CES 2018 Review

CES: Connectivity, Efficiency, Satisfaction

CES 2018 Review

Wonjae [email protected]

Hakmoo [email protected]

Chul Joong [email protected]

Young Gun [email protected]

Seung Ho [email protected]

Analysts who prepared this report areregistered as research analysts in Korea butnot in any other jurisdiction, including the U.S.PLEASE SEE ANALYST CERTIFICATIONS ANDIMPORTANT DISCLOSURES & DISCLAIMERS INAPPENDIX 1 AT THE END OF REPORT.

Mirae Asset Daewoo Research2| CES 2018 Review

I. CES 2018 review conclusion

II. CES history, keynote speech

III. Connected cars

IV. TV/Display

V. VR/AR

VI. Robotics

VII. Korean exhibitors at CES 2018

VIII. Others


■ Connectivity

- We are moving towards an ultra-connected society, where networks connect humans with each other and devices, and devices with humans and eachother.

- At CES 2018, the possibility of the establishment of smart cities (moving beyond the smart car and smart home technologies) was placed in the spotlight.

- The invention of the internet has allowed for the sharing of human knowledge. In the future, securing and utilizing big data will hold the key tosuccess for IT firms.

* Amazon Alexa in 2017 vs. Google Assistant in 2018

Amazon and Google will garner more attention; additional investments in 5G network are necessary.

■ Efficiency

- In a world where everything is connected, overall efficiency will be enhanced to overcome the constraints of time and space.

- Time constraint issues to be resolved with: 1) Self-driving cars; and 2) robots

- Space constraint issues to be addressed with: 1) AR/VR; and 2) sharing services, such as Uber (car sharing)and Airbnb

Domestic semiconductor/display/smartphone component players likely to expand into new markets (e.g., automotive electronics, robots)

■ Satisfaction

- Improving efficiency to enhance consumer satisfaction levels

The 4th Industrial Revolution to allow humans to spend more time on entertainment and health-related activities; the entertainment,biotech and healthcare sectors to come into focus

CES: Connectivity, Efficiency, Satisfaction

I. Key takeaways from CES 2018




III. Connected cars

IV. TV/Display

V. VR/AR

VI. Robotics


VIII. Others


II. History of CES and CES 2018 keynote addresses

■ CES: 50 years as the IT trendsetter - First held in New York in 1967, CES now takes place in in Las Vegas each January.

- New IT products/technologies unveiled at past CES events include the following: VCRs (1970); camcorders (1981); DVD players (1996); HDTVs (1998); and OLED TVs (2008).

- New products/technologies showcased at recent CES events include the following: 3D TVs (2011), smart watches (2012); UHD TVs (2013); curved TVs and wearables (2014); IoT (2015); smart cars and VR devices (2016); and autonomous vehicles 2017).

- While the Mobile World Congress (MWC) held in March each year focuses on mobile devices, CES is a home appliance-oriented show.

- Technologies related to smart cities and cyber security, as well as future growth engines related to AI technologies, should garner attention at CES 2018.

- Key words for CES 2018 (January 9th to 12th) include: 1) 5G mobile technology; 2) autonomous driving; 3) cyber security; 4) robotics; and 5) IoT.

CES 2018: The future of smart cities

Flagship products presented at past CES events

Source: Press materials, Mirae Asset Daewoo Research

First CES (1967) vs. CES 2018

Source: Press materials

1970: VCR (Philips)

1967: Inaugural event

1996: DVD

2008: OLED TV (Panasonic)

1981: CD & camcorder (Sony)

1998: HD TV

2011: Tablet PC

2001: XBOX (MS)

2018: AI


① How data is shaping innovation for the future


Intel shows off its Volocopter ‘flying car’ (‘autonomous air taxi’)


NBC to live stream 2018 Winter Olympics in VR

II. Keynote addresses #1: Intel CEO Brian Krzanich


Jazz improvisation at Intel's CES 2018 pre-show

■ Data will redefine the future of human beings - By 2020, the average person is expected to generate 1.5GB of data a day; each

autonomous vehicle, approximately 4,000 GB of data; and each smart factory, 1PB of data.

- Data innovation to drive technological advances for autonomous driving, AI, VR, andimmersive media.

- Autonomous driving: Intel should expand its cooperation with Chinese automakers;Shanghai Motors is looking to develop Level 3, 4, and 5 self-driving cars, based on thetechnology of Mobileye, which was acquired by Intel in 2017.

- Intel CEO announced a three-year partnership with Ferrari North America that “willbring the power of artificial intelligence to the Ferrari Challenge North America Series.”

- Artificial Intelligent (AI): As part of a groundbreaking musical performanceintroducing Intel’s keynote at CES 2018, a percussionist accompanied a pianist in ajazz improvisation featuring AI avatars playing guitar and bass.

- Virtual reality (VR): Intel unveiled its “voxel” VR system, that lets users watch sportsfrom a player’s point of view. The voxel is the next step from the pixel, and can beviewed as a pixel that is placed in three-dimensional space.

