Normally, when we look at monthly display panel sales, they are ~5 weeks old[1] and represent the totals for the previous month.  While we do the same this month, it seems a long time has passed since March, making those metrics seemingly less relevant.  As CE brands spent much of March pulling forward production and shipments to beat the Trump  ‘Liberation Day’ deadline, it is difficult to look at the data the same way it is normally used.  That said, large panel shipments were ~73m units, up 11.1% m/m and up 6.0% y/y, while total shipments were 5.1% above the typical (5-year) March shipment average.  This put the quarterly shipment total at 202.3m units, 6.2% above typical, indicating that the quarter (Jan/Feb) was already about 1% above average.
In terms of sales, total large panel sales for March were ~$6.24b, up 12.7% m/m, but down 6.4% y/y, while on a YTD basis, sales were up 4.5% y/y.  Among those panel manufacturers that are primary large panel producers, the biggest gainers in March were both South Korean producers, Samsung Display (pvt) and LG Display (LPL), up 57.9% m/m and 34.8% m/m respectively.  This implies that while both South Korean panel producers accounted for only 21.5% of total panel revenue for March, they accounted for ~38% of March large panel sales growth.  SDC feeds parent Samsung Electronics (005930.KS) QD/OLED TV set and OLED monitor line, and, as much of the Samsung’s TV line is assembled in Mexico before shipping to the US, we expect these were rush orders to beat the early April deadline.  LG is basically the same in the TV space.
Now that the deadline has been pushed out until July, we expect April large panel shipments will better reflect actual demand and inventory levels but given the capricious nature of comments from the President and White House, it is still difficult to predict what path consumers and CE companies will take in the short-term.  At our gut level, we feel that as negotiations with potentially heavily tariffed countries continue, the WH spin will be positive and while the reality of the outcomes is questionable at best, consumer sentiment on trade will improve through May and early June.  That said, the offset will be increasing prices of both components and CE products as old inventory is sold, and higher tariffed goods take their place.  This leaves us, once again, in a net neutral position for the next month (May) and a slight negative bias for the CE space in 2H thus far, as consumer pre-tariff buys and higher prices weaken typical holiday demand.


[1] 2 weeks from previous quarter mid-point and 3 weeks into following quarter.

It is easy to tell that the postponement of the most severe tariffs is better than if they had been implemented.  It is certainly better for CE brands who will not incur additional massive increases in cost and absolutely better for consumers, who will only have to incur the tariffs on Chinese goods and the broader ‘token’ 10% across-the-board tariff hike.  However for anyone trying to run a CE business, at almost any level, the inability to plan both short-term and long-term strategies with little or no understanding of the US government’s plan for trade, makes their own planning almost impossible.
The only area where there seems to be some actual demand, not surprisingly, is the server space, where monitors are a necessary adjunct.  However many monitor panel producers are still losing money on monitor panels and are reducing production whenever possible, leaving Chinese producers to pick up the slack.  This has led to slight monitor price increases but was offset by weak pricing for notebooks and TVs, where tariff issues continue to keep brand demand weak.  Pricing pressure overall has been modest, but brands will be looking for some panel price concessions as they absorb higher tariff costs, and that means both up and down the supply chain.  Whether panel producers are willing to share in some of the tariff pain is still an open question, but at some point, the cost of components, both at the panel level and the module level, will add to their cost burden as it has for brand level products. 
We expect addition stocking pull-ins as we get closer to the end of June, which, as we have previously noted, sets a poor tone for the 3rd and 4th quarters, typically the better half of the year for the CE space.  The only hope right now is that those consumers who did not jump in and buy before the last  tariff announcements might now feel the urge before July, assuming the potential for higher prices.  We believe that most CE brands are looking to share tariff price increases with the supply chain, but those negotiations are ongoing and will have to account for the potential for additional tariffs in July, making price negotiations even more difficult than usual.
That said, we believe that while China will still remain a tariff focus, we expect most of the broad ‘reciprocal’ tariffs recently proposed will not be put into effect as promises of trade balancing are made, but whether those promises are fulfilled remains questionable.  Right now, we expect panel prices to remain relatively flat for May as most take a wait and see approach to near-term planning.

