MIC in Taiwan Publicizes 2011 ICT Perspectives

Amid the still uncertain outcome of the European debt crisis and high unemployment in the U.S. as well as high inflation in India and China, which has been impacting the multimedia consumer-electronics market, some new products are still predicted for high growth, such as the media tablet with innovative user interfaces and strong support from service platforms, according to the Market Intelligence & Consulting Institute (MIC) at the Institute for Information Industry (III) in Taiwan.

The MIC says in its recently released information and communication technology (ICT) perspectives that in 2011 sales of media tablets will grow by more than 200% while that of e-readers by at least 150%.

Some product categories will maintain single-digit growth this year, including digital cameras and digital satellite-TV set-top boxes (STB), with sales of personal navigation devices (PND), digital TV (DTV) STBs and family game consoles expected to show negative growth due to sliding demand, says MIC.

In 2011 some 25 million e-readers are predicted to be sold, a 151.2% increase from the previous year, with the 2012 volume growth to exceed 30 million units, up 22.9% year-on-year (YoY), says MIC.

C.C. Wei, senior analyst at MIC, notes that touch control is now a mainstream functionality of e-readers launched in 2011, such as Kindle, Nook and Kobo's new products, but no information about new models with colored displays has been reported due mainly to makers' cost concerns.

Taiwanese contract suppliers are forecast to ship over 63 million digital cameras this year, up 3.1% from 2010, with the global digital-camera market predicted to be close to some 140 million units, a 2.5% increase, says MIC.

Some 135 million digital cameras are forecast to be shipped in 2011, a 3% YoY increase, a tepid growth to which MIC attributes weak demand from Europe and the U.S. as well as saturated global markets, which will be propped up by still strong demand in emerging markets as China, India, Brazil, Mexico etc.

Saturation
All major consumer-electronics sectors are saturated, except the media tablet and e-reader, with these two new segments also facing intensifying competition due to more players however, and the rivalry in the fourth quarter to be even more heated with the new Amazon Fire tablet on the scene, priced at only US$199.

Wei says that design, development of value-added service platforms will decide the fate of consumer-electronic product vendors, who must cope with increasingly diversified audiovisual download services in the long term, as well as the short-term threat due to increasingly mature functionally-integrated smartphones, meaning ever more makers can offer such products with similar functions.

In addition, the senior analyst says, integrating Internet-based social-network functions, value-added applications, intuitive human/machine interface etc. into consumer-electronics will change user experiences and provide more, wider room for new-application development, to further drive growth of the consumer-electronics market, MIC says.

LCD TV Growth Slows
Global shipments of LCD TVs in 2011 will reach 194 million units, only a 9% YoY increase, with that of LCD monitors to be about 167 million units, up only 2.9% from 2010, to which S.H. Chou, senior analyst at MIC, attributes the lukewarm global economy that is impacting demand for large-sized thin film transistor-liquid crystal display (TFT-LCD) products.

MIC says the LCD TV penetration in the global market has exceeded 80%, meaning substantially less demand to replace cathode-ray tube (CRT) TVs. In addition, the replacement peak for new models adapted to digital TV broadcasting in Europe and North America has passed, hence slowing the growth momentum in the LCD TV market. By 2016 the global shipment of LCD TVs will reach 285 million units, for an 8% compound annual growth rate (CAGR) from 2011 to 2016.

The LCD monitor market is on a downtrend for the longer term, MIC says. In the short term, steadily falling prices and growing mainstream sizes, coupled with ever

more consumers choosing smaller, lighter notebook PCs with LCD monitors at home or office, will stimulate replacement purchases to generate short-term growth. However, MIC adds, the negative growth of desktop PCs from 2012 and growth of all-in-one (AIO) PCs will directly impact the monitor market, resulting in annual sales of only 157 million units in 2016 for only CAGR of -1.2% from 2011 to 2016.

Driven by falling prices of light-emitting diodes (LEDs) for LCD panel backlights, the penetration of LED-backlit LCD panels has exceeded 50% in 2011, MIC says, with that for LED-backlit panels now as high as 97% in notebook PCs, compared to 43% in LCD monitors and 44% in LCD TVs. LED-backlighting technology will likely dominate all applications, MIC says, including by 2015 to 100% in LCD TV panels and 98% in monitor panels.

Compared to LED-backlighting, 3D technology applications seem lagging: In large-sized applications, 3D panels are expected to see 11% penetration in LCD TVs in 2011, compared to less than 2% in monitors and notebook PCs. But by 2014, 3D technology will likely penetrate about 30% in LCD TVs, driven by increasingly mature peripherals and 3D content. Active shutter 3D technology will be mainstream that year, MIC says, accounting for approximately 60% share, compared to about 40% for passive polarizer technology and only about 1% for naked-eye 3D counterpart.

Overall, MIC says, demand from the end-user market is worse than expected, with the industry at large still in oversupply despite panel makers having been aggressively cutting utilization, and the market generally to continue being oversupplied due mainly to weak demand in 2012.

Promising Cloud Computing
The global cloud computing market has been rapidly expanding, from US$12.3 billion in 2009 to the forecast US$42 billion by 2014 at CAGR of 27.7%, according to MIC, meaning such growth exceeds quintuple that of the traditional IT services segment.

Taiwan's cloud-computing market is forecast to grow at CAGR of 21.8% to NT$41.2 billion (US$1.37 billion) by 2014, from NT$15.3 billion (US$510 million) in 2009. The public cloud service market on the island is forecast to grow to NT$13.3 billion (US$443.3 million) by 2014 from NT$3.9 billion (US$130 million) in 2009, with the cloud technical application market to NT$27.9 billion (US$930 million) from NT$11.4 billion (US$380 million), MIC says.

Wong Wei-hsiu, senior analyst at MIC, says the future business model of IT services will change clearly according to several factors: continued attention paid to global cloud computing, rising corporate interest in cloud computing, engagement in cloud computing by major ICT makers, increasing end-user devices connected to cloud computing etc. In short, cloud computing will continue to be a key IT option rather than a bubble for global enterprises, whose IT investment decisions will be impacted by global economic turmoil.

MIC says the major cloud-computing business model has developed into three major types: cloud construction (building services for both private and public clouds), cloud services (Infrastructure as a Service or IaaS, Platform as a Service or PaaS, and scalable Software as a Service or SaaS, and terminal-device application (desktop and intelligent mobile device products and technologies).

The cloud computing market in Taiwan is forecast to continue developing, wit the construction of both private and public clouds to grow steadily while generating demand for data storage and information security services. MIC says that ever more related services as simulated efficiency management, data analysis, cloud-service governance and enterprise mobile applications will emerge due to the robust cloud market.