla and it will additionally provide ADAS (advanced driver assistance system) solutions via acquiring Spain-based automotive part maker Ficosa International, according to Digitimes Research.