OLED-TV revenue to rise by a factor of 240 by 2015—but still remain a niche

EL SEGUNDO, USA: Consumers are turned on by the bright, clear pictures produced by Organic Light-Emitting Diode (OLED) televisions—but they are tuning out to the small sizes and prohibitively high prices of these sets.

Because of this, shipments of OLED panels for televisions will account for only a tiny portion of the global TV market during the next six years, despite a nearly 200 240 times increase in Active-Matrix OLED (AM-OLED) panel revenue during the same period, according to iSuppli Corp.Source: iSuppli, Oct. 2009

Global revenue from shipments of OLED panels for use in televisions will surge to $1.8 billion in 2015, up from $10 million in 2009. This will make television the biggest revenue-generating application for OLED panels in 2015, surpassing the much higher-volume market of main displays for cell phones. The large sizes of televisions relative to the small displays on cell phones means the pricing for their OLED displays is dramatically higher, boosting revenue.

However, even with this growth, unit shipments of OLED panels for televisions will amount to just 850,000 units in 2013 and only 4.7 million units in 2015, up from 25,000 in 2009. This represents a tiny number of shipments compared to the LCD-TV panel market, which is set to reach 232.6 million units in 2013.

“Ever since Sony Corp. unveiled an 11-inch Active Matrix (AM) OLED television in late 2007, consumers and the display industry have been buzzing about its stunning images,” said Vinita Jakhanwal, principal analyst, small/medium displays, for iSuppli.

“But average pricing for an 11-inch AM-OLED television is presently about $2,500, compared to $704 for a 42- to 44-inch LCD television. Due to manufacturing challenges and limited production, OLED-TVs will remain small in size and high in price in the coming years, consigning them to small niche of the global television market at least through 2015.”

OLED allures
LG Display will be launching a 15-inch AM-OLED TV for the Korean market by Christmas this year. As the demonstrations of this television proved, AM-OLED technology offers several advantages compared to LCDs.

Beyond the obvious attribute of superior image quality, AM-OLEDs have a very slim form factor. They also consume much less power than LCDs, making them attractive to environmentally conscious consumers.

OLED obstacles
The major barriers for the OLED-TV market include limited manufacturing, technological and quality challenges and the increasing competitiveness of LCDs.

“The AM-OLED market presently has few suppliers,” Jakhanwal said. “This precludes competition that could drive prices down and volume up.”

There currently is no investment in fabs capable of producing larger AM-OLED panels that can compete directly with the most popular LCD-TV sizes. Because of this, it is unknown whether high-volume manufacturing of large-sized AM-OLED panels can generate yields that are competitive with other display technologies.

OLED panels are based on a current-driven backplane technology that offers poor stability and a lack of uniformity. Lifetime issues are also a concern, with large-sized AM-OLED TV sets’ operational life constrained by the OLED material performance and differential aging of the various materials in the display.

AM-OLEDs also suffer from “image sticking,” a phenomenon that leaves an artifact on a screen after a static image is displayed too long.

On the competitive front, LCD-TVs are improving thier refresh rates, moving from 120Hz to 180Hz and 240Hz. They also are using LED backlights to improve color performance.

Furthermore, LCDs are getting thinner, reducing a key advantage of OLEDs. Finally, TFT-LCD prices are dropping quickly, expanding their cost edge over OLEDs.

Samsung maintains worldwide LCD-TV lead in Q2

EL SEGUNDO, USA: Samsung Electronics Co. Ltd. in the second quarter maintained its lead in the global LCD-TV market, partly due to a surge in shipments of its LED-backlit sets, according to iSuppli Corp.

Samsung’s worldwide LCD-TV shipments for the second quarter amounted to 5.7 million units, up 605,956 from 5.1 million in the first quarter, the largest unit increase of all LCD-TV brands during the quarter. The 12 percent growth gave Samsung a market share of 18.5 percent.

“Samsung in the second quarter was very aggressive in introducing and marketing LCD-TVs that featured LED backlights,” said Riddhi Patel, principal analyst, television, for iSuppli. “This put Samsung at the forefront of this fast-growing technology trend, helping to boost the company’s sales during the period.”

Unlike traditional Cathode Ray Tube (CRT) televisions that generate their own light, LCD-TVs require an additional illumination source—or backlight—in order to present a visible image. LCDs historically have employed Fluorescent Lamps (CCFLs) as backlights. However, because of price reductions, LEDs in recent years have become a viable alternative to CCFLs.

LEDs deliver multiple advantages compared to CCFLs, including greater power savings, thinner form factors and the elimination of toxic materials employed in CCFL manufacturing.

Worldwide shipments of LCD TVs with LED backlights rose to 604,000 units in the second quarter, up 75 percent from 345,000 in the first. Shipments of such sets are expected to rise by 170 percent in the third quarter and by another 20 percent in the fourth quarter.

For all of 2009, shipments of LCD-TVs with LED backlights are predicted to reach 4.5 million units, up by more than a factor of 10 from 438,000 in 2008. By 2013, shipments will rise to 98.8 million, accounting for 42.5 percent of the global LCD-TV market.

Sales rise for both high-end and low-end LCD-TVs
Global LCD-TVs shipments rose to 30.7 million units in the second quarter, up 14.1 percent from 26.9 million in the first.

“Consumers in the second quarter continued to buy more LCD TVs despite the economic downturn due to the introduction of more advanced models and because of price declines for older sets,” Patel observed.

Consumers in developed economies who already have purchased flat-panel sets now are buying replacement or additional LCD-TVs that have enhanced features. In addition to LCD-TVs with LED backlights, these consumers are purchasing larger televisions and sets with faster refresh rates, i.e., 120Hz and 240Hz, which yield higher-quality pictures and superior presentation of fast motion.

Meanwhile, retail prices for older models declined in the second quarter, despite a glass shortage that has driven up pricing for some LCD panels. The price drops attracted first-time LCD-TV buyers, as well those with lower incomes and consumers in developing economies.

Global average selling price for all LCD-TVs remained flat in the second quarter compared to the first. However, pricing for the most popular size range for LCD-TVs, i.e., 30- to 34-inches, decreased by 4 percent sequentially in the second quarter.

“While panel prices may have risen, LCD-TV makers have taken some reductions on their margins to reduce pricing and maintain sales momentum,” Patel said. “Furthermore, in some cases, retailers are willing to compromise on their mark-ups to ensure the ongoing uptake of these sets.”

On a percentage basis, the fastest growth in the second quarter was achieved by LG Electronics, whose shipments rose by 20 percent to reach 3.5 million units, up from 2.9 million in the first quarter.

“LG’s strong growth was due to the company’s increased shipments to the emerging markets, where consumers are now looking at buying their first LCD TVs,” Patel said.

The figure presents iSuppli’s ranking of the Top-5 LCD-TV brands in the second quarter.

iSuppli: Quarterly Global Ranking of the World's Top-Five LCD-TV Brands (Ranking by Percentage of Global Unit Shipments)Source: iSuppli, Sept. 2009

Stimulus stimulates US education projector market

EL SEGUNDO, USA: While politicians are debating the efficacy of the US stimulus package, there’s no debate that the program has benefitted sales of projectors to the American education market, according to iSuppli Corp.

Shipments of projectors in North America rose 12.4 percent in the second quarter to reach 440,322 units, up from 391,646 in the first quarter.

This contrasts with a 0.4 percent sequential decline in global projector shipments during the quarter.

“The primary factor responsible for the growth in the US projector market is the increase in shipments of front projectors in K-12 classrooms and universities,” observed Sanju Khatri, principal analyst, projection and large screen displays, for iSuppli.

“The US education market is benefitting from Title IID funding under the American Recovery and Reinvestment Act (ARRA), with about $650 million appropriated for the use of new or existing technologies to improve academic achievement for elementary and secondary schools. As the funds have become available in July, education spending on projectors in the United States is now on the rise.”

The education sector, a major driver for the projector market, is expected to account for 38 percent of shipments in 2009.

The strong performance in the United States contrasts markedly with those of some other regions.