Microsoft (MSFT) Windows™ is a popular operating system, averaging a 26.4% share over the last 12 months, but when it comes to number of devices in use, it pales in comparison to Android OS, which averages ~45.1% over the same period.  So as not to offend the Apple (AAPL) base, iOS has averaged ~18.1%, and OS X (Now Mac OS) holds a 5.5% share, so technically Apple OS’s (combined) have a 23.6% share, just a bit behind Windows.  There are other operating systems, particularly Linux, that are used in a wide range of hardware systems, and a number of, for lack of a better name, proprietary operating systems sponsored by companies, for example Chrome OS, the operating system that runs the Chrome  browser, or Samsung’s (005930.KS)  Tizen OS that runs its smart TVs. 
Way back in 2008, HTC (2498.TT) released the Dream smartphone, the first to use the Android OS, competing with Symbian, owned by Nokia (NOKIA.FI) (49.8% share) and Blackberry OS, owned by RIM (BB), with a 16.6% share.  Within 3 years Android became the OS with the largest share and has maintained that position since[1].  The ability to maintain such leadership is based on the fact that the Android kernel is open-source and can therefore be downloaded and modified with paying Google (GOOG). However there are many Google apps that run under Android (Google Maps, Gmail, Google Playstore, etc.) that have to be licensed. 
Because Android is so popular, it is surprising that any company would undertake a project to develop a proprietary OS.  Estimates range from 5 to 10 years to develop the kernel and components for a large team of skilled engineers, with specialties in embedded systems, security, and assembly language.  Cost estimates range from ~$1b to over $10b, with the user interface alone running close to $100m.  This prices out most companies, but instead of developing a proprietary OS from scratch, companies can modify the Android  or Linux kernel in order to create an OS that they believe is best suited to their products and affords some differentiation.
That is exactly what Amazon (AMZN) is thought to be doing.  While the Vega OS is based on the Linux kernel, it is being built from the ground up, allowing it to be highly customized to Amazon hardware, similar to the way Samsung’s Tizen OS is based around Linux rather than Android.  As noted below, the control Amazon gains, including a modern user interface and potentially deep AI integration, is likely far more so than could be achieved through continued Android development, but it takes considerable time to build an application development ecosystem, with no guarantee that it will be successful.  Samsung has been successful with Tizen in the smart TV space, but as the leader in that genre, it has a distinct advantage, although its applications are still a bit limited, even after almost 10 years of development.
Amazon will have to bear the continued development cost and maintenance of the Vega OS system and find ways to encourage developers to hop on board once the OS is officially released (expected some time this year), all of which can be an albatross if little momentum is developed.  It’s a high risk, high reward game that only a few players could afford to play, but Amazon does have over 500m Alexa devices in operation, over 200m streaming sticks, e-readers, home security systems, and lots of smart speakers to eventually connect through Vega OS, so at the least, they have at least a shot over the next few years to gain enough share to make it into the top 5.


[1] Note that in terms of active device share, that crossover did note occur until 2017.

Last month we reported (see our note 1/30/2025) that 12,000 runners would be participating in a 13 mile half-marathon sponsored by the Beijing Economic-Technological Development Area, known as E-Town. We noted that this marathon was different in that the regular runners were to be joined by 20 teams of humanoid robots for the first time, although recently robots have been used as pacers to encourage human runners during the last mile of earlier races.  In this race however, the humanoid robots ran the entire race for the first time.  They were allowed to be remotely controlled or fully autonomous and are able to take a break to have batteries replaced if needed.  Other than that there are few restrictions as to the mechanics, with entries from robotics companies from all over the world.
The race was run late last week, with over twenty ‘humanoid’ robots participating in the race that was a showcase for Chinese robotics efforts, another area where the Chinese government has set aggressive goals to compete with the US.  There has been a constant barrage of publicity promotions and flowery propaganda over the last few months about how China will become the frontrunner in robotics, leading to concern that the US lead in the space might be diminished, and to some, adding to the fear that humans might one day be replaced by robots.  The robots ran in  a separate lane and were allowed to be accompanied by ‘handlers’ that ‘ran’ the robots with wireless or wired controllers.  The robots were allowed time to replace batteries when necessary and teams were also allowed to replace a faulty robot with another, although incurring a 10 minute penalty.
The robot winner was Tiangong Ultra, who completed the race in 2 hours and 40 minutes, with only three battery changes (and a human with a hand behind Tiangong in case he fell backward) while the human winner finished in one hour and two minutes, but a number of robotics professors and Chinese company officials said they were quite impressed with the fact that many of the robots were able to finish the race, although there were some obvious mishaps as seen in the video below.
This was an interesting show of China’s robotics expertise and while these robots were designed for running and not the acrobatics usually seen in puff pieces on the competition between the US and China.  This was a more practical approach to robotics, and based on some of the results not nearly as easy as might be thought.  When one thinks about what the mechanics are for a human marathon runner it becomes easier to understand how complex translating that schema into a mechanical device can be.   Aside from the obvious individual muscle contractions and the timing of those contractions, their coordination is essential to movement, and small adjustments to muscle movements are essential to maintaining balance and stability on even slightly uneven surfaces. 
There is also the need for a constant stream of sensing information, including what is called ‘proprioception’, the human body’s ability to sense its own position , movement, and force in space without relying completely on visual information.  While this ‘sixth sense’ is typically referred to in connection with more highly refined skills, such as playing an instrument, it is what makes humans able to touch their nose with their eyes closed or pick up something without looking at it.  As this is considered a subconscious sense in humans, it will be a hard one to instill in robots, and without it, it will be hard for robots to adapt to the varying conditions that we face each day.  Perhaps when we figure out how it works in us, we will be able to pass the concept on to our new marathon partners.

