Published in IT/AV Report, Spring 2007

A Display Futures Market?
By Neal Weinstock

Different approaches affect pricing.

A Toshiba SED exhibited at CES; the company probably is now prohibited from producing the device because of a patent suit.

    OLED (organic light-emitting diode) is entering the race, finally, after decades in training. Plasma and DLP are fading overall, but DLP and all other projector technologies are hot in commercial AV because of 3M’s Vikuiti and other new screen materials. SED almost arrived, but is now in the penalty box. More competition in LED is on the way, although municipal approvals for outdoor signs are so slow in coming that key suppliers’ share prices dropped. And LCD remains the big volume leader; can any of these others ever catch up?
    The display business is far more complicated than the markets for commodities such as wheat, oil or politicians, all of which have generated futures markets that help mitigate investors’ risks. Arguably, the display market has lots more riding on its results than any of those just mentioned, because the career that may be made or broken may just be yours. Or mine.
    We can’t establish a futures market in this publication, but at least we can help inform those who have bet their livelihoods on displays. Here’s the current state of the handicap:

    Sony showed 27-inch OLED TVs at CES. This is not, in itself, revolutionary, because manufacturers have been showing OLEDs at trade shows for many years with no actual product larger than five inches available. (These are ever more commonly being deployed in cell phones and digital cameras.) This time, things are different.
    Why? Last year, as Sony entered its big reorganization, the company told analysts it was betting hugely on OLEDs. Indeed, development of other display types was cut back in favor of billions invested in the organic technology, with manufacturing in a joint venture with Toyota. Now, Sony’s profitability is still in the dumps, and it needs its investment to pay off. But is the technology ready for volume manufacturing? In April, the company announced that it is able to manufacture 1000 a month; it would sell them as “status symbols” and endeavor to keep the price to just a few times that of LCDs.
    Why buy an OLED display? How about brightness 1000 times that of an LCD, with at least as wide a color gamut as plasma? How about displays so thin we eventually will be able to roll them up (though not yet in this generation of product), so light they hang easily on any wall, and they use far less power, too? All good. But, how about displays that have very short usable lives? Not so good. That and complex manufacturing issues are what remain to be overcome for the technology. Not only Sony, but also Seiko Epson, Canon, Samsung, and a joint venture between Toshiba and Matsushita are beginning volume manufacturing of OLEDs soon.

SED Who?
    Toshiba and Canon formed a joint venture in 2004 to develop and make SED (surface-conduction electron-emitter display) panels. The SED promise is a panel higher in contrast, brighter, thinner and more energy-efficient than LCD or plasma, but less so than OLED, though manufacturable in large sizes with far greater efficiency than OLED. SEDs also allow extremely wide viewing angles, similar to CRTs.
    Last Winter, Toshiba and Canon had forecast that they would begin volume shipments of SEDs by now, but they’ve stalled that until late in the year at best. They face two issues. For one, prices for LCD and plasma are falling fast, potentially killing any market for the much-higher-priced SED until it also faces competition from OLED. The other: a patent dispute with the acknowledged rights holder. Canon bought a license to the technology, but courts have now ruled that it cannot share those rights with its manufacturing partner, Toshiba, unless Toshiba licenses them, too. So, now it seems most likely that Canon will buy out its partner and proceed alone.
    An SED consists of two flat pieces of glass, sealed with a vacuum in-between. One of the glass pieces is covered with electron emitters, the other is covered with phosphorus; essentially, the concept is the same as in CRTs. In the case of SEDs, the vacuum in-between the glasses is only half an inch thick, allowing for extremely thin monitors. Each electron emitter is matched up with a pixel on the monitor, allowing extreme precision in images. But, will they ever be manufactured in mass quantities? Check back in 2008.

Vikuiti to the Rescue
    3M’s Vikuiti brightness enhancement film has been around for a decade, and is incorporated into LCDs from Sharp and LG Philips. Only a couple of years ago, however, 3M began selling the surface as a standalone product for use as a projection screen. Other providers of translucent screens have come along since, and so have other specialized materials that give different looks to projected images. Relatively inexpensive and bright, compared with most large flat screens, video projectors suddenly have been granted a coolness factor in many commercial applications.
    This couldn’t come at a more opportune time, because DLP and other projection displays are in a sales tailspin as flat panel pricing declines.
    Meanwhile, according to the most recent sales data from iSuppli, DisplaySearch and others, LCD sales are now roughly double plasma sales. In Weinstock Media Analysis’ most recent study of the digital signage business, we’ve found hardly any commercial AV using plasma; by units, the indoor signage market is about 90% LCD, with the rest split between plasma and projection. This is a huge change from just a few years ago, and is attributable largely to LCDs’ greater trouble-free lifespan.

LEDs and Regulation
    Some LCDs go outdoors, too, but the outdoor market mostly is about LEDs. Especially important to overall sales numbers are the 48- or 60-foot non-video billboards being put in place by major outdoor advertising companies including Lamar, Clear Channel, Yesco, etc. At more than $300,000 each, every unit is a biggie. As with any big-ticket market, sales are blocky (several in one month, none in the next), but outdoor LEDs are made especially blocky by long approval processes in each municipality where they may be built. Many localities are afraid of the signs distracting drivers; some don’t want to look like little Times Squares.
    The result has been a slowdown in construction, even at a time when the number of big LED suppliers is increasing. They’ve been drawn in by companies such as Clear Channel boasting of getting six times the revenue out of a digital sign as from old-fashioned paper signs. But, you can only get that revenue increase where you are able to build a sign.
    Meanwhile, the intense competition in LEDs has led to far better brightness specs from many suppliers, new shape flexibility and other innovations. It’s a great time to be building outdoor signs, if only you have permission.

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