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Display vendors eye emerging markets

While the mobile phone market is the dominant force driving conditions in the small/medium display industry, there are other applications and markets beyond handsets that offer attractive growth opportunities for suppliers of diminutive screens.

“These applications are also creating demand for alternate display technologies that offer benefits like lower power consumption and higher reflectivity, very important features for small handheld devices,” said Vinita Jakhanwal, principal analyst, small/medium displays for iSuppli Corp. “Different forms of electrophoretic displays and bistable LCDs are stepping in to serve the needs of these niche markets.”

Examples of companies in these technologies and markets include E Ink, SiPix, Bridgestone, Nemoptic, and ZBD.

Display manufacturers are looking to numerous emerging applications to help expand their businesses and hopefully to lessen their revenue dependence upon mobile phones. The
three main markets that small/medium display manufacturers are coveting are:

* Electronic Shelf Labels (ESLs).
* Point-of-Sale (POS) systems.
* E-books.

Furthermore, there is the market for transportation and other signage that is currently the domain of larger display sizes. A market is emerging for displays to be incorporated in smartcards for one-time password generation for financial applications.

Another novel use for displays is in removable USB flash drives to indicate free memory space. Unit shipments of displays to smartcards and USB drives are forecast to reach 191 million by 2011, however, these will be low-value markets because of their typically low ASPs, with the those markets totaling $140 million in 2011.

iSuppli Corp forecasts the display revenue derived from ESL, POS, e-books and transportation markets will reach $1.6 billion by 2010, rising at a compound annual growth rate (CAGR) of 10.2 per cent up from $1.2 billion in 2007.

ESL displays are small, at about 3-ins in diagonal dimension, and do not need high pixel densities. Segmented monochrome displays, which are cheap at about $5 per label, provide sufficient performance for ESL.

ESL will be one of the largest emerging applications during the next four years as it is set to grow to $601.9 million in 2010, rising at a CAGR or 11.9 per cent, up from $429.3 million in 2007. While the revenue growth will be moderate, ESL unit shipments are set to nearly double, reaching 160.9 million units by 2010, increasing at a 25.7 per cent CAGR from 81 million units in 2007. Much of this growth will be generated by the European and Japanese food and supermarket businesses.

ESL displays are used on shelf edges to display pricing information employing Radio Frequency (RF) and Infrared (IR) technology to communicate with the central server, which provides simultaneous pricing updates. This means the primary markets for ESL displays will be grocery stores, superstores, warehouse outlets and department stores where price is the
strongest competitive tool.

Another emerging small/medium display segment that will contribute to high growth in Europe and Asia is the point-of-sale (POS) market. Larger in size than ESLs at 5-ins in diagonal, POS systems are used in the retail environment for display of pricing information and product advertisements.

POS displays compete against paper and laminates, meaning it will be impossible for displays to compete on price in this market. However, the case can be made that the additional cost of electronic displays in POS systems is worthwhile due to the fact that retailers are giving consumers more visually appealing imagery with more information.

Target markets for POS electronic displays include gas stations with convenience stores, mass merchandisers, department stories and retailers that have electronics departments.

POS electronics display revenue is expected to grow to $233.8 million by 2010, rising at a CAGR of 31.2 percent, up from $103.6 million in 2007. While this is impressive, unit shipments will hit 12.3 million units by 2010, expanding at a CAGR of 39.8 per cent, up from 4.5 million units by 2007.

With only three to four companies making E-book readers, this market is considerably smaller than the ESL or POS display segments.

E-book displays are about 7-ins diagonally with current average selling prices (ASPs) at about $25. The main requirement in this market is for high resolutions, high contrast ratios, fast refresh rates and low power consumption.

Electrophoretic Displays (EPDs), mainly from E Ink Corp, now are being used in these readers.

The E-book market is forecast by iSuppli to grow to $9.4 million by 2010, expanding at a CAGR of 35.5 per cent, up from $3.8 million in 2007. Shipments of E-books will reach 506,000 units by 2010, rising at a CAGR of 50 per cent from 150,000 in 2007.

The benefits to E-books include long display life, high resolution, low power consumption, good viewing angles and fast refresh rates.

The transportation signage market is small in terms of unit shipments, but is extremely attractive because of the high ASPs of the products. This market typically uses displays 30-ins and larger. Most transportation signage is used in airports, in bus and rail stations and on highways as overhead signs.

The market now is dominated by plasma and LCD displays.

However, alternative display technologies may be able to take some market share if they can solve the problems of high power consumption and image burn-in.

The transportation market is set to grow to $739.3 million by 2010, expanding at a CAGR of 4.5 per cent from $647.8 million in 2007. However, this amount of money is for only 517,000 unit shipments by 2010, which will rise at a CAGR of 23.9 per cent, up from 272,000 units in 2007.

iSuppli Corp

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