https://youtu.be/l4FHhuswZfs
​

In anticipation of US reciprocal tariffs, shippers have been frontloading cargo since late 2024 and US ports, for the most part, have been able to handle the increased shipments without significant congestion as much product has been offloaded to local warehouses.  With the implementation and subsequent 90-day postponement of the reciprocal tariffs, and the additional tariffs placed on Chinese goods, there are a number of indications that Chinese container bookings are being cancelled, with the Port of LA indicating late last week that it has received notice of 12 potential cancellations.  As Chinese shippers have built US inventory, they can hold new shipments for a while as landed inventory gets worked down, but smaller US importers are unable to deal with the on-again-off-again tariff situation as easily.
A recent Freightos survey of small business importers in the US revealed that on a general basis the average rate of ‘concern’ over the tariff situation was 8.9 out of 10, with 62% of respondents choosing 10.   We have seen some panel producers indicate that they are trying to make production adjustments on a bi-weekly basis as customers rapidly change plans in this volatile environment, but small businesses are far less able to make such short-term  alterations to schedules.  When asked what their thoughts were concerning the administration’s plans for further tariff changes, here’s what they said:

• 51.3% said there is no way to know
• 22.6% said they expected tariffs to be reduced
• 17.4% said they expected tariffs to be increased
• 8.7% said they expected tariffs to remain the same

More significant was the response to the increased global and Chinese tariffs from a business perspective:

• 33% have paused shipments entirely
• 29% are exploring sourcing outside of affected regions
• 29% will ‘wait and see’
• 19% are accelerating shipments

Aside from the obvious planning issues that face both large and small CE product shippers, even with the exceptions we have noted previously, small importers face cash flow issues as they now have higher upfront customs costs that they cannot always pass on to customers.  Some are now itemizing shipping costs on invoices to make customers aware of how substantial the changes are, and a number of survey respondents indicated that they would not be able to remain in business if current tariffs remained in place for an extended period.  Many indicated that they are unable to source in the US at a reasonable cost and a number of companies we have spoken with indicated that while they can make relatively small changes between production locations, establishing production in the US would take years and would be limited to higher value products that could absorb higher production costs.
All in, while the tariffs themselves are a serious issue for small CE importers, the uncertainty around tariff policy and the lack of a coherent plan seems to be the real issue that leads to questioning whether some can sustain their business in light of their inability to plan for or recover some of the additional customs costs that still remain.  With the administration threatening additional tariffs, new port call fees for Chinese vessels, and the end to the de minimis exemption for direct-to-consumer shipping on May 3, small importers are facing  serious issues that can cause further disruptions to their business or end it entirely, not the desired goal of current tariff programs. We expect some front loading to resume again as we get closer to July, but the inevitability of price increases to cover higher overall shipping and/or sourcing costs will begin to show as pre-April inventory is reduced.  Large producers can absorb much of the increased cost and reduced cash flow, while smaller ones cannot.

