CMB Securities: Intensive release of new products in autumn, focusing on the sales volume of new devices such as Apple and the pace of AI iteration

According to the latest information from the Wise Finance APP, CMB Securities released a research report stating that in September, the consumer electronics sector is entering a period of intensive new product releases, with AI terminal innovation continuing to be a market focus. Apple (AAPL.US) released its autumn new products as scheduled. Subsequently, attention can be paid to the market feedback after the AI function goes online in October and the sales trend of new devices. The long-term investment opportunities in high-quality companies in the Apple AI industry chain continue to be optimistic. On the Android side, Huawei released its first foldable screen phone. It is important to follow the subsequent AI innovations, pricing, and sales of new Android devices. Smart glasses and AR innovations have also become key opportunities of market interest. The acceleration of automotive intelligence is noteworthy, with the rise of new brands like Huawei and Xiaomi, as well as upstream innovative supply chains. Luxshare's acquisition of Laini and its subsidiaries aims to establish itself as a global leader in automotive wiring harnesses.

Key Points from CMB Securities:

Mobile Phones: Entering the period of intensive new phone releases in autumn, focusing on the sales of new iPhones and the pace of AI function iteration

Global smartphone shipments in Q2 increased by +6.5% year-on-year, with the industry chain maintaining a low single-digit growth forecast for 24 years. Apple's iPhone 16 new models were released as scheduled, with upgrades in chips, cameras, cooling systems, microphones, battery life, and glass back panels. The new phone's pre-sale delivery period is shorter than the 15 series, mainly due to the large inventory this year and the AI function not being synchronized. It is still necessary to track the market feedback and sales trends of the new phones after the AI function goes online in October. Huawei released the world's first foldable phone, Mate XT, with the Mate 70 new model expected to be released in the fourth quarter. Attention should be paid to the AI innovations, pricing, and sales of other Android new phones this year.

PC/Tablets: Major OEMs expect Q3 shipments to remain stable, focusing on market feedback for AI PC new products

Global PC/tablet shipments in Q2 increased by +3%/+22% year-on-year, marking two consecutive quarters of growth. The five major notebook OEMs in Taiwan are expected to maintain stable notebook shipments in Q3, mainly due to some customers pulling orders forward in the second quarter. Many brands have launched AI PCs in the second half of the year, with market attention focused on application compatibility and the actual effects of AI functions. Overall, the industry chain believes that PC shipments will moderately recover in 2024, with optimism for the long-term impact of AI PCs and Windows update cycles driving replacement cycles. The impact of AI PCs will be more significant in 2025-2027.

Wearable Devices: Upgrades across the AirPods product line, focusing on AI applications and new form factor terminals

In terms of new products, Apple has introduced two AirPods 4 models, with the high-end version featuring active noise cancellation for the first time in in-ear TWS earphones. AirPods Pro 2 has added hearing aid and other hearing health functions, while Watch S10 is thinner, with a larger screen, a switch from stainless steel to titanium, and new health functions such as sleep apnea detection. In terms of innovation, continued attention is needed on AI applications and new form factor terminals like smart glasses.

XR: AR technology continues to iterate at the Optics Expo, Meta Connect expected to release AR glasses in September

VRMR sales have declined year-on-year for 8 consecutive quarters, with global sales in Q2 down by 6%, while AR sales remained stable. Many manufacturers showcased the latest AR achievements at the Optics Expo in September. Compared to previous years, this year's expo focused more on full-color Micro-LED advancements in array waveguide displays, with a reduction in holographic waveguides and a greater emphasis on diffractive waveguides. In terms of micro-displays, full-color Micro-LEDs have made significant progress this year Single green light engine volume reduction, in terms of waveguide materials, the new SiC technology has attracted attention; it is recommended to pay attention to the AR new product releases and the integration of AI innovation, with the Meta AR prototype expected to debut at the end of September at the Connect conference.

Smart Home: Differentiated demand continues in various categories, focusing on AI-driven terminal innovation

Since the beginning of the year, the demand for various categories of smart home products has continued to differentiate. Among them, the demand for televisions has slightly improved due to the demand driven by sports event stocking, while the demand for cameras remains strong due to the increase in home security needs. However, the demand for smart speakers and game consoles has declined, with weaker sales. The industry chain predicts that overall demand is expected to continue to recover this year, but demand may continue to differentiate. In terms of innovation, focus on new forms of terminals such as desktop robots with integrated AI functions.

Automobiles: Passenger car sales in August decreased year-on-year but increased month-on-month, with significant differentiation in sales among domestic new energy vehicle manufacturers

In August, national passenger car retail sales decreased by -4% year-on-year but increased by 9.4% month-on-month. The year-on-year decline was mainly due to the continued sluggish sales of fuel vehicles and factors such as high temperatures and heavy rainfall in many places in August. Sales of new energy vehicles increased by 30% year-on-year and 11% month-on-month, maintaining relatively fast year-on-year growth. Looking at different brands, in August, there was significant differentiation in sales among domestic new energy vehicle manufacturers. Li Auto and Hongmeng Intelligent Drive maintained the first and second positions among new forces with sales of 48,000 and 34,000 vehicles respectively in August, with a month-on-month decrease of -5.6% and -23.6%. Recently, Huawei's Zhijie R7 started pre-sales at a starting price of 268,000 yuan, with pre-sales exceeding 10,000 units in 24 hours; Tesla announced that it will launch FSD in China and Europe in Q1 25, pending regulatory approval; Xiaomi's deliveries in June, July, and August continued to exceed 10,000 units, with the possibility of achieving the annual delivery target of 100,000 units by November.

Investment Advice: Based on research frameworks and industry data tracking, the consumer electronics industry chain's prosperity continues to improve; industry innovation is also accelerating, with leading companies in terminals/ chips/ software applications and other industry chains jointly investing in AI technology, smart terminals are expected to usher in an AI innovation wave; the intelligentization of automobiles is in a rapid development stage, and high-level intelligent driving is rapidly being implemented.

Risk Warning: Demand falls short of expectations, AI development falls short of expectations, macroeconomic downturn, escalating trade frictions, intensified industry competition