china ce and ha industry...

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Confidential. © 2018 IHS Markit. All Rights Reserved.

China CE and HA Industry Overview

IHS TECHNOLOGY, MEDIA AND TELECOM

Bing Zhang 张兵

Director, Research and Analysis | TMT Shenzhen China

[email protected]

May 2018

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

China Consumer Markets

2

Worldwide and China Consumer Electronic market

China Home Appliance

Wrap Up


China Consumer Markets Economy is the key driving force of consumer market, consumption habits differ greatly in China


China economy outlook summary

4

*Annual average, **Billions of US dollars

0

100

200

300

400

2010 2012 2014 2016 2018 2020

6.0

6.5

7.0

7.5

2010 2012 2014 2016 2018 2020

0

3

6

9

12

2010 2012 2014 2016 2018 20200

2

4

6

2010 2012 2014 2016 2018 2020

Real GDP growth (%)

Exchange rate per US dollar*

Consumer price inflation (%)

Current-account balance**

Source: IHS Markit © 2018 IHS Markit Source: IHS Markit © 2018 IHS Markit

Source: IHS Markit © 2018 IHS Markit Source: IHS Markit © 2018 IHS Markit

• Real GDP increased 6.9% y/y in

2017, supported by policy stimulus

to ensure stability, it is expected to

keep increasing the coming years,

with higher than 6% y/y.

• Efforts to reduce excess industrial

capacity, the anti-pollution

campaign, and a housing-market

correction will slow real GDP

growth from 6.8% in 2017 to 6.5%

in 2018 and 6.2% in 2019.

• The yuan is expected to

depreciate gradually against the

US dollar through 2020.

• Under China’s 13th five-year plan,

services will account for 70% of

incremental growth in 2016–20, up

from about 60% in 2011–15.


China’s consumption growth is expected to rise in 2018; Engel’s law in action,

consumption habits differ greatly between Beijing and in-land provinces

Note: 2016 urban data for 31 provinces and municipalities in China

Food spending and household income

Guangdong

Beijing

Shanghai

Jiangsu

TianjinShandong

FujianXinjiang

TibetHainan

HunanChongqing Hubei

HeilongjiangJiangxi

Sichuan

Shanxi

Shaanxi

Henan

Qinghai Hebei

GuizhouGansuJilin

Ningxia

Inner Mongolia

Source: IHS Markit © 2018 IHS Markit

Entertainment spending and household income

Jiangsu

Beijing

Guangdong Shanghai

ZhejiangTianjin

Jilin

Gansu

Guizhou

Shaanxi

Fujian

Henan

Hunan

Sichuan

Yunnan

© 2018 IHS MarkitSource: IHS Markit

Shanxi

Hainan

Guangxi

Heilongjiang

Xinjiang

Sichuan

5


China Consumer Electronic marketMost consumer devices become commodity with low growth rate, including smart phone.

New tech and value-added service keep driving long-term market

Confidential. © 2018 IHS Markit. All Rights Reserved. 7

Worldwide Consumer electronics revenue forecast by product, 2015-2021• Portable device, large appliances, and A/V products contribute to major sales revenue in 2021.

0

200

400

600

800

1,000

1,200

1,400

2015 2016 2017 2018 2019 2020 2021

Portable device Large Home appliance Home computing Home audio and video Small and personal appliance Personal appliance Consumer robotics

Consumer electronics revenue forecast by product, 2018-2021


Bil

lio

ns

of

Do

lla

rs

36.4%

35.8%

12.6%

Confidential. © 2018 IHS Markit. All Rights Reserved. 8

China Consumer electronics annual growth ratio in shipment volumes forecast by

product, 2018-2021

• PC market will suffer decline, but other segments will retain unit growth in the future three years

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

2016 2017 2018 2019 2020 2021

Portable device Large Home appliance Home computing Home audio and video Small and personal appliance Personal appliance Consumer robotics

Consumer electronics annual growth ratio in shipment volumes forecast by product, 2018-2021


Gro

wth

Rate

Y/Y


Global Display Capacity Expansion & China Shares

TFT Array (including AMOLED Backplane) Capacity By Countries

(Million Sq. Meters)


0.0

50.0

100.0

150.0

200.0

250.0

300.0

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

America China

Germany India

Japan Korea

Singapore Taiwan

55%

52%

39%

AMOLED Capacity By Countries (K Sq. Meters)


0

5

10

15

20

25

30

35

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

China Japan

Korea Taiwan

12%

38%

38%

9


Demand & Capacity Growth Rate

10

• In theory, it is forecast a three-year over-supply to occur in 2018-2020. But, the first oversupply in H2 2017-H1 2018 may

make some new investments postponed, and larger size demand grows as prices go down sharply.

