On Tuesday, a US International Trade Commission issued a determination in the case of Masimo/Ceracor vs. Apple (AAPL) that was part of an investigation requested by Masimo (MASI) in June of 2021.  The case involved the pulse oximeter sensor system in the Apple Watch 5, which Masimo and Ceracor (pvt) believed violated certain patents that the companies held.  The original complaint indicates that Masimo, who is said to have discovered how to reliably measure arterial oxygen saturation without drawing blood and developed and sold a number of pulse oximeters using the technology, met with Apple in 2013 in reference to integrating the technology into the Apple Watch.  After the meeting Apple began hiring Masimo employees, including the company’s Chief Medical Officer, and in 2020 released the Series 6 Watch, which Apple claims can measure arterial oxygen saturation.
Masimo has been seeking an order from the US ITC barring the importation of the Apple Series 6 watch or components and any other wearable devices that use light-based pulse oximetry from Apple.  The company alleged that Apple has infringed on one or more of 5 patents held by Masimo, as has requested a cease and desist order prohibiting Apple from ‘engaging in the importation, sale for importation, marketing and/or advertising, distribution, offering for sale, sale, testing, use after importation, sale after importation, or other transfer within the United States of those devices and components.’  The suit goes on to specify that the Series 6 watch claims to measure blood oxygen, giving it ‘the appearance of a medical device’ but hid the fine print that indicated that the blood oxygen measurements should not be relied upon for medical purposes, which the suit alleges is concerning to public health and safety.
While the initial final ruling is confidential, all 343 pages of it, we believe the judge ruled that Apple had violated one of Masimo’s patents which puts the importation of the Apple Watch 6 in jeopardy, although the remaining 4 patents were clear of violations.  What makes this case a bit unusual is that last November the US District Court for the Central District of California ruled that Dr. Marcelo Lamego, a Masimo engineer that also served as the CTO at Ceracor, a Masimo spin-off, was guilty of violating his employment agreements concerning confidentiality, having stolen multiple Masimo trade secrets, when he left the company in 2014 to work for Apple. , eventually starting his own company that developed a wireless wearable pulse oximeter.  The ruling force Dr. Lamego to abandon 12 patent applications that contained Massimo trade secrets and enjoined the sale of his company’s wireless devices, as the trade secrets were the foundation for the device’s sensing features.
While the case remains open with Apple, there is an investigation as to the relationship  between Apple CEO, Tim Cook and Dr. Lamego, with attorneys for the plaintiff requesting that Mr. Cook testify in court in March, while Apple is requesting a full review by the ITC.  It is not an easy task to get the courts to take such drastic action as to stop the importation of a popular consumer device, but Masimo has at least one the first round in what will likely be a drawn out battle.  In the interim, Masimo says it will take on Apple in the consumer market by providing an ‘accurate and continuous health tracking’ device of its own to the public, as seen in Figure 1.