- Intel Ture VR technology will be used for the 2018 PyeongChang Winter Olympics;roughly 30 events will be broadcast live in VR.


■ Ford developed its new self-driving platform- At CES 2018, Ford unveiled a new cloud-based platform for mobility services,

which is designed to provide drivers with information on road and weatherconditions.

- At the tech show, Ford CEO Jim Hacket said that the time would come whensmart roadside infrastructure and shared transportation means will come intofocus, adding that technology will be developed to support a more-efficientvehicle management, based on a cloud-based mobility platform.

- Ford also showcased its Cellular Vehicle-to-Everything (C-V2X) technology,intended to ensure that everything in a city, including stoplights, and signs thatcan communicate with each other.

- Ford plans to apply the C-V2X technology (jointly developed with QualcommTechnologies) to all new vehicles by end-2019. With the development of theTransportation Mobility Cloud, the firm has also established a revenue modelusing autonomous vehicles. The firm is also teaming up with Lyft, Domino’s, andPostmates to expand its business areas.

- The firm has also developed the Ford Fusion Hybrid Titanium, a self-drivingdelivery vehicle for which all the doors can be unlocked with a 4-digit code.

② “The era of car-manufacturing-only is over”


Ford releases Ford Fusion Hybrid Titanium, a self-driving delivery vehicle


Ford and Qualcomm jointly developed the C-VX technology

II. Keynote addresses #2: Ford CEO Jim Hackett


Ford pre-releases the transportation mobility cloud


■ Huawei unveiled Mate 10 smartphones, based on its AI chip (NPU)- At its CES keynote, Huawei CEO Richuard Yu addressed the controversy over a failed

deal to have AT&T sell its flagship phone, saying that the lack of US carrier supportwould be a big loss to US consumers, who will lose out on a strong smartphone option.

- Prior to its entry into the US, Huawei plans to enhance its brand image by advancingits premium products.

- At the tech show, the firm unveiled the Mate 10 Pro (powered by its AI processor), andits neutral processing unit (NPU), and disclosed details regarding its camera modulesand security policy.

- The Mate 10, released in Europe and China back in October 2017, is powered by thefirm’s in-house developed Kirin 970 chip (with AI capabilities and embedded with400mAH battery). This model is slated for launch in the US in February.

- The firm has also launched the Matebook X series, in order to expand into thepremium notebook markets in Europe and North America.

- Huawei’s first-ever laptop, the Matebook X, is based on the 7th Generation Intel Core i7processor, which is equivalent to those embedded in SEC’s Pen, and the LG gramlaptop.

- The Matebook E, a 2-in-1 laptop tablet, is a rival to Microsoft’s Surface Book.

③ Poised for entry into the US market


Huawei to release its premium smartphone model, the Mate 10, in the US in February


Huawei Matebook was designed to rival Microsoft’s Surface series

II. Keynote addresses #3: Huawei CEO Richard Yu


Huawei uses the slogan “Wow Way” for English-speaking consumers


④Mobile Innovation: Future of 5G technology


Qualcomm’s first-ever 5G modem, Snapdragon


Qualcomm CEO Steve Mollenkopf unveils its 5G technology

II. Keynote addresses #4: Qualcomm, Verizon, Baidu


CES 2018 Keynote addressing 5G mobile telecommunications technologies

■ 5G will aid in establishment of ultra-connected society - At CES 2018, the potential of 5G to aid in the establishment of smart cities took center

stage.- During the keynote, “Mobile Innovation: How 5G will Enable the Future,” executives from

Qualcomm, the world’s leading processor maker, Verizon, the US’ largest mobile carrier,and Baidu, China’s largest search engine company, discussed the ways in which 5Gconnectivity will transform industries, business models, and society as a whole.

- Qualcomm unveiled the Snapdragon X16 LTE model, featuring improved speed,efficiency, and connectivity. The firm also showcased the Qualcomm Halo wirelesselectric vehicle charging technology.

- In 2016, Verizon already set up 5G spectrum allocation plans and confirmed the frequencydomain. The firm is looking to commercialize 5G services for the first time in the world in2H18, by launching 5G services in some US cities, such as Atlanta, Houston, Miami.

- Baidu will likely unleash accelerated innovation for autonomous driving, smart home,and 5G at “China speed.” Indeed, China has massive quantities of data, which holdsthe key to 5G technology. The Chinese government has a plan to promote AI and 5Gtechnologies over the next five years.

- Once 5G gains traction, communication costs between devices will be lowered andbattery consumption will also be reduced, thus boosting markets for fitnesswearables, smart apparels, and security systems.




III. Connected cars

IV. TV/Display

V. VR/AR

VI. Robotics


VIII. Others


■ Jeep’s Uconnect to spark expansion of connected car services - At CES 2018, Jeep offered Uconnect demos for its Wrangler model.

- Drivers can connect to and remotely control their vehicles via smartwatches;network connectivity enables better navigation/alert functionality thanconventional built-in navigation systems.

- Furthermore, Jeep is likely to launch Jeep Skills for Amazon’s Alexa and Echo Dotsoon.