Samsung Display’s (pvt) QD/OLED display technology has faced some significant challenges.  Developed to bring Samsung Display into the large panel OLED business, which has been dominated by LG Display’s (LPL) WOLED panels, there seemed to be some skepticism from SDC’s parent Samsung Electronics (005930.KS).  We expect some of that skepticism came from low initial yields for QD/OLED, with Samsung needing a reliable source of high volume production before committing to the technology, but SDC persevered and refined production processes to more normalized yields.  Samsung Electronics adopted the technology in 2022 with 55” and 65” TV models, their first large panel OLED offerings since abandoning large panel OLED technology in 2013 and has maintained QD/OLED’s presence with additional sizes since then.  However with relatively limited production capabilities (~750,000 TV sets/year assuming 75% yield), Samsung seems to still be wary of relying solely on QD/OLED technology for its large panel OLED line and has purchased WOLED panels from LG Display to augment its large panel OLED offerings.
Quality does not seem an issue, in fact QD/OLED has been lauded for its color purity, color volume and higher peak brightness than WOLED displays, but despite these positive points parent Samsung still does not seem to have jumped into the QD/OLED pool deep-end and is offering both QD/OLED and WOLED (from LGD) to TV consumers, in some cases without disclosing which technology they are getting.  That said,  it seems that QD/OLED has found a home, and one that Samsung Electronics  seems to be in sync with; monitors, high-end monitors in particular.  Gamers, who look for high quality reproduction and rapid response time have been impressed with Samsung Display’s QD/OLED monitor product and a number of monitor brands have taken to QD/OLED for their flagship gaming monitors.
A quick look at Amazon (AMZN) or Best Buy (BBY) shows just under a dozen brands with at least one QD/OLED monitor offering, with sizes ranging from 27” to 49” and prices ranging from $589 to $1,285.  Considering that you can buy a 27” LCD monitor for under $100 and a 27” OLED monitor for under $500, QD/OLED monitors are certainly considered high-end, with most labeled ‘gaming monitors’ specifically.  Companies like MSI (2377.TT) and ASUS (2357.TT) offer quite a few QD/OLED models, along with more standard OLED and LCD models, while Samsung, maintains the lead, recently releasing the first 27” QD/OLED gaming monitor with a 500 Hz refresh rate (that unusually high refresh rate is particularly attractive to gamers who thrive on being able to see rapid screen movements without lag).  With this new high refresh rate QD/OLED monitor and other recent 27” QD/OLED entries, QD/OLED is expected to increase its share of the 27” OLED monitor market from 32% last year to 47% this year.
While OLED monitors overall are still a small part of the general monitor market, roughly between 1.4 and 1.5m units out of between 150m and 155m, over the last few years, QD/OLED has become the standard bearer for high-end gaming monitors, and their share of the OLED monitor market is expected to increase from 68% last year to 73% this year.  With  only one 30,000 sheet/month QD/OLED fab, SDC can either produce ~700,000 QD/OLED TVs or ~3m+ monitor panels.  With large panel OLED (TV) growth relatively slow and OLED monitor growth increasing, the likely higher per unit profitability on monitors than on TVs, it would seem that QD/OLED has found a new home.  With considerable room for QD/OLED technology improvement that can widen the gap between WOLED and QD/OLED, it seems a more comfortable home than the technology battles that rage between LCD, Mini-LED, QD, and WOLED in the TV space

Actors have it rough.  They have to compete with other actors for even the most lowly roles and can go for years or even a lifetime without making enough money to buy a car that is under 10 years old or live in an apartment without roommates.  After years of rejection, disappointment, and relatives asking, “Does he have a real job yet?”, when an opportunity to offer your smiling countenance up for a few thousand bucks comes along, it has to be considered. 
Such was the case with struggling Korean actor Simon Lee, who signed his image over to an AI marketing company, thinking the money would help him move his acting career forward.  Instead he was horrified to see himself on TikTok and Instagram, dressed as a surgeon or a gynecologist, hawking dubious healthcare products.  The contract he signed, likely extremely one-sided, did not allow him to have any say in how his image was used and gave him no ‘removal’ options, leaving his image available to sell weight-loss remedies and other questionable products.
AI marketing firms, as we have noted in the past, develop a menu of human-based facial and body images that they sell/rent to clients who can use them for whatever their needs.  The larger the model gallery, the more chance a potential client will see a face they like and sign on with the agency.  From the agency’s perspective, buying a human image for a few thousand dollars gives them the potential to resell it many times over, at a cost that is lower than what it would cost to film an actor for each client spot, and that digital image can be molded into whatever the client believes will sell the most product. 
In Mr. Lee’s case he became a doctor in order to legitimize sketchy products, which were a bit less helpful to his career than he might have thought when signing the contract.  A few hours of filming movements and facial expressions seemed an easy job for a few thousand dollars but unless a lawyer  reviewed the contract (most likely not), he gave up all of his rights, (no pornography, alcohol or tobacco ads are usually highlighted in the contract to give a sense of protection the actor’s image), while including fine print that allows the agency to use the image for almost anything else.
It’s a new world and those looking to capitalize on it, either legitimately or not, have the early advantage as the legal system is slow to understand the nuance of AI and digital advertising.  Since there are few legal protections specific to human image use, before you decide to sell your image to an agency, have a lawyer read the contract, even if it means sleeping in your car for a few more days…