Total TFT array capacity vs. large-area and small/medium FPD module demand growth rate

© 2018 IHS Markit

Notes: Demand includes AMEPD, AMLCD, AMOLED, a-Si, LTPS and oxide panels for both large-area and small/medium applications. Capacity includes all ramped capacity for fabs with ≥30% probability for all applications,, glass sizes and technologies.

Source: IHS Markit

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

LCD, AMOLED, AMEPD Demand Y/Y% 16% 6% 14% 5% 6% 6% 6% 5% 6% 2% 4% 3%

TFT Capacity for AM Applications Y/Y% 8% 5% 5% 7% 6% 3% 9% 11% 8% 5% 1% 0%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Y/Y

Gro

wth

(%

)

Old Fab Shut-

down

Investments in Gen 10.5

(4 fabs - BOE, CSOT, LGD,

Sharp)..More Gen 8/8.6


TV Resolution trend changes every 6 years

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

0%

10%

20%

30%

40%

50%

60%

70%

80%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

HD(1366 x 768) FHD(1920 x 1080) 4K(3840 x 2160) 8K(7680 x 4320) Average LCD TV size(inch)

LCD TV panel penetration forecasting by resolution

© 2018 IHS Markit

Pen

etr

ati

on

(%)

Notes: LCD TV panel only

Source: IHS Markit

11


Worldwide TV household penetrations have reached already 80% since 2015 with

Net Additions falling quickly, China follow the trend

72.0%

73.0%

74.0%

75.0%

76.0%

77.0%

78.0%

79.0%

80.0%

81.0%

82.0%

0

50,000

100,000

150,000

200,000

250,000

300,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Replacements(000s) Net Additions(000s) Worldwide TV Household Penetration(%)

9-pt - IHS column and line - 2015


Do

me

sti

c C

on

su

mp

tio

n(0

00

s)

TV

Ho

us

eh

old

Pe

ne

trati

on

(%

)

Worldwide TV Domestic Consumption Split between Net Additions and Replacements

12


2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Total 199.5 207.7 210.8 248.4 248.6 232.8 227.4 234.9 226.2 222.7 215.2 222.7 228.3 237.5 237.4 240.1

RP 1.8 0.4 0.2 0.2 0.1 0.1

OLED 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.3 0.7 1.6 2.5 3.6 6.0 7.1 9.4

PDP 11.3 14.4 14.2 18.4 17.2 13.3 10.3 6.6 0.2 0.0

LCD 79.2 106.4 145.4 191.6 205.3 203.3 209.9 224.9 224.3 221.5 213.5 220.2 224.7 231.5 230.3 230.7

CRT 107.2 86.4 51.1 38.3 26.0 16.1 7.1 3.4 1.3 0.5 0.1

FP TV Y/Y Growth 63.8% 33.5% 32.1% 31.6% 6.0% -2.6% 1.7% 5.1% -2.9% -1.2% -3.2% 3.6% 2.5% 4.0% 0.0% 1.1%

Y/Y Growth w/o Mexico Subsidy 4.0% -5.1% 2.0% -3.0%

-25%

0%

25%

50%

75%

100%

125%

150%

0

50

100

150

200

250

Y/Y

Un

it G

row

th

WW TV Shipment Forecast by Technology (Million Units)


WW TV Shipment Forecast by Technology ~ Total TV demand flat after a small

replacement cycle peak in 2020. OLED TV in 2020-2022 is up by increased capacity.• LCD TV demand in 2017 fell 213.5M units mostly driven by falling demand in China. OLED TV shipments had 200K units

upside on Q4’17 forecast.