In the Europe/Middle East/Africa region, shipments declined by 19 percent in the second quarter compared to the first. Seasonal factors contributed to the low shipments, as well as weak sales in Germany, Eastern Europe, and Africa and the Middle East.

Projector shipments worldwide are expected to grow at a more healthy rate in the third quarter due to further increases in education sales in the United States and Europe/Middle East/Africa. North American shipments will rise 18.2 percent in the third quarter to reach 520,578 units, while the worldwide market will climb to 1.3 million units, up 15.4 percent from the second quarter.

“Shipments will rise due to increased sales in education market in the United States as school districts make use of the ARRA funding,” Khatri said. “The front-projector market is expected to benefit from this as the technology still remains the most cost-effective solution for large-sized displays. Furthermore, the Europe/Middle East/Africa market is expected to recover as education and corporate demand picks up.”

Blu-ray sings the PC blues!

EL SEGUNDO, USA: Despite a rapid rise in the sales of consumer Blu-ray players, a fall in their prices and an increase in the number of high-definition movie titles, Blu-ray Drives (BDs) in PC systems have been left singing the blues, according to iSuppli Corp.

By 2013, BDs will be found in only 16.3 percent of PCs shipped, up from 3.6 percent in 2009. The figure presents iSuppli’s forecast of the penetration of BDs in global PC shipments.

iSuppli: Forecast of Global Blu-ray Drive Percentage Penetration in PCs, 2009-2013 (Percentage of Total PC Shipments)Source: iSuppli, USA

“BDs won’t be replacing DVDs as the primary optical drive in PC systems through at least the year 2013,” said Michael Yang, senior analyst for storage and mobile memory at iSuppli. “They eventually will find success, but during the next five years, that success will be limited in the PC segment.”

According to Yang, the two main reasons hampering the adoption of Blu-ray drives in PCs include cost, as well as the lack of a library of movies to justify the need for consumers to move to a different drive in their PCs.

Cost, Yang said, is the primary impediment. Given the high price of the product, consumers are unwilling to pay the extra money in order to obtain a high-definition drive. “The cost issue is amplified by the fact that the library of content is so small that there really isn’t a reason for users to switch at the moment,” Yang added. And while this is changing and studios are rolling out more Blu-ray content every week, there remains a long way to go.

Succession crisis
A tertiary factor worth mentioning is the difficulty of supplanting an incumbent storage medium in PCs—a distinction currently held by the DVD-RW drive.

From a historical perspective, each of the successful storage media in PCs has gained popularity only when content became available and when consumers actually understood that what they were getting was easy to use and worth the cost.

For instance, the once-ubiquitous 3.5-inch floppy drive had a lifespan of 15-plus years, surviving well past its prime. Eventually, it was replaced by CD-ROMs—which, in turn, gave way to DVD drives. A changeover occurred and the floppy disk finally supplanted when it became apparent that CD-ROMs not only offered a distinct advantage but were also the medium being adopted by everything from music to games to movies.

Such a pivotal moment, Yang said, has not yet arrived for the Blu-ray drive. “It’s undeniable that Blu-ray delivers a higher-definition picture, better sound quality and larger storage space for home entertainment,” he remarked. “However, these benefits may have little or no value when viewing the content on a smaller desktop or laptop PC screen and using poor speakers.”

Until BD costs decline and user knowledge increases, the technology will continue to struggle.

Set-top box shipments rise in 2009 despite economic downturn

EL SEGUNDO, USA: Defying the current economic turmoil, global Set-Top Box (STB) shipments are expected to rise in 2009 due to rising demand from Asia and from products supporting High Definition (HD), Digital Video Recording and Internet Protocol Television (IPTV), according to iSuppli Corp.

Worldwide STB shipments are set to grow to 136.7 million units in 2009, up 4.2 percent from 131.2 million in 2008, as presented in the attached figure. Shipments will rise to 201 million systems by 2013, growing at a CAGR of 9 percent during the forecast period.

STB sales have continued to expand during the worse phase of the current downturn.

“In the fourth quarter, when the wheels were literally coming off of the world’s economies, the leading STB makers were reporting surging sales,” said Jordan Selburn, principal analyst for semiconductor design and STBs at iSuppli.

“This phenomenon carried over into 2009 and beyond with first-quarter shipments of STBs. And while they were down from the fourth-quarter holiday season, they were still ahead of the first quarter from 2008—an unusual event for any product in today’s depressed electronics market.”

Although terrestrial and satellite STB shipments were essentially flat during this time period, cable boxes have showed very strong growth, driven in particular by increasing rollouts in China and other parts of the Asia-Pacific region.

IPTV STBs are continuing to proliferate as well, shipping over 50 percent more systems in 2008 than during the previous year. The growth of IPTV STBs nearly matched that of cable in terms of the number of systems shipped in 2008.

Must-see STBs
“Premium boxes — like DVR-enabled STBs and HD products — will grow at a substantially higher rate than the 4.2 percent level for the overall STB market in 2009, Selburn said. “These STBs will buoy the entire market as non-DVR and standard-definition from this point forward.”

Shipments of premium boxes in 2008 almost doubled to 22.4 million systems. This growth will continue to be substantial in 2009, with a 28 percent rise.

“This is a strong growth number for any era, but considering the state of the economy and business environments, it is even more impressive,” Selburn said.

Among premium boxes, HD STBs are on their way to becoming the new standard in the home. Shipments of these boxes are set to grow at a 22.8 percent CAGR between 2008 and 2013, and by the end of the forecast period will take the lead in market share. This is being helped by a number of factors, including HD display sales, increasing access to broadband technology and improving HD content from service providers.

DVR-enabled boxes are growing at a rapid rate as well and will maintain a CAGR of 18 percent through 2013. The plummeting cost of hardware—especially Hard Disk Drives (HDDs)—is making the DVR HDD a more affordable purchase for consumers. However, rising sales of whole-home DVRs used as in-home media servers will continue to push sales of non-DVR boxes that act as clients to a central STB containing a hard drive.

iSuppli: Worldwide STB Unit Shipment Forecast, 2006-2013 (Millions of Units)Source: iSuppli, USA

Earthquake causes minor disruption in LCD glass supply

EL SEGUNDO, USA: An earthquake in Japan this month at a plant operated by Corning Inc. will slightly exacerbate an existing shortage of glass for LCDs, but the impact is not likely to have a major impact on panel supply during the holiday season, according to iSuppli Corp.

“Because of the earthquake, Corning has suspended production at its glass manufacturing facility in Shizuoka, Japan,” said Sweta Dash, senior director of LCD research for iSuppli.

“This supply interruption will disrupt LCD production at Sharp. Corp.’s eighth-generation fab, which supplies panels for 32-inch and 40-inch as well as larger LCD-TVs. However, with glass suppliers increasing their output to meet rising demand for Christmas, the overall demand for this key raw material is expected to exceed demand by the start of the fourth quarter.”

All other LCD glass facilities operated by Corning and other glass manufacturers worldwide continue to operate normally. Corning expects to restore its Shizuoka facility to full production within a few months.

LCD glass supply has been in a state of oversupply since the second half of 2008.

After suffering a supply glut of 13 percent in the fourth quarter of 2008, conditions shifted dramatically in the first quarter of 2009 as panel makers idled many of their production lines in order to adjust to reduced demand. This caused demand to exceed supply by 0.5 percent in the first quarter.

The undersupply rose to 1 percent in the second quarter primarily due to strong panel demand, especially from China’s television market. The shortage is expected to intensify in the third quarter to a 2 percent undersupply, before reversing to a 4 percent oversupply in the fourth quarter as panel demand cools following the holiday purchasing season.

Demand-driven shortfall
While the glass shortage has contributed to tight availability of large-sized LCD panels, the major factor behind the short supply is strong demand.

