Display market - forecast for 2010-2016

27 August 2010, by Grzegorz Swiniarski

Since April I have written several articles about screens - mostly about OLED technology. These articles were published on our Polish site and covered major new developments. This time I would like to approach the subject from a different angle. I will give you a forecast for the display market for the coming years. The word forecast is perhaps an overstatemnet. I am going to make some speculations based on my knowledge and my intuition. Although such speculations are risky, I think that they have practical value. Few people are aware of the arising opportunities. Even if my predictions turn out to be only partially true, they will be better than total ignorance. Here is my version of the future events on the display market

2010

There are only a few month left till the end of 2010, but I have to write about this short period as well. Thanks to Samsung, OLED screens have recently started to gain popularity at a faster pace. OLED screens are used in the new top models of Samsung mobile phones (Wave, Galaxy S). These devices are manufactured by millions. The introduction of these products on the market is a very important stage in the history of OLEDs. This process will continue, it will be relatively slow, but constant.

Will LG start selling the first OLED TV with a diagonal over 20 inches this year, as promised earlier? What OLED TVs will be presented at IFA in Berlin? While such questions are quite interesting, I would not bother too much about them. No matter what OLED TVs will be exhibited at shows or available for purchase this year, they will not be mass-produced at low cost. We know that it is already possible to prepare OLED TVs for demos, but it is not yet possible to mass produce them. So neither the exhibitions at shows, nor pilot production will change our present knowledge.

Introduction of a tablet from Samsung with an OLED screen would be much more interesting than a new OLED TV. Speculations on that subject have been circulating for some time. We will know the answer within a few days. Unlike TVs, such a tablet would have to be produced economically in large quantities. Its appearance on the market would be an important stage in the maturing of OLED technology. It would be an evidence that after successful commercialization of the 4-inch OLED screens, this technology can be competitive in the 7-inch class as well. Personally, I would consider this to be a major technological success.

Interesting things will be going on behind the scenes. The four largest manufacturers of flat panel displays (Samsung, LG, AU Optronics, Chimei Innolux) will invest in new production lines for OLED screens. Samsung will be already building Gen 5.5 lines. The other companies will be building Gen 4 (appoximately) lines. It has been said that LG plans to start production on Gen 5.5 lines in 2012, but the associated investment will probably commence next year.

The research activities concerning development of new materials and new equipment for the OLED manufacturing will be very intense. It would be intersting if we could learn more about the results of all this research, but in the next few month detailed information will probably remain secret.

We should also closely watch the transflective and reflective screens in the coming month. There are chances for new product introductions in these categories. The first 10-inch transflective screen from PixelQi (Qi is pronounced chee in this case) is even available for individual customers. It is a screen for the DIY market. It can be used as a substitute for standard LCD screens in some netbooks. But I am waiting for a true debut in a mass produced device. I think that PixelQi screen will be introduced despite delays. Perhaps in the Notion Ink Adam tablet - also delayed. Apart from that the reflective Mirasol screen (MEMS type) from Qualcomm is most promising.

2011

The expansion of small OLED screens (up to 4 inches) will accelerate next year. Samsung will be still leading the pack, but the other three major FPD manufacturers (LG, AUO, Chimei) will also produce big quantities of small OLEDs. A company (or even companies) from China will also join that group. By the end of 2011, the market of small screens will change considerably. OLED screens will be found in numerous devices, from many different manufacturers. Mostly they will be used in cell phones, but also in cameras, portable AV players. At the beginning of 2011 this will not be evident yet, but by the end of 2011 we will all easily notice the changes in shops. Apart from expansion of the group of companies mass-manufacturing OLEDs, start of operation of the Samsung's Gen 5.5 production line will also be very important. OLED technology will become substantially more popular in portable devices. Despite all this, LCD will be still dominant in this category.

