The new generation of so-called “iPhone killers” is set to drive demand and increase sales of displays commonly used in smart phones in 2009, despite an expected decline in the overall mobile-phone display market this year, according to iSuppli Corp.
Worldwide shipments of mobile-phone LCD displays between 2.5in and 4.9in in size, and with pixel formats of QVGA and higher, are projected to rise to 149.9 million units in 2009, up an impressive 22.1 percent from 122.8 million in 2008. In contrast, overall shipments of all mobile phone displays are expected to decline by 11 percent for the year.
While a large number of smart phones use smaller displays and LCDs with other pixel formats, these displays are most likely to be used in high-end, feature-rich products. Thus, their growth provides an accurate picture of growth in smart-phone display demand.
"The continued success of Apple Inc.’s iPhone is driving market demand for competitive products,” said Vinita Jakhanwal, principal analyst for small and medium displays at iSuppli. “Companies are rolling out a range of iPhone killers, including new products based on Google’s Android operating system. To this end, many OEMs are introducing higher-end, multimedia-enabled phones that include larger displays with superior resolutions.”
The rising demand for smart-phone-oriented displays and the continued strength in demand from the Chinese mobile phone makers are helping propel a recovery in the mobile phone display market, with sequential growth starting in the second quarter, after two consecutive quarter of decline.
Normal seasonal factors, combined with the continued economic downturn and large inventories, caused overall shipments to decline sequentially by 17.4 percent in the fourth quarter of 2008 and by 8.5 percent in the first quarter of 2009.
In the second quarter, shipments actually slowed in May compared to April due to a shortage of components such as driver ICs and LCD glass. However, most of this shortage, particularly for driver ICs, was resolved by June, allowing mobile-phone display shipments to rise by 4.6 percent in the second quarter.
“Early indicators from the Taiwanese small/medium suppliers are pointing to a strong third-quarter performance,” Jakhanwal said. “The Taiwanese vendors are significant suppliers to the Chinese mobile phone makers for both the branded and clone markets. Incentives from the Chinese government have helped boost demand for consumer electronics, including cell phones, in rural China. The government is looking at expanding this program further.”
The third quarter is usually the strongest period of the year, as panels are shipped to meet the end-year holiday demand for electronic devices. Strong demand is expected from Tier-1 handset OEMs in this quarter, too. However, uncertainty in consumer demand persists. If mobile-phone sales fail to pick up the fourth quarter, oversupply in the mobile phone display market could build up.
iSuppli
