As the global semiconductor supply chain based on specialization, the design and development of Application Processors (AP) or System on Chip (SoC) for smartphones primarily fall under the responsibility of IC design houses. In the wake of Apple’s notable success in pioneering in-house chips, other smartphone companies are now emulating this trend.

Developing in-house chips poses a challenge for smartphone brands, involving not only significant initial investments but also the navigation of various modules and architectures on the smartphone’s SoCs, including ISP and Modem. Balancing performance and power consumption optimally in specific application scenarios tests the R&D skills of designers, presenting a particularly challenging task for brands lacking relevant technological expertise. However, fueled by the ambition to “product differentiation” and “have a say in the market,” smartphone brands remain enthusiastic about venturing into in-house chips.

Smartphone Brands and SoC Dilemma

In current specialization, smartphone brands typically purchase SoC chips from IC design companies like Qualcomm or MediaTek. While they can fine-tune chip performance to suit the brand’s needs after purchase, the room for modification is quite limited.

Currently, smartphone product development is reaching maturity, and the market lacks innovation. For consumers, in the intensely competitive landscape, smartphones equipped with similar-level SoCs from Qualcomm may only differ in terms of “pricing” as a determining factor for purchase. If the market shifts into a price competition, it becomes unprofitable for smartphone brands.

Moreover, without the ability to develop in-house SoC, smartphone brands become dependent on IC design companies. If IC design companies alter their fee structures or take measures such as raising prices or adding licensing fees, brands have little choice but to comply, significantly impacting their profits.

As the central component of smartphones, if brands can design everything from scratch, it enables them to create product differentiation and gain a competitive edge. Although the initial investment is substantial, in the long run, it allows smartphone brands to have a say in the market.

Apple’s in-house SoC chip has become a significant standard for other smartphone brands in shaping their strategies. Examining Apple’s development trends, the success of the iPhone is largely attributed to Apple’s creation of powerful and efficient SoC chips.

Apple’s decision not to rely on IC design companies but to design chips in-house allowed iPhone to surpass other competing smartphone products. The key lies in Apple’s ability to plan for hardware and software from the ground up through its self-designed SoC architecture, achieving a high level of product differentiation. In addition to creating the most suitable SoC for the iPhone, it also solidifies a unique competitive advantage for Apple.

The Costly Pursuit on SoC          

However, venturing into in-house chips poses formidable challenges for smartphone brands. The primary hurdle lies in the necessity for a substantial financial investment. According to statistics from The New York Times, Apple invested about US$10 billion in developing the A4 chip, while Apple’s revenue at that time was approximately US$65 billion. At that time, the smartphone market was not saturated at that time and was still in the development stage, providing ample room for Apple’s growth.

Focus on the data, from 2010 to 2011, Apple’s revenue generated from selling iPhones grew from about US$25.2 billion to approximately US$45.9 billion, with a growth rate of about 82%. Apple’s revenue scale surpassed US$100 billion in 2012. With a huge and sufficient revenue scale support and the market still having growth potential, although self-developing chips require a large amount of investment, it is indeed feasible for Apple, whose iPhone business is thriving.

In the current mature and competitive smartphone market, creating product differentiation is the only way to break through. As most Chinese smartphone brands lack the technology to develop SoC, it becomes trending to adopt new strategy of developing in-house chips. Apart from self-developing SoC, some brands also choose to enter from the “specific function chip” on the smartphone.

Next Challenges in Plateauing Market

However, compared to the smartphone market situation when Apple initially turned to in-house SoC, current market has entered a plateau phase from the previous golden growth period. Brands find it difficult to generate sufficient revenue scale to support the high cost of in-house chips in the saturated and competitive market.

Moreover, with the continuous advancement of semiconductor process technology, the current cost to enter is much higher comparing to the past. Even with funds. Achieving in-house SoC involves a significant technical threshold, and it is challenging to bypass patents, especially when competitors have accumulated decades of experience.

