Review 2015 and outlook 2016

Meko analyses the European Public Display market

Bob Raikes, Managing Director - Meko Ltd, comments on the “S curve” growth, which has not stopped yet for Public Display.
Review 2015 and outlook 2016: Bob Raikes (Image: Meko)

Bob Raikes, Managing Director, Meko Ltd:

The Public Display market in Europe has been showing good growth compared to many other technology markets. It took some time to get going, with growth slower than many hoped from 2004 to 2008. The market was then hit by the 2008 crisis, but by 2010 it had recovered and we have seen five years of growth on the classic “hockey stick” curve that is often seen in new technology markets. This has been enabled by the availability of bigger and cheaper LCDs and those have become available because of the huge scale of the global TV market, which allows the huge investments needed to build the LCD factories.

Most technologies go through what is called “S curve” growth, that is to say that, at a certain point, the growth starts to slow down and may eventually turn negative so that the market starts to contract again. Market players hope to sustain growth by jumping into a new technology that is still on the early part of the “S curve”. So how are public displays doing? Is it time for growth to slow?

We don’t think this is close yet in Public Display. In some countries, especially Germany, France and the UK, the market is reasonably mature. However, these markets represent over 40% of the whole market in EMEA in 2015 which is a disproportionate share. This means that the other regions have the potential to keep growing, although economic and political problems in Southern Europe, Russia and the East and the Middle East are acting as a brake on developments. Outside Europe, in the Middle East and Africa, there is also something of a barrier to growth because there are fewer systems integrators that can install, maintain and support systems.

Another interesting development has been in the “seasonality” of the market. Some technology markets are very seasonal. For example, the TV market is very strong in the fourth quarter of the year as consumers like to buy sets at Christmas or around “Black Friday” or in New Year sales. The Public Display market, in recent years, has seen most of its growth in Q4 of the year, with a small amount of additional growth in Q1. However, there is not much growth in Q2 or Q3. As forecasters, that makes us very nervous at this time of the year. There has usually not been much growth during the year, so everybody is nervous about Q4.

We believe that this emphasis on Q4 and Q1 is really because of the way that many organisations organise their budgets, which are often based on the calendar year. At the end of one budget, there may be some money left that needs to be spent before the end of the year. At the beginning of the next budget, in Q1, there may be new funds that might be available to support investment plans. During Q2 and Q3, there is a tendency for companies to limit expenditure in case there are unexpected costs during the year, so there is little or no growth.

Is There a New Display Technology “S” Curve?

Display technology continues to develop. LCD is totally dominant, with no more PDPs being sold, these days. OLED is beginning to win a reputation for great image quality at the very high end of the TV set market, but not only are costs high, but also OLED suffers from a number of the “burn-in” issues that caused so many problems for PDP. OLED also struggles to achieve high brightness, although the dark blacks are very attractive. There has been some discussion of OLED starting to appear in the Public Display market in 2016, but our expectation is that any sales will be very small indeed.

Samsung’s panel business has developed a very impressive transparent OLED that has very high levels of transmissivity compared to LCDs. However, the panel is quite sensitive to working conditions and early products are rated only for 12 hour per day operation and we have heard that there may be limits on the level of brightness of ambient light in places where the OLED may be used as the organic materials in OLEDs are very sensitive and may be damaged by long exposure to bright light.

The other interesting development in display technology is in inorganic discrete LED displays. These are made by assembling individual LEDs onto a black substrate. They can be very bright and are used in big billboards either inside or outside buildings and stadiums. Traditionally, this kind of display had pixels that were several mm apart, but over the last couple of years there have been developments in “small pixel pitch” LEDs that have brought pixels down to 1mm or less apart. Getting the pixels closer together means that the display can be viewed from shorter distances.

LED displays have tended to be much more expensive than LCDs, but there is fierce competition among many companies, most of them in China, and this has driven down the cost and in 2015, the crossover point between small pitch LEDs and video wall LCDs got down to around 3.5mm. That has meant that single LED displays may be a better option than a video wall. However, if the display is to be used closer than four or five metres viewing distance, then LCD is likely to be a better option as the individual LEDs will be visible and that doesn’t look so good.

LCD makers have also been continuing their development and new video wall displays will become available during 2016, with even thinner bezels than in the past – down to bezel to bezel distances of 1.8mm (from 3.5mm or so at the moment) They are quite fragile (given the breakages already seen in demonstrations at trade shows!) and so are unlikely to be used in rental or staging applications, but mainly in fixed installations.

UltraHD or “4K” displays are also being developed, although at the moment they are only a small share of the Public Display market. There are a number of practical challenges in using UltraHD in Public Displays in the short term, although they will eventually be overcome and there will be a switch to UltraHD. At the moment, UltraHD uses more power, or reduces brightness compared to FullHD displays. The benefits of UltraHD are also not very apparent unless the display is viewed from a very close distance.