- Infotainment systems are increasingly supporting Apple CarPlay and AndroidAuto, becoming more convenient and customer-oriented.

- Car connectivity will likely expand going forward.

- Infotainment system makers, including Sony, Kenwood, and Pioneer, aresupporting not only Apple CarPlay and Android Auto, but also Google Assistant.

Source: Mirae Daewoo Research

Jeep’s Uconnect

Source: Rinspeed, Mirae Daewoo Research

Sony’s and Kenwood’s infotainment systems

III. Connected cars


Pioneer’s infotainment systems

Telematics services to drive car connectivity market


■ LTE-based V2X technology to support connected car platforms- Qualcomm will likely drive the expansion of connected car services by supplying

chipsets based on LTE-based V2X technology to automakers.

- Since last year, Qualcomm has been testing its LTE-based V2X technology (inFord vehicles) on public roads, along with German, French, and US companies;the chipmaker plans to make V2X more sophisticated through additional roadtests.

- Going forward, the company plans to offer 5G-based V2X technology to supportautonomous driving.

- Wireless access in vehicular environments (WAVE), the first V2X technology(developed by NXP Semiconductors and STMicroelectronics), needs additionaltelecom infrastructure in order to be adopted by connected car services.

- However, LTE-based V2X technology can use existing mobile networks;furthermore, when 5G services are launched, the technology will boast acompetitive edge without additional costs.


Cellular V2X technology to enable greater driver safety


LTE-based V2X technology should be able to offer competitive services without additional costs when 5G services are launched

III. Connected cars


LTE-based V2X technology can facilitate the transmission of high-quality, in-car content

Qualcomm’s LTE-based V2X and dawn of 5G era


■ Mercedes-Benz, Nissan, Toyota, and Korean automakers are introducing AI features to their models - Most automakers that displayed cars at CES 2018 plan to use AI to develop more

user-friendly infotainment systems and offer more comfortable drivingexperiences.

- This trend is being driven by Mercedes-Benz, which unveiled innovativeinfotainment systems with stable, intuitive UIs during CES 2018, increasing thelikelihood of commercial AI application.

- Nissan unveiled a brain-to-vehicle technology that allows a car to automaticallyturn the steering wheel or to accelerate by reading the driver’s brain waves.

- Hyundai Motor (HMC) and Kia Motors also demonstrated voice recognitionfeatures for autonomous driving.

- Car connectivity is essential to the application of automotive AI, as the use ofservers is necessary to ensure system stability and reliability.

Source: Motorgraph

Mercedes-Benz’s next-generation infotainment system


Nissan’s brain wave-reading next-generation concept car

III. Connected cars


Voice-activated driver’s seat (Hyundai Motor)

AI to accelerate car connectivity


■ Connected parking and automated valet parking to expand- Bosch presented a connected parking solution (part of its smart city business) at

CES 2018..

- Domestic and US drivers are estimated to spend 30% of their driving hourssearching for parking spaces.

- Bosch’s connected parking solution aims to automatically recognize andmeasure the gaps between parked cars, transmitting the data in real time to adigital map; then, drivers can be guided directly to empty parking spaces.

- Bosch is already testing its service in German cities, including Stuttgart; this year,the solution will be tested in 20 US cities, including Los Angeles, Miami, andBoston.

- Automated valet parking is a more advanced parking solution.

- After arrived at a parking garage, the driver can leave his/her vehicle at a drop-off area. By clicking on a smartphone app, the driver can send his/her car to afree space (autonomously).

- These services will likely stimulate demand for car connectivity. Source: Bosch

Bosch’s connected parking solution concept


Smartwatches to support Mercedes-Benz’s automated valet parking

III. Connected cars


Automated valet parking (Mercedes-Benz)

Increased parking convenience


■ Advanced sensors and high-precision map technologies - During CES 2018, more advanced autonomous driving technologies were

confirmed, thus increasing the visibility of autonomous cars and expectationsfor 5G network technology.

- In our view, autonomous cars represent a core application of 5G; sophisticatedtechnology related to sensors and high-precision maps, which are essential forautonomous cars, were presented at CES 2018, boosting expectations for thelaunches of autonomous cars.

- As low latency is essential for autonomous cars, which are dependent on avariety of external data, the introduction of autonomous cars will likely drive thegrowth of 5G services.

- In addition, autonomous driving will likely lead to an increase in datatransmission requirements, further increasing the need for 5G services.


TomTom’s high-precision map

Source: Rinspeed, Mirae Daewoo Research

Map technology that identifies cars’ locations in a more sophisticated way

III. Connected cars


HERE’s connected vehicle services

Visibility of autonomous cars to boost expectations for 5G technology




III. Connected cars

IV. TV/Display

V. VR/AR

VI. Robotics


VIII. Others


■ OLED took center stage at TV makers’ booths - LGE presented its “OLED Canyon”, comprised of 236 4K OLED screens.

- Sony unveiled its new A8F OLED TV, which is cheaper than the previous model,the A1E, and showcased its ‘Acoustic Surface’ Crystal Sound technology at adedicated booth.

- Most Chinese TV makers placed OLED TVs at the center of their booths.