"The adoption of 5G will [be] even faster than what we saw on 4G, which was already fairly fast."[1]
"5G is the fundamental platform for the fourth industrial revolution and will become an integral part of societies and civil infrastructures, just like roads, energy and transportation."[2]
"Every generation of wireless technology has brought a huge and largely unseen step forward in innovation. 2G brought us two-way texting. 3G brought us high-quality digital voicemail. 4G bought us Waze, Uber and DoorDash, none of which were envisioned when 4G was rolled out. So 5G is really going to bring us things that we haven’t even imagined yet."[3]
"5G will be the platform linking billions of devices together."[4]
"The arrival of 5G-enabling smart devices will change the way we live, work, and think in fascinating, new ways."[5]
"5G networking is being phased in and will be transformative to society."[6]
Back in 2019, when 5G was first released, it was to be a game changer, providing a high-speed gateway into a new world of devices and applications with unmatched speed and the capacity to link together, well, almost everything.  The promise of a new era of VR was particularly emphasized, with real-time multiplayer gaming, live VR events, and remote collaboration revolutionizing how we are entertained and work, along with the promise of a new healthcare model that allowed doctors to perform complex surgery remotely.  All part of the 5G hype.
Now that 5G has been around for 5+ years, how much of that came true and how much was justification for the spending that carriers knew was coming as 5G rollouts began?  The answer is that neither the glass half full or the glass half empty crowd had any clue about 5G at the time, but they do now.  Fierce Wireless just completed a survey of 176 telco executives (36% are decision makers, 64% are decision influencers) who made their opinion concerning 5G quite plain.
The good news is

• 10% said they believe 5G has been ‘Extremely successful’
• 23% said 5G has been ‘Successful with good ROI’

But…

• 60% said they have had ‘limited success with 5G so far’ (They see it as a long-term return product).
• 7% say they are disappointed with 5G.

