An early teardown (translation) of Samsung's (SSNLF) Galaxy S5 has turned up the same 6-axis InvenSense (INVN) motion sensor found in the Note 3. The InvenSense part displaces the STMicroelectronics (STM) motion sensor found in the S4.
Multiple Maxim (MXIM) power ICs were also uncovered. Though Barclays thinks Maxim lost the gesture IC slot it had in the S4 to rival AMS, it nonetheless thinks its dollar content grew ~10% (previous).
An NXP (NXPI) NFC controller/secure element displaced the Broadcom (BRCM) NFC chip that went into the S4; Barclays estimates the design win will be worth $50M-$60M to NXP, assuming average content of $1. Broadcom is still expected to get $4/unit for supplying the S5's Wi-Fi/Bluetooth combo chip.
Synaptics (SYNA) is believed to have the S5's touch controller slot and (though not revealed in the teardown) its fingerprint/swipe sensor slot. The company's S4 touch controller win delivered a windfall.
Though a Skyworks (SWKS) power amplifier module and discrete amplifier were found, and a Wi-Fi filter is believed to be present, Barclays thinks Skyworks' content share likely fell, thanks to the absence of Wi-Fi switch/LNA content. It also thinks the total value of the S5's Wi-Fi RF content is lower due to Broadcom's use of internal power amplifiers (possibly a negative for S4 supplier ANAD).
Separately, DisplayMate calls the S5's OLED display "the best-performing smartphone display we have ever tested," after doing an in-depth analysis. The display's color accuracy, brightness, ambient lighting performance, and power efficiency all receive high marks. OLED materials/tech supplier Universal Display (OLED) will be happy to hear that.
Universal Display (OLED) expects 2014 revenue of $190M-$205M, in-line with a $198.9M consensus. At the midpoint, the guidance range implies 35% Y/Y revenue growth.
Materials sales totaled $25.5M in Q4, -16% Q/Q and +153% Y/Y; green host and emitter sales once more lead the way. Royalty/license fees +50% to $23.1M; Samsung licensing revenue rose to $20M from $15M a year earlier.
Materials gross margin rose 210 bps Q/Q and fell 2290 bps Y/Y to 69.8%. Opex rose 52% Y/Y to $30.1M.
As expected, Samsung (SSNLF, SSNGY) has unveiled its next-gen flagship smartphone at a Mobile World Congress event (live blog). Whereas the Korean electronics giant trumpeted a variety of bells and whistles (some might say gimmicks) when launching the Galaxy S4 a year ago, it's taking a more low-key approach with the S5.
The S5 has a 5.1" display, just slightly larger than the S4's 5" display. The resolution is unchanged at 1080p; past reports had pointed to a 2K resolution. Like Apple (AAPL) with the iPhone 5S, Samsung is integrating a fingerprint sensor into the S5's home button, and is offering a gold model.
A 16MP camera supporting 4K video recording is included (the S4 has a 13MP camera), as is a perforated back meant to provide better grip. Qualcomm's (QCOM +0.2%) Snapdragon 801 baseband/app processor (2.5GHz., quad-core) powers the device. A heart rate monitor and slightly larger battery are also on board.
Remarks from co-CEO JK Shin point to a shift in Samsung's product philosophy, one that arguably meshes with reports of a deal with Google to tone down Samsung's efforts to customize its hardware. "Our consumers do not want eye-popping technology or the most complex technology."
Samsung (SSNLF) has sent out invites for a Feb. 24 event at the Mobile World Congress that's expected to feature the launch of the Galaxy S5. Separately, Korean and Indian sites indicate the S5, like the S4, will eventually be accompanied by a water/dust-resistant Active version, and a Zoom version featuring a camera with an optical zoom.
The timing of the S5 event is three weeks ahead of when the S4 launched last year.
The S5 is expected to have ~5.25" display with a whopping 2K (2560x1440) resolution, a 16MP camera, and a fingerprint sensor. It might also ship in both a costlier metal version and a cheaper plastic version.
The launch of Samsung's next flagship will follow a downbeat Q4 report, and a reported deal with Google in which Samsung agreed to tone down its efforts to offer custom apps/UIs for its Android hardware.
Samsung is facing stiffening competition from Chinese OEMs as Android sales continue seeing a mix shift towards cheaper hardware (often sold in emerging markets). Following an epic rise from 2011-2013, IDC estimates Samsung's smartphone share fell 30 bps Y/Y in Q4 to 28.8%.
Companies likely to have strong S5 exposure (as a % of total revenue): OLED, ANAD, SYNA, RFMD, MXIM.
SamMobile, which has been fairly accurate with its Samsung (SSNLF, SSNGY) scoops, reports the Galaxy S5 will come in both a costlier metal and cheaper plastic versions, and feature a 2K (2560x1440) OLED display in the 5.25" range.
The Galaxy S4, by contrast, features a 5" 1080p display. A Korean site previously reported the S5 would come in metal and plastic versions, while adding the metal version would also have a curved display.