Therefore, while the strategy of brands choosing to self-develop chips is likely to impact IC design companies like Qualcomm and MediaTek, its effects are expected to be limited. The reason is that for IC design companies like MediaTek and Qualcomm, they already occupy a place in the market with exclusive key technologies and accumulated intellectual property rights (IP), making it challenging for smartphone brands’ in-house chips to completely replace MediaTek and Qualcomm products.
(Image: Apple)

According to TechNews’ report, ever since the introduction of Apple’s AirPods, there’s been a surge in demand for true wireless earphones, resulting in a proliferation of knockoffs attempting to mimic the success of AirPods.

While these counterfeits may resemble AirPods in appearance and claim to match their functionality, can they truly serve as a substitute for the genuine article?

To explore this, the startup company Lumafield turned to CT scanning technology, originally used in medical diagnostics, now finding new applications in combating counterfeit electronics.

After examining the internal structure of genuine and counterfeit AirPods, Lumafield concluded that the intricate and precise design of the authentic AirPods is unmatched by counterfeit products. They elaborated on three aspects: batteries, circuitry, and build quality.

Batteries

Lumafield highlighted that batteries are crucial to the wireless convenience and flexibility of AirPods. Authentic AirPods feature meticulously designed button cell batteries in each earbud, aimed at snugly fitting the compact design and providing optimal power.

In contrast, counterfeit AirPods use lithium-ion pouch cell batteries, structurally simpler and potentially less safe than the genuine ones. The counterfeit AirPods simply cram rectangular batteries into circular spaces, lacking the tailored fit of the authentic design.

Circuitry

Regarding internal circuitry, Lumafield deemed the genuine AirPods a marvel of miniaturization and precision engineering.

Apple uses a combination of rigid and flexible printed circuit boards to densely pack components, ensuring effective utilization of every millimeter of internal space in AirPods. Counterfeits, on the other hand, are much simpler, composed of off-the-shelf components, compromising functionality with fewer microphones and control circuitry, thus affecting sound quality.

Build Quality

The stark contrast in overall build quality between authentic AirPods and counterfeits is evident. In one of the tested counterfeit AirPods, wireless charging is entirely absent (as no coils are visible in the scans), while the other counterfeit model lacks the magnets that snap the real AirPods case onto Apple’s Watch charger, despite having wireless charging coils.

Counterfeit AirPods even resort to using internal weights solely to mimic the weight of the genuine product. While these counterfeits may replicate the appearance of the original, the use of inferior materials not only impacts the tactile experience but also compromises the structural integrity and overall lifespan of the product.

Authentic vs. Counterfeit

Lumafield highlighted that the differences between these products and their counterfeits might seem subtle at first, but industrial CT scans revealed significant implications for performance and safety. Ultimately, choosing between authentic and counterfeit may not merely be a matter of cost but rather a decision about investing in reliability and peace of mind.

(Photo credit: Lumafield)

According to MoneyDJ’s report, Samsung Electronics, the South Korean smartphone giant, unveiled its latest foldable phones, the Galaxy Z Fold5 and Galaxy Z Flip5, in August. With a year until the next generation hits the market, speculation is arising that Samsung plans to incorporate foldable features into mid-range models. This move aims to lower the entry barrier, attract a broader customer base, and strengthen Samsung’s leading position in the foldable phone market.

TrendForce recently reported that Android smartphone brands are actively entering the foldable phone market, aiming to break through the plateau in smartphone market growth with the unique design of foldable phones. However, the widespread adoption of foldable phones faces a significant obstacle in their high pricing.

According to supply chain sources, Samsung is set to launch a mid-range foldable phone in 2024, targeting a relatively budget-friendly price range of $400 to $500 USD.

In August, Samsung launched its latest generation of foldable phones, the Galaxy Z Fold5 and Galaxy Z Flip5, maintaining a premium pricing strategy. The suggested retail prices are $1,799 USD for the Galaxy Z Fold5 and $999 USD for the Galaxy Z Flip5.

The market is eagerly anticipating Samsung’s introduction of a mid-range foldable phone. However, as of now, this remains in the speculative phase, and there’s no information available regarding its design, specifications, or other details.

Previous market rumors suggested that Samsung’s Z series of foldable phones might follow the flagship S series by introducing a “Lite Flagship” FE version. This version is expected to feature hardware downgrades to offer a more budget-friendly price, aiming to attract consumers.