“In a positive sign for the global large-sized LCD market, panels are in short supply mainly due to strong demand from television and PC makers that are building supply in advance of the Christmas selling season,” Dash said. “This indicates that computer, monitor and LCD-TV makers are anticipating strong demand during the upcoming holiday season.”

iSuppli defines large-sized panels as those having a diagonal dimension of 10 inches or more. Aggravating the shortage, LCD panel buyers are engaging in overbooking, i.e., placing more orders than they really need, in order to secure supply in the face of limited availability and despite some increase in inventories among channels and buyers.

Taiwanese troubles
Beyond the direct impact on Sharp, some Taiwanese suppliers are concerned that their supplies may be impacted if glass shipments are diverted to Japan.

The Taiwanese suppliers already were bearing the brunt of the glass shortage at their older fifth- and sixth-generation LCD fabs. Such fabs specialize in producing smaller displays used in products like desktop monitors, notebook PCs and smaller-sized televisions.

Glass supplies get clearer
“Fortunately for the global large-sized LCD panel industry, the Corning supply disruption is coming at a time when most of the idled glass tanks in the world are starting to come back to full production mode,” Dash said. “That will help to reduce the total impact on LCD panel supply.”

Previously idled glass tanks are expected to return to normal production levels by the end of August. In the fourth quarter, most of the glass issues are expected to be resolved, allowing panel suppliers to operate at full production levels.

Because of this, many panel suppliers are already planning expansions of their newer eighth- , 8.5- and tenth-generation fabs in the fourth quarter.

Prices affecting profitability?
The combination of strong demand and short supply caused large-sized panel prices to rise sharply during July. For example, the price of a representative large-sized LCD, the 32-inch WXGA television panel, climbed 10.4 percent in July. The price increase moderated to a 5.8 percent rise in August.

The figure presents average global pricing for 32-inch WXGA LCD panels for the period of October 2008 through August 2009.

iSuppli: Global Average Pricing for 32-inch WXGA LCD TV Panels (Pricing in US Dollars)Source: iSuppli, Aug. 2009

“The increase in pricing is certainly welcome news for panel suppliers especially after facing several quarters of pricing below manufacturing costs,” Dash said. “However, at this point it comes as bad news for branded vendors of televisions, desktop PC monitors and notebooks, as their profitability is being squeezed by rising panel prices.”

iSuppli already is noting that monitor and TV system makers are suffering losses in profitability due to these hikes. As a result, some panel buyers have become conservative about building their panel inventories and are resisting accepting any sharp price increases. This is causing price hikes to moderate somewhat in August.

“iSuppli anticipates a downward price correction in the fourth quarter as LCD panels return to a state of oversupply,” Dash said. “This correction could be of a greater magnitude than the industry expects.”

New cash-for-clunkers cars stop short on tech features

EL SEGUNDO, USA: While the US cash-for-clunkers incentive has been an overwhelming success in terms of spurring sales and retiring gas guzzlers, the most popular cars bought under the program are slightly below average in terms of their technology content, iSuppli Corp. reports.

According to iSuppli’s Technology Availability (TA) index, the Top-10 best-selling cash-for-clunkers cars score an average of 14.5, compared to 17.8 for all model-year 2009 autos in the United States. The TA score indicates how many infotainment and Advanced Driver Assist Systems (ADAS) are available for each model.

A range of car technologies is covered by the TA, comprising infotainment functions like navigation, iPod connections and satellite radio, to advanced ADAS features like park assist, Tire Pressure Monitoring Systems (TPMS), Electronic Stability Control (ESC) and telematics services such as General Motors’ OnStar,

“The low TA scores reflect the fact that buyers for the cash-for-clunkers cars are seeking smaller and more fuel-efficient cars, which tend to be low-end models,” said Mark Boyadjis, analyst and regional manager for North American automotive research for iSuppli.

“Despite the proliferation of more advanced technologies throughout carmakers’ lines, automakers still haven’t migrated all these features to these less-expensive vehicles.”

The table presents iSuppli’s TA index for the top-10-selling cash-for-clunkers models.Source: iSuppli, Aug. 2009

Cash for clunkers is no clunker
By August 5, the cash-for-clunkers program had sold more than 184,000 autos. General Motors accounted for 18.7 percent of those cars, followed by Toyota at 17.9 percent, Ford at 16 percent, Honda at 11.6 percent and Chrysler at 10.6 percent.

“The additional $2 billion that Congress allocated this month will bring the cash-for-clunkers sales to about 700,000 units when completed,” said Egil Juliussen, principal analyst and fellow for iSuppli’s Automotive Practice.

The attached table also presents sales for the Top-10 cash-for-clunkers cars in June and July. These 10 cars are different from the models that had the overall highest sales in July; note that the cash-for-clunkers program was only available for the last week of July. The total US auto sales increase from June to July 2009 was 16 percent.

From an environmental perspective, autos sold under the program had an average fuel efficiency of 25.3 Miles Per Gallon (MPG), a 60 percent improvement from 15.8 MPG for the traded-in models, according to U.S. Department of Transportation data through August 5.

Carbon dioxide emission reductions are proportional to MPG improvements, so the environmental impact appears very promising as well.

Infotainment features prevalent
While the top cash-for-clunkers models are far from being loaded from a technology standpoint, they do include some essential infotainment features formerly available only on higher-end vehicles.

Features such as satellite radio, Bluetooth connectivity and portable music device integration are widely available on the top-selling models under the cash-for-clunkers program.

All but one model offers Bluetooth connectivity, and three also include Bluetooth A2DP or audio streaming. All of the models offer satellite radio, either XM or Sirius, and six of the models offer USB inputs.

On the other hand, embedded telematics is largely absent from these vehicles, with only the OnStar-equipped 2009 Chevy Cobalt integrating this feature in the form on OnStar.

Ford vehicles offer mobile device telematics using the driver’s Bluetooth phone and have some telematics services, including turn-by-turn navigation, Automatic Collision Notification (ACN), and remote diagnostics programs.

“The Ford Sync option is a hit among Ford buyers and likely contributes to the overwhelming popularity of the top-selling Ford Focus,” Boyadjis observed.

HD Radio is only available on one model: the Ford Escape. This discrepancy is a result of the standardization and saturation of satellite radio in the automotive market, as well as the relative infancy of HD Radio technology in the automobile.

The safety features of the 10 models are much better than the trade-ins since every model has ESC and tire pressure monitoring system (TPMS). Few of the Top-10 models have added driver assist systems—only two models had park assist and none had any other driver assist systems.

iPhone killers are lifesavers for display demand

EL SEGUNDO, USA: The new generation of so-called “iPhone killers” is set to drive demand and increase sales of displays commonly used in smartphones in 2009, despite an expected decline in the overall mobile-phone display market this year, according to iSuppli Corp.

Worldwide shipments of mobile-phone LCD displays between 2.5-inches and 4.9- inches in size diagonally, and with pixel formats of QVGA and higher, are projected to rise to 149.9 million units in 2009, up an impressive 22.1 percent from 122.8 million in 2008. In contrast, overall shipments of all mobile phone displays are expected to decline by 11 percent for the year.

The figure presents iSuppli’s worldwide shipment for LCD displays sized between 2.5-inches and 4.9 inches diagonally, and with pixel formats of QVGA and higher.

iSuppli: Global Forecast of Unit Shipments of Displays From 2.5-Inches to 4.9-Inches in Size with Pixel Formats QVGA and Higher (Thousands of Units)Source: iSuppli, Aug. 2009

While a large number of smart phones use smaller displays and LCDs with other pixel formats, these displays are most likely to be used in high-end, feature-rich products. Thus, their growth provides an accurate picture of growth in smartphone display demand.

“The continued success of Apple Inc.’s iPhone is driving market demand for competitive products,” said Vinita Jakhanwal, principal analyst for small and medium displays at iSuppli.

“Companies are rolling out a range of iPhone killers, including new products based on Google’s Android operating system. To this end, many OEMs are introducing higher-end, multimedia-enabled phones that include larger displays with superior resolutions.”

The rising demand for smart-phone-oriented displays and the continued strength in demand from the Chinese mobile phone makers are helping propel a recovery in the mobile phone display market, with sequential growth starting in the second quarter, after two consecutive quarter of decline.