So 33% say they see it as a positive, while 67% don’t.  With the 2019 promise of 5G as a world-changing technology comes the reality of what actual benefits 5G has provided for the consumer and telcos.  It seems that telcos are a bit less than impressed with what they have gained from 5G and consumers, well we would be surprised if most consumers realized that they were using 5G at all.  We have doubts that much remote surgery is being done and VR certainly has not been the focus for the average consumer, so what is 5G really being used for ?
The survey says the number one use for 5G is for Fixed Wireless Access, the process by which 5G connects a fiber-optic or microwave backhaul to a local base station which uses 5G’s bandwidth to wirelessly connect to 5G antennas on houses or businesses, which is then connected to an internal modem at each location.  This allows 5G’s high speed and low latency without the high cost of fiber or cable installation, along with rapid deployment time. 48% of telco executives believe that FWA is the key 5G application.  There are limitations for FWA, particularly the need for line-of-sight between base stations and consumer nodes, but FWA is expected to reach over 98m connections this year (global) compared to over 58m last year.
The 2nd most important 5G application, according to telco executives, is network slicing (33%).  Network slicing uses software to define customized virtual networks that share the same physical 5G infrastructure but are isolated from each other.  This allows the 5G spectrum to be used most efficiently, without allocating static network blocks that are not used consistently.  This is a great plus for carriers as they can reallocate 5G bandwidth to those customers experiencing high demand and remove it from those with low demand.  That said, in order for 5G network slicing to be effective the 5G infrastructure that it is operating on has to be 5G standalone (SA), not 5G NSA (Non-standalone), a 5G overlay on top of 4G LTE infrastructure.  The majority of global 5G infrastructure is still NSA and SA is not expected to become the dominant technology until 2028.  The 3rd most important 5G application to telco executives is private wireless, which allows for a completely secure network (24%) and is more profitable for carriers.
When asked about what have been the biggest barriers to 5G deployment there were few surprises with cost having the highest percentage at 39%, followed by 29% citing a lack of in-house 5G expertise.  But when it came to the question of how important 5G is to enterprise customers, not surprisingly, 78% of carriers executives said either ‘critical’ or ‘important’ with only 22% calling it ‘one of many factors or ‘don’t care’.  Of course, when asking that question to those whose livelihood depends on 5G, it should be expected that there will be some bias.
As par for the course, there was a question about AI in relation to 5G, and while we expected AI-based network slicing to be the winner (it was at 24%) AI-based predictive maintenance came in a close 2nd at 22%, with only 9% citing the use of chatbots to enhance customer support or the overall customer experience.  When the final question came up, it was easier to see a bit of frustration with 5G come to the surface.  The final question was “Do you see a need for 6G in 2030?”  51% said yes, as new applications will require it, but 43% said no, with 5G advanced being sufficient and 6% saying they did not even want to hear about 6G.
As with most new technologies, the tendency is to overpromise and underperform, and while that seems to be the case with 5G at least to some, consumers seem oblivious.  While they are able to download a game or video faster and are likely to see less ‘loading’ time for videos, 5G applications are primarily higher level applications that carriers would find most beneficial.  What is surprising to us is how slowly 5G has been deployed globally, despite the hype in the early days, but given that cost was the biggest sticking point for carrier deployment and the fact that not all carriers seem to be making money from 5G, it is logical that deployment has slowed from the days when it was imperative that we install 5G faster than  China.  Does that sound strangely familiar?
BTW, we admit that we had expected mmWave 5G (much higher frequency, leading to higher speed, expanded bandwidth and even lower latency) would be even more popular than sub-6.  We were wrong as mmWave was just too expensive to support itself, as the base station to base station distance is only 600 to 1200 feet, making it only suitable in urban areas and stadiums, so we cut the carriers a little slack…


[1] Ignacio Contreras, Qualcomm’s director of marketing for 5G

[2] Top executives at Verizon

[3] Dolan Beckel, director of the Office of Civic Innovation and Digital Strategy for the city of San José, Calif.

[4] Serhat Terzioğlu, at the World Economic Forum in Davos

[5] Business Today

[6] Streaming Media

In 2024 China shipped 314.6m mobile phones, up 8.7% y/y, marking the 2nd consecutive year that shipments have increased y/y.  86.4% of phones shipped were 5G models, the highest for any year (2023 was 82.2%), and 85.6% of shipments were domestic (Chinese) brands.  As can be seen in Figure 1 and Figure 2, after a dismal 2022 and 2023, China’s smartphone market has recovered, albeit modestly.
So far this year (Jan/Feb data only) January smartphone shipments were down 14.2% y/y, but February shipments were up 37.9% y/y and above the 5-year average by over 25%.  On January 20, the Chinese government added smartphones to its “New for Old” consumer product subsidy program, which we expect accounted for the strong February results.  While we expect continued strength in smartphone shipments in the domestic Chinese market, we expect consumers took advantage of the subsidy at the onset, and front-loaded February shipments.  March is  typically a strong shipment month, so we can see how much front-loading was done in February through the March shipments when they are released.
While the domestic situation for Chinese smartphone brands improves, the current trade war with the US, despite recent smartphone exceptions, still requires that Chinese smartphone brands entering the US pay an import tariff of between 20% and 25%, which, unless absorbed by the brand, will make them less attractive against other non-Chinese brands.  The most common Chinese brands entering the US are:

• One Plus (pvt) – Offered through all three major US carriers, although estimates for US sales are between 5% and 10% of company totals.
• TCL (000100.CH) – Typically sold unlocked.  Estimates are for between 10% and 15% of total sales to the US.
• Motorola – Owned by China’s Lenovo (992.HK) and sold through all US carriers and retailers.  Roughly 20% to 30% of total sales (estimated) are in the US.
• ZTE (000063.CH) – While most consumers believe ZTE smartphones are banned in the US (They were in 2018, but they paid a $1.4b fine and the ban was lifted), pre-paid phones from Metro (TMUS) are made by ZTE, but the numbers are small.