In November of 2021 we noted that AT&T (T) and Verizon (VZ) had agreed to defer the launch of 5G services on C-Band spectrum (3.7 to 3.98 GHz), a portion of the 5G spectrum that they acquired during an earlier auction, until early January 2022.  The postponement was at the request of the FAA who claims that the new service could interfere with altimeters used on aircraft.   This comes in contrast to the FCC examination and approval of the band, finding no evidence to support the FAA’s claims, making sure that a wide spectrum guard band is left unused adjacent to the C-band spectrum.  That guard band is twice the width requested by the airlines to make absolutely sure the altimeters are protected.
What made that a bit unusual is that the C-band spectrum was already being used in ~40 countries for 5G, with no reported altimeter problems, while at the time the FAA was quoted saying, “Tick, tick, tick” in a Tweet, alluding to the eventual disaster they expected to occur, which has riled many, especially as the FAA acknowledged that it had no proven evidence of interference from C-band operation and continued to use contacts in Congress to wage a battle against the FCC’s ‘no issue’ ruling.  While the FAA continued to push for a block to 5G C-band deployment near airports, they released a bulletin in November ‘21 suggesting that “radio altimeter manufacturers, aircraft manufacturers, and operators voluntarily provide to federal authorities specific information related to altimeter design and functionality, specifics on deployment and usage of radio altimeters in aircraft, and that they test and assess their equipment in conjunction with federal authorities.” In other words, lets upgrade those altimeters, despite the fact that the same C-band issues had been under review for over 4 years.
It now seems that the FAA has issued a new directive that requires both cargo and passenger airplanes in the US to install 5G C-band tolerant radio altimeters or an approved RF filter by February 24, 2024, which will allow AT&T, Verizon, and other potential 5G carriers to bring 5G services to full power near airports, something which they have been unable to do under the 2021 stand-off agreement, but the new directive also contained the FAA’s estimate of what it would cost to modify planes under the new rules.  That cost is ~$26m to outfit 180 airplanes that need new altimeters and 820 that will need RF filters, out of a total fleet of 7,993 planes, far less than the direct and indirect cost of resources used to promote the media battle  that has lasted over a year and a half between the FAA and the FCC.  Some have even suggested that AT&T and Verizon would have paid the $26m for the upgrades out-of-pocket if they had known of the cost, or it could have been included in the price of the spectrum bid at auction if it had been communicated by the FAA (the auction bid for the C-band was $81.2 billion).
Once again political infighting based on political agendas between government agencies cost the taxpayers money and resources, and slowed the progress of technology improvements, with the low level of communications between agencies that have a common focus generating headlines that both confuse consumers and create governmental distrust.  While expanding 5G services might not be an essential key to economic growth in the US, it does have implications across a broad spathe of consumer devices and the deployment of 5G in the US will serve to enhance many existing services and produce income for a wide variety of companies, including the Treasury of the United States.  If carriers are unsure that they will be able to deploy purchased spectrum, the value of that spectrum will decline, and given that the 1st C-band auction, which took place in 2020, generated $81b in gross bids, those dollars will pay for lots of projects that will benefit consumers.
Mandates (according to usa.gov)
FCC - The goal of the Commission is to promote connectivity and ensure a robust and competitive market.
FAA – The goal of the FAA is to provide the safest, most efficient aerospace system in the world.
​

China is big on promoting its success in the LCD display space, and rightly so given its regional revenue dominance of nearly 50% of large panel LCD sales, but  while BOE (200725.CH) and Chinastar (pvt) stand out in terms of growth, not all Chinese LCD panel producers have been quite as successful, even with the help of the Chinese state or local governments. N One such casualty is Nanjing Panda (600775.CH), a panel supplier that began its first production line in September of 2011, and at its peak had one Gen 6 fab and two Gen 8.5 fabs in Nanjing and Chengdu.  Unfortunately Panda was not able to sustain profitability and was forced to sell both Gen 8 fabs to BOPE for $1.78b, leaving it with one Gen 6 fab whose lines were over 8 years old on average.
Panda’s largest shareholder is the Chinese state, which through a number of state-run entities owns almost all of the shares that are not in the hands of the public, although there are no greater than 5% individual shareholders in the public group, so the impact of any continuing financial difficulties would likely be borne primarily by the government, but it seems that even with quarterly state grants, things have not been living up to plan for the company as losses continue.  According to local press, it seems that Le Eco (pvt) a Chinese CE brand that has had its own financial problems, camped outside of Panda’s fab carrying signage that read, “China Electronics Panda Home Appliance Repay My Hard-earned Money!”, and other similar statements.
It seems that Le Eco had been supplied LCD TV panels by Panda that it used in its branded TV sets.  Under a contractual agreement, Panda was required to reimburse Le Eco if the panel failure rate exceeded 1.8%, roughly an industry standard, however Le Eco found that the failure rate was as high as 20% for three of the models supplied by Panda and tried to negotiate with Panda concerning the cost of replacement or repair over the last 18 months.  Unfortunately, Panda has not reimbursed the company for the cost of replacement displays that Le Eco was forced to purchase, even though both parties agreed that the Panda displays were the cause of the TV defects. 
As Panda is theoretically part of China’s state-run electronics conglomerate China Electronics Corporation, Le Eco thought it would have no problem collecting what was due, yet Panda seems unable or unwilling to make amends for the inferior displays.  As the publicity over the ‘protest’ gets into the media, we expect either Panda will make amends or the company’s reputation will suffer so much that their financial difficulties will worsen, which would eventually cause the company’s demise.  Such things usually take some time to play out, so we would not expect much change in the near-term, but given the weakness seen in the CE space, weaker players in the LCD space, despite government subsidies, will eventually be culled from the herd.