Even if no new OLED TVs are introduced in 2010, in 2011 some interesting models will appear on the market. They will be very expensive, but they will reach more useful sizes than the only two earlier models (11-inch Sony and 15-inch LG). I would not be surprised to see OLED TVs sized over 30 inches. Most probably, LG will launch such TVs. Will Samsung, Sony or some other company surprise us with OLED TVs? I wouldn't count on that. Samsung will have the necessary technology. But if I were a Samsung executive, I would not decide to manufacture small quantities of expensive TVs providing poor profits, but I would rather manufacture big quantities of more profitable small screens. Production of smaller screens can also be used to collect valuable experience that will help in mastering the technology needed to manufacture monitors and TV sets. I think that Samsung will react only if LG turns out to be surprisingly ambitious, or if the OLED manufacturing technology improves much faster than expected. Other companies - Sony in particular - would probably like to introduce OLED TVs for publicity and prestige. But I doubt whether anyone except Samsung will have the technology to compete with LG.

I wrote about the extensive, ongoing, research and development connected with OLED. I expect that we will begin to learn about the results of these activities in 2011. Now we can only mention a long list of experimental materials and production techniques. In 2011 we will learn what is their real potential. This will not influence the production OLED screens in 2011, but will help a lot to set our expectations for the next few years. Although typical buyers of electronic equipment usually show little interest in such reports, I assure you that we will hear a lot of interesting technical information next year.

2011 will be the breakthrough year for the reflective and transflective screens. New technologies will start to compete seriously. It will be a real fight on the market, not just rivalery of prototypes at exhibitions. Apart from PixelQi and Mirasol other solutions will also be introduced. I think it is not that important who is first on the market. In the long term the advantage resulting from early introduction will be irrelevant. Only the cost of production and the quality of the screen will count. The entry points for these new technologies are usually sought in e-book readers and tablets. I think that such technologies can also be introduced in small portable devices (mobile phones again), and even notebooks. So we will have a lot of debuts, technology refinements and similar events. Electrowetting, various types of MEMS and various kinds of e-paper - all these will develop quickly next year. You have to realize that the tablets market and the e-book readers market are both specific. These markets are dominated by a handfull of big companies. If one of the key players - such as Amazon and Barnes & Noble - decides to use a new type of screen in an e-book reader, the rules of the game will change instantly. The new solution will be immediately mainstream, there will be no such thing as slow and long transition. Such introductions are impossible with other types of devices which also use screens. However we have to remember that the absolute quantities of e-readers and tablets sold are much smaller than the numbers of mobile devices, TVs, notebooks and computer monitors.

2012

LCD will be put under serious pressure in the small screens category, with diagonals of up to 4 inches. First of all there will be the market pressure. The scale of production of new types of screens - especially OLED - will be so large that the number of manufactured small LCD screens will fall for the first time in comparison with the previous year. And it will be the beginning of a constant trend. And secondly, in 2012, the perceived status of LCD technology will deteriorate seriously. It will be treated as an inferior solution, at least for mobile devices. More demanding users will be be looking for new kinds of screens in their mobile phones, either for OLED screens, or for screens able to work in reflective mode. OLED will be the natural choice for users focused on multimedia features. Those interested primarely in practical usability and the business customers will probably prefer reflective and transflective screens, providing good visibility in bright sunlight. The differences between various types of screens will become well known, and customer demand for screens free from the shortcomings of LCD will become strongly developed.

In 2012 the leading FPD manufacturers will start to think about serious production of OLED TVs. The research done in 2010 and 2011 will extend the practical knowledge and it will gradually bring benefits. The OLED TVs available in 2012 will still come from small- or medium- scale manufacturing. They will be expensive. There will be very few models sold. But their sizes will probably exceed 40 inches. And there will be some limited choice - OLED TVs from different manufacturers will be available. We will likely be able to buy LG and Samsung TV sets. The Japanese will also try hard to prevent Koreans from grabbing the whole market and the whole splendor. But the Japanese companies will have to rely heavily on technologies supplied by external contractors. It is widely expected that LG will be the pioneer of OLED television. This is indeed the most likely option, but not the only possible. For now, Samsung has more experience in the production of OLEDs. No matter what OLED TVs will be available in 2012, leading manufacturers will probably have the experience required for construction of factories for mass production of OLED televisions. The necessary planning or even necessary investments will be undertaken.

