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Optoelectronics/Displays??

DisplaySearch sees lower handset display demand

Posted: 20 Nov 2008 ?? ?Print Version ?Bookmark and Share

Keywords:display demand? handset market? mobile phone?

Even with the holiday shopping season fast approaching, worldwide shipments of displays for mobile phones are slowing significantly. According to the latest forecast from DisplaySearch, Q4 08 mobile phone display unit shipments will only be 2.5 percent higher y-on-y. By comparison, Q4 07 unit growth was up 28 percent y-on-y, and y-on-y growth has remained in double digits every quarter during since Q3 07. The outlook for Q4 08 revenues is stronger, however, due to demand for larger and/or higher resolution displays to support growing video and internet usage. Q4 08 revenue growth is forecast at 11 percent y-on-y, just slightly about the Q3 08 y-on-y growth of 10 percent.

Market slide
These findings are part of DisplaySearch's latest Quarterly Mobile Phone Shipment and Forecast Report, which analyzes key market trends for mobile phone displays and PDAs. The report stated that the market for mobile phone main displays will reach $13.2 billion and 1.46 billion units in 2008, up from $10.9 billion and 1.27 billion units in 2007. Any downturn for mobile phone displays will likely weaken the overall small/medium displays market, which includes any displays less than 10-inch diagonal in size used for portable electronics and other applications. "The mobile phone market accounts for about 50 percent of the total small/medium market," noted Chris Crotty, DisplaySearch director of small and medium displays research. "An efficient supply chain and short lead times also make the mobile phone display market a key leading indicator for the health of overall mobile phone market."

Despite exciting new products like the new 3G iPhone and the Blackberry Storm, the overall demand for mobile phones seems to be weakening amid economic uncertainty. Replacement cycles are lengthening in more developed regions as consumers are increasingly reluctant to spend on unnecessary upgrades. In developing economic areas including China, production and job cutbacks have reduced demand for lower-end models.

The report also found that more Internet and video usage among mobile phone owners is driving steady increases in both display size and resolution. However, in 2008 average mobile phone display size (diagonal) will reach just 2.05-inch, while average pixel count will be 56.9K pixels, less than the 76.8K pixels in the popular 320 x 240 pixel QVGA format, often considered the minimum for video. From 2008 to 2012, resolution is forecast to grow at a much faster average annual rate than size, i.e., 3 to 11 percent.

Less suppliers
Also, the combined market share for leading mobile phone display suppliers has decreased over the last year, DispalySearch said. The total unit share for the top three and top five leading suppliers declined from 40 percent and 57 percent in Q2 07 to 37 percent and 52 percent in Q2 08. However, phone makers are not adding more display suppliers, but instead increasing orders among non-leading vendors. In both Q2 07 and Q2 08 phone makers purchased from an average of 5.7 display suppliers.

Meanwhile, Wintek has climbed to the top position among mobile phone display suppliers by increasing its unit share from 9.2 percent in Q2 07 to 14.1 percent in Q2 08. During that period, the Taiwan-based firm has grown unit shipments nearly four times faster than the total market. Wintek has added several new customersKyocera, Sagem, Tianyu, and ZTEwhile sharply increasing orders from industry leader Nokia. These gains have more than offset declines from struggling maker Motorola.





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