Global LCD public display market sees first sequential downturn

April 30, 2012 — The global market for flat panel TVs hit a plateau in recent years, causing flat panel display (FPD) manufacturers — especially liquid crystal display (LCD) makers — to look to commercial markets such as digital signage to increase sales and profits from their large-area FPD production.

Electronic menu boards, in-classroom interactive white boards (IWB), out-of-home digital advertising and other non-consumer uses for FPDs — collectively categorized as public displays (PD) or large-format displays (LFD) — have shown solid and steady growth in recent years, rising 65% in unit volume production from 2009 to 2011.

Also read: LCD prices, display advances enable more public digital signage

While the PD/LFD market generally continues to rise and LCDs continue to take over for plasma, Q4’11 witnessed the first sequential decline over the last three years in the LCD portion of this market. According to the recently released NPD DisplaySearch Quarterly FPD Public Display Shipment and Forecast Report, the sequential drop in global shipments came in the least well-defined portion of this market, the 26-37” space. This is not the first sequential decline seen in the PD space, but most sequential declines in recent years have been from reduced plasma production, not from reduced LCD sales.

Figure. Worldwide FPD Commercial Public Display Shipments by Technology. SOURCE: NPD DisplaySearch Quarterly FPD Public Display Shipment and Forecast Report.

The commercial markets for larger-size FPDs remain small compared to the vast market for consumer TVs, but the complex nature of these B2B sales and the specialized nature of the displays produced specifically for these markets yield higher revenues and margins compared to commodity consumer applications.

On the surface, many of the displays used in commercial environments have similar specifications to their TV counterparts, especially in terms of size and resolution, but most are engineered for specific use in out-of-home environments. Many use more advanced materials in their design and production to meet the stringent needs of commercial installers. Such advanced materials include higher brightness backlights needed to overcome uncontrollable ambient light in open-air environments and unique liquid crystal material needed to minimize imagine sticking when static images are displayed. Others also offer advanced features such as uniform, super narrow bezels for video walls, network connectivity, interactive touch capabilities such as for white boards and even transparent capabilities.

“Commercial markets for flat panel displays, such as for digital signage, remain the jewel of the LCD industry,” noted Chris Connery, DisplaySearch Vice President of PC and Large Format Commercial Displays. “The challenge comes when trying to fully quantify these markets since many times installers use consumer-grade TVs for quick hang-and-bang solutions.”

The volume zone of the public display market still centers around the 32” category (same as the LCD TV market). The 26-39” segment, while being the largest, has also been the least defined segment of the public display sector. This market is largely filled with installations of consumer-grade TVs or with commercial-grade sets that use LCD TV panels. For this reason, many in the industry often disregard segments below 40” when trying to quantify the true market and/or its growth. While these gray areas below 40” showed a short-term downturn, quite noticeable in Q4’11 was the increased production share of very large-size displays. In particular, Sharp aggressively shipped out 70” panels to most efficiently utilize its Gen 10 capacity and to boost the interactive white board market.

Table. Global LCD public display unit shipments/growth. SOURCE: NPD DisplaySearch Quarterly FPD Public Display Shipment and Forecast Report.

Size Category

Q3’11

Q4’11

Q/Q Growth

26-39"

234,335

145,109

-38%

40-43"

174,263

166,736

-4%

45-47"

130,413

149,860

15%

50-65"

67,294

98,858

47%

70-99"

4,619

15,545

237%

Over 100"

20

10

-50%

Total

610,944

576,118

-6%

“Any sequential decline in unit volume shipments into commercial sectors is hardly cause for alarm, as it may be in consumer sectors,” notes Connery “This market is more project-based, with no seasonality. For example, Burger King is rolling out electronic menu boards across the country right now. The market and major projects rolling out globally all need to be monitored regularly to confirm market success.”

NPD DisplaySearch provides global market research and consulting, specializing in the display supply chain, as well as the emerging photovoltaic/solar cell industries. Learn more at http://www.displaysearch.com/.

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