While other Chinese smartphone brand phones are sold in the US, the numbers are small and most have no official presence in the US.  However, even though  the recent exemptions  from additional tariffs have given the Chines smartphone brands shown above a bit of breathing room, the administration has promised to ‘investigate’ the matter further, essentially threatening new phone tariffs.  Chinese brands already work for very tight margins, so should any new smartphone tariffs be levied on Chinese brands, they will likely have to pass most of the incremental cost on to consumers.
That said, they have one thing in their favor, Apple (AAPL) who has been able to lobby the President to postpone another massive Chinese tariff increase.  While Apple is still a competitor, it has considerable production in China, and therefore works toward the same goals as Chinese brands in this instance.  As Apple continues to shift iPhone production away from China that will dissipate, leaving Chinese brands to fend for themselves, an unenviable position at best, at least for the next 3.5 years.

Autonomous vehicles seem to continue to fascinate entrepreneurs, hardware developers, and automobile manufacturers around the globe, although it also seems obvious that such vehicles might not be completely ready to roam the open roads, and since June of 2021,  ADS crashes involving autonomous systems must be reported to the National Highway Traffic Safety Administration if the system was in use withing 30 seconds of the crash and property damage or injury occurred.  Requirements get more stringent with each level, although there are so few vehicles with level 3+ systems due to state and other restrictions that there is little crash data.
Regardless of the available data, it would seem that while ADS and ADAS (level 2 ) systems are getting more sophisticated, they still require both careful use and full driver management.  Level 3 and above need more time for refinements, particularly lots of time in a controlled environment.  We think of that test zone as a very large parking lot where there are a few vehicles with test drivers rather than a public road.  What if you could have a parking lot that was hundreds of miles wide?  Wouldn’t this be the ideal testbed for an autonomous vehicle?

Instead of a vehicle, how about a ship?  Not an aircraft carrier or a giant cargo ship, but smaller, scalable, and relatively inexpensive fully autonomous craft that could be trained and deployed on the high seas with little chance of potential accidents.  The US Navy has been working on such a program for years, although including air (drones) and ground systems, but the accelerated conflicts that the US Navy faces daily, such as those in the Red Sea or in the South China Sea, make the necessity for such systems an absolute. 
Recently a company, Blue Water Autonomy (pvt) came out of stealth mode after raising $14m of seed capital and indicated that they have been developing such a ship for the Navy.  The company, founded by a former Navy officer who became the founder of 6 River Systems[1] (pvt) (sold to Ocado Group (pvt)) after a stint at Amazon (AMZN) Robotics, a former VP of Engineering at iRobot (IRBT), and an MIT grad who helped Ukraine collect front line data with drones.  Given this level of expertise and experience, the company developed a concept ship design in less than a year and has already begun saltwater testing of a 100 ton prototype for the US Navy.
The idea behind the autonomous ships is to make the design scalable and low-cost, allowing for modular payloads, giving the ship the ability to perform a wide variety of services.  But why does it need to be autonomous? 
China is ahead of the US in naval shipbuilding, making competition at the carrier and cruiser level difficult, but by employing large numbers of smaller autonomous ships, long duration patrols, surveillance, border patrol, and electronic warfare (jamming, etc.) can more easily be accomplished, without risk of life.  Such ships could easily be outfitted for logistics or resupply, search & rescue, or even mine recovery, but there are some things that autonomous ships can do that are far different than what goes on in more traditional naval warfare. 
If you have seen New Year or 4th of July celebrations recently, you have probably seen drone ‘swarms’ that can spell out words or create images using hundreds of linked drones.  Autonomous ships, especially small, less detectable ones, can do the same, linking themselves electronically and moving together as if they are a larger vessel.  This technique can be used to fool adversaries into thinking they are outnumbered or outgunned, when the ships involved are small and less far less equipped.  This ability to link systems also allows these ships to operate without human supervision in difficult circumstances or when given a specific task, such as a general command like “Return to base, restock fuel and return to location to refuel XYZ”
While we understand that the lure of being the supplier of millions of autonomous vehicles is unbelievably attractive to both large and small companies, it is also one that will take years to refine enough to where autonomous vehicle accidents will not be any more significant that those caused by human drivers.  It seems a smart idea to work such systems in a larger ‘parking lot’ like and ocean, where the chances of hitting something are far less than on the East River Drive or the 101.  JOHO.


[1] Warehouse robotics