- Skyworth, Changhong, Hisense, and Konka offered their wallpaper displays andCrystal Sound technologies as their key exhibits.

- Panasonic and Vestel also showcased some of their OLED TV models.

- Meanwhile, QLED TVs have lost ground, compared with last year.

- Among major TV makers, only TCL showed off QLED TVs as the centerpiece of itsexhibit.

- The pool of OLED TV makers expanded to 15 this year, with Sharp and Hisensethe latest additions.

- Overall, exhibitors presented more advanced TVs, in terms of both design andtechnologies, than last year.

TV: Rise of OLED

Source: Mirae Asset Daewoo Research

LGE’s 4K OLED Canyon


Skyworth’s OLED Wallpaper

IV. TV/Display


Sony’s 4K OLED TV



Changhong’s Wall Paper OLED TV

Source: Konka, Mirae Asset Daewoo Research

Konka’s OLED TV


Changhong’s Crystal Sound OLED TV

Skyworth’s Crystal Sound OLED


IV. TV/Display



Vestel’s OLED TV


TCL’s QLED TV


SEC’s QLED TV

Panasonic’s OLED TV


IV. TV/Display


■ Rollable TVs - LGD unveiled a 65” UHD rollable TV panel (with a curvature radius of 50mm) at

its invitation-only booth.

- The new panel is expected to be folded/unfolded over 100,000 times (a life cycleof about 10 years assuming daily folding/unfolding at 30 times).

- Rollable panels also enable users to adjust the aspect ratio.

- If LGD improves the design and utilization of the bottom box, it should be ableto present newfound value to customers.

- In addition to rollable displays, LGD presented an 8K OLED TV, a TV andnotebook PC based on Crystal Sound OLED (CSO) technologies, and acommercial large-sized display with “in-cell” touch function.

- Of note, the company has developed an 88” 8K OLED display by successfullyreducing the aperture ratio.

TV: Rollable and MicroLED TVs

Source: Media reports, Mirae Asset Daewoo Research

LGD’s rollable OLED display


LGD’s 88” 8K OLED TV


LGD’s rollable OLED display

IV. TV/Display


■ MicroLED TVs- SEC unveiled “The Wall,” the world’s first modular 146” TV based on MicroLED

technology.

- Thanks to the model’s module-based design, users can customize the shape andsize.

- As each pixel is its own LED, it can be lit up or turned off, as necessary.

- Unlike OLED, MicroLED panels use inorganic materials, and thus have no “burn-in” issues.

- Korean LED product manufacturer Lumens also unveiled its MicroLED TV.

- A 139” UHD MicroLED TV could be made of 1,020 modules of 102X5mm.

- A MicroLED TV’s pixel pitch averages 0.8mm, with 128X51 pixels per module.

TV: Rollable and MicroLED TVs


SEC’s The Wall


Lumens’ 0.57” micro LED


Lumens’ microLED TV

IV. TV/Display


■ MicroLED - MicroLED is a self-emitting display consisting of microscopic LEDs (5-10㎛).

Theoretically, MicroLED has a wide array of potential applications, including low-energy devices, ultra-large screens, and flexible displays.

- MicroLED displays do not require color filters or BLUs, which are essential to LCDdisplays that utilize the light-modulating properties of liquid crystals. Moreover,unlike OLED displays, which require an encapsulation process to protect organiccompounds from moisture, MicroLED is not sensitive to external conditions.

■ MicroLED power consumption five times lower than OLED- Expectations are particularly high for MicroLED, due to its low power consumption.

- Despite ongoing battery capacity growth (iPhone 5’s 1,440mAh iPhone 7’s1,960 mAh), battery hours per charge have not improved significantly, asconsumers spend more time connected to the internet, and display panelsconsume increasing amounts of power.

- Battery hours are particularly important for smart watches, such as the AppleWatch, which have batteries that can last 18 hours on a charge.

- Apple’s investment in MicroLED is widely believed to be part of the firm’smid/long-term roadmap to extend battery life.

TV: MicroLED technology

Source: YOLE

MicroLED structure

Source: Phone Arena, Mirae Asset Daewoo Research

iPhone battery capacity and talk time

1,440 1,560

1,810 1,715 1,960

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0

500

1,000

1,500

2,000

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iPhone 4 4S 5 5S 6 6S 7

배터리용량(L)Talk time (R)

(mAh) (Hours)

IV. TV/Display

Battery life (L)


■ MicroLED process consists of light-source manufacturing and transfer processes- In the light source-manufacturing process, wafers are divided into small 5-10㎛

LED chips.

- Chip-separating methods include: 1) flip-chip, which uses electrical bondingtechnology; 2) heating; and 3) wet etching.

- In the transfer process, separated ultra-small LED chips are transferred to eitherflexible or rigid substrates. Study of the electrostatic transfer element (ETE) andelastomer stamp methods are currently underway.

- ETE uses electrostatic effects, specifically, forming an electrode on the upperportion of a chip, and picking up the chip using print head, with some voltageapplied thereto.

