Slowing Mobile Phone Market Weakening Demand for Displays; DisplaySearch Forecasts Lower Growth for the Holiday Season

Sort Date: 11132008

AUSTIN, Texas, November 13, 2008—Coming into the holiday shopping season, worldwide shipments of displays for mobile phones are slowing significantly. According to the latest forecast from DisplaySearch, Q4’08 mobile phone display unit shipments will only be 2.5% higher Y/Y. By comparison, Q4’07 unit growth was up 28% Y/Y, and Y/Y growth has remained in double digits every quarter during since Q3’07. The outlook for Q4’08 revenues is stronger, however, due to demand for larger and/or higher resolution displays to support growing video and internet usage. Q4’08 revenue growth is forecast at 11% Y/Y, just slightly about the Q3’08 Y/Y growth of 10%.

These findings are part of DisplaySearch’s most recent Quarterly Mobile Phone Shipment and Forecast Report, which analyzes key market trends for mobile phone displays and PDAs. According to DisplaySearch, the market for mobile phone main displays will reach $13.2 billion and 1.46 billion units in 2008, up from $10.9 billion and 1.27 billion units in 2007. Any downturn for mobile phone displays will likely weaken the overall small/medium displays market, which includes any displays less than 10” diagonal in size used for portable electronics and other applications. “The mobile phone market accounts for about 50% of the total small/medium market,” noted Chris Crotty, DisplaySearch Director of Small & Medium Displays Research, who added, “An efficient supply chain and short lead times also make the mobile phone display market a key leading indicator for the health of overall mobile phone market.”

Despite exciting new products like the new 3G iPhone and the Blackberry Storm, the overall demand for mobile phones seems to be weakening amid economic uncertainty. Replacement cycles are lengthening in more developed regions as consumers are increasingly reluctant to spend on unnecessary upgrades. In developing economic areas including China, production and job cutbacks have reduced demand for lower-end models.

Other key findings from the latest DisplaySearch mobile phone displays research include:

• More internet and video usage among mobile phone owners is driving steady increases in both display size and resolution. However, in 2008 average mobile phone display size (diagonal) will reach just 2.05”, while average pixel count will be 56.9K pixels, less than the 76.8K pixels in the popular 320 × 240 pixel QVGA format, often considered the minimum for video. From 2008 to 2012, resolution is forecast to grow at a much faster average annual rate than size, i.e., 3-11%.
• The combined market share for leading mobile phone display suppliers has decreased over the last year. The total unit share for the top three and top five leading suppliers declined from 40% and 57% in Q2’07 to 37% and 52% in Q2’08. However, phone makers are not adding more display suppliers, but instead increasing orders among non-leading vendors. In both Q2’07 and Q2’08 phone makers purchased from an average of 5.7 display suppliers.
• Wintek has climbed to the top position among mobile phone display suppliers by increasing its unit share from 9.2% in Q2’07 to 14.1% in Q2’07. During that period, the Taiwan-based firm has grown unit shipments nearly four times faster than the total market. Wintek has added several new customers—Kyocera, Sagem, Tianyu, and ZTE—while sharply increasing orders from industry leader Nokia. These gains have more than offset declines from struggling maker Motorola.

Based on detailed supplier surveys, DisplaySearch small/medium displays research examines shipment, revenue, and pricing data by key metrics including market application, size, resolution, technology and supplier. Available research includes four quarterly reports focusing on different aspects of the market. The comprehensive Quarterly Small/Medium Shipment and Forecast Report provides full market analysis while the Quarterly Small/Medium Pricing Report, Quarterly Mobile Phone Shipment and Forecast Report and Quarterly Small/Medium Value Chain Report focus on ASPs, mobile phone displays, and market share data, respectively. For more information, contact DisplaySearch at +1.512.687.1511 or sales@displaysearch.com.

About DisplaySearch
DisplaySearch, an NPD Group Company, has a core team of 59 employees located in Europe, North America and Asia who produce a valued suite of FPD-related market forecasts, technology assessments, surveys, studies and analyses. Visit the DisplaySearch blog to read about how our top analysts are interpreting up-to-the-minute issues that impact the display industry, and join us in this discussion about technology and the flat panel industry. The company also organizes influential events worldwide. Headquartered in Austin, Texas, DisplaySearch has regional operations in Chicago, Houston, Kyoto, London, San Diego, San Jose, Seoul, Shenzhen, Taipei and Tokyo, and the company is on the web at http://www.displaysearch.com/.

About The NPD Group, Inc.
The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,600 manufacturers, retailers and service companies rely on NPD to help them drive critical business decisions at the global, national and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys and wireless. For more information, visit http://www.npd.com/.