December 2005: A Wonderful Uncertainty…

This year’s Christmas shopping season is in full swing. Merchants are doing their best to get us to spend, spend, spend. Some stores are opening at ridiculous hours such as 5:00 am with special bargains to get people to stand in line for hours even before that. Fights are erupting as these grumpy sleep-deprived early risers try to get to the specially priced items that enticed them there to begin with. The “word” is out that this will be the year of electronic purchases and especially flat panel televisions.

A few days ago, I saw an ad for a 32” LCD TV for $697! Have flat panels now dropped so far in price as to compete with, and even under-price, CRT televisions? More and more popular magazines are coming out with articles trying to explain the differences between LCD, Plasma, rear and front projection technologies, and how these may compare to the traditional CRT televisions. Almost all of these articles are full of technical errors and misstatements that most likely will do more harm than good. (I read one just today that implied that all flat panel televisions were HDTV while CRT sets were not.) The no-longer-valid statements that plasma displays use much more power and have problems with image burn-in are continuing to be emphasized. Nevertheless, accurate or not, these articles are adding to the shopping frenzy that seems to be engulfing the display industry.

The convergence of digital recording media, digital television, and flat panel technologies is becoming like the forces in a perfect storm. Quite suddenly it seems, nearly everyone in the world has awakened to a “need” for a flat panel television. The perception is that the great new flat panel technologies are an absolute must for all kinds of video entertainment viewing. Since this “need” is now so “obvious” to everyone, the rational product evaluation processes that normally might apply have been abandoned. Consumers have mostly given up on trying to figure out the real benefits of one technology over another and are making purchases based on the pure desire to own a product with “great new digital flat-panel technology”. The only operative limitation seems to be how much one is able to spend. Are the credit cards “maxed out” yet?

This emotion-driven market does not yield well to rational analysis. Which products and which technologies will be the most popular? How quickly will sales grow? Can the CRT still keep a market share with a bulkier but higher-quality image at a lower price? Or will the emotion-driven desire for a flat-panel technology send it to a premature death? Wow! What confusion! What uncertainty!

But what a great Christmas present for the display industry! And this will be a gift that keeps on giving for years to come.

Along with this great blessing comes the frustration of not being able to figure out just how this will all turn out. For a business enterprise making major investments in plant and equipment this uncertainty can constitute a life or death decision.

From a rational economic and scientific viewpoint, there should be a future where CRT technology continues to provide excellent viewing at the lowest price. Then, the smaller size flat panel displays for computers and televisions should end up being dominated by LCD technology and the larger flat panels should continue to be the natural turf of plasma displays. Also, in this rational world, the lower-priced large screens should continue to be based on rear projection technologies, and the really large home theaters are most likely implemented with front projectors installed in rooms having controlled illumination. And then, over several years, we should expect to see the gradual introduction of OLED technology that nicely establishes it’s own market -- beginning with energy efficient portable devices.

Is this scenario too obvious and too comfortable? What if LCD technology takes it all? Not one of the other technologies has the major support base of laptop and desktop displays -- plus all of the even smaller displays in portable devices. Will this broad product base allow for the funding of so much development activity that the scale-up to larger sizes will become ever more cost effective? Will plasma and rear-projection technologies be relegated to ever-smaller market segments?

Since personally I like variety, I sincerely hope not. But consumer behavior at the present time is so darn unpredictable. Poorly explained statements in newspapers and magazines such as “burn-in”, “runs hot”, and “uses lots of power” take on a life of their own. Most consumers seem unable to perceive the differences in image quality even among the products within a given technology. Therefore, an LCD television with 480-line resolution and inferior circuitry, but an attractive price, may end up in someone’s living room and be shown off to friends as their “great new flat-panel digital HDTV”.

Perhaps over the next year, consumers will become more sophisticated and knowledgeable as the initial emotional enthusiasm dissipates. We in the display industry can do more to help. The promotional literature should teach as well as sell. Too many ads still emphasize a single meaningless number such as contrast ratio. We can do better.

Nevertheless, the message this Christmas for the worldwide display community -- and for many Christmases to come -- is one of great joy, incredible growth, and the promise of even greater opportunities in the years ahead.

Should you have some opinions on what the future holds for the display industry and how all this will turn out, please let me know via this site, by e-mail at silzars@attglobal.net, by telephone at 425-898-9117, or by fax at 425-898-1727. And a Merry Christmas to all.