iSuppli, the market research firm who seems to know a little bit about everything, has been studying the gray-market cell phone business. The bad news? Business is booming. But on the bright side, a recent crackdown by China officials was more than just a little bit effective.
"Recent developments indicate that the China government is beginning to take seriously the long-festering problem of smuggled handsets and counterfeit handsets, a thorny issue that not only undercuts tax revenues but also tarnishes China's image abroad," said Kevin Wang, director of China Research at iSuppli. "As a result, iSuppli believes that the gray handset market will be greatly affected by the government investigation."
The effect can already be felt in gray market circles, in which the total number of shipments fell by 25 percent in June compared to May. Still, the war is far from won. Looking ahead, iSuppli predicts gray market cell phone shipments to reach 172 million in 2010, up from 145 million in 2009.
It's shaping up to be a great year for semiconductor foundries, says market research firm iSuppli, which predicts that revenue will reach $29.8 billion by the end of 2010. If it does, that will represent a 42.3 percent increase from last year, when revenue settled in at $22.1 billion.
Semiconductor foundries are adjusting to the growing demand for consumer products, following a rough recession in which spending slowed way down starting in 2008. The landscape is decidedly different now, however, and iSuppli says foundries will likely spend 123 percent more on capital equipment this year than they did in 2009.
China, which hasn't expanded aggressively as it should have and hasn't come up with many technological advancements, has forfeited its role as a leader in contract manufacturing, a position which now belongs to Taiwan, iSuppli added.
Despite reports to the contrary, market research firm iSuppli warns that semiconductor inventories are too low to sustain demand, The Wall Street Journal reports.
"When measured in terms of [days of inventory], chip supplier stockpiles for the 10 semiconductor product categories tracked by iSuppli appear to be within the range of normal seasonal equilibrium," said analyst Carlo Ciriello. "However, iSuppli believes these numbers are misleading and that the supply chain is actually leaner than current levels indicate."
iSuppli's bean counters determined that global semiconductor inventory amounted to $25.73 billion in the first quarter of 2010, up just 1 percent from $25.48 billion in the previous quarter, and barely rising to the tune of 0.2 percent from the first quarter of 2009.
The numbers are somewhat deceiving, says iSuppli. During the 69 days in the first quarter, days of inventory rose 3.2 percent from the fourth quarter and appear to be strong. But that isn't the case when factoring in both reported revenue and inventory value, as well as adjusting cost of goods. When all is said and done, the metric drops 20 percent below the seasonal average, iSuppli said.
For the first time ever, hard disk drive (HDD) shipments from Western Digital have zipped past Seagate, according to a report by market research firm iSuppli.
Western Digital managed to ship 51.1 million HDDs for the first quarter of 2010, a 3.2 percent increase from the 49.5 million units it shipped in the fourth quarter of 2009. That was enough to finally edge out Seagate, which shipped 50.3 million, up 0.8 percent from 49.9 million over the prior quarter.
While Western Digital wins the quarterly shipment war, Seagate still has the edge in revenue. According to iSuppli, Seagate's revenue numbers sit at $3.1 billion, a good chunk higher than Western Digital's $2.64 billion.
It would have been hard to imagine just a few short years ago that 3D in the home would suddenly take off overnight, but that's exactly what appears to be happening. According to market research firm iSuppli, global 3D TV shipments will reach 4.2 million units in 2010, and that's just the beginning.
Early adopters and increased traction are cited as reasons for the sector's explosive growth, and as iSuppli tells it, 3D TV shipments will more than triple to 12.9 million units in 2011. After that, you can expect the 3D TV market to double to 27.4 million units in 2012, and by 2015, shipments will reach 78.1 million units, rising at a CAGR of 80.2 percent from 2010.
Those are impressive numbers, though just a fraction of the overall TV market. Shipments of all types of LCD TVs are on pace to hit 170 million units this year, while LED backlit sets will see shipments of 26 million units.
Of course, hardware is only part of the equation. Content providers are preparing for the explosive growth, and already ESPN has talked up plans to launch the world's first 3D network. Disney and Sony, meanwhile, both have announced 3D Blu-ray releases for 2010.
If tablets are going to kill off the netbook market, they're going to have to kick things up a notch or three. According to market research firm iSuppli, netbooks posted double digit growth so far in 2010, the result of improved economic conditions around the world.
"Despite the worldwide recession last year, consumers were enthusiastic about notebooks, a trend that will persist in 2010 especially for the market's two fastest-growing segments-the netbook and the ultra-thin notebook," said Peter Lin, senior analyst for compute platforms at iSuppli.