​Taiwan-based Wistron (3231.TT) is said to be in talks with India’s largest conglomerate Tata Group (pvt) to sell its 2.2m ft2 factory outside of Bangalore that it has used to assemble iPhones for Apple (AAPL).  The deal, which is rumored to be worth ~$600m, would give Tata access to the Indian government’s next round of incentives, which begin in April.  The plant employs over 10,000 workers and while ownership would pass to Tata if the deal is completed, Wistron would remain an iPhone service partner in India. 
Tata has been working toward both increasing its technology exposure and its ties to Apple, having expanded operations at its component factory in Hosur, where it produces components for the iPhone, and committing to opening 100 Apple stores across India, the first of which opening this quarters.   Tata is working toward assisting the India government’s plan to build out the country’s manufacturing capabilities to compete against China’s manufacturing dominance, which has been hindered by its stringent COVID-19 rules and other anti-China sentiment.   The Wistron deal would move at least some iPhone assembly from Taiwanese assemblers to in-country production, although the majority of iPhone assembly in India is done by Foxconn and Pegatron (4938.TT).  Wistron is selling the facility to further its transition away from low-margin assembly toward higher margin server-related manufacturing.    

The Tv market is highly competitive to say the least and brand competition pushes brands to offload some TV set design and production to OEMs in order to reduce costs.  TV set ODMs produced ~76.2m sets in 2022, and inclusive of the four brands that produce for their own brands (Changhong (600839.CH), Skyworth (751.HK), Konka (000016.CH), and Hisense (600060.CH)) ODMs actually saw an increase from the 97.2m sets produced by ODMs in 2021, a 3.5% increase, with 76.2m units coming from non-branded ODMs. 
Results for 2022, as indicated in Figure 1 show unit volume ranking and reference y/y growth (blue) or decline (red), and where known, key customers in 2022.  A number of ODMs have strong relationships with a relatively small number of customers, which can magnify the impact to those ODMs depending on yearly brand results.  TPV’s (000727.CH) ‘house brands’, Philips and AOC represented ~40% of unit volume and poor Philips results in Europe, along with Best Buy house brand (Insignia) and Vizio weakness, caused overall shipments to decline by ~4.2% y/y, and while TPV is expected to see Hisense become its largest outside customer this year, 1Q is expected to see a ~20% decline y/y as ODMs face difficult 1H y/y comparisons.  Maojia (pvt), which was acquired by TCL (000100.CH) saw a ~25.8% increase y/y in 2022 as TCL’s aggressive expansion kept utilization higher than most, and BOE VT (200725.CH) saw growth as Xiaomi (1810.HK) its largest customer (~40%) grew its TV business last year.