13

• Around 10 years

replacement cycle

• Final transition to

flat panel TVs in

emerging regions

• Huge capacity of

Gen. 10.5 coming

• UHD broadcast

starts, 4K stream -

ing contents

available

Numbers of TVs

per household

will fall toward

1 units


0

10

20

30

40

50

60

70

Japan North America Western Europe Eastern Europe China Asia Pacific Latin America Middle East & Africa

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

WW Flat Panel TV Shipment Forecast by Technology (Million Units)


Flat panel TV demand in 2017 in North America and China especially was damaged

by steep panel price increases. Price sensitivity remains very high in both regions• In 2016, TV shipments for US and China in 2016 was good, due to better firm consumer spending and currency exchange

rate. Demand for both regions in 2017 was weak.

14


TV Related Highlights Toward 2020 and Beyond

Key Topics Region ~ 2016 2017 2018 2019 2020 2021~

4K Broadcasting Korea, Japan

8K Broadcasting Japan (NHK,

BS only)

4K/HDR Streaming WW

Technology WW

8K TV Japan ~

120Hz65”+

China ~

60Hz65”+


4K/8K TV Related Highlights toward 2020

OLED Printing

QD LCD QLED

Streaming Services & Streaming TVs

Left

Handed

Tuner

spec

Right

Handed

15

http://www.kntimes.co.kr/news/articleView.html?idxno=10221


0.0

10,000.0

20,000.0

30,000.0

40,000.0

50,000.0

60,000.0

2015 2016 2017 2018 2019 2020 2021 2022

China TV Shipment Forecast by Size Category/Resolution/Features (Millions of Units)


Sh

ipm

en

ts (

tho

us

an

ds o

f u

nit

s)

TV Features Forecast ~ Continued trend of larger sizes, 4K/HDR and Smart TV will

drive the demand globally, even faster in China

• Hot topics of features are OLED and 8K TVs from now on

16

Premium

w/ 4K TV and contents

SpecialtyPremium ? Specialty

Fashion


iFLYTEK dominates voice control and voice assistant in Smart TVs, while

DuerOS of Baidu is aggressively to enter this market.

• iFLYTEK is a national key software enterprise dedicated to the research of intelligent speech and language technologies, development of software and chip products.

• Voice control function was very popular several years ago along with the fast adoption of smart TV, major local brands have been adopting iFLYTEK solution for over

5 years, iFLYTEK focus in China market with the advantage of complicated reginal languages, in addition to mandarin.

• In overseas market, tier-1 Chinese brands are adopting Google assistant mainly.

17

iFLYTEK

AISpeech under Ali

DuerOS of Baidu

Sogou under sohu

Google


China smartphone is saturated, it’s couldn’t have fast growth in the future years

2014 2015 2016 2017 2018 2019 2020 2021

Smartphone 401.99 416.87 475.65 463.75 469.37 479.53 493.22 502.80

AGR 26.3% 3.7% 14.10% -2.50% 1.20% 2.20% 2.90% 1.90%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

0.00

100.00

200.00

300.00

400.00

500.00

600.00

Smartphone AGR

18


China market is high concentrated，The top 4 players take up about 70% market share

and leading growth in China market in 2017Market Share Of Each Brand In China Market（Unit：%） YOY growth by Brand In China Market（Unit：Million/%）

