Wednesday, June 7, 2006
The HD TV Evolution: Part 3 – Tomorrow’s TV
Posted by Felix Torres in "THOUGHT" @ 08:00 AM
Ever since its invention, TV has been watched almost exclusively on the glorified oscilloscope we call a Cathode Ray Tube (CRT). Alternatives have evolved, most recently in the form of flat-panel displays and microchip-based rear projection units and projectors collectively referred to as micro-displays. Nonetheless, close to 90% of TV viewing on planet Earth is done on CRT TV sets, mostly because they are reliable, cheap, and readily available. Given that the earliest HDTVs to hit the market were CRT-based, in both direct-view and projection form, it would be easy to assume the CRT will go on forever. It would be a false assumption.
Now, CRTs are not going to vanish overnight off the face of the Earth. But neither are they going to endure in the major HD markets much past 2010, if that long. Why? The very reason they are popular: the CRT market endures, despite razor-thin profit margins, because it is a high volume business. Once the volume starts to shrink even the slightest, the profits will vanish almost overnight. This will lead to a wave of product consolidation as some vendors choose to exit the market, letting their competitors pick up the residual market, rather than contest the scraps that remain. The process, in fact, has already begun: Lucky Goldstar has already announced their withdrawal from the CRT business in Western Europe. Henceforth they will only sell low-end CRTs in emerging markets. Others will follow.
The upcoming collapse in the CRT market is due to a combination of two factors. The first, obviously, is the transition to digital HDTV in North America, as CRTs are finding it hard to compete at the larger screen sizes that the higher-res formats enable. The second is that even in HD-less markets like Europe and Asia, customers tend to buy by form factor and in those markets, thin is in, to the point that even high-res micro-displays are unable to penetrate those markets to any great extent.
So, the question that arises is, what will be the replacement for the ubiquitous CRT? Plasma Display Panels (PDP), Liquid Crystal Displays (LCD), micro-display rear projection (at least in North America) or some other emerging display technology?
The facile answer is: all of the above. The 90% of the market still held by CRT displays will be carved up among most of the existing competitors.
The more detailed answer, however, is that the market is not going to be carved up equally; one of the contending technologies is going to easily grab at least 60% of the market and strongly contest the other third or so to be fought over by its competitors. When the dust settles, as much as 90% of all TVs sold in HD markets with run on variants of the same core technology, a technology already on the market and snowballing to an early lead.
The televisions of tomorrow (defined as 2005-2015) are going to be overwhelmingly built off LCD technology in one of three variants: direct-view flat panels, transmissive micro-display, and reflective micro-display (aka LCOS). Which isn’t to say there won’t be room for the micro-mirror DLP rear projection systems (lots of them, in fact) or Plasma Displays and other advanced emissive systems like SED or OLED. However, the core TV market, the mainstream that serves as a baseline to define the market, the high volume center of the market is going to be strongly dominated by LCD displays.
Why? Price, primarily. Scalability of the technology, too. But also because of reliability, consistency, and ubiquity, all of which which increase consumer comfort with the technology.
The ultimate key key is scalability: The same technology that allows for 3.7” VGA panels for handhelds and 17” SXGA Computer displays can also be applied to HDTVs ranging from 19” upwards. And, while LCD-based HDTVs have tended to be more expensive than their PDP and MD-based competitors, at a given size, that is because, the size given in those comparisons tends to be 40+ inches. At smaller sizes, LCDs have dominated, simply because LCDs are the only alternative at sub-40in sizes and you can't buy a display that isn't for sale.
And there begins the story of LCD domination: LCDs do small very well. LCDs do big reasonably well today and are doing better at it and getting bigger by the month. Most importantly, LCDs do very small at medium panel sizes very, very well. The migration of the displays to ever-larger, higher sizes is not so much a technology issue as it is a manufacturability issue, of the facilities being optimized to produce less large panels per “motherglass” slab instead of more smaller panels. It is those smaller panels that are the impetus behind the development of LCD technology: consumers are already well acquainted with LCD tech through their laptops, desktop monitors, digital music players, cell-phones, calculators and what-not.
LCDs are everywhere. And LCD manufacturers are also everywhere. And they have all decided, en-masse, to invest massive amounts of capital to develop LCD tech suitable for HDTVs, all seeking to migrate from their current, marginally-profitable, small panel markets to the promised land of HDTVs. And they are right to do so. There is a lot of money to be made there. Just not as much as there would be if they weren’t all aiming for it.