- Elastomer stamp refers to the transfer of chips to either flexible or rigidsubstrates, by casting polydimethylsiloxane (PDMS) against a microfabricatedmaster wafer.

■ MicroLED display not yet cost-effective- Pure-LED display (with all pixels composed of LED chips) may be too costly to be

used in large-sized and high-resolution products.

- For UHD (3840 x 2160) displays, ~ 25m pixels are required.

- Indeed, at the 2012 CES, Sony unveiled its crystal-LED TV (based on the micro-LEDtechnology), which featured a total of 6mn MicroLED units (2mn red, green, andblue LED chips) to realize full-HD resolution pictures.

- Although Sony’s micro-LED display outperformed existing LED products, in termsof contrast, color gamut, and response speed, it was not commercially launched,due to high costs.

- While Sony revealed its next-generation MicroLED, CLEDIS, in 2016, it is highlylikely to be used for outdoor display advertising (rather than in householdelectronics), owing to the still-lofty manufacturing costs.

■ Market penetration to be limited in short term- In their early stages, micro-LEDs will likely be used only for some relatively low-

resolution wearable devices and large displays for outdoor ads.

- We do not believe micro-LEDs will be adopted in TVs (which have seen steady risesin resolution) or replace OLEDs, for which production costs have fallen to those ofLCDs.

- In the medium to long term, we think the decline in LED chip prices arising fromprocess improvements, particularly in chip-bonding technology, deservesattention.

TV: mLED technology

Source: KOPTI, Mirae Asset Daewoo Research

LuxVue’s ETE method

Source: Phone Arena

No. of sub-pixel by product

Company Product PPI No. of sub-pixels

Sony Crystal LED display 40 6,220,800

Sony CLEDIS™ 15 345,600

Apple Apple Watch 38mm 290 277,440

4K UHD TV (3840X2160) - 24,883,200

IV. TV/Display


■ TV makers expanding their OLED exposure - Chinese TV makers, as well as major global TV producers, are carrying out

aggressive marketing campaigns for OLED products.- Chinese players, like Skyworth, Changhong, Konka, and Hisense, placed OLED

products at the center of their CES booths.- Overall, exhibitors presented more advanced TVs, in terms of both design and

technologies, than last year.- Chinese TV makers are strengthening OLED marketing activities, as OLED sales

sharply outpaced LCD sales in 2017.- LGE’s HE division recorded an OP margin of 8% in 4Q, a traditional low-demand

season.- Historically, the TV market’s trend has been dictated by the direction of TV

makers’ investments.- In 2018, a total of 15 TV makers are expected to produce OLED TVs, with Sharp

and Hisense the most recent newcomers.- Hisense, Skyworth, Changhong, Konka, and Sharp claim a combined market

share of 36% in China.- We will likely see more panel makers making forays into the OLED space.

2018 to mark start of OLED TV market growth

Source: Industry data, Mirae Asset Daewoo Research

Monthly OLED TV sales volume


Major TV makers’ Chinese market share


OLED TV shipments and penetration

IV. TV/Display

0

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(%)

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16/1 16/4 16/7 16/10 17/1 17/4 17/7 17/10 18/1

(‘000)

기타

중국업체

일본업체

LG전자

0.0

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2015 2016 2017 2018F 2019F 2020F 2021F

(%)(mn)

OLED TV 출햐량 (L)

OLED TV 침투율 (R)

OLED TV Shipment(L)OLED TV Penetration rate(R)

Others

China

Japan

LG Electronics


■ Google, the winner of CES 2018 - Google garnered the greatest attention at CES 2018.

- The company promoted its AI-based Google Assistant platform

- Google’s AI platform is different from Amazon’s, as it “visualizes”information and can be installed in existing devices.

- TV markers, like LGE, TCL, Skyworth, Hisense, and Konka, showcased TVssupporting Google Assistant.

- Google also introduced the Smart Display, a new AI hub, developed incooperation with Lenovo, JBL, LGE, and Sony.

- Lenovo Smart Display features speakers built into the sides of a 8-10” screen.

- As Google Assistant is enabled via voice commands, it does not require touchmodules for displays.

Impact of AI on display


Google, the winner of CES 2018


Skyworth’s products supporting Google Assistant


LGE’s products including Google Assistant

IV. TV/Display



LGE’s Smart Display


UBL’s Smart Display


Lenovo’s Smart Display

TCL’s TV supporting Google Assistant


IV. TV/Display


■ Automotive display demand to grow in line with spread of AI-based vehicles - We see strong growth potential for automotive display for the following reasons:

1) Demand for output devices should increase alongside the growingadoption of automotive electronics in vehicles

2) Automotive display systems should also be important for drivers’entertainment during autonomous driving, as well as for differentiationfrom traditional vehicles

- Google is also cooperating with 40 companies for the adoption of GoogleAssistant for automotive applications.

- SEC and Harman introduced the Digital Cockpit platform, which consists of threedisplays, including a 12.3” OLED, 12.4” flexible, and 28” QLED.