​There are many TV brands represented in the US, with Best Buy (BBY) and Walmart (WMT) listing over 20 and Amazon (AMZN) listing over 25 TV brands offered.  But while US TV consumers have choices when it comes to LCD TVs, they have far less choice when it comes to OLED TVs.  OLED TV brands are plentiful on a global basis, with over 20 brands having at least a single model (albeit some a bit dated), and while this was not a good year for the TV market in general, ~7m OLED TV sets were shipped globally, for a ~3.5% share of the overall TV market.  In the US however, a quick look at the OLED TV market shows that it is dominated by three or four brands, and few, if any other OLED TV brands are sold in the US market.  Until last year, LG (066570.KS) and Sony (SNE) were the dominant OLED TV brands sold in the US, with Vizio (VZIO) entering the US OLED TV market in 2020, and Samsung Electronics (005930.KS) entering the OLED TV market last year with its QD/OLED TVs.
One brand that has been conspicuously absent from the US market has been the Japanese TV brand Sharp (6753.JP), who built a reputation on calculators and later microwave ovens, built the world’s first Gen 10 LCD plant in 2004, years ahead of other panel manufacturers, and was the leader in large-size LCD TVs.  By 2010 however, the company faced mounting losses and instituted staff reductions in 2012, but was unable to recover sustainable profitability, being forced to sell a 50% stake in its Sakai LCD plant to then Hon Hai (2317.TT) chairman Terry Gou and 10% stake in the overall company to Hon Hai (aka Foxconn (2354.TT)) for a bit over $800m US.  
While the Foxconn stake kept the company afloat for a while, in 2015 Sharp sold its Mexico assembly plant to China’s Hisense (000921.CH) for $23.7m US, along with the rights to the Sharp brand name in North and South America, where it had a ~4.5% share of the US TV market.  In 2016 Foxconn announced it would raise its Sharp stake up to 66% for an additional $6.24b US, but after additional financial issues were revealed, the payout was reduced to $3.5b US.  In 2017, after a restructuring by Foxconn, Sharp began legal proceedings against Hisense, who they said was producing low quality TV sets using the Sharp name and a protracted legal battle ensued, ending with Sharp buying back the brand name rights in the US in 2019 for an undisclosed sum and was expected to return to the US TV market that year.  While Sharp’s TVs are sold on Amazon to US customers, the brand remains under-represented in the US although it is still a major brand in Japan.
With all of that said, we expect Sharp to enter the US OLED TV market this year, likely with assembly being done at the Mexico plant, which is now owned by Foxconn, and will likely be Roku (ROKU) based, as their LCD TVs have been, which would be the first 4K Roku OLED TV sold in the US (it sells OLED TVs in Japan and other regions).  We believe Sharp will offer at least a 55” and 65” OLED model, but pricing and other specifications are still unknown, although we expect sets will be priced toward the middle of the range relative to LG’s pricing, which would be ~$1,100 to $1,200 for a 55” set and between $1,400 and $1,800 for a 65” set.  While we expect Sharp will enter the US OLED TV market with a limited number of models, Sharp does represent a recognizable TV brand name to US consumers, as opposed to many Chinese TV brands and could have the potential to compete with Samsung, LG and Sony, however unless Sharp is able to strike a deal with major retailers, we expect most consumers will stick with those brands featured by Best Buy and Amazon, unless Sharp can prove its TVs are of higher value, a difficult task when competing with the two sole producers of OLED TV displays.

​As the world’s largest smartphone brand, Samsung presents consumers with a large variety of smartphones at as many price points as possible, but while the aim is to capture every possible smartphone buyer, be it a potential $116 M04 series buyer or a $1,150 Z Fold series buyer, presenting such a wide variety of models and price points can become an expensive proposition from both a production cost perspective and a marketing perspective.  The chart below shows the number of models that Samsung has offered each year since 2016 compared to normalized (2016) global smartphone shipments and those of Samsung alone.  It can be seen that while global and Samsung’s own smartphone shipments declined between 2018 and 2022 (we assume a flat 4Q ’22), the number of models offered by Samsung increased until 2021 when offerings began to be reduced, now falling below the 2016 starting point and nearing the low point seen in 2017.
Given the prospects for a weak 1Q ’23 and relatively flat global smartphone shipments this year, we expect that Samsung will reduce the number of models it offers again this year, particularly for those lines where volumes have been decreasing.  We expect there will be a new foldable model released this year, likely a double folding smartphone, but we also expect the flagship ‘S’ line to be narrowed to two, rather than three models, as rumors that Samsung has abandon 2023 development of the Galaxy S+ line to concentrate on the better selling ‘regular S’ and the Galaxy S Ultra, which has replaced the former Galaxy Note line, also cannibalized by the Galaxy Fold series.  Samsung’s Mid-priced Galaxy A series and the lower priced Galaxy M series have some price overlaps, so we would expect to see at least two model eliminations in those series, after the A40 and M40 series were eliminated last year.
All in, Samsung needs to continue to focus on best selling models in each series to keep its own component inventory levels low, along with those of its OED/OEM partners, especially given the increases seen in component costs last year.  All things to all people is a great philosophy but it doesn’t take into account the inventory, marketing, and stocking costs associated with smaller volume models, and against a backdrop of relatively weak overall smartphone volume growth, the necessity to focus on higher margin and higher volume models becomes even more important.   We expect 2023 will see an overall continuing reduction in the number of smartphone models Samsung offers, with an emphasis on the top and bottom models in each smartphone price tier.