Netbooks shipments are expect to surge to 34.5 million units in 2010, a 30 percent increase over one year ago, and by 2014, iSuppli forecasts netbook shipments in the neighborhood of 58.3 million. At the same time, ultra-thins are becoming extremely popular and will ship nearly 14.5 million units in 2010, equivalent to a 93 percent increase from the 7.5 million units shipped in 2009.
In a report issued on Thursday, market research firm iSuppli said the semiconductor industry is on track to generate $300.3 billion in revenue this year, which would be a 30.6 percent boost from the $229.9 billion generated in 2009.
If iSuppli ends up being right, 2010 will be a record year for the worldwide chip industry, toppling the previous record of $275 billion set in 2007. It would also be the second time in 10 years that the industry noted a more than 30 percent increase in revenue. The first time was back in 2000 when chip makers saw a 36.7 percent increase, which was largely attributable to the rise of the Internet.
"Building on the continuing expansion in sales that followed the downturn in late 2008 and early 2009, the semiconductor industry is set to achieve remarkable revenue growth and record size in 2010," said Dale Ford, an analyst with iSuppli. "Chip sales growth this year will be fueled by a number of key factors, including continued strong consumer demand for hot electronic products, diligent inventory and capacity management efforts among chip makers, and the arrival of innovative technologies at both the component and end-system levels."
Even with the positive outlook, Ford warns that the economy remains "the biggest wild card," with a number of financial and economic trouble spots that could ultimately stunt growth.
Recession? What recession? There's no such thing in the cell phone industry, at least not anymore, says iSuppli. The market research firm proclaimed the end of the cell phone recession after the industry closed out 2009 with a bang.
Cell phones ended 2009 with shipments of 1.15 billion units. That's slightly down from the 1.2 billion units shipped in 2008, but it's the fourth quarter performance that has iSuppli gushing over the cell phone market. Mobile handset shipments reached 335 million in the final quarter of 2009, up 15.5 percent from the 290 million shipped in the previous quarter.
"Given the recovery of the market in the final quarter of 2009, and with Europe, Latin America and the Middle East/Africa regions doing exceptionally well during the period, the recession can be said to be officially over for the cell phone industry," said Tina Teng, senior analyst for wireless systems at iSuppli. "The continued growth this year of total handsets - up a projected 11.3 percent to 1.3 billion units - further bolsters such a view."
The future looks equally bright, says iSuppli, which projects that smartphones will see growth of 35.5 percent in 2010. This will be helped by the introduction of entry-level handsets and 3G network expansion expected to take place this year.
Intel's empire wasn't built in a day, nor does it look like it's in any danger of falling. AMD does continue to chip away, however, and managed to gain some ground in the market share disparity between the two chip makers.
According to iSuppli, AMD in the fourth quarter of 2009 grabbed a 12.1 percent chunk of worldwide microprocessor revenues , picking up 1.6 percentage points from its position in the same quarter in 2008, and 0.28 percent over its position in Q3 of 2009.
Intel, meanwhile, dropped a percentage point from 2008, but still holds a dominating 80.6 share of the market. The No. 1 chip maker did gain slightly over the previous quarter, rising 0.1 of a point from 80.5 percent.
"For the full year of 2009, the market share situation was somewhat more balanced with AMD and Intel picking up two-tenths and three-tenths of a percent of share, respectively, in 2009 compared to 2008," said Matthew Wilkins, principal analyst for computer platforms at iSuppli. "This is an interesting development because PC average selling prices (ASPs) dropped significantly during the course of 2009 - especially for notebooks. So, the fact that AMD and Intel virtually maintained their market share at the annual level shows that neither supplier was overly punished by the dropping ASPs. It also indicates that neither was able to capitalize on the situation very effectively."
All other chip makers accounted for 7.3 percent of combined shipments.
Despite a strong showing by Western Digital, Seagate can continue chanting "We're No. 1!," according to the latest figures from market research firm iSuppli.
Hard drive shipments were up 8 percent overall in the fourth quarter of 2009 with 49.9 million units destined for new homes. Seagate, still on top, controls 31 percent of the market, while Western Digital's strong performance has the HDD maker nipping at Seagate's heels with 30 percent of the market.
The results are somewhat of a surprise, says iSuppli analyst Fang Zhang, who said many expected Western Digital would leapfrog in front of its rival. But even though WD is right there, Zhang says Seagate will likely hold onto its top spot in the current quarter.