Normal seasonal factors, combined with the continued economic downturn and large inventories, caused overall shipments to decline sequentially by 17.4 percent in the fourth quarter of 2008 and by 8.5 percent in the first quarter of 2009.

In the second quarter, shipments actually slowed in May compared to April due to a shortage of components such as driver ICs and LCD glass. However, most of this shortage, particularly for driver ICs, was resolved by June, allowing mobile-phone display shipments to rise by 4.6 percent in the second quarter.

“Early indicators from the Taiwanese small/medium suppliers are pointing to a strong third-quarter performance,” Jakhanwal said.

“The Taiwanese vendors are significant suppliers to the Chinese mobile phone makers for both the branded and clone markets. Incentives from the Chinese government have helped boost demand for consumer electronics, including cell phones, in rural China. The government is looking at expanding this program further.”

The third quarter is usually the strongest period of the year, as panels are shipped to meet the end-year holiday demand for electronic devices. Strong demand is expected from Tier-1 handset OEMs in this quarter, too. However, uncertainty in consumer demand persists. If mobile-phone sales fail to pick up the fourth quarter, oversupply in the mobile phone display market could build up.

Huge growth set for pico projectors in cell phones, other mobile electronics

EL SEGUNDO, USA: Because of their capability to overcome screen-size limitations in mobile electronics devices, tiny pico projectors embedded into products such as smart phones are set for a staggering sixtyfold growth in shipments during the next four years, according to iSuppli Corp.

Shipments of embedded pico projectors will rise to more than 3 million units in 2013, up from less than 50,000 units this year. The figure presents iSuppli’s forecast of global embedded Pico projector shipments.Source: iSuppli, Aug. 2009

iSuppli defines pico projectors as front projectors weighing less than 2 pounds—or about 0.9 kilograms—and sized at less than 60 cubic inches—or about 983 cubic centimeters—without a battery pack. Despite their small sizes, pico projectors produce large displays, with some products capable of showing bright, 50-inch diagonal images on a wall or other surface.

This combination of small physical size and large image makes embedded pico projectors a perfect fit for space-constrained mobile devices.

“Mobile electronic devices offer consumers and corporate users the portability they desire, causing an increasing number of users to employ products like smart phones and netbook PCs as their primary platforms for computing and Internet access,” said Sanju Khatri, principal analyst, signage/projection, for iSuppli.

“However, a major obstacle blocking the use of mobile devices in this fashion has been their tiny displays relative to desktop PCs. Embedded pico projectors promise to enlarge these displays, making mobile devices more capable as primary computing and Internet-access platforms.”

Pico projectors are likely to find initial acceptance in the corporate market, allowing businesspeople to make presentations directly from their mobile PCs, smart phones or PDAs. However, they also have a strong allure to consumers, allowing large-sized display of video, Internet sites and applications.

Smartphones represent a promising market for embedded pico projectors.

Samsung Electronics Co. Ltd. fired the starting gun for this area with the unveiling of its Show smartphone at the International Consumer Electronics Show (CES) in January. The Show, which presently is only being sold in South Korea, employs Texas Instruments Inc.’s Digital Light Processing (DLP) projection technology. Other smartphones equipped with pico-projectors are likely to be introduced soon.

Besides DLP and other Microelectromechanical System (MEMS) display technologies, Liquid Crystal on Silicon (LCOS) technology shows equally strong promise in the embedded pico projector market.

In an example of the use of LCOS, Nikon announced it will ship in September its Coolpix S1000pj digital camera, which employs pico projection technology for the display of pictures and video.

While iSuppli predicts fast growth for embedded pico projectors, they still will account for a tiny fraction of overall mobile device shipments through 2013.

“The growth potential for embedded pico projectors will be limited during the next few years due to challenges in areas including power consumption, size and manufacturing,” Khatri said. “As these issues are resolved, pico projectors will appear in many more mobile electronics devices.”

New Energy Star guidelines spur changes in LCD TV design

EL SEGUNDO, USA: New US Environmental Protection Agency (EPA) guidelines call for the energy consumption of some televisions to be cut by as much as two-thirds by 2013, compelling the LCD-TV supply chain to implement changes in its products and components, according to iSuppli Corp.

The EPA’s Energy Star Program Requirements for TVs: Version 3.0, which went into effect in November 2008, are guidelines that impact on-mode power consumption limits for TVs.

The EPA believes Version 3.0 of the regulation can reduce energy demand by millions of kilowatt hours per year. The EPA guidelines for TV on-mode power limits will grow more stringent over time with Tier-1 limits now in effect, moving to more restrictive levels during the Tier-2 and Tier-3 phases in 2010 and 2012, respectively.

“While not mandatory, these guidelines are likely to spur major changes in television design as brands move to maintain the coveted Energy Star label on their sets,” said Randy Lawson, senior analyst for digital TV and display electronics at iSuppli.

“The larger the television size, the more power consumption should be cut to comply with the guidelines.” For 26-inch sets, Lawson noted maximum power consumption when the television is turned on should be reduced to 42.3 watts by 2013, down 52.8 percent from 89.7 watts in 2008.

For 50-inch sets, on-mode power consumption should be reduced to 106.9 watts in 2013, down 66.3 percent from 317.5 watts in 2008.

The figure presents the EPA’s on-mode power limitations for televisions in the coming years as well as the schedule for phasing in different tiers of power-consumption limits for TV makers.Source: EPA/iSuppli, July 2009

Large LCDs mean large energy usage
Television power consumption is soaring mainly due to the transition from CRT to LCD display technology, as well as the resultant shift to larger screen sizes.

At screen sizes smaller than 26 inches, only a small difference exists between the power consumption of the two television types. However, LCD-TVs in the popular 37- , 40- , 42- and 50-inch sizes have dramatically greater power consumption than the
smaller CRT-TVs, which max out at the 35-inch dimension.

Previous global standards, including earlier versions of the Energy Star regulations, focused on reducing power consumption only during the off and standby modes. However, the new requirements focus on the on-mode, in which televisions consume the most power.

The Energy Star Program Requirements for TVs: Version 3.0 is the first such standard to go into effect, but will be followed by similar guidelines in other countries.

LCD-TVs adjust to changes
“The advent of these more restrictive government guidelines will have a significant impact on the development of LCD-TV technology and the television supply chain, impacting panel materials, LCD backlight unit designs and audio/video electronics,” Lawson said.

While many design changes will occur in television electronics and OEM-enabled features, including technologies like ambient light sensing to help facilitate intelligent backlight drive options, the largest gains will have to come from redesigns of the panel materials and backlight source electronics.

One very effective approach to address the need for on-mode power reduction will be the adoption of LED backlighting, especially the direct-lit type, which will can allow for up to 40 percent or more power savings in a typical 30-inch-or-larger LCD-TV.

Vehicle scrappage to spur double-dip downturn for automotive?

EL SEGUNDO, USA: While government-sponsored scrappage programs may be mitigating the worst impacts of the automotive downturn in the short term, they may cause another sales downturn further in the future, causing a potential double-dip downturn for the global car market, according to iSuppli Corp.

Although iSuppli is forecasting global auto production will decline to 52 million units in 2009, down 25 percent from 2008, some commentators are talking about the green shoots of recovery appearing in the market, due to vehicle scrappage and incentive programs that are now being rolled out in many countries.

Such programs, sometimes referred to as “cash-for-clunkers,” offer discounts on the purchase of new vehicles to replace cars 10 years in age or older.

“These scrappage programs, however, could have a negative impact,” said Richard Robinson, principal analyst for automotive electronics at iSuppli, “They will simply bring forward—and some would say, distort—the natural buying cycle, creating a double dip. ”

Robinson continued: “Scrappage programs also are having a disproportionately negative effect on Tier-1 automotive infotainment system suppliers, as many countries have built-in green incentives with the maximum benefits given to those consumers who purchase lower-emission and, hence, lighter and cheaper vehicles.