​It has been well-documented that Meta (FB) has been losing considerable sums by seeding the VR market with its Quest VR headsets, and while they are certainly the best-selling and most popular VR devices available to the general public, even the biggest proponent of the Metaverse, seems to have begun to understand that there is some point at which selling items below cost is not quite the best solution to developing a new market.  Meta’s Quest Pro XR headset is the company’s first attempt to create a device that has appeal outside of the traditional VR gaming market and while its considerably higher price ($1,500 compared to the $300 Quest 2) will certainly reduce unit volumes, we expect the company will actually be able to sell the Quest Pro above cash cost.
 
That said, while other VR brands struggled to produce VR headsets with similar features and such a low price, without bankrupting their companies, this new and more realistic pricing tier also gives others VR brands the opportunity to take on Meta’s unit volume domination and challenge the company for leadership in the VR space.  One such company that seems to have made such a challenge is Taiwan’s HTC (2498.TT), who announced their Vive XR Elite headset on January 5 and expects to ship units toward the end of February.  HTC generated ~$145m in sales last year, between it headsets, notebooks and smartphones, so they are no match for the seemingly endless resources of Meta, but have made the challenge regardless, despite Meta’s dominance of the market over the last few years. 
 
That said, it was not a great year for RA/VR sales in 2022, and unlike some who saw unit volume growth essentially flat, we estimate shipments were up ~14.8% y/y and revenue was up 24.1% based on our composite sources.  Regardless, those brands, and there seem to be ne ones popping up monthly, that are serious about the XR business, continue to churn out new and more sophisticated headsets on a regular basis.  Right now, we count about 18 announced but unreleased VR headsets and a similar number of AR devices from a variety of companies, both large and small, that are expected to be released this year.  Some, particularly those from smaller companies, could fall into 2024, but most are pushing for a release before Apple (AAPL) might announce some sort of XR device.  As the average time between announcement and product release was 193 days last year, in theory, all should be released before the end of 2023.
 
Back to the HTC/Meta battle…  based on what we know thus far here are some of the comparisons between the two devices:
 
·       Both are standalone devices, meaning they are not required to be tethered to a PC or smartphone but both can be connected to a PC via USB or Wi-Fi 6E
 
·       The HTC device has a retail price (including controllers) of $1,100, while the Meta device sells for $1,500
 
·       The Meta deice is based on the Qualcomm (QCOM) XR2+ chipset while the HTC device is based on the Qualcomm XR2, while both have a Kryo 585 CPU and Adreno 650 GPU.  The XR2+ is said to have 50% higher sustained power and 30% improved thermal performance (Company data), which, in theory, should allow for faster image processing and lower latency, while leaving room for camera image processing without raising latency.  As the XR2+ is quite new, real world usage metrics are still being developed, so we must take Qualcomm’s word for it for the time being.
 
·       Both use pancake optics, a system that allows lenses to be closer together, reducing the thickness of the device
 
·       We do not know what type of display the HTC device uses, although the 1920 x 2160 resolution is slightly higher than the LCD display used in the Meta device, with both having a 90Hz refresh rate
·       The diagonal field of view, meaning the width and height of the visual image field is 110° for the HTC system and 95° for the Meta, so close to the same, but every little gain in FOV helps to convince the brain that it is not seeing something that is confusing, which helps reduce fatigue and motion sickness for some.
 
·       The Meta device (inclusive of battery pack, etc.) is slightly heavier at 722 grams, while the HTC is 625 grams, which comes to 1.59 lbs. and 1.38 lbs. respectively
 
·       The Meta device does come out ahead when it comes to tracking, as it is able to track eye, face, and hand movements with dedicated tracking cameras, while the HTC can track only hand movements, and important factor in game play.
 
According to HTC the battery is expected to last15 hours, while the Meta battery is expected to last 2 hours, but we seriously doubt the HTC metric on an apples-to-apples basis.  Some brands give battery life metrics using hot swappable battery packs or low-level usage, so we do not see this as a valid comparison
All in. as these two devices are quite similar, real world performance and price will be the determining factor as to who will win the VR race in 2023, although with Apple as a major wild card, even a whiff that Apple has a product that will actually be released in 2023 (other than speculation) could push potential XR adopters to wait and see what Apple might release. 
 