Automotive display demand to grow

Source: Mirae Asset Daewoo ResearchSource: Media reports, Mirae Asset Daewoo Research

SEC’s digital cockpit

IV. TV/Display


■ Display also the key feature for concept cars - Panasonic unveiled futuristic concept for its driverless cars, with large-sized

displays on the top and sides.

- Byton’s concept car features a 49” wide dashboard monitor and 8” touch screenon the steering wheel.

- Mercedes-Benz unveiled its new infotainment system, called the Mercedes-BenzUser Experience (MBUX). Powered by NVIDIA AI technologies, the systemfeatures a voice-controlled touchscreen and two 10” displays.

- Mercedes-Benz will apply the MBUX in new A-Class models starting in April ofthis year.

- Hyundai Mobis, HMC, and Toyota also presented various concept cars andcockpits using high-end displays.



Panasonic’s autonomous concept car


Byton’s concept EV


Byton’s concept EV

IV. TV/Display




HMC’s concept car (interior)


Toyota’s concept car, e-Palette


Mercedes Benz’s MBUX

IV. TV/Display


Hyundai Mobis’ concept car


■ Increasing data processing volume to boost new display demand - Display stocks have been undervalued since the stagnation of TV demand, due

to lack of new applications generating fresh demand.

- The introduction of AI-based IoT and autonomous driving technologies areexpected to create new demand for displays.

- AI-enabled TVs, refrigerators, and speakers should require displays that canvisualize information.

- On the back of AI technologies, many home appliances and IT devices arebecoming increasingly versatile.

- SEC launched a refrigerator with a 21” LCD display.

- Display demand from other home appliance makers, like LGE and Whirlpool, isalso increasing, as they adopt the AI systems of Amazon or Google.



80% of information entering the human brain is visual


SEC’s refrigerator with 21” display


IoT in the kitchen

IV. TV/Display

See 80%


■ Demand from “others” to be important - AI-enabled speakers, smart home solutions, and self-driving cars should

generate fresh demand for displays going forward.

- Strategy Analytics projects that AI speaker shipments will grow to 160mn unitsby 2022 (similar to tablet PC shipments in 2017).

- AI speakers’ display adoption is expected to increase going forward.

- Although the smart home and automotive display markets are still in theirnascent stages, the markets are expected to grow to meaningful sizes, in linewith increasing display adoption and high ASPs.

- The ASP of automotive 17” panels is estimated to be four times higher than thatof notebook PC panels, as they are customized according to models andcustomers.


Source: Voicebot, Mirae Asset Daewoo Research

AI speaker shipment trend


Automotive display market outlook

Source: Voicebot, Mirae Asset Daewoo Research

AI-enabled speaker market breakdown

IV. TV/Display

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(mn)

97.771.3

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Ohters Google Amazon

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2015 2017 2019F 2021F 2023F

(US$bn)

차량용디스플레이시장규모추이Auto display market size




III. Connected cars

IV. TV/Display

V. VR/AR

VI. Robotics


VIII. Others


■ VR- Major firms have launched standalone VR headsets with built-in display and

chips Formation of the VR market

- The IDC forecasts the VR market to expand to US$800mn (with an annual sales volume of 30mn units) by 2020

- Oculus is expanding into the Chinese VR market through a partnership with Xiaomi Facebook (Oculus’ parent company) to secure a footing in the Chinese market

- Google released a standalone VR device by partnering with Lenovo The standalone device’s resolution shows improvement over Lenovo’s previous smartphone VR headset, thanks to its built-in display

- HTC, which focuses on high-end VR headsets, launched an upgraded PC VR device (Vive Pro) following the release of a standalone product in 2017: Two-track strategy

■ AR- The first Amazon Alexa-enabled digital glasses were unveiled Diversification of AI search results (voice and videos)

e.g., Google Assistant’s Smart Display and Amazon Alexa’s AR glassesSource: IDC, Mirae Daewoo Research

AR/VR headset shipments

Source: Engadget, Mirae Daewoo Research

Visual results of AI searches (Google Smart Display)

V. VR/AR

Source: IDC, Mirae Daewoo Research

AR/VR device market outlook

Moving to maximize strengths

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Augmented Reality

Virtual Reality

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(US$bn)

Augmented RealityVirtual Reality


■ Announces deal with Xiaomi to expand into Chinese market

- Facebook Vice President Hugo Barra announced a deal with Xiaomi as a hardware partner to manufacture the Oculus Go standalone HMD, during Qualcomm’s press conference

- Currently, Facebook products are banned in China the launch of hardware via Xiaomi is expected to lead to the soft landing of Facebook content in China

- The Mi VR Standalone, nearly identical to Oculus Go (released in October 2017), is set to be released with Xiaomi’s brand and software

- Expected specifications of Mi VR Standalone• Standalone VR device• AP: Qualcomm Snapdragon 821• Display: WQHD 2560 X 1440 LCD (higher than OLED’s resolution)• Expected price: US$199