"On the whole, these vehicles tend to be bought from the mid- and entry-level classes, which typically sport fewer added features. The result is fewer sales of feature-rich vehicles that offer a smaller number of the media, navigation and infotainment features provided by the top auto electronics suppliers.”

Navigating out of trouble
Nevertheless, as the car market stages a recovery starting in 2010, there will be a number of significant market opportunities for Tier-1 infotainment electronics and semiconductors suppliers. These opportunities include the growth of low-cost navigation systems that displace Portable Navigation Devices (PNDs), as well as the increasing demand for connectivity that will expand the supply chain to other segments of the electronics market.

This new supply chain will move the car well beyond the static environment of hardware and into the sphere of services, which will extend the sales possibilities for vehicle manufacturers and their service providers.

PND suppliers TomTom and Garmin, entering the automotive Tier-1 battle, are taking very different approaches as they look to extend their reach beyond the PND platform.

The figure presents iSuppli’s navigation shipment forecast for the OEM and aftermarket.

iSuppli: Global Forecast for Navigation Shipments by Platform (Thousands of Units)Source: iSuppli, July 2009

LCD market rebounds in Q2, recovery set for H2

EL SEGUNDO, USA: After declining for the previous nine months, global shipments of large-sized LCD panels rose sequentially by 41.4 percent in the second quarter compared to the first due to higher pricing and healthy demand, according to iSuppli Corp.

The large-sized LCD panel market rose to 129.7 million units in the second quarter, up from 91.7 million in the first quarter. This follows sequential declines of 2.3 percent in the third quarter, of 18.6 percent in the fourth quarter of 2008 and 2 percent in the first quarter of 2008.

iSuppli defines large-sized LCD panels as those having a diagonal dimension of 10-inches or larger.

“On the demand side, strong sales in China spurred by a government stimulus program propped up sales in the first half,” said Sweta Dash, senior director for LCD research at iSuppli. “Meanwhile, notebook panel demand recovered in the second quarter and global LCD-TV sales remained strong.”

Low inventories throughout the supply chain, combined with the severe cut in LCD fab utilization rates and production, pushed the market to tight supply beginning in the first quarter of 2009. As a result, panel prices have been increasing since the beginning of 2009, especially for monitor and TV panels, although these prices were still below manufacturers’ costs.

However, while shipments rose on a sequential basis in the second quarter, the market actually declined in the first half compared to the same period in 2008.

“A full recovery in the large-sized LCD panel market is expected in the second half of 2009, when strong panel demand combined with higher prices will bring the market back to profitability and revenue growth,” Dash said.

Global shipments of large-sized LCD panels in the third quarter of 2009 will rise by a robust 28.9 percent compared to the same period in 2008. Shipments in the fourth quarter will growth by an even more impressive 57.1 percent from the same quarter in 2008.

For the full year of 2009, large-sized LCD panel shipments will rise to 516.7 million units, up 18.6 percent from 435.7 million units in 2008.

However, large-sized LCD panel revenue for all of 2009 is still expected to decline by 8 percent compared to 2008 due to the below-cost pricing throughout the first half of 2009. Revenue in 2009 will amount to $67.2 billion, down from $73.1 billion in 2008.

The figure presents iSuppli’s forecast of quarterly, global shipments for large-sized LCD panels.Source: iSuppli, July 2009

Healthy inventories
Large-sized panel inventory remained at low to normal levels in the second quarter. Inventory is expected to remain healthy until the third quarter.

Panel inventory is expected to remain low, given that panel suppliers worried about overbooking will be controlling panel shipments to prevent inventory from building up at buyers. But panel buyers are starting to pull in orders in preparation for expected tight supply in the third quarter of 2009.

China’s strong LCD-TV growth
The Chinese government’s rural subsidies program has increased TV demand in China. Now that the program has been extended to nine cities, growth is expected to continue through future quarters.

Television panel demand, especially from domestic brands, is expected to be strong in the third quarter to support strong growth expectations.

Branded TV manufacturers are beginning to offer discounts on new models in the United States, especially sets based on LED backlights and products with higher frame rates such as 120Hz and 240Hz.

More aggressive television set pricing, combined with stabilization in the global economy, will drive further demand in the second half of 2009. Television panel demand, excluding monitor panels used for TVs, is expected to reach 130 million units by the end of 2009, up 28 percent from 2008.

Notebook panel demand recovered in the second quarter after a slowdown in the first due to the introduction of notebook product based on Intel Corp.’s Consumer Ultra Low Voltage (CULV) featuring a thinner form factor, 16:9 format panels and LED backlight.

PC market to suffer first decline since Dot-Com bubble!

EL SEGUNDO, USA: For the first time since the Dot-Com bust of 2001, the global PC market will suffer a contraction in unit shipments in 2009, due to a combination of falling IT spending and plunging sales of desktop computers, iSuppli Corp. predicts.

Global PC shipments are expected to decline to 287.3 million units in 2009, down 4 percent from 299.2 million in 2008. iSuppli previously forecasted 0.7 percent growth in PC shipments for the year.

“An annual decline in unit shipments is highly unusual in the PC market,” observed Matthew Wilkins, principal analyst, compute platforms for iSuppli. “Even in weak years, PC unit shipments typically rise by single-digit percentages. The last decline—in 2001—was a 5.1 decrease in unit shipments due to the extraordinary impact of the Dot-Com bust, which caused inflated IT spending levels from the previous years to collapse.”

The primary factor driving the decline in the PC market in 2009 is an expected 18.1 percent plunge in desktop shipments. Unit shipments of desktop PCs will amount to 124.4 million in 2009, down from 151.9 million in 2008.

Entry-level servers -- which iSuppli includes in its definition of PCs -- also will suffer a decline, with shipments falling to 6.9 million units, down 9.5 percent from 7.7 million in 2008.

In contrast, notebook PC shipments in 2009 will rise by 11.7 percent to reach 155.97 million units, up from 139.6 million in 2008. Notebook PC shipments will exceed those of desktops on an annual basis for the first time ever in 2009.

“Mobility is winning out in the PC market,” Wilkins said. “Businesses and consumers continue to embrace notebooks PCs because of the benefits of mobility and the near-equal performance and feature set. This is cutting into desktop PC shipments.” Meanwhile, enterprise spending on IT technology is hurting PC sales.

“Tight budgets are putting the squeeze on corporate IT spending,” Wilkins said. “This is hitting desktop and server sales particularly hard.” The figure presents iSuppli’s forecast of global annual PC shipments.

iSuppli Figure: Global PC Shipment Forecast (Thousands of Units)Source: iSuppli, July 2009

Rocky bottom
While iSuppli is currently correlating its data for second-quarter 2009 PC shipments, iSuppli’s forecast for the second quarter calls for flat shipments rising a scant 0.1 percent to reach 66.54 million units, up from 66.45 million in the first quarter.

In the third and fourth quarters, shipments are expected to rise sequentially by 11 and 8.9 percent, respectively.

“Although our expectation is for shipments to rise vigorously in the third quarter on a sequential basis, conditions remain weak compared to 2008.”

Shipments in the third quarter will be down 6.5 percent compared to the same period in 2008.

However, in the fourth quarter, shipments will rise by 3.6 percent compared to a year earlier. This trend will continue in 2010, with shipments rising on a year-over-year basis during every quarter of the year. For all of 2010, global PC shipments will rise by 4.7 percent from 2009.

Global car industry hits bottom in Q1; auto electronics recovery commences

EL SEGUNDO, USA: The downturn in the car electronics market hit bottom in the first quarter, paving the way for a return to annual growth in 2010, according to iSuppli Corp.

“After a dismal 2008 and first quarter, auto sales recently have performed more strongly than expected in some regions, mostly due to government-sponsored incentives,” said Egil Juliussen, principal analyst and fellow, automotive, for iSuppli.

“While 2009 will still be weak, the second half of the year will bring a significant improvement in auto sales compared to the first. This will lead to an annual sales increase in 2010 for auto electronics categories including audio head units, navigation, Advanced Driver Assist Systems (ADAS), embedded telematics and Bluetooth.”

