Digital Home Thoughts: The HD TV Evolution: Part 3 – Tomorrow’s TV

Deja Vu?
Now, where have we seen this before? Right! Desktop PCs. And like desktop PCs, LCD displays come with a multi-vendor, competitive, component supply chain. A supply chain that is already taking the first steps towards commoditization. Consider the following charts:

32” LCD Display parts cost breakdown projections, US$


A name brand panel that sold for $2000 at a national bricks 'n mortar store in summer 2005 is expected to retail for as low as $1000 by next Christmas. That’s a 50% price drop in 18 months. Not quite Moore’s law but still plenty good. And these price cuts are expected to continue unabated for the foreseeable future:

LCD Display price projections
(Name brand at B&M retail. Club/online prices 20% lower; 2nd tier lower still)



Direct-view LCD TVs are already the dominant non-CRT HD displays in '06. After that, the only question that remains is how soon will they usurp CRTs' top spot.

Forecast: HD-ready sales, US (2005-2007)



Looking at the projected pricing trends, it would seem 2008-'10 is a good time for a CRT market implosion in North America; right around the time 32” LCD displays hit the $600 price point.

Now, of course, all this simply refers to market forces; nothing says that people will want to buy the LCD TVs. Proponents of other technologies will argue that their preferred tech is superior. Just as proponents of alternative PC architectures and OSes have long argued their favorites are “clearly” superior...which I’m not going to debate; each technology system has its strengths and its weaknesses and in the HD business the strengths of a given technology (PDPs, for example) come with directly linked weaknesses and vice-versa.

The thing to keep in mind that in HD, even the worst is very, very good.
And that, as Adam Osborne said: “Adequacy is sufficient.” LCDs are, frankly, the MS Windows of HD; they are simply “good enough”. Good enough to replace 27” CRTs. Good enough to watch sports and soaps and newscasts. Good enough for XBOXes and Playstations. Good enough to watch in brightly-lit living rooms. Good enough for the average consumer.

Take for example the greatest bugaboo of LCD criticism; their “limited” color gamut. Yes, Direct-view LCD TVs’ color gamut—the variety of colors they can accurately reproduce—range from about 70-90% of the NTSC spec, whereas PDPs and microdisplays run close enough to 100% as makes no difference, right?

One small problem: what customers are used to is actually worse.
"Huh? CRTs are better than that!" Nope. Yes, professional grade CRT-monitors ARE better than that. But consumer-grade TVs (those 27” $299-699 baseline sets that dominate the analog TV market?), those only display about 60-70 percent NTSC. Which is why when consumers take LCD TVs home they are invariably pleased by the brightness (LCDs’ calling card: see below) saturation, and purity. It’s not that LCDs are the perfect display; it's just that they are better than what came before. And that is before addressing the strengths of LCD tech. Strengths such as: high full screen brightness, high contrast, and above all, high consistency. LCD brightness and picture quality is constant. Rear projector lamps dim over time; CRTs and PDPs lose brightness over time as the phosphors erode. But direct-view LCDs remain steady as a rock over a decade or more. And consumers already know this because of their exposure to LCD tech in their laptops and desktop displays.

Finally, the nature of LCD tech allows a greater degree of product differentiation within a single company’s line than its current competition. It is easier for a company to create a line of products along the traditional good-better-best market segmentation philosophy that allows for cheap entry-level products that don’t cannibalize the high-margin premium products. (More on this later.) A company can, for example, build a three-tier LCD product line based on 720p CCFL backlight panels for the low end, 1080p strobing-CCFL panels for the midrange, and 1080p LED-backlight panels for the high end. All at the same 37” size. Or 42”. Or whatever.

The thing to keep in mind is that they are not the best display technology for any single display characteristic one might measure, but they are a solid second or third in most of them. And they are cheaper: cheaper to build, cheaper to sell. Just like PCs.

HD Display sample Specs:



Bottom line:
The HDTV market is headed toward the same economies that rule the PC business and just as in the PC business, adequacy rules.

Rule number two of HD: “Good enough is exactly that; good enough.”
The mainstream TV market will not go to the technology that best pleases techies and home theater aficionados; it will go to the tech that allows Joe-six-pack to sit back and watch his NFL or reality TV shows in the environment he is most used to at the best possible price. Absolute brightness is a must. Crisp, high-res images is a plus. Low-price is a big plus.

So, while PDPs, micro-displays (most of which use LCD tech, btw), and future emerging technologies will have a place in the overall market, that place will be as complements to the mainstream direct-view LCD, not as a challenger. Because LCD is too far along the price/performance curve for alternatives (some of which can’t even play at the size/price combos that are LCD’s domain) to catch up. From now on, any alternative HD display tech that wants Joe six-pack's business has to match LCDs in size and price AND be demonstrably better, or offer a compelling answer why not.

It won’t happen soon. What will happen is that microdisplays and PDPs will specialize and move into safer, more profitable, niches.

Next up: HD likes to be big. And Microdisplays can do big cheap.

Felix Torres is a dabbler in home entertainment electronics and a survivor of both the home computing wars of the 80's and the multimedia wars of the 90's who is currently most interested in home media networks and the North American transition away from broadcast media.