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Galaxy Note 3 / Galaxy Gear September 5, 2013 IT Galaxy Note 3 / Galaxy Gear KDB Daewoo Securities Research (IT team) Galaxy Note 3 Galaxy Gear [Galaxy Note 3/Gear] Executive Summary “Smart Freedom” – Greater convenience and device interoperability √ Galaxy Note 3 : Utility rather than style - Focus on functions than hardware: S Pen’s Air Command feature - Mobility: Larger, but thinner and faster (compared to Galaxy Note 2) √ Galaxy Note 3 : Minimal changes in supply chain... - Digitizer pen: Greater supply by Interflex (FPCB) and Innox (IT materials) -Component supply chain intact, except for digitizers Galaxy Gear : Greater interoperability with existing smartphones √ - Improves user experience with existing smartphones - Key features: Smart Relay (display), voice calls, Memographer (camera app), voice memo Galaxy Gear : Lacks of novelty √ - Lacks differentiation with existing products: Absence of core hardware features (NFC, health monitoring sensors) - Relatively low compatibility: Compatible with only five Galaxy products √ Future of Galaxy Gear : Healthcare M2M (Machine to Machine) - Sensors (mobile healthcare) + wearables (smart watch) ⇨ Measuring daily activity, heart rate, etc., to monitor health conditions - Compilation of individual health data ⇨ Big data ⇨ Personalized healthcare services KDB Daewoo Securities Research 3 [Galaxy Note 3] Specification Galaxy Note 3 Galaxy Note 2 Company SEC SEC Model SM-N9000 GT-N7100 AP *Snapdragon 800 / Exynos Octa 5420 Exynos 4412 - CPU Quad-core 2.3GHz Krait 400 Quad-core 1.6GHz Cortex-A9 -GPU Adreno 330 Mali-400MP OS Android 4.3 Jelly Bean Android 4.1.1 Jelly Bean Display 5.7” S-AMOLED capacitive 5.5" S-AMOLED capacitive Resolution 1920x1080 Full HD (~386 ppi) 1280x720 (~267 ppi) RAM 3GB LPDDR3 2GB LPDDR3 Storage 32GB/64GB 16GB/32GB/64GB External memory Micro SD (up to 64GB) Micro SD (up to 64GB) Wireless 4G LTE (Advanced), 3G, Wi-Fi 4G LTE, 3G, Wi-Fi Front: 2.0MP Front: 1.9MP Camera Rear: 13MP Rear: 8MP Battery 3,200mAh 3,100mAh Dimensions 151.2 x 79.2 x 8.3 mm 151.1 x 80.5 x 9.4 mm (H x W x D) Weight 168g 183g Action Memo, Scrapbook, Pen User experience Multi Window, Air View, Photo Note Window S Note, Multivision Below W1mn (based on shipment Price W1.08mn (based on shipment prices) prices) Launch September 2013 September 2012 * AP may differ by market; APs above are for products in Korea Source: Samsung Electronics, KDB Daewoo Securities Research KDB Daewoo Securities Research 4 [Galaxy Note 3] Supply chain Galaxy Note3 Supply‐chain (current estimates) Supplier Supplier Component Part Component Part Domestic Overseas Domestic Overseas Semiconductor AP SEC (005930 KS) Qualcomm (QCOM US) Camera Camera module SEC (005930 KS) Baseband SEC (005930 KS) Qualcomm (QCOM US) SEMCO (009150 KS) DRAM/NAND SEC (005930 KS) Partron (091700 KQ) Display Panel Samsung Display Camera lens SEMCO (009150 KS) On‐cell Touch Dongwoo Fine‐chem HannsTouch (3049 TT) Sekonix (053450 KQ) Touch IC Synaptics (SYNA US) Digitaloptics (106520 KQ) Glass Slimming Soulbrain (036830 KQ) Kolen (078650 KQ) Chemtronics (089010 KQ) IR filter/Blue filter Nanos (151910 KQ) Battery Li‐Ion Battery Samsung SDI (006400) Optrontec (082210 KQ) Substrate PCB SEMCO (009150 KS) Actuator SEMCO (009150 KS) Daeduck Electro. (008060 KS) Jahwa Electro. (033240 KS) Korea Circuit (007810 KS) Inspection equip. HyVISION (126700 KQ) FPCB