A tale of two halves
A major culprit in the global car downturn has been the US auto market, which continues to struggle. US sales of cars and light trucks suffered an 18 percent decline in 2008, and fell by an even worse 35 percent in the first half of 2009.

Despite these depressing statistics, total 2009 US auto sales are forecasted to decline by a relatively mild 17 percent.

One major factor leading to improved auto market conditions in the United States is the end of the uncertainty surrounding the bankruptcies of General Motors and Chrysler.

“Both General Motors and Chrysler emerged from their restructurings unbelievably quickly, lifting a major cloud from the US auto industry,” Juliussen said.

Furthermore, the United States government now is offering a cash-for-clunkers program that gives consumers incentives to trade in old cars for new models. This is expected to boost U.S. auto sales by 250,000 in 2009. The total could be even higher if the program’s $1 billion budget is increased.

“The cash-for-clunkers program also is serving to spur more consumer visits to car dealerships,” Juliussen noted. “This rise in consumer traffic is likely to have an even more positive impact on car sales than the incentives themselves.”

A final reason for the improved results is strictly statistical: Year-to-year comparisons with 2008 will become much more favorable in the second half, since auto sales plunged in late 2008.

The new model 2009 auto industry
Fig. 1 attached presents a forecast of the US auto electronics industry through the year 2014.Source: iSuppli, July 2009

The figure shows relative yearly sales for several electronics categories compared to 2008 auto sales, which are normalized to 100. The base figure for 2008 auto sales is 13.3 million units. By using this format, unit sales for each automotive electronics category can easily be compared to auto sales and production.

At a value of 83, 2009 US auto sales are set to decline by a total of 17 percent from 2008. Auto sales are projected to increase slowly in 2010 to reach 15.5 million units in 2014. While this represents an improvement from 2009, 2014 sales will still be below the 2007 total.

US auto production lags far behind its sales since a large portion of cars sold in the US are manufactured in Canada, Mexico, Europe and Asia.

The figure also shows relative sales of head-unit, in-vehicle navigation, ADAS, embedded telematics and Bluetooth-based Hands-Free Interface (HFI) electronics. The sales pattern is similar for each category, with a decline in 2009 and growth in the following years. Only Bluetooth HFI systems are set to enjoy a sales increase in 2009 due to the success of Ford Sync and similar systems.

A world of hurt
Fig. 2 shows the same trends on a worldwide basis. The base number of 100 again represents worldwide sales for 2008, which amounted to 66 million units.Source: iSuppli, July 2009

Worldwide auto sales are forecasted to decline by 12 percent in 2009, but will increase in 2010 and will top 73 million units in 2014, up 11 percent from 2008.

Worldwide auto production will decline by 25 percent in 2009 due to excessive inventory levels at the end of 2008 and lower 2009 sales. The production declines hit bottom in the first quarter of 2009.

The sales pattern is similar for each category with a decline in 2009 and growth in the following years. ADAS will achieve a slight sales increase in 2009.

ADAS consist of five segments: ultrasonic and camera park assist, adaptive cruise control, lane departure warning and blind-spot detection systems. Bluetooth HFI systems also will enjoy a sales increase in 2009 due to higher availability of such systems in every region.

Incendiary incentives?
“The automotive electronics market is seeing the light at the end of the tunnel, but there are a few caution signs,” Juliussen warned.

“The incentive-driven sales surges in some countries could mean that the light at the end of tunnel is actually the headlights of a semi-truck, one that may slam head-on into 2010 auto sales. Germany’s incentive-based sales are not sustainable. China’s sales jump is also large, but since most of the sales are to new buyers, the impact may be much milder.”

Can Google’s Chrome OS challenge Windows in fast-growing netbook market?

EL SEGUNDO, USA: Google Inc.’s new Chrome Operating System (OS) represents a direct challenge to Microsoft Corp.’s hegemony in the burgeoning market for netbook software, according to iSuppli Corp.

Google’s Chrome OS will launch in the second half of 2010 and will initially target netbook PCs. However, the OS will not only run on netbooks based on Intel’s X86 architecture microprocessors, but also those using ARM-based chips, clearly showing the operating system is targeted at very low-cost netbooks.

iSuppli predicts shipments of wirelessly-enabled netbooks will more than triple by 2012, rising to 36.3 million units, up from 10.3 million in 2008, as presented in the attached figure.

The wirelessly-enabled category represents the majority—but not all—of the total netbook market, consisting of devices that support WLAN, 3G WLAN and WMAN connectivity.

Google versus Goliath
The announcement of Chrome sets the stage for battle royale between Google and Microsoft.

“Google’s launch of the Chrome Web browser served as a preliminary bout in the company’s battle with Microsoft, taking on the market leading OS, Internet Explorer,” said Matthew Wilkins, principal analyst, compute platforms research, for iSuppli. “However, with the PC OS version of Chrome, Google is ringing the bell for the main event.

“The arrival of the Chrome OS is a direct threat to one of Microsoft’s main revenue streams: sales of the Windows operating system for netbook PCs. It also comes at a time when Microsoft is on the eve of launching its most promising operating systems in a number of years: Windows 7.”

Linux’s challenge
Currently, Windows is the dominant operating system on netbooks, with Linux running a distant second. The Chrome OS is based on Linux, running a windowing interface on top of the Linux kernel.

“The small penetration of Linux in netbooks is not due to any technical shortcomings,” Wilkins said. “Rather, the OS has suffered from the fact that there is not one Linux brand name that is capable of taking on the strength of the Microsoft trademark in the PC market.

"Because the vast majority of people who buy netbooks are consumers, who do not have a high degree of knowledge of the key players in the OS market, they are going with the names that they know. And in PCs, that name is Microsoft.

“For Google to be successful, it needs to promote and position its brand so that non-tech-savvy consumers will be comfortable buying a netbook running its operating system rather than one from Microsoft. This will be a major challenge.”

Google must counter the high visibility of the Microsoft brand name on countless products in retail outlets, ranging from software, to PCs, to peripherals. In contrast, in retail outlets, Google’s name appears only on mobile phones that run the company’s Android operating system.

To succeed, Google must establish OEM deals that place its Chrome OS name on the netbooks as they ship from OEMs’ factories.

“If this does not happen with sufficient critical mass, then the OS will be left at the mercy of digital distribution, requiring that users download and install some client software on their own,” Wilkins said. “This is a procedure at considerable odds with the basic PC knowledge of the typical netbook user.”

Google’s Chrome OS: A boon for wireless operators?
A key aspect of Chrome, and a major differentiator from Google’s Android, is that it runs in the “cloud,” meaning it’s essentially a Web-based OS, rather than one that entirely resides in the actual device’s hardware. This feature also distinguishes Chrome from the new wave of other mobile operating systems.

“The Chrome OS stimulates data traffic usage on mobile devices such as netbooks and Mobile Internet Devices (MIDs) by encouraging users to access applications running on the cloud,” said Jagdish Rebello, senior director and principal analyst at iSuppli.

“Because of this, Google’s Chrome OS has the potential to drive increased data usage on netbooks and notebooks in a way that allows operators to monetize this data traffic.

“Revenue from broadband access will be a very important component of the data revenue of total revenues of wireless carriers worldwide. iSuppli projects that global revenue from mobile broadband access will grow to more than $180 billion in 2013, up from $61 billion in 2008.”

iSuppli: Worldwide Forecast of Shipments of Netbooks With Wireless Communications Capabilities (WLAN, 3G WWAN, and WMAN)Source: iSuppli, July 2009

CE market looks up, but low prices prevent true recovery

EL SEGUNDO, USA: Although the global consumer electronics market returned to sequential revenue growth in the second quarter, the industry this year will not achieve an annual expansion that would signal a true recovery, according to iSuppli Corp.

Global consumer-electronics equipment revenue rose to $71.1 billion in the second quarter, up 4.2 percent from $68.3 billion in the first quarter, based on a preliminary estimate from iSuppli.