While we expect unit volumes and sales of XR devices will rise this year, macro economics are not going to make for a stellar 1Q for the XR space, but there is some hope for the 2nd half, especially if Apple is ready to enter the space.  Even with Apple, the industry is still looking for practical applications that can drive hardware sales, and the Metaverse seems to have returned to a more sedentary state, rather than the hype it received earlier last year, so it is up to hardware brands to find those applications that will appeal to the public.  While there are many niche applications, we would hope that someone will create an inexpensive AR headset that could function as a dedicated translation device that could generate translated text for the wearer.  An application such as that, especially if priced right, would at least have the potential to become ubiquitous and help the public become more familiar with the potential that AR can bring.
 

​With over 3,200 exhibitors at the 2023 Consumer Electronics Show, of which over 1,000 are start-ups, getting product releases out can be a difficult task, especially when competing with the massive PR machines that are part of major CE companies.  This leaves companies to spend an inordinate amount of time formulating a single headline that is fashioned to catch the attention of the media, who then, hopefully, pass it on to consumers[1].  When searching for a word to describe many of the headlines that emanate from CES, the word ‘bombastic’ comes to mind (Oxford definition - “high-sounding but with little meaning; inflated”).  “Words like ‘revolutionary’, ‘game-changing’, and ‘unbelievable’ pop up in many releases, but when one digs a bit further into what was actually released or announced, things tend to be a bit less than those adjectives might imply.
One such headline from a company we have mentioned recently was “Magic Leap 2 Receives 60601 Certification for Use in The Operating Room”.  Magic Leap (pvt) is a well-funded AR unicorn that recently became the property of the Saudi government, when it took a controlling stake in the company through a $450m purchase made by the country’s sovereign wealth fund.  Magic Leap, as we have previously noted has been through some highs and lows since its founding in 2010, including the stepping down of its founder in 2020 when the company faced financial trouble.  Magic Leap refocused itself from a consumer orientation to a commercial one and last September released the Magic Leap 2 AR headset, the follow-up to the Magic Leap 1 released in 2018, an improved version that has been touted for use by both repairmen and surgeons, albeit the $3,300 price.  
 
We have no issue with the Magic Leap 2 device itself, however the release seemed to indicate that there was some governmental approval for the device’s use in operating rooms, opening up the world of AR to surgical suites across the globe, however if one looks at what 60601 certification actually is, the headline is a bit misleading.  IEC 60601 is a series of technical standards for the safety and effectiveness of medical electrical equipment.  It is the de facto requirement for bringing new medical devices to market in many countries, but is quite specific as to what it covers which is the operation of a device’s power supply.  With a number of certification levels as noted below, the certification is an absolute necessity for any device used in a healthcare facility or even a home environment and measures the potential for a number of potential electromagnetic hazards that could emanate from such devices.  In some cases those emanations might cause problems with other equipment in the vicinity, similar to the way in which smartphones must be certified for excessive RF radiation before they are made available to the public.
 
·       No body contact – such as with X-Ray or MRI machines, or even hospital beds and lighting
·       Physical Contact – such as blood pressure monitors, ultrasound tools, or even thermometers
·       Cardiac Contact – such as defibrillators or dialysis machines
 
In no way does this certification mean that the Magic Leap 2 AR headset has been certified by a government organization like the FDA or other drug or medically-related organization and the option to use the ML 2 headset would be in the hands of the user.  We are certainly not criticizing the use of AR in a surgery suite, just the opposite, but rather than tout a certification that sounds like a tacit road to AR or VR assisted surgery, it might have been more beneficial to produce a headline that highlighted the company’s partnership with SentiAR (pvt), a company that has developed the software to visualize cardiac catheter lab procedures, bring them from typical 2D visualization on monitor screens, to 3D visualization using AR devices such as the Magic Leap 2 (https://youtu.be/rsS2D7PrkEo) or EchoPixel (pvt) working toward similar cardiac 3D imaging solutions.
 
