So much of our IT is produced in China that it is important to watch the trends there to see what will arrive on our retail shelves sooner or later.
Some news from DigitTimes:
- China is maxed out with power, labour, plant and equipment shortages in various places. Factories were being built inland to avoid labour and power shortages on the coast but workers were migrating…
- Acer has dropped its prediction for its production of tablets for 2011 but it is not clear whether this is a sign that the competition is taking share from Acer or retail demand is softening.
- Production of capacitive touch-panels is being ramped up.
- China is ramping up LCD screen production to catch front-runner Korea soon. Currently China has 20% share and Korea 50%.China’s retail market is expected to use 130 million LCD panels in TVs, monitors and notebooks in 2011. China is expected to pass Japan to become the third largest producer of global LCD production in 2012/2013.
- While smart phones are still a newish market commanding premium prices, in 2011 cheap smart phones will grows to be 20 million units in 2011 thanks to many white box manufacturers in China and elsewhere. Look for sub-$150 smart phones to be widely available. More than 66million Android smart phones shipped in 2010 (23% share of 287 million) and more than double that number will ship in 2011 (37% share of 360 million).
- Touch-panel displays for tablets shipped 28% more units in May than April reaching 6.43million units.
Taken altogether this indicates that production of the new IT, smart phones and tablets, continues to ramp up and is partly limited by supply-side limits which are being raised by new investment happening now and planned for the next couple of years. I don’t see any slowdown in new plants so the players see the recent slowdown in tablet sales as a temporary thing. I agree with that. People love small cheap computers and if the Chinese won’t give them those, someone else will. Clearly, Apple made a smart move by signing up huge production capacity last year. The competition is scrambling for the new capacity. That will prolong Apple’s monopoly on smart thingies for another year perhaps but they have already lost the monopoly on smart phones and will soon lose the monopoly on tablets. This is a fast-paced market leaving little room for Wintel.