Interflex (051370 KQ) Components MLCC SEMCO (009150 KS) Murata (6981 JP) BHflex (090460 KQ) Resistor/Inductor Abco Electronics (036010 KQ) Daeduck GDS (004130 KS) Connector Uju Electronics (065680 KQ) Innox (088390 KQ) Others Case Intops (049070 KQ) FC‐CSP SEMCO (009150 KS) Shinyang (086830 KQ) Communication Antena Partron (091700 KQ) Speaker Emtek (091120 KQ) EMW (079190 KQ) Microphone BSE (045970 KQ) DMB, GPS, Bluetooth chip Partron (091700 KQ) Charger RFTech (061040 KQ) RFTech (061040 KQ) Dongyang E&P (079960 KQ) SAW filter Wisol (122990 KQ) Wireless charger Chemtronics (089010 KQ) Wi‐Fi module SEMCO (009150 KS) RFTech (061040 KQ) Chip varistor/CMF Amotech (052710 KQ) Clover Hitech (043590 KQ) Innochips (080420 KQ) Software OS Google (GOOG US) NFC Amotech (052710 KQ) Mobile Office Infraware (041020 KQ) Source: KDB Daewoo Securities Research KDB Daewoo Securities Research 5 [Galaxy Gear] Specification Galaxy Gear iWatch (Forecast) Company SEC Apple Model Galaxy Gear iWatch CPU 800MHz - OS Android 4.3 iOS Display 1.62” S-AMOLED capacitive 1.5”OLED Resolution 320x320 - RAM 512MB 2GB Storage 4GB 16GB Camera 1.9 MP - Battery life 25 hours (on a single battery charge) 3-5 days Dimensions 36.8x56.6x11.1mm - (H x W x D) Weight 73.8g - Mobile phone functions S Voice, Smart Relay User experience - Memographer; voice memo Find My Device; Auto Lock Six colors Price $299 $200 To be launched in 140 countries on Sep. Launch 2014 25, 2013; US, Japan, and others in Oct. Source: Samsung Electronics, KDB Daewoo Securities Research KDB Daewoo Securities Research 6 [Galaxy Gear] Key features – 1) Smart relay, 2) Voice call Connects seamlessly with existing devices - Smart Relay: Seamless connection between smartwatch and existing Galaxy smartphones (data can be synched with Galaxy Note) - Voice call: Answers calls by taking wrist towards the ear - User-friendly thanks to seamless connection with smartphones Galaxy Gear’s smart relay feature Galaxy Gear’s voice call feature Source: Samsung Electronics Source: Samsung Electronics KDB Daewoo Securities Research 7 [Galaxy Gear] Key features – 3) Memographer, 4) Voice memo Captures key moments: Records daily activity with simple swipes - Memographer: Takes photos and video clips with 1.9-megapixel camera mounted on wrist strap - Voice Memo: Converts voice into text; Offers search functionality for texts converted from voice - Simplifies user experience (UX) for daily routines Galaxy Gear’s Memographer Galaxy Gear’s Voice Memo Source: Samsung Electronics Source: Samsung Electronics KDB Daewoo Securities Research 8 [Galaxy Gear] Comparison with other products TOQ Smart Watch 2 WIMM One MOTOACTV I’m Watch Pebble E-paper Manufacturer Qualcomm Sony WIMM Labs (Google) Motorola (Google) I’m Spa Pebble Technology Model TOQ Smart Watch 2 WIMM One MOTOACTV I’m Watch Pebble E-Paper Watch CPU Cortex-M3 200MHz - ARM11 667MHz 600 MHz OMAP3 IMX233(454MHz) Cortex-M3 123MHz i’m Droid 2 OS Custom Android Android 4.0 and later Custom Android Android 2.3.4 Pebble OS (Custom Android) Display 2.1" Mirasol Display 1.6" Transflective LCD 1.41” TFT capacitive 1.6” capacitive LCD 1.54” color TFT 1.26" Memory LCD Resolution - 220x176 160x160 220x176 240x240 (~220 ppi) 144 x 168 RAM 512MB - 256MB 256MB 64MB/128MB 512KB Storage - - 2GB 8GB/16GB 4GB 32MB Camera - - - - - - Battery hours 3 days 3-7 days 30 hours Up to 325 hours 5 hours to 2 days 3 hours or longer Size (H x W x D) - 