This represents a major improvement from the first quarter, when revenue fell by 25.8 percent compared to the fourth quarter of 2008. While consumer-electronics revenue typically declines on a sequential basis in the first quarter following the fourth-quarter holiday selling season, this represented a particularly sharp decline.

The figure presents iSuppli’s forecast of global quarterly consumer electronics equipment revenue.

iSuppli" Worldwide Consumer Electronics Equipment OEM Revenue Forecast (Revenue in Millions of US Dollars)Source: iSuppli, July 2009

“Following the dismal first quarter, conditions are starting to improve in the consumer electronics business,” said Sheri Greenspan, senior analyst, consumer electronics, for iSuppli. “Revenue will continue increasing on a sequential basis in the third and fourth quarters, rising by 12.5 percent and 10.2 percent. While this growth is encouraging, 2009 will still be a down year for the industry.”

iSuppli predicts global consumer electronics equipment revenue will decline to $307.6 billion in 2009, down 8.2 percent from $335.2 billion in 2008, due to the impact of the worldwide economic downturn as well as sharply declining prices for key products.

These factors caused revenue to decline by 10 percent in the first quarter compared to the same period in 2008 and by 11.3 percent in the second quarter. Revenue will decline by 8 percent and 4.2 percent in the third and fourth quarters, respectively, on an annual basis.

Pricing’s double-edged sword
“With the recession having eaten into consumers’ disposable incomes, the consumer electronics industry has responded by cutting prices on popular products,” Greenspan said. “In diverse areas -- from digital still cameras, to video game consoles to LCD-TVs, manufacturers are offering price cuts to help move product.”

To a degree, this appears to be working, with aggregate consumer electronics product unit shipments set to rise sequentially by 5 percent, 16.1 percent and 14.1 percent in the second, third and fourth quarters.

However, following a 29.9 percent plunge in the first quarter, these sequential increases won’t be enough to prevent a 4.8 percent decline for all of 2009.

Although all 19 consumer electronics product segments tracked by iSuppli experienced a sequential decline in unit shipments in the seasonally weak first quarter, the second quarter saw a rebound, with most products returning to growth.

The only products to see a decline in unit shipments in the second quarter were handheld video games, video game consoles, camcorders and the moribund segment of rear-projection televisions.

In the third quarter, the only major segments set to experience sequential unit shipment declines will be digital set-top boxes and rear-projection TVs.

As the economy continues to recover, overall consumer electronics product revenue in 2010 will rise 2 percent to reach $313.7 billion, iSuppli predicts.

Real-time traffic service revenue to boom over next five years

EL SEGUNDO, USA: Real-time traffic information is emerging as a must-have feature in automotive navigation and telematics solutions, causing global revenue from service subscriptions to rise by nearly a factor of 18 during the period from 2008 to 2014, according to iSuppli Corp.

Worldwide revenue generated by real-time traffic services delivered to telematics and navigation devices will soar to $4.7 billion in 2014, up from just $268 million in 2008. The number of global subscribers for these services will rise tenfold during the same period, reaching 184.9 million in 2014, up from 18.5 million in 2008.

The figure presents iSuppli’s forecast of global real-time traffic service revenue and subscribers.

iSuppli: Global Real-Time Traffic Service Revenue and Subscriber Forecast (Thousands of Subscribers and Millions of US Dollars)Source: iSuppli, July 2009

“In an automotive electronics market characterized by commoditization and rapidly declining price points, traffic data represents critical and time-sensitive information that can make the difference between a nice-to-have and a must-have navigation device,” said Phil Magney, vice president, automotive research for iSuppli.

“Real-time traffic has the potential to be a key differentiator and major opportunity for device makers and service providers to distinguish themselves from their competitors. However, within a few years, such traffic information will become so common that it will be an essential feature on navigation and telematics solutions, ” he added.

Traffic services improve
Real-time traffic services provide up-to-date information to drivers about traffic jams, incidents, projected delays and alternate routes.

The quality of real-time traffic information is getting better every day. Data analysis technologies are being applied to traffic data that involve predictive modeling based on historical trends.

There also are new ways to collect traffic information that help improve the quality of the data.

One method, called probe car data collection, involves a device periodically transmitting its position to a central server. Probe car traffic collection was pioneered in Japan, but since has been deployed in other regions, including the United States and Europe.

Probe car data represents a breakthrough for the collection of traffic conditions because it is conducted in real time using customers’ navigation devices. Any device—whether it is a telematics system or portable device—is capable of acting as a probe as long as it has two-way connectivity.

Distributing traffic with broadcast wireless
The distribution of traffic information to navigation devices requires one-way broadcast technologies or two-way connectivity via cellular modems.

Broadcast via FM or other wireless signals, the traditional method of delivering such services, accounts for more than 83 percent of the total market for delivery of traffic information.

Broadcast traffic subscribers are forecasted to increase to nearly 57 million in 2014, up from 15.5 million in 2008, rising at a Compound Annual Growth Rate (CAGR) of 24 percent. Japan in 2008 accounted for the largest share of the broadcast traffic segment—about 8.8 million—representing slightly more than half the global users. Western Europe accounted for 3.7 million of the broadcast subscribers, or 23 percent.

During the next five years, Japan’s share will decline as the United States, China and other regions use more broadcast traffic information.

Distributing traffic with two-way wireless
The distribution of traffic data on devices with two-way wireless (i.e., cellular) represents a relatively small segment of the market, with 3 million subscribers estimated for 2008.

Owing to the rapid growth of off-board navigation and on-board navigation for smartphones and mobile phones, two-way traffic is expected to grow strongly and will reach nearly 128 million users in 2014, representing a CAGR of more than 86 percent from 2008.

“The biggest opportunity for navigation-related content—including real-time traffic—is through two-way distribution to navigation systems and smart phones,” Magney said.

“To compete with free or low-cost broadcast traffic information, two-way solutions offer more capability, such as the ability to offer multiple routing options based on favorite routes or common destinations. Estimated time of arrival is often presented based on historical traffic patterns, road construction, or incidents. In the near future, customers will increasingly expect their device to tell them more than how to get from point A to point B.”Source: iSuppli, July 2009

Glass shortage won’t derail Black Friday LCD TV deals

EL SEGUNDO, USA: Although pricing for LCD panels used in televisions now is rising due an acute shortage of glass, the shortfall is expected to be resolved in time for the all-important holiday buying season, allowing LCD-TV brands to offer their customary Black Friday deals, according to iSuppli Corp.

Amid an extreme oversupply situation in the fourth quarter of 2008, suppliers of glass for the kinds of large-sized LCD panels used in televisions started cutting capacity to less than 50 percent of full utilization at the end of 2008, according to Sweta Dash, senior director, LCD research, for iSuppli. Some glass makers even shut down some of their glass-producing tanks.

Because of this, panel suppliers now are unable to increase their LCD panel production capacity despite strong television demand from China and other regions. Global prices for large-sized LCD panels are expected to rise for a fifth consecutive month in June.

However, this situation is not expected to last, with prices for nearly all sizes of LCD-TV panels peaking in September and commencing a decline that will persist through the remainder of 2009 and into 2010.

This will help pave the way for the customary round of price reductions and Black Friday deals that historically have driven LCD-TV sales during the holiday selling season.

“If the LCD-TV brands hope to come anywhere near their sales targets for 2009, they will have to offer aggressive pricing deals during Black Friday and the following weeks,” said Riddhi Patel, principal analyst, television, for iSuppli. “If the deals don't materialize, sales this year will fall well short of predictions.”

Pricing for 32-inch 720p (progressive) scan LCD-TVs are expected to decline to $480 by November, with Black Friday specials possibly as low as $299. This is down from an average of $634 in June.

For 42-inch Full High-Definition (HD) or 1080p sets, pricing in November will fall to $628, down from $856 in June. Black Friday specials could be as low as $499.

Fig. 1 presents the pricing trends for popular sizes of LCD-TVs.Source: iSuppli, June 2009

Priceless pricing
While LCD-TV buyers have increased their focus on factors like picture quality, pricing remains a critical element in influencing purchasing decisions.

