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  "documentTitle": "Monolithic Power Systems (MPWR)",
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  "authorName": "Ben Axler",
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  "notes": "The slide uses a quote from an external report to undermine the growth narrative of the target company's consumer electronics business.",
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      "text": "As a result, the compound annual growth rate of tablet market is expected to be -4.6% from 2017 to 2022.",
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      "text": "CAGR: -6.8%",
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      "text": "We believe Pegatron, a Taiwanese company, works with companies like Microsoft to design and manufacture its consumer products such as tablets and gaming consoles. Flextronics used to, but has moved away from the business.(1) Pegatron's market commentary outlook about consumer end markets is bearish.",
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      "text": "c. Consumer Electronics Industry\nTablets, game consoles and IoT devices are the major revenue contributors in consumer electronics segment. According to IDC, around 150 million units of tablet shipped in 2018, decline by 8.9% YoY. While consumer tablet market has been declining with cannibalization from lower price convertible PC and smartphones with large screen size, commercial tablets have been on a growing trend mainly driven by increasing adoption in education, financial, and public sectors. Looking forward to 2019, despite potential growth of commercial tablets with specific functions aiming at education, retail, medical and logistics sectors, it is believed that continuous decline in consumer tablets will negatively impact the overall tablet market. As a result, the compound annual growth rate of tablet market is expected to be -4.6% from 2017 to 2022.\nLed by continuous market demand in Sony PS4 and Nintendo Switch, around 45.3 million units of game console shipped in 2018, an increase of 3.6% YoY. In 2019, market estimates that overall game console volume is expected to decline as Sony and Microsoft game consoles have been in the market for quite some time, while demand for Nintendo Switch also started to slow down. IDC further predicts that next wave of growth will start from 2020 after the launch of 9th general game console and volume will pick up from 2021. As a result, the compound growth rate for game console will be -6.8% from 2017 to 2022.",
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      "text": "As a result, the compound growth rate for game console will be -6.8% from 2017 to 2022. — Pegatron 2018 Annual Report",
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      "text": "1) \"Microsoft tapping Pegatron as its high end Surface AIO manufacturer\" - onmsft.com\n2) \"Microsoft and Flextronics to Open Xbox Manufacturing Facility In China\" - Microsoft.com and Citigroup Tech Conf, 9/14/19",
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      "text": "Source: Pegatron 2018 Annual Report filed May 2019",
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      "text": "Commentary From Large Microsoft Partner In Consumer Electronics Suggests Weak Outlook",
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