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February Snapshot of the Display Industry

On Monday, we published the March issue of Large Display Report, which documents the activity in the display industry for monitor-sized and larger displays, components and finished products. One of the benefits of a monthly publication is the ability to step back and look at the events over the last month and try to figure out what all the individual news items mean for the overall industry. Here is a quick summary of some of those trends and events that may have an impact on the industry.

In flat panels, the new alliance between Sony and Sharp is guaranteed to shake things up. In case you missed it, Sony has agreed to invest in Sharp's new Gen10 LCD fab and will get about 1/3 of the output. Undoubtedly, Sony was also talking to Samsung about more cooperative investments in next generation fabs, continuing their cooperative relationship. Now, Sony seems to have changed dance partners in this high stakes game and the impact on supply chain and other major manufacturers will now start to be studied in more detail. We suspect that this move will change industry dynamics quite a bit, although it is hard to tell exactly in what ways just yet.

As for sales of TVs, the news is not all that great. Pacific Media reported that inventories for North American distributors rose 68% in January over December levels while sales fell 37% - a sharp contrast from the situation a year ago. Distributors were clearly overly optimistic about their sales prospects. And the economic situation in the US is not looking too good right now. Oil and gas prices are high, credit is tight for everyone and the mortgage crisis keeps getting worse. Consumer spending fuels the US economy and if they stop spending, a recession will occur. That's obviously bad news for TVs sales and the chances of avoiding a recession seem to be getting slimmer each day.

On the other hand, lots of new LCD and PDP capacity is coming on line this year. This will increase supply, particularly in larger-sized displays. While most forecasters still see demand outstripping supply in 2008, given the changing economic situation this math may start to change. That means pricing should get soft and the hoped for stabilization in flat panel manufacturing (pricing and profitability) may not be so stable. We suspect this will lead some companies to consider stretching out production ramps and plant equipment installs.

In LED/Laser Projection, Insight Media just released its updated analysis of the Pico Projector market. There is considerable interest in the opportunity this market could represent, and companies continue to show new products, making it hard to keep a report like this current. In LDR this month, we report on a new concept from Giotti, a new demo from Motorola and a new change and renewed competition for bTendo (formerly TeraOp Displays).

The activity in 3D also continues its torrid pace. This includes new 3D formatting and conversion deals from DDD and new concepts from Trioviz, Actuality, Nagoya University and Provision. We also report updates on a number of other 3D display developers and provide several stories on 3D image capture. Our activities to form the 3D Home Consortium are progressing well, too. Look for news on this front soon.

Driving 3D interest is 3D cinema, of course. This got a big boost last month with the successful release of the Hannah Montana movie. The Disney Digital 3D movie opened Super Bowl weekend and grossed $31.1M in 683 theaters, a record for any movie on Super Bowl weekend. To date, it has grossed $62M, a record for any 3D movie or for any concert movie. This compares, for example, to $27.5M opening weekend for Beowulf on 3,153 2D and 3D screens. To date, Beowulf has grossed a total of $196M -- $82M domestically and $114M internationally. We will be at ShoWest next week to tell you about activity there.

And, we had a chance to go to the Digital Signage Expo in Las Vegas last week and report on activities there. Perhaps the biggest take away was the rapid proliferation of large-sized flat panel solutions. This means 103" PDPs, 70" LCDs and tiled LCD solutions that can compete with other large screen display alternatives like LED walls and projection systems. This market is definitely maturing now with more turnkey solutions and user interfaces that make it much easier to manage content on these out-of-home networks.

The current issue is 109 pages, so there is a lot more detail than can be summarized here.

Until next time...

Chris Chinnock

President, Insight Media

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