Hugo Barra announces deal with Xiaomi during Qualcomm’s press conference

Source: Reuters, Mirae Daewoo Research

Oculus Go

V. VR/AR

Source: Oculus, Mirae Daewoo Research

Mi VR Standalone

Oculus


■ Mirage Solo, based on Google’s VR platform, unveiled

- In addition to its existing smartphone VR headset, Google released Mirage Solo, a standalone VR product, at CES 2018 Two-track (portability + premium) strategy

- Given the adoption of Qualcomm Snapdragon 835 AP, Mirage Solo could feature Android OS going forward Manufacturing by Lenovo + Qualcomm’s core parts + Google’s content

- Mirage Camera, a VR streaming camera, will also be launched to create a VR ecosystem

- Expected specifications of Mirage Solo • AP: Qualcomm Snapdragon 835• Display: QHD 2560 X 1440 5.5” LCD• 4GB memory; 64GB flash storage• Expected price: US$400 Source: Mirae Daewoo Research

Mirage Solo

Source: Androidcentral, Mirae Daewoo Research

Google’s Daydream VR (left) and Lenovo’s Mirage Solo (right)

V. VR/AR


Mirage Solo controller and Mirage Camera

Lenovo


■ Upgraded PC VR device, Vive Pro, unveiled

- To improve picture quality, two 1440x1600 pixel 3.5” AMOLED panels are used78% increase in pixel count, compared with Vive

- Vive Wireless Adaptor was also rolled out for wireless communication with PCs; the adaptor supports a 5G-level communication with PCs, thanks to the use of Intel’s WiGig technology

- HTC, which focuses on high-end VR headsets, unveiled an upgraded PC VR device (Vive Pro), following the release of a standalone product in 2017: Two-track strategy

- Expected specifications of Vive Pro • PC VR device No AP used• Display: Dual AMOLED 3.5”(2880 X 1600 pixels)


HTC unveils Vive Pro

Source: Cnet, Mirae Daewoo Research

Vive Pro

V. VR/AR


Vive Wireless Adaptor

HTC


■ First Amazon Alexa-enabled digital glasses unveiled

- Google Glass Enterprise Edition has been released; Apple is preparing apps using 3D depth sensing technology: the likelihood of smart glasses being launched is increasing

- Although many Alexa-enabled apps were released over the past year, Vuzix Blade has been the only Alexa-enabled smart glasses

- AI speakers generate voice search results, while smart glasses show visual results Amazon Alexa’s AR glasses are more advanced Google Assistant’s Smart Display

- Expected specifications of Vuzix Blade: US$1,000


Vuzix Blade


AR image

V. VR/AR


Vuzix Blade’s AR image

Vuzix



VR game


AR image

V. VR/AR


AR product similar to Google Glass

Other VR/AR displays


Realwear’s industrial AR kit




III. Connected cars

IV. TV/Display

V. VR/AR

VI. Robotics


VIII. Others


■ Robots becoming part of our daily lives- The International Data Corporation (IDC) forecasts the global robot market to

expand from US$71bn in 2015 to US$135bn in 2019.

- The International Federation of Robotics (IFR) expects China’s robot sales totriple (to 150,000 units) from 2015 to 2017, and China’s commercial robot marketto expand 10-fold by end-2019.

- Robots, whose utilization had previously remained confined to factoryautomation, have recently begun to be used in our daily lives.

- At CES 2018, LGE unveiled its serving robot, porter robot and shopping cartrobot. LGE Vice Chairman Jo Seong-jin said that LGE had been facing growingdemand for its robotics from the Pyeongchang Organizing Committee for the2018 Olympics and global international airports.

- Sony has recently revived its Aibo robot dog 11 years after shelving its originalline of robot dogs.

- At CES 2018, Honda showcased its new 3E (empower, experience, empathy) roboticsconcept, and Honda Accelerator, its startup technology development platform.

Advances in AI technologies to help accelerate the development of robotics

Robotics

Source: CES, press materials, company data, Mirae Asset Daewoo Research

LGE’s serving robot, porter robot and shopping cart robot


LGE’s AI robot, ClOi

Source: IFR, Mirae Asset Daewoo Research

Global commercial robot sales

VI. Robotics

13.2

9.1

1.2 1.01.2 1.0

0

4

8

12

16

가정용로봇 레저용로봇

2016-19F 2015 2014

(US$mn)

Household robots Leisure/entertainment robots



Sony’s robot dog Aibo revived after 11 years


Honda to release four types of 3E commercial robots


OMRON’s ping pong robot

VI. Robotics

Source: CES, press materials, ITRI, Mirae Asset Daewoo Research

Taiwan-based ITRI’s chess-playing robot


Source: CES, press materials, Murata, Mirae Asset Daewoo Research

Murata’s robots

Source: CES, press materials, Mirae Asset Daewoo Research

A variety of other robots

Source: CES, press materials, Mirae Asset Daewoo Research

A variety of other robots

VI. Robotics

Source: CES, press materials, Nidec, Mirae Asset Daewoo Research

Nidec’s robot




III. Connected cars

IV. TV/Display

V. VR/AR

VI. Robotics


VIII. Others


■ CES 2018 attracted around 4,000 exhibitors from 150 countries- 1,744 exhibitors from the US; 1,325 from China; and 210 from Korea