Folks, there is a glut of high-quality HD grade LCD manufacturing capacity of epic proportions out there. In a market growing at a rate of 50-70% year-over-year, capacity is coming online to exceed even that demand by another 50%. And, since LCD tech is semiconductor-based, it comes with volume-based learning curves that drive down the per-unit cost over time as the manufacturing process is improved and yields rise.
And so we arrive at the fortuitous combination of a technology consumers are comfortable with coming to market in ever-increasing volume, at ever-increasing quality and an ever-decreasing price.
Now, CRTs are not going to vanish overnight off the face of the Earth. But neither are they going to endure in the major HD markets much past 2010, if that long. Why? The very reason they are popular: the CRT market endures, despite razor-thin profit margins, because it is a high volume business. Once the volume starts to shrink even the slightest, the profits will vanish almost overnight. This will lead to a wave of product consolidation as some vendors choose to exit the market, letting their competitors pick up the residual market, rather than contest the scraps that remain. The process, in fact, has already begun: Lucky Goldstar has already announced their withdrawal from the CRT business in Western Europe. Henceforth they will only sell low-end CRTs in emerging markets. Others will follow.
The upcoming collapse in the CRT market is due to a combination of two factors. The first, obviously, is the transition to digital HDTV in North America, as CRTs are finding it hard to compete at the larger screen sizes that the higher-res formats enable. The second is that even in HD-less markets like Europe and Asia, customers tend to buy by form factor and in those markets, thin is in, to the point that even high-res micro-displays are unable to penetrate those markets to any great extent.
So, the question that arises is, what will be the replacement for the ubiquitous CRT? Plasma Display Panels (PDP), Liquid Crystal Displays (LCD), micro-display rear projection (at least in North America) or some other emerging display technology?
The facile answer is: all of the above. The 90% of the market still held by CRT displays will be carved up among most of the existing competitors.
The more detailed answer, however, is that the market is not going to be carved up equally; one of the contending technologies is going to easily grab at least 60% of the market and strongly contest the other third or so to be fought over by its competitors. When the dust settles, as much as 90% of all TVs sold in HD markets with run on variants of the same core technology, a technology already on the market and snowballing to an early lead.
The televisions of tomorrow (defined as 2005-2015) are going to be overwhelmingly built off LCD technology in one of three variants: direct-view flat panels, transmissive micro-display, and reflective micro-display (aka LCOS). Which isn’t to say there won’t be room for the micro-mirror DLP rear projection systems (lots of them, in fact) or Plasma Displays and other advanced emissive systems like SED or OLED. However, the core TV market, the mainstream that serves as a baseline to define the market, the high volume center of the market is going to be strongly dominated by LCD displays.
Why? Price, primarily. Scalability of the technology, too. But also because of reliability, consistency, and ubiquity, all of which which increase consumer comfort with the technology.
The ultimate key key is scalability: The same technology that allows for 3.7” VGA panels for handhelds and 17” SXGA Computer displays can also be applied to HDTVs ranging from 19” upwards. And, while LCD-based HDTVs have tended to be more expensive than their PDP and MD-based competitors, at a given size, that is because, the size given in those comparisons tends to be 40+ inches. At smaller sizes, LCDs have dominated, simply because LCDs are the only alternative at sub-40in sizes and you can't buy a display that isn't for sale.
And there begins the story of LCD domination: LCDs do small very well. LCDs do big reasonably well today and are doing better at it and getting bigger by the month. Most importantly, LCDs do very small at medium panel sizes very, very well. The migration of the displays to ever-larger, higher sizes is not so much a technology issue as it is a manufacturability issue, of the facilities being optimized to produce less large panels per “motherglass” slab instead of more smaller panels. It is those smaller panels that are the impetus behind the development of LCD technology: consumers are already well acquainted with LCD tech through their laptops, desktop monitors, digital music players, cell-phones, calculators and what-not.
LCDs are everywhere. And LCD manufacturers are also everywhere. And they have all decided, en-masse, to invest massive amounts of capital to develop LCD tech suitable for HDTVs, all seeking to migrate from their current, marginally-profitable, small panel markets to the promised land of HDTVs. And they are right to do so. There is a lot of money to be made there. Just not as much as there would be if they weren’t all aiming for it.
Folks, there is a glut of high-quality HD grade LCD manufacturing capacity of epic proportions out there. In a market growing at a rate of 50-70% year-over-year, capacity is coming online to exceed even that demand by another 50%. And, since LCD tech is semiconductor-based, it comes with volume-based learning curves that drive down the per-unit cost over time as the manufacturing process is improved and yields rise.
And so we arrive at the fortuitous combination of a technology consumers are comfortable with coming to market in ever-increasing volume, at ever-increasing quality and an ever-decreasing price.