After a series of introductions in 2011, tablets and e-book readers will undergo profound transformation in 2012. LCD screens will be quickly abandonned in such applications. The new competitors will change the situation of e-paper. The new solutions will take over leading roles. I am not going to take the risk of naming the winners, but I think that the old technologies do not have a chance in tablets and e-readers. LCD will become completely irrelevent in these applications. E-Ink (and related technologies) will become more of a niche solution. I do not think PixelQi has a chance for big success. Essentially it is a kind LCD screen and has some resulting limitations. Competing solutions have bigger potential. New screen technologies will probably blur the differences between tablets and e-readers. Apple will introduce an iPad successor with a screen other than LCD. This introduction will help to make one of the new technologies more popular. Thanks to new types of screens tablets will become more attractive in general and we will perceive them in a different way. A tablet will not be a gadget anymore, it will become a practical device. Used iPads with LCD screens will quickly lose their resale value.

I expect that in 2012 a major revolution will be started, but somewhat surprisigly nobody talks about this subject. What is going to happen? New technologies will enter the notebook market. It will be an extremely important change.

Each kind of screens has its own specific character. In notebooks we have a narrow range of screen sizes, mostly between 15-17 inches. Energy efficiency is also important. Ability to work in bright sunlight would be also valuable, much more than in desktop monitors or in TVs. In addition, notebook screens should handle video well, should provide full range of colors and good contrast. In 2012, LCD competitors (both OLED and transflective screens) should be ready for a serious entry into the notebook market. Inevitably, the beginnings will be modest. But the notebook market is the perfect battleground for the new display technologies. It provides excellent opportunity to break the dominance of LCD and to accelerate the development of competing technologies. On the one hand, the above-described character of notebook screens creates strong demand for better display technologies. Reduction of energy consumption or improvement of readability in bright sunlight would attract customers. On the other hand the moderate size of notebook screens lowers the technological barrier for manufacturers. Notebook screens can be mass-produced on smaller production lines than those necessary for TVs. The structure of the notebook market is also favourable. Firstly, it is huge. It is also diverse, highly competitive, and notebook manufacturers are large companies able to invest big money in new technologies. Currently, the quantity of manufactured screens is similar for notebooks and TVs (more than 200 million per year in 2010). But the growth rate is much higher in the case of notebook screens. The premium notebook sector provides a good market for new types of displays, initially sold at high prices. In 2012 it will be possible to use substantial quantities of OLED screens in notebooks. Samsung will have a lot of experience in production on Gen 5.5 lines. High volume, economic manufacturing of OLED notebook screens will be possible. But application of transflective screens should be even more interesting and potentially also more important. After gaining a foothold in the market of e-readers and tablets, in 2012 such screens will be mature enough for wider application in notebooks.

2013

LCD production volume will rapidly shrink in the sub 4-inch sector. Nevertheless LCD will retain majority of this market. OLED, reflective screens (maybe Mirasol, Liquavista) and transflective screens (maybe Liquavista, Pixtronix) will successfully compete.

LCD will become irrelevant for e-book readers and tablets. I do not believe that any serious, major manufacturer will introduce a tablet or an e-book reader based on LCD in 2013. This sector will be almost exclusively served by new types of screens. But this category will not be particularely good for OLED. Electronic paper will have to change its range of applications. A reader like Kindle or Nook from 2010 will no longer be able to compete effectively in 2013.

The TV market will be quite interesting. OLED TV will go through a transition phase. It will gradually change from prohibitively expensive luxury to a normal upmarket product. Apart from LG and Samsung, several other companies will also sell OLED TVs. Ordinary customers will often ponder purchase of an OLED TV, but prices will be too high for average people.

This brings us to one of the most speculative parts of my forecasts - that is, the notebook market in 2013. I have the impression that there will be a case of special synergy. The demand from the market and the emerging technical possibilities will fit each other perfectly. I have already written about the notebook specifics. Now I would like to add that some new types of screens use manufacturing technology very similar to that used for LCD, but in theory are much better than LCD for notebook applications. I think that demand for such screens will increase quickly. The relative ease of transforming LCD plants into plants manufacturing other screens will enable very rapid transition. Market will change dynamically, there will be some confusion and prices will flactuate quite quickly as well.

2014

Will LCD retain majority share of the small screen market in 2014? Maybe it will, but only with a slight advantage and for the last time. However I wouldn't be surprised, if competing technologies surpass LCD in their combined sales volume. Portable devices using new types of screens will be manufactured in hundreds of millions. Interestingly, expansion of OLED in the sub 4-inch category will be also slowed down. Although at the beginning small screens provided the springboard for OLED growth, in a few years time, new technologies will create very effective competition. Their ability to work in reflective mode will be a major advantage.