Source: Mobile handset database country, IHS Markit

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

2014 2015 2016 2017

Huawei OPPO Vivo Xiaomi Apple Other Gionee

Meizu Samsung ZTE Coolpad LeEco Hisense Lenovo

TCL Alcatel Sony HTC LG Microsoft

OEM 2016 2017 YOYHuawei 76.2 90.9 19%

OPPO 76.7 86.3 12%

Vivo 71.1 73.1 3%

Xiaomi 53.0 56.1 6%

Apple 49.1 48.1 -2%

Other 21.0 26.2 25%

Gionee 20.4 15.0 -26%

Meizu 20.7 14.3 -31%

Samsung 31.3 13.1 -58%

ZTE 13.6 7.7 -44%

Coolpad 12.9 3.2 -75%

LeEco 18.9 2.0 -89%

Hisense 3.4 1.7 -51%

Lenovo 4.7 1.0 -80%

TCL Alcatel 0.7 0.3 -63%

Sony 0.4 0.2 -53%

HTC 0.7 0.2 -77%

LG 0.1 0.1 -30%

Microsoft 0.8 0.0 -100%

Total 475.6 439.2 -8%

19


0

5

10

15

20

25

30

35

40

May Jun Jul Aug Sep Oct Nov Dec

Huawei OPPO Vivo Xiaomi Apple

Samsung Goinne Nubia HTC Nokia

Smartisan Oneplus GOME Sharp 3600

1000

2000

3000

4000

5000

6000

7000

May Jun Jul Aug Sep Oct Nov Dec

sharp

Galaxy S8

AQUOS S2

M7

Maimang6

Honor7X

F205

Redmi5

Wide display smartphone model number is China market Lowest Bezel-Less smartphone price in china market every month(unit: RMB)

Chinese brands pushed the 18:9 aspect ratio smartphones to the lower-end

segment within about half years

Source: IHS Markit

20


Dual camera product market share of will reached to 35.9% in 2018, it will little bit

higher than world level

Dual camera forecast of China market（Unit： million/%）

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

0

20

40

60

80

100

120

140

160

180

2016 2017 2018

Dual Camera Market share

⚫ The Chinese brand is very aggressive on Dual camera

product，since Huawei launched P9 by corporate with

Leica. But the large prat of volume is dominated by Apple,

LG in the worldwide.

⚫ Most part of Chinese brand launched the Dual camera

product in the from 2017Q2, but most of models are

flagship model.

⚫ In the second half year, As the Dual camera productivity

get mature and it cost down, the dual camera product will

extend into lower end product.

⚫ OPPO, vivo and Huawei Leading the shipment on dual

camera.

Source: IHS Markit

21


Camera will keep being upgraded in China market，when UGC（User Generated

Content）time is coming

• There are about 150 K short videos being uploaded on these APP in every minutes ，most users are female who

below 30 years old

The total users reached 700 millions in 2017

November, from the 100million in 2016 June

There are about 200 million users in 2017 October,

the average daily use time lasted more than 70

minutes, and the total daily volume exceeded 3

billion.

There are 280 million by monthly Active Users

The team was formed in early 2016, The total

community day VV has reached 300 million,

with users watching over 100 videos on

average every day

The number of active users on June 30, 2017 has

reached 152 million, a 33.3% year-on-year growth.

the total platform has grown by more than 12 million

users.

the peak performance of the second and little curry shows has

exceeded 2.5 billion times, with daily upload volume exceeding

1.5 million and daily coverage of over 70 million users, in

December 2016.

22


Worldwide and China Notebook PC Shipment Forecast

• Notebook shipments are projected to be 167M units with 1% Y/Y declined in 2018 by component supply constrained

impact and return to positive growth in 2019 by PC replacement demand caused by end of support of Win 7 & Win Server

2008 since 2020.

23


Worldwide and China Tablet PC Shipment Forecast

• Low-priced 9.7” iPad ($329 starting) helped Apple to gain shares in 2017, but it also impacted non-Apple tablet demand.

• New PC replacement demand of small and medium business in Western Europe comes from smartphones and

tablets/detachable PCs, not from desktop PC, when PC brands realize the reason of high monitor inventory in the end of

2017 recently.

24


2-in-1 PC Shipment Forecast

• PC brands hope to have closed business relationship with Google because of having tussle over 4K OS fee with Microsoft.

Also, convertible PC design is popular with Americans, so some of PC brands (ex: Dell) plan to develop more convertible

Chromebooks since 2018.

• Detachable shipment declining in 2017 is expected that Apple and Microsoft 2017 shipments will be less than 2016.

25


Worldwide and China Desktop Monitor Shipment Forecast

• Desktop monitor shipments are projected to be 122.7M units with 0.2% Y/Y declined in 2018 by component supply

constrained impact and return to positive growth in 2019 by PC replacement demand caused by end of support of Win 7

& Win Server 2008 since 2020.

