Makers of tablets, smart phones, PCs, and TVs make lots of promises about the specifications and timing of forthcoming products. Our reaction to those promises is often doveryai, no proveryai (trust, but verify). Alternatively, a company may not say anything at all. In either case, it is often possible to gather useful intelligence by listening to what the supply is saying, and watching what the supply chain is doing.
There have been mutterings for some time, and we’ve reported them here, that Amazon was planning to join the Tablet PC wars. A week ago, Yenting Chen and Adam Hwang of Digitimes reported that Taiwanese component-makers were saying models could appear as early as August or September, with a sales target of 4 million units in calendar 2011. The supply-chain sources said the Amazon tablets will use processors from TI, touch panels from Wintek, display-driver ICs from ILI Technology. The pieces will be bolted together by Quanta Computer, with monthly shipments expected to be in the range of 700k to 800k units. (Let’s see. Multiply 800k by 5 months and you get 4 million units. Okay. At least that’s consistent.) The sources said Amazon will provide streaming movie services for users of its tablets, which could excited potential buyers.
Today, the second wave chimed in, saying that in addition to Wintek, HannStar Display and J Touch could be supplying touch panels to Amazon. The first batch of touch panels is likely to be in the 1.5 to 2.0 million range, and is scheduled to be delivered in September, the sources said.
There are unconfirmed reports that Amazon also spoke with TPK Holdings, but that TPK is cautious about becoming an Amazon supplier because is a major supplier of touch modules for the iPad and is concerned about whether it has sufficient capacity to supply both vendors. Wintek has also won significant orders from Apple, and has said the company might have trouble fulfilling orders from Amazon in H2′11.
Wintek also supplies LCD touch panels to Apple. The company says that demand from smart phone and tablet companies have been moderate in H1′11, but there are rumblings that Apple plans to increase orders in Q3. Wintek’s monthly shipments of small-size touch panels to Apple have been estimated at 2.4-2. 6 million units per month in Q2.
I didn’t have time to discuss it in any depth when I reported on the Nomura Pan Asia Technology Forum (Hong Kong, May 25-26), but Nomura International made a very good case for an explosion in mid-range smart-phones, with the mid-range appealing to general consumers rather than business users, and taking considerable market share from feature phones.
Richard Windsor, Nomura’s Global Technology Marketing Analyst, noted that Apple has unsuccessfully tried to enter the mid-range by putting a lower price on its previous model while setting a premium price for its newest model. The problems has been that Apple’s traditional customers just buy the new model while new customers stay away. So, Windsor said, if Apple wishes to play in the growing market for moderately priced smart phones, it will have to design a new model especially for that niche. The problem, he said, is there is absolutely no indication that Apple is doing that.
The plot thickened this week when Deutsche Bank analyst Chris Whitmore said Apple will be releasing two new iPhones this September, the iPhone 5 (which is no surprise) and the iPhone 4S, a mid-range prepaid smartphone priced at $350.
But what does the supply chain say? "I am increasingly cautious on a mid-range iPhone," says Nomura’s Windsor. "It has to be a mid-range-specific device - not an iPhone for poor people. We have heard nothing from anybody about supplying this device, which makes me think that the device is on the drawing board if [it exists] at all."
The supply chain for sophisticated consumer electronics is large, complicated, and messy. It’s hard for it to keep secrets. Make that impossible. But the information that leaks out can be conflicting. That’s what makes unraveling the various threads so entertaining.