Korean exhibitors

- Coway: Fresh wear styling system (FWSS), smart bed system (e.g., smart sleepsensors, anti-snoring devices), air purifiers

- Hancom Group: Educational robots

- Patron: Healthcare products

- Bodyfriend: Massage chair

- Golfzon: Screen golf

- Thinkware Systems: Advanced driving assistance system (ADAS), such as LaneDeparture Warning System (LDWS)

- Movon: Drowsiness Warning System (DWS)

- Dot: Smart braille watch

- Roborus: AI robots for the service industry (e.g., face-recognition robots)

Korean exhibitors

Source: Coway, Mirae Asset Daewoo Research

Coway’s booth at CES 2018


Coway’s air purifiers and smart bed system


Coway’s fresh wear styling system (FWSS)

VII. Korean exhibiters at CES 2018



MCNEX: ADAS and automotive camera modules


Yujin Robot: Autonomous GoCart service bot


Golfzon: Screen golf



Patron: Healthcare products



Thinkware Systems


Hancom Group


Hancom Group



Lumens: 139” Mini LED display




III. Connected cars

IV. TV/Display

V. VR/AR

VI. Robotics


VIII. Others


■ 21 Keynotes- The CEO of Huawei and the vice chairman and COO of Baidu (China) delivered

keynote addresses at CES 2018.

- SEC, LGE, HMC, and Kia made media-day presentations.

■ Eureka Park Marketplace- A specialized exhibit area for startups.

- Attracted roughly 900 startups from 42 countries.

- At Eureka Park, SEC’s Creative Lab (C-Lab) garnered less attention than otherstartups from France, Italy, Singapore, the Netherlands, and Taiwan.

■ SEC and LGE took center stage at CES 2018. Who will follow suit?

Room for improvement

Source: CES, Mirae Asset Daewoo Research

Italian and French booths at Eureka Park Marketplace


Eureka Park Marketplace exhibitors


Dutch and Singapore booths at Eureka Park Marketplace

VIII. Others


■ Seven Dreamers (Japan) showcased Laundroid (automatic laundry-folding machine)- The average person spends a total of 375 days (or 9,000 hours) folding clothes

over his or her lifetime.

- FoldiMate, the robotic laundry-folding machine, earned an award at CES 2018.

- While the robot is currently limited to folding laundry, the developer envisions afuture where its functions include washing, drying, and folding laundry, as wellas delivering clothing items to the wearers’ respective rooms.

- Over the long term, the development of the laundry folding bot will lead toincreased spare time for consumers.

cf) The washing machine was one the of the most innovative inventions of the20th century.

Others

Source: Laundroid, Mirae Asset Daewoo Research

The average person spends a total of 375 days (or 9,000 hours) folding clothes over his or her lifetime


FoldiMate earns a CES award


Seven Dreamer (Japan)

VIII. Others


■ Urban farms - Food shortages are one of the most serious problems facing humans.

- In urban farms, vegetables are cultivated utilizing LED lamps.

- Automatic waterer and adjustments to sunshine amount should help furtherexpand agricultural production.

■ Sun-tracking system- Can also be used in solar power businesses.

■ Urban farms, solar power, purified water


Urban farms


Purified water bottles


Sun-tracking console system

VIII. Others


■ Google Assistant vs. Amazon Alexa- At CES 2017, many market watchers agreed that the winner was Amazon’s Alexa.

- During CES 2018, Google Assistant attracted keen attention.

- One of the core elements in a super-connected society is communications.

- In-put features (typewriting>touch>voice) that trigger the operation of devicesare needed.

- Whirlpool displayed both Google Assistant-enabled and Amazon Alexa–enabledversions of the same cooking utensil.

- Although Amazon is dominant in the virtual assistant market, Google, with itsAndroid smartphone OS, is coming back in full force.

Other takeaways from CES 2018

Source: Laundroid, Mirae Daewoo Research

Whirlpool booth

Source: CES, Mirae Daewoo Research

Amazon Alexa-enabled appliance

Source: CES, Mirae Daewoo Research

Google Assistant-enabled appliance

VIII. Others


■ ZTE’s AXON M- Smartphones have increasingly lost ground at CES, in line with the slowdown of

the smartphone market.

- This year, ZTE presented a foldable smartphone, the AXON M.

- With an extended mode, the smartphone’s entire system UI spans both screens,giving users larger displays for various uses.

- Currently, ZTE is the third or fourth largest smartphone maker, in terms ofmarket share in the US, competing with LGE.

- We are positive about the company’s various attempts.



ZTE’s foldable smartphone(AXON M) CES booth


ZTE’s foldable smartphone(AXON M), side view(hinge)


ZTE’s foldable smartphone(AXON M), front view

VIII. Others


■ Power outage - Rains in Las Vegas during the event caused a power outage for over two hours,

as well as roof leaks.



Intel booth hit by power blackout


Roof leak after rain


Message on power outage at CES

VIII. Others

Mirae Asset Daewoo Research54| Monthly InsighT

APPENDIX 1

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CES 2018 Review

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