Tablets and e-book readers will be based exclusively on new technolgies. The transition will be so complete, that even second rate manufacturers of cheap equipment will stop using LCD for such devices. E-paper will significantly change its range of applications in comparison to what we know from 2010 realities.

This should be a breakthrough year for OLED TVs. They will not be price competitive with cheaper LCDs, but there will be many models available, in various sizes, from several manufacturers. Prices will be fairly high but not prohibitive. In short, OLED TVs will start to gain popularity. The debate about LCD-plasma superiority will gradually die. OLED will become the undisputed favourite. Another important issue will be decided on the television market. In 2014 we should find out whether any other new technology except OLED will be able to enter the TV market. We can certainly consider application of electrowetting or MEMS for manufacturing of TVs. But first of all such screens will have to show their potential. Only if the image quality is sufficiently high and manufacturing costs are low enough, competition on the TV market will be possible. The experience from tablets and notebooks will give us an answer about potential application of these technologies in TV sets.

Manufacturers will be hastily switching their LCD plants making screens for notebooks to new technologies. Considering the volume of production in this sector, it will be a difficult task. Nevertheless the transformation of notebook screens, started slowly in 2012, and accelerated in 2013, will rapidly move forward.

2015

LCD will definitely become a minority technology in the screens sized 4 inches and less. Replacement of LCD will proceed very quickly. OLEDs, transflective and reflective screens will compete for this market.

OLED TVs will be quite commonplace, but their average prices will be still higher than LCD. We will have the same situation we had a few years ago, when many people were inclined to buy a plasma or LCD TV, but for economic reasons decided to buy a CRT TV. The process of pushing LCD into the budget part of the market will begin. Yet one more similarity between LCD and CRT.

In notebooks LCD will be rapidly replaced by new technologies (looks like Liquavista and Pixtronics have good chances here), but because of the size of the notebook market the transition process - extended over several years - will be far from over. New types of screens will finally grab a big share of the desktop monitor market. Most desktop monitors are rather cheap and offer average performance. But in 2015 the prices of new display technologies will be low enough to compete with LCD in this market segment.

2016

2016 is quite far away, but I will take the risk and make some predictions. LCD will retain its position as the type of screen bringing the biggest revenue, mainly thanks to TV sets and desktop computer monitors. But it will be the final chapter of LCD supremacy. LCD technology will be quickly displaced by competitors in all market segments. By 2017 or 2018 LCD will loose its position of the most popular screen technology. LCD will be pushed into the budget part of the market. Upmarket models will use exclusively one of the new types of screens, regardless of the category of equipment. LCD will almost completely disappear from mobile phones, cameras, media players, tablets and e-book readers. LCD screens will loose most of the notebook market. The viability of standalone LCD monitors and LCD TVs will be based on economic reasons. But even in these two areas, LCD will quickly lose popularity. Manufacturing of plasma screens will be close to extinction.

Summary

I will not proceed further. I think I reached into pretty distant future. Precise forecasts are impossible by definition, so I am aware that the situation will not develop exactly the way I described it. For example, if all the experimental technologies for OLED manufacturing prove their practical value, the development of OLED TV market will be even faster than in my prediction. But an opposite scenario is also possible and the whole process may take more time. There is no way we can avoid such errors.

This entire article can be summarized very briefly. The structure of contemporary display market is simple. We have LCD dominating all segments except e-book readers. We have declining CRT market. There is the niche occupied by plasma. Another niche is occupied by E-Ink. And finally there is the small market foothold captured by rising OLED technology. In a few years E-Ink in its current form will disappear, plasma will disappear as well, LCD will quickly lose market share. OLED and two or three technologies from the transflective and reflective group will assume leading roles.

What if my forecasts turn out to be completely wrong? Most probably it would be good for us. I do not think that excessive optimism could be my mistake. In the most pessimistic scenario which seems possible to me, the described changes would take more time than projected. On the other hand, if I had underestimated the potential of any of the emerging technologies, we will witness more revolutionary changes. None of us would complain in such case and everyone would forgive the inaccuracy of my forecasts. And I would have a good reason to be satisfied. My misjudgement would be smaller than is the norm, because most journalists and analysts still strongly believe in the superiority of LCD.