The FDA is still a bit iffy about software  used in or around medical devices, so there are a number of classifications that can be bandied about in headlines for companies associated with AR in a healthcare setting, and while there is no overarching FDA policy toward medical software, when software is used to analyze medical device data it is considered an accessory to the device, however when the software is part of the device’s functions, and could pose a risk, the FDA oversight can become more stringent.  While in some such cases, such as the use of a small or low resolution screen in a radiological exam, could lead to a poor or misleading diagnosis, the FDA seems to recognize the importance of managing those risks through regulation, but the field of AR or VR in practical medicine is relatively new and will likely take years for the FDA to develop regulations that are specific to their use in medical settings.  If the use of devices that indicate blood glucose levels or display ECG information are any indication, it will be even more difficult for the FDA to classify how it will regulate AR or VR software that can create 3D visual images that can be viewed before or during procedures.
 
Headlines do not make products, or at least not in the medical AR/VR space.  Devices and software that make complex medical procedures safer, simpler, and more successful can bring XR into the public eye far more significantly than eye-catching headlines, just as robotically assisted surgery has reduced the risks related to on-pump CABG procedures.  Being able to visualize actual patient organs in 3 dimensions should make procedures faster and therefore less risky, so if companies like Magic Leap want to popularize AR devices in the medical space, they should focus on how such devices can be used to save lives.  If they are as effective as the company (and others) say they are at improving surgical outcomes, and the media can make that information available to the public, it would go a long way toward improving the regulatory processes needed to maintain a safe use environment.  If the public thought there was a real benefit to using AR/VR in healthcare and puts some pressure on regulatory agencies to codify better regulations, things will move more quickly for AR companies than confusing headlines.


[1] We note that CES is not open to the general public.  One has to prove they are a part of the media or are ‘in’ the CE industry in some way, either as a producer or consumer (retail or otherwise) of CE products.

​As we have noted, the EU will implement strict power consumption rules in March that would disqualify 8K Micro-LED and OED/LCD TVs from being sold in EU countries.  Under the new regulations the power consumption of 8K TV sets, as they currently stand, would not qualify under the regulations and could not be sold in EU countries.  While the power consumption of control and driving circuitry  for each sub-pixel in both 4K and 8K TVs is small, there are 24.88m sub-pixels in a 4K TV and 99.53m in an 8K TV, which makes even this basic power consumption math simple to understand, although TV set brands do little to help consumers understand TV set power consumption, with many stating only a ‘predicted amount of electricity needed to operate the product under average conditions for one year’, without specifying the number of hours.
Simple comparisons between 4K and 8K sets (same series, same size, same brand) indicate that total energy consumption for some sets can be as high as 3.3x for 8K, while others show a more reasonable 2.0 to 2.5x ratio.  Regardless of the numbers, the EU seems to be holding steadfast to the new rules and thus far has not even  granted a hearing where TV brands could plead their case.  That said, LG Display (LPL) has taken matters into their own hands and announced its 3rd generation OLED display panel, which combines Micro-Lens technology and a new ‘brightness enhancing algorithm’ with last year’s ‘Ex Technology’ which swaps the strong atomic bonds of Deuterium (aka Heavy Hydrogen) for those of Hydrogen in a number of materials in the OLED stack.  According to LGD, the combination will improve panel energy efficiency by 22% at the same brightness level.
If those specs prove out, LG Display OLED panels would be able to operate under the new EU requirements, allowing products made with such panels to be sold in EU countries.  While LGD’s 55”, 65” and 77” 4K panels will use the new technology, the most important application will be for the company’s 77” and 88” 8K panels and is expected to push the technology toward its 97” OLED panel in 2024.  The company indicated that mass production of the updated panels will begin some time this year, which we expect will begin in 1Q, at least on a limited basis, as each of the company’s OLED TV panel fabs will have to make production process changes and requalify designs.  That said, unless similar power efficiencies are found for LCD and Micro-LED 8K sets, OLED will rule the European 8K market for at least a portion of 2023, although with less than 400,000 8K units expected to have been sold in both eastern and western Europe last year, it is still a very small market that is struggling to grow..