41.6 x 41.1x 9mm 36 x 32 x 12.5mm 46 x 46 x 9.6mm 52.9 x 40.6 x 10mm 50.33 x 32.1x 9mm 48.4g (silicon) Weight - 22g 35g 90/95/130/170g 38g 122.5g (metal) Connection with iPhone, Android Bluetooth 4,0 Connection with Auto lock phones, and Blackberry Connection with NFC iPhone, Android Heartbeat/GPS sensors User Experience Auto brightness Offers products with iPhone and Android App running feature phones, and Blackberry Calorie check adjustment diverse materials phones Micro App Built-in mic and No voice call feature speaker Price $299 $260 (expected) $199 $249/$299 $349~ $115 - 150 Source: 각 사, KDB대우증권 리서치센터 Oct. 2012 – early Release date Oct. 10, 2013 Sep. 2013 (Expected) Sep. 2011 – mid 2012 Jun. 2012 Jan. 2013 2013 KDB Daewoo Securities Research 9 [Galaxy Gear] The future of healthcare industry: M2M M2M demand to grow in the healthcare industry - Machine to machine (M2M): A technology to support wired/wireless communications between devices - Growing interests in health amid population aging ⇨ Boosting M2M demand in healthcare industry - Sensor (a mobile healthcare gadget) + wearable (a smart watch) ⇨ Monitoring household/individual health - Accumulating health data of individuals ⇨ Big data ⇨ Expanding customized healthcare services market Health checkup using a smartphone M2M business in the healthcare industry Source: Marketwire Source: Machina Research KDB Daewoo Securities Research 10 Appendix: Brief history of smartwatch 1970s~ 1980s~ 1990s~ 2010~ Calculators & games Programs & beepers PDA & bluetooth Based on OS & ? 2002 Fossil 1975 Pulsar calculator 1984 SEIKO UC2000 1982 SEIKO TV Watch Windows Mobile OS 1999, 2009 Samsung (with keyboard) Palm OS IR sync Watch Phone 1977 SEIKO C153 (LCD Watch) 1991 Swatch Beep (beeper function) 2005 Fossil PDA Watch 2009 Fossil, Sony (bluetooth) 2010~ Smart watches Source: Media reports, PocketCalculatorShow.com, KDB Daewoo Securities Research have been rolled out by Samsung, Sony, Allerta, Smart watch: Allows communication between devices and humans WIMM, META, Motorola, I’m Watch, Nike - 1970s~: The first calculator watch (1975), LCD and casino game watches (1977) Communications (X), data storage (X), programs (X) - 1980s~: Featuring basic programs and beeper functions Communications (△), data storage (△), programs (△) - 1990s~: Featuring PDA, connections with PDAs and smartphones, touch sensor, bluetooth, and phone call functions Communications (O), data storage (△), programs (△) - 2010s~: Featuring OS, OLED, healthcare functions Communications (O), data storage (O), programs (O) KDB Daewoo Securities Research 11 KDB Daewoo IT Team Semiconductor James Song Joonho Jang Dir) +822‐768‐3722 Dir) +822‐768‐3241 E‐mail) james.song@dwsec.com E‐mail) joonho.jang@dwsec.com Handset / Wonjae Park Electronic components Dir) +822‐768‐3372 E‐mail) william.park@dwsec.com Display/ Jonathan Hwang Battery Dir) +822‐768‐4140 E‐mail) j.hwang@dwsec.com IT Parts/ Will Cho Young Ryu Electronic materials Dir) +822‐768‐4306 Dir) +822‐768‐4138 E‐mail) will.cho@dwsec.com E‐mail) young.ryu@dwsec.com KDB Daewoo Securities Research 12 Important Disclosures & Disclaimers Disclosures As of the publication date, Daewoo Securities Co., Ltd. issued equity-linked warrants with Samsung Electronics as an underlying asset, and other than this, Daewoo Securities has no other special interests in the covered companies.
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