According to a TrendForce’s forecast, as foldable phones gain increased acceptance in the consumer market, the global shipment volume of foldable smartphones is estimated to reach 18.3 million units in 2023. This represents a substantial 43% growth compared to 2022, although it accounts for only 1.6% of the total smartphone market sales. Looking ahead to 2024, the shipment volume is expected to grow by another 38%, reaching 25.2 million units, and the market share is projected to increase to 2.2%.

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(Photo credit: Samsung)

According to IThome’ report, Alibaba Group CEO Eddie Wu, speaking at the 2023 World Internet Conference Wuzhen Summit today, announced that Alibaba is gearing up to open-source a massive model with 72 billion parameters. This model is set to become the largest-scale open-source model in China.

Wu expressed that with AI becoming a crucial breakthrough in China’s digital economy innovation, Alibaba aims to evolve into an open technology platform. The goal is to provide foundational infrastructure for AI innovation and transformation across various industries.

It’s reported that Alibaba has, up to this point, open-sourced Tongyi Qianwen’s Qwen-14B model with 14 billion parameters and the Qwen-7B model with 7 billion parameters.

According to guandian’s report, Eddie Wu mentioned at the 2023 World Internet Conference Wuzhen Summit that AI technology will fundamentally transform the ways knowledge iteration and social collaboration occur, creating a profound impact on productivity, production relationships, the digital world, and the physical world.

He emphasized that society is currently at a turning point from traditional computing to AI computing, with AI eventually taking over all computing resources. The dual drive of AI and cloud computing is the underlying capability that Alibaba Cloud relies on to provide services for the future AI infrastructure.

In addition, on October 31st, Alibaba Cloud announced the release of the large-scale model Tongyi Qianwen 2.0 at the Apsara Conference. On the same day, the Tongyi Qianwen app was officially launched on major mobile application markets. Compared to the 1.0 version released in April, Tongyi Qianwen 2.0 has shown improvements in capabilities such as complex instruction understanding, literary creation, general mathematics, knowledge retention, and illusion resistance.

(Photo credit: Alibaba)

Chinese smartphone giants like Xiaomi and Vivo are entering the satellite communication technology arena. A Chinese industry insider claimed that Huawei maintains an exclusive hold on satellite communication solutions for smartphones has stirred controversy, resulting in other smartphone manufacturers having to bide their time before introducing their satellite communication features, Jiwei reported.

An insider at China Telecom affirmed that this technology is not exclusively held by Huawei. However, achieving satellite communication on smartphones indeed poses certain technical challenges, crossing over the substantial R&D efforts to break through the bottlenecks on chip module miniaturization (including RF, Baseband Unit, etc), optimizing the TCP/IP protocol over satellite communication, and end user management.

Huawei Mate 60 Pro has emerged as a pioneer in satellite communication, offering support for satellite calling. Industry insiders have revealed that the satellite communication processor within Huawei Mate 60 Pro was specially crafted for Huawei by a research institute under the China Electronics Technology Group Corporation (CETC). Therefore, Huawei Mate 60 partnered with China Telecom to achieve “satellite calls” services via China’s domestic satellite “Tiantong”, which is currently operated by China Telecom.

Moreover, Qualcomm’s recent announcement about partnering with smartphone brands such as Motorola, OnePlus, Honor, OPPO, Vivo, Xiaomi, and others to develop smartphones with satellite communication feature indicates a broader interest in this technology.

Currently, the consumers tends to extend their device-replacement timelines since the upgrades on smartphone hardware stuck in the bottlenecks such as the performance improvements of processors and camera modules are limited, proven by TrendForce’s estimation that the YoY growth rate of the average DRAM content of smartphones will reach around 6.7% for 2023. This projection is a significant improvement compared with the YoY growth rate of 3.9% for 2022. However, TrendForce also forecasts that the YoY growth rate will stay under 10% in the next several years.

As for smartphone CIS, the shipments is projected to decrease from 4.46 billion units in 2022 to a more subdued 4.318 billion units in 2023. That translates to a YoY contraction of 3.2%.

Consequently, satellite communication is poised to become a key selling point, enticing consumers to upgrade their devices. The industry foresees satellite communication features extending beyond high-end smartphones, and becoming available across a wider range of models, with this shift expected to happen between 2024~2025.
(Image: Huawei)

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