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Cell Phones, Handsets

VIDEO – Defining disaster in Japan: Impact on Japanese and global electronics industry supply chains

Japan represents 10% to 15% of global electronics demand but 16% to 30% of electronics component supply. OEMs with meaningful cash positions are trying to pull in orders, buying up available component supplies. Taiwan printed circuit board companies like Kinsus and Unimicron could see bigger negative impacts.
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Breakdown of electronics end markets served by top EMS providers

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Non-traditional EMS markets make up larger portion of business for smaller EMS providers such as Benchmark Electronics, Plexus. Automotive, medical electronics believed to be pivotal components to helping EMS market out of the recession. Also, covers Foxconn, Hon Hai, Jabil Circuit, Flextronics, Sanmina-SCI, Celestica.
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iPhone 4 smartphone success driven by apps, platform, loyalty

Overall mix creates true differentiation in marketplace. Channel check of 100 stores reveals iPhone 4 demand outstripping supply across several regions. Apps growing 10% to 20% monthly with majority of downloads costing $9.99. Most widely deployed smartphone OS is Symbian followed by Blackberry OS then iPhone OS. EMS provider Pegatron to develop CDMA version.
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EMS, ODM recovery tied to consumer electronics

Hon Hai and several ODMs investing in optoelectronics to take advantage of growing LED TV market. OEMs increasingly turn to third parties for product design. ODM sector increases share of overall electronics contract manufacturing revenues to 45%. EMS industry expected to grow consistently for next five years, with 8% CAGR, ODMs with slightly stronger CAGR of 9%.
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Nokia restructuring and issues with outsourcing strategy

Nokia outsourced less than 5% of smartphone volume beginning 2010. Finding balance between leveraging internal strengths and faster execution. Competition from Apple, HTC, RIM driving margins downward. Nokia’s size obscures the fact their competition has been growing in recent years. Nokia attempting to make a hard change in course using Yahoo as one of its rudders.


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EMS pricing assumptions and economic influences

EMS industry growth still largely tied to PC industry. Competition among EMS / ODMs will continue to keep prices and profit margins low leading to eroding ASPs that will continually challenge EMS and ODM providers.
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Palm acquisition benefits and HP’s EMS universe

Low risk for Hewlett Packard with huge payoff potential. Acquisition catapults HP into Mobile devices. Microsoft and Google relations could sour. EMS currently serving HP include Flextronics, Jabil Circuit, Sanmina-SCI, Hon Hai… 

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EMS as a growth industry and reasons for optimism

EMS industry underestimated. Growth opportunities seen at numerous EMS companies. Sanmina-SCI in major identity makeover. Flextronics disproportionate beneficiary in computing. Clean tech aids non-traditional EMS sectors. OEMs reevaluate strategies.

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Foxconn, Flextronics, Jabil, Celestica top chip spenders 2010

2010 chip spend for EMS providers to total $38 billion. OEMs to outsource other product types. OEM semiconductor spend to rise 13%.


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China consumer tech spending trends

Looking at LCD flat screen TV brands most likely to be purchased, consumers like Sharp and Sony (both 10%) most, followed by Samsung (8%), among the LCD TV brands. PC brands most likely to be purchased, consumers prefer Lenovo (20%), followed by HP (11%), unbranded computers (9%) and…Dell (7%).
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How to Cut Costs 5% to 15% for EMS Manufacturing Services

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