26


China Smart Speak Market forecast

27

• IHS Markit expects the China smart speaker domestic market to grow to 540,000 units in 2017 as several new models are expected to be

announced in the second half of 2017

• IHS Markit forecast that the China smart speaker domestic market will grow to 1.9 million units in 2018, and 3.4 million units in 2019

• By 2021 this market is expected to reach nearly 7 million units on conservative forecast basis

60 120

1,380

2,260

3,490

5,040

6,960

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2015 2016 2017 2018 2019 2020 2021

China smart speaker unit shipments forecast in domestic market, 2017–2021


Th

ou

sa

nd

s o

f u

nit

s


China Home ApplianceChina domestic smart home appliance still in initial stage


China domestic smart home appliance development trend

2010-2020 2021-2030 2031-

Introduction Growth Maturity

Product definitionCloud platform

Smartphone controlLarge data

Standard issueLow penetration

Conventional business model

Online sales channels

Smart homeOperation system

IoT automation and services

Grow quicklyNew business model

Brisk competitionLarge playersBetter profit

Hardware makers Integrated service

providersHigher industry entry

barrierLow growth ratio

Dominators

Unit shipment

29


China smart room air conditioner market

30

• Shipment: over 25 mu in 2017, total market soared

• Penetration ratio: nearly 55% by 2021

• Market drivers: low-price, flagship products

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

0

10

20

30

40

50

60

70

80

90

100

2014 2015 2016 2017 2018 2019 2020 2021

Mil

lio

n U

nit

s

Air conditioner Smart air conditioner Smart %

China domestic smart connected room air conditioner unit shipments forecast, 2018-2021

2018 IHS MarkitSource: IHS Markit


China smart washing machine market

31


• Shipment: 8.3 mu in 2017, over 18mu in 2021

• Market drivers: new products, one leader’s aggressive strategy

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

0

10

20

30

40

50

60

2014 2015 2016 2017 2018 2019 2020 2021

Mil

lio

n U

nit

s

Washing machine Smart washing machine Smart %

China domestic smart connected washing machine unit shipments forecast, 2018-2021



China smart refrigerator market

32

• Refrigerator + tablet: control center for smart kitchen


• Market drivers: new business model, new ecosystem, high-end

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

0

5

10

15

20

25

30

35

40

45

2014 2015 2016 2017 2018 2019 2020 2021

Mil

lio

n U

nit

s

Refrigerator Smart refrigerator Smart %

China domestic smart connected refrigerator unit shipments forecast, 2018-2021



White-goods characteristics

• White-goods: weak MMI

• Single function: cooling, store foods, washing clothes

• Strong MMI: television(set-top box), smartphone, tablet……

• Connected white-goods: new MMI

• Smartphone, tablet

• AI white-goods: new MMI

• Nascence AI

• Voice control

• Gesture control

• ……

• Improving MMI increase customer loyalty???

• Long-term smart home

33


Wrap Up

• Economy is the key driving force of consumer market, consumption habits differ greatly in China

• Most consumer devices become commodity with low growth rate, including smart phone, but new tech and

value-added service keep driving long-term market on a revenue basis

• New TFT array (including AMOLED backplane) capacity mainly come from China, high possibility of a three-

year over-supply in 2018-2020. But, it could make some new investments postponed, and larger size demand

grows as prices go down sharply

• Advanced features for most products are popular in China, big differentiation by OLED is about “rollable” and

“paper like” both for smartphone and TV. Companies to have penetration of platforms have more power even

for future smart car, from now on.

• Gaming is hot even on saturated notebook PC and monitors

• AI, IoT, voice assistant are important elements for platform makers such as amazon/google/apple, etc. and

BAT in China

• Home appliance is steady on revenue growth, due to localization.

• How to create less manpower and fun of users are important for the future of consumer devices. If H/W

makers force consumer to do something, it will not be successful.

IHS Markit Ltd and its affiliates (“IHS Markit”) make no warranty, expressed or implied, as to accuracy, completeness, or timeliness, or as to the results to be obtained by use of the products and services described herein, and shall not in any way be

liable for any inaccuracies, errors, or omissions therein. IHS Markit is a trademark of IHS Markit. All other company and product names, including [sub-brand] are trademarks of their respective owners and are used under license or with permission.

© 2018 IHS Markit. All rights reserved. Any unauthorized use, reproduction, or dissemination is strictly prohibited.

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