The phenomenon has been apparent this month, when LCD-TV sales are softening due to the cessation of pricing deals offered in April and May.

“Once the price deals went away, demand went away,” Patel said.

Pricing is the key factor driving consumers to recommend an LCD-TV model or brand to their friends and family members, according to iSuppli’s US TV Consumer Preference Analysis Service, which uses surveys to determine American consumer attitudes.

Beyond reduced panel costs, television brands also are set to reduce prices by utilizing less expensive sales channels.

“Consumers are becoming more comfortable with buying LCDs from Internet retailers and mass merchandisers, and they have become more concerned about paying too much for a television set,” Patel observed. “These outlets offer TVs at lower prices than traditional electronics specialty stores.”

With the essential Black Friday deals expected to make their annual appearance, iSuppli recently boosted its forecast of 2009 LCD-TV sales to 123 million units, up from 110 million before.

iSuppli Fig. 2: Global LCD-TV Sales Forecast (Millions of Units)Source: iSuppli, June 2009

Pain in the glass
In the meantime, the LCD panel market will continue to struggle with the glass shortage issue.

Unlike some raw materials, whose production can be ramped up quickly to meet changes in the level of demand, it takes time for glass makers to restore manufacturing to previous levels.

Depending on the level of deactivation of a glass furnace, it may take from one to six months to restore it to full production. Because of this, iSuppli expects the glass shortage won’t be resolved until September, by which time panel suppliers will be able to increase capacity and expand supply.

Because of these challenges, glass makers traditionally have been very judicious in their capacity and utilization—which makes the oversupply situation seen this year as even more of rarity in the LCD glass business.

Fortunately, the process of relighting furnaces has begun, paving the way for a strong year in the LCD-TV business. iSuppli predicts global LCD-TV sales will rise 23.5 percent in 2009 compared to 2008.

Can Europe cut road deaths in half by next year?

EL SEGUNDO, USA: The European Union (EU) and the European Commission (EC) have adopted the admirable goal of cutting the number of deaths on the region’s roads seen in 2001 in half by 2010.

But despite Europe’s aggressive initiatives that include the use of promising Advanced Driver Assist Systems (ADAS), this lofty goal is unlikely to hit its target, according to iSuppli Corp.

“The European Union in 2001 experienced 1,300,000 accidents, resulting in 1,700,000 injuries and 40,000 deaths,” observed Jeremy Carlson, researcher for ADAS and EMEA automotive at iSuppli. “Europe’s efforts up to this point have resulted in a 27 percent decrease in road deaths in 2008, which is certainly a noteworthy achievement. However, given the drawn-out EU decision process, the lengthy automotive product life cycle, and the fact that the only ADAS safety technology currently mandated is Electronic Stability Control (ESC), Europe is unlikely to reach this target.”

The EU and the EC have been active in proposing new initiatives to help accomplish its goal. Involving every entity from national governments to public authorities and private enterprises, the EC sought to bring together the individual stakeholders in order to share ideas and best practices, and to instill a sense of shared responsibility in this life-saving goal.

Many of these initiatives and discussions involve ADAS technologies, which include ultrasonic and camera park-assist, adaptive cruise control, lane departure warning and blind-spot detection systems.

European road safety charter
First among these initiatives is the European Road Safety Charter. The charter is the largest existing road safety platform, encompassing all 27 EU member states and including more than 1,100 public authorities and private entities as signatories. The charter invites public and private organizations to specifically and actively contribute to the realization of Europe’s auto safety goal.

Among the Charter’s efforts is encouraging the adoption of proven ADAS safety technologies.

Unfortunately, many safety technologies such as adaptive cruise control and blind-spot detection systems have not had the luxury of time and widespread availability to sufficiently prove they can reduce accidents or deaths.

As a result, many of these new ADAS solutions are relegated to research while the tried-and-true technologies such as seat belts and airbags find their way to the legislative front.

Currently, the European Road Safety Charter is pursuing a requirement for seat-belt reminders in passenger vehicles and now requires that all heavy goods vehicles be equipped with blind-spot mirrors on the passenger side to help protect bikers and pedestrians. The requirement of these side-object detection systems by the EC acknowledges the importance of blind-spot safety and could lead to the consideration of radar- and camera-based detection and recognition systems in the future.

The EC also has nominated driver monitoring, collision avoidance and mitigation, pedestrian protection, and visibility systems such as night vision as potential candidates for worthwhile research.

Roads, cars get smart
The Charter and other European initiatives involve the development of Intelligent Transportation Systems (ITS). The proposals could also lead to more navigation-enabled ADAS systems that benefit from mindfully-designed roadways.

Furthermore, the EC’s Intelligent Car Initiative formed in February 2006 was conceived to advance the use of intelligent technologies in automobiles to help make them smarter, safer and cleaner. Naturally, this initiative works side by side with the Charter to help achieve Europe’s goal, although it was not designed specifically for that purpose.

The Intelligent Car Initiative includes the eSafety Forum, which aims to accelerate the development and deployment of intelligent information and communication technologies by building consensus among industry stakeholders.

The latest research agenda from the eSafety Forum included insight into ADAS technologies, including collision avoidance. As a directive for future research and development, the results indicate that current collision mitigation systems should evolve into full-collision-avoidance systems with a focus on reducing costs for deployment in small- and medium-sized cars, although it provides no specific action to reach that goal.

Global PC shipments plunge at historic rate in Q1

EL SEGUNDO, USA: Worldwide PC shipments in the first quarter fell by the largest historic rate in the seven years iSuppli Corp. has been tracking the market, as weaker-than-expected desktop sales dragged down the industry, according to iSuppli Corp.

PC shipments in the first quarter of 2009 amounted to 66.5 million units, an 8.1 percent decline from 72.3 million during the same period in 2008, and a 14.4 percent drop from 77.6 million in the fourth quarter of 2008.

“The worldwide recession sparked by the credit crisis slammed PC shipments for the second quarter in succession during the first three months of 2009,” said Matthew Wilkins, principal analyst for compute platforms research at iSuppli.

“The first-quarter performance of the worldwide PC market was worse than iSuppli had expected in its prior forecast, which called for a 4 percent decline in shipments compared to the same period in 2008. After a long period of immunity to the global downturn, the economic crisis finally has begun to impact the PC market.”

The desktop segment was the major culprit for the PC decline, with first-quarter unit shipments dropping by 23 percent compared to the same period in 2008. In contrast, notebook shipments grew 10 percent compared to the first quarter of 2008.Source: iSuppli, June 2009

Top-5 PC makers retain ranks
There were no changes in the rankings of the world’s Top-5 PC OEMs in the first quarter compared to the same period a year earlier.

Hewlett-Packard remained the No.-1 PC OEM for the 11th successive quarter, with its shipments remaining flat from a year earlier at 13 million units. The company held a market share of 19.7 percent.

Dell experienced an 18.7 percent drop in PC unit shipments, declining to 8.8 million in the first quarter, compared to 10.8 million during the same period in the 2008. The company’s market share declined to 13.2 percent, down from 14.9 percent in the first quarter of 2008.

“Dell’s performance in the first quarter was heavily influenced by its weak desktop shipments, which dragged down its overall market share,” Wilkins said.

The remainder of the Top-5 was rounded out by the Asian PC OEMs, Acer, Lenovo and Toshiba, which had market shares of 11.1, 6.7, and 5.2 percent, respectively.

Toshiba posted the strongest growth among the Top-5 on a percentage basis, with its shipments rising by 13.5 percent from a year earlier.

Platform exposure
iSuppli in the first quarter continued to observe strong netbook sales through network operator retail stores. The Top-5 PC OEMs cited sales through such outlets as driving demand for their netbook products.

“The bundling of a low-cost portable computer and an Internet access package clearly has struck a chord with consumers,” Wilkins said. “The reduced upfront pricing of such packages provided by monthly contract plans also has been a strong factor propelling their success.”

iSuppli predicts that netbooks will account for 14 percent of worldwide notebook PC shipments in 2009, up from 9 percent last year.