Industry analyst forecast big-time growth in panel demand, sales

The technology industry analysis group called iSuppli has released a report about the projected growth of flat panel displays in the digital signage sector with shipments of such units expected to grow to some 22 million over the next five years.

From DigiTimes:

“The digital signage and professional displays market is set to grow to US$14.6 billion by 2011, managing a compound annual growth rate (CAGR) of 9.8%, up from US$9.1 billion in 2006, according to iSuppli. However, it is the unit growth that is the impressive part of the market. Unit growth in the digital signage market will hit 22.7 million units by 2011, rising at a CAGR of 42.2% from 3.9 million units in 2006, a nearly six-fold increase.

The main reason for the weak revenue growth is the substantial price declines occurring in display technology enabled by improvements in manufacturing processes and the maturation of technology. This steep decline in prices is enabling the adoption of displays in signage applications. Price competition is less intense and margins are much healthier in the digital signage market than other display areas, so companies are anxious to enter the segment.

Users of signage and professional displays such as retail and department stores, fast-food restaurants, museums, hotels, auditoriums, trade shows and retail banks are expected to provide more opportunities for display manufacturers to sell products for higher margins in less-crowded markets.”

The DigiTimes article explains a big chunk of the growth involves the hotel sector switching TVs over in rooms from CRTs to sexier and slimmer plasmas and LCDs. However, it does not the retail-signage market is gaining ground quickly.

“This market is expected to reach US$2.8 billion by 2011, up from US$1.4 billion in 2006, making it the second-largest signage market after the indoor venues segment.

The retail-signage market is being driven primarily by the demands of the retail marketplace that are changing due to factors including:

-Rapid product revisions

-Retail feature proliferation

-Lack of a knowledgeable sales staff

-The need to effectively communicate ads and sales to customers on retail floors

The advantage that digital signage presents to the retail environment includes interactive and dynamic solutions that address these challenges and provide the capability to communicate timely and relevant information regarding product features and benefits about brands and content to customers effectively.

Retailers also benefit from digital signage solutions because of their capability to display information on a greater range of products than a store would typically carry due to space constraints. This enables customers to review all product models and features even if they are not in stock.

Typically, the third and fourth quarters are the times when demand for digital signage peaks. However, because the retail signage market is in a nascent phase, it is expected to grow even during the off-season for retailers.”

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