Universal Display's (OLED) shares recently sold off on a report from a Chinese site stating the S5 would use Sharp LCDs instead of OLEDs, but the small size of the drop suggested investors were skeptical from the start.
SamMobile also reports the S5 will have a 16MP camera (the S4 has a 13MP camera), and that it will rely on both Samsung's Exynos 6 CPU and Qualcomm's (QCOM) recently-announced Snapdragon 805 (its new flagship). The S4 uses a combo of Samsung's Exynos 5 and Qualcomm's Snapdragon 600.
Meanwhile, Italian journalist Flavio Piccioni reports Samsung will host its S5 event in mid-March. That's exactly when Samsung hosted its S4 event last year.
"Options markets suggest this will be one of the most important earnings seasons in 10 years for stock pickers given low expected correlation and limited pre-positioning," says Goldman analyst John Marshall.
"We expect outsized profitability for call buying strategies on single stocks this quarter," he adds, noting options markets are actually pricing in a lower earnings-day move than any time on record for the average stock. "We expect earnings surprises to spark unexpectedly large stock moves."
The average earnings-day move last quarter was 3.5x as large as the average daily move, he says, greater than any other time in the past 17 years.
A Chinese site reports (translation) Samsung is having trouble mass-producing Super AMOLED displays featuring 2K (2560x1440) resolutions for the Galaxy S5, and has thus decided to have its next-gen flagship phone use Sharp (SHCAY) LCDs.
Universal Display (OLED -2.4%), which gets over half its revenue from Samsung, sold off in afternoon trading thanks to the report. The relatively moderate size of the drop suggests investors have their doubts about the report.
Ramping sales to Samsung - particularly sales of green host/emitter materials for the Galaxy S4 and other high-end Samsung smartphones - allowed Universal to post triple-digit materials revenue growth in Q3.
Samsung announced in November it plans to launch phones with 2K displays in 2014, and phones with 4K displays in 2015. There's plenty of skepticism regarding the practical value of placing such high-res displays on smartphones.
Canaccord's Jonathan Dorsheimer is reiterating a Sell on Universal Display (OLED -2.1%) and predicting the OLED TV and bendable phone prototypes likely to be shown off at CES (runs from Jan. 7-10) won't translate into major commercial volumes.
Dorsheimer, who downgraded Universal to Sell on Oct. 1 (he cited checks pointing to Samsung/LG OLED material R&D programs), also highlights Sony and Panasonic's recent decision to call off an OLED TV JV.
Thanks to a mixture of strong green host/emitter material sales growth (fueled by high-end Samsung phones), margin/competition concerns, and patent news, Universal's shares have had plenty of ups and downs in 2013. With two trading days left in the the year, they're up 30% YTD.
Citing technical challenges in improving panel durability and lowering production costs, Sony (SNE -1.7%) and Panasonic (PCRFF) are ending an OLED TV panel JV, and will focus on creating 4K/UltraHD LCD panels. OLED materials/technology provider Universal Display (OLED -0.4%) is off moderately.
Samsung and LG remain committed to creating OLED TV panels and sets; the companies settled a bitter LCD/OLED IP dispute in September, and have independently launched OLED sets. However, their price tags make them a niche product for now.
Universal Display (OLED +6.9%) is reiterated at Buy with a $50 price target at JMP Securities, which raises estimates for next year based on increasing use of the organic light-emitting diode technology by Samsung, a possible deal with LG Electronics and possible inclusion in the OLED display of a forthcoming iWatch from Apple (AAPL).
After talking with company management last week, JMP analyst Alex Gauna says he didn’t fully appreciate the revenue ramp from OLED's green host and emitter technology it will get from Samsung's Galaxy S4 and Note 3, and it will not have the inventory overhang it suffered from last year.
Gauna adds that Apple is launching an OLED-based iWatch - he’s "not sure what the timing is” but "it sure feels like it’s a 2014-type of development"; he thinks “Apple would have to include Universal technology to make a compelling product.”
Samsung (SSNLF, SSNGY) says it has sold 10M+ Galaxy Note 3 units (measured in terms of of channel sell-in, rather than end-user sales) since the 5.7" phablet went on sale on Sep. 25.
The figure highlights the burgeoning size of the phablet market, whose growth has been fueled in part by strong Asian demand. It comes in a year that has seen sales of Samsung's flagship Galaxy S4 fall short of initial expectations, and a host of rival OEMs launch phablets of their own. Samsung tries to differentiate its Note line via its proprietary S Pen and related apps.
Universal Display (OLED) and Synaptics (SYNA) are among the companies that benefit from strong Note 3 sales.
Meanwhile, South Korea's ET News reports (translation) Samsung has lowered its 2014 smartphone shipment target to 330M units from a prior 360M. The new figure represents expected growth of just 14%, or less than the 20% growth forecast by IDC.