Sales of flat panel TVs rise in Q2 2009

In contrast to many product categories in the pro a-v/IT space, the B2B flat-panel market has experienced steady growth this year, racking up in excess of 400,000 units sold in Q2 (excluding sales to the hotel segment), according to research by Futuresource Consulting. This represents close to 30 per cent year-on-year growth, underlining the feeling that flat-panel product is a viable and ever more affordable display technology.

However, this performance also includes consumer TV crossover product, which has been widely adopted in the professional market over the past few years, accounting for more than 60 per cent of global sales in Q2. There are myriad arguments and counter-arguments for the selection of pro monitors over consumer TV products, but, ultimately, displays - once the lead product in any reseller's armoury - have become just one element of a wider solution and are often the last consideration in a project when budgets are all but spent.

Mixed results

Looking back 18 months, the corporate sector held much promise for flat-panel displays, as falling price points made them an attractive option for internal communications and a challenge, albeit a weak one, to projection technology in the meeting room. This momentum has been checked by the global recession as users opt for a 'make do' policy. The corporate sector showed signs of recovery in Q2, but remained around the 80,000 unit mark for the previous 12 months, growing just 2 per cent year on year.

Futuresource research shows that the public display application has enjoyed strong year-on-year growth of nearly 40 per cent, with digital signage driving flat-panel display penetration in almost every application and vertical market. Retail signage has long been heralded as the main vertical for flat-panel displays, currently representing around 45 per cent of total public display application sales, with the obvious attraction of funding the network via advertising revenue.

There has been doubt about how this vertical will perform through recession, but it is the networks and installations without a clear ROI, such as point of information or wayfinding installations, that have suffered.

After a period of growing pains, the digital signage industry shows hints of maturing to adolescence. A good indicator of this comes from the growing number of trade shows, signage publications, web sites and bloggers. More recently, industry body Out-of-Home Video Advertising Bureau (OVAB) extended its reach to Europe, helping to create industry standards and develop dialogue between companies.

Problem solving

Barriers identified by Futuresource in its early 2007 research have, at the very least, been addressed, and in most cases overcome. Indeed, OVAB itself is important in addressing the first barrier, which is the sharing of experiences and knowledge.

Just a few years ago the vast majority of end users were loath to discuss project failures which, while completely understandable in such an entrepreneurial industry, slowed progress as projects suffered the same problems time and again.

Other barriers have been overcome with aggregators helping to make the medium more accessible to advertisers and media agencies, as well as giving a deeper appreciation of the benefits offered by sound ROI modelling.

Securing quality affordable content still remains an issue for the market, but this is gradually changing as the industry evolves and demand drives initiatives.

Fresh approach

This growing maturity of the digital signage industry has had a huge impact on the way display vendors approach the market. Chasing factory efficiencies and producing quality affordable screens are certainly important, but more pressing is how display vendors fit into a market where the screen is just part of a solution.

Over the past few years, vendors have experimented with developing branded end-to-end solutions, but few have had the knowledge or resources to keep pace with specialist software houses. More recently, display vendors have opted for the partnership route in a symbiotic relationship that offers software specialists access to vendors' reseller networks in exchange for, hopefully, a robust, well-established signage software package.

The future for the industry is clearly bright and opportunities for large complex installations are abundant. However, in the longer term, display vendors need to develop run-rate business from digital signage, and this will ultimately come from a distribution-based model. Plug-and-play is an ugly phrase - perhaps plug-and-pray might be more suitable - but this is an area where bundled solutions will do well, and for all its previous failings a branded 'solution' could work well for display vendors.

Attractive features

Demand for larger screen sizes shows no sign of slowing in the B2B space, and has helped plasma technology survive - it had a 32 per cent market share in Q2 (jumping to 50 per cent in the 'smaller than 42in' categories).

While the usual screen size, resolution and technology issues will stay important, it is the development of other display features such as touchscreen and integrated media/PC players that will help professional monitors survive the glut of consumer TV products entering the market. The recent introduction of ultra-thin bezel products has also sparked renewed interest in large-scale displays. Anyone attending InfoComm in Orlando this year will have been blown away by the tiling solution on the Samsung stand.

Futuresource expects latent demand to drive strong growth in 2010, reaching 2.4 million units. Systems integration will continue its ascendancy as the lines between a-v and IT continue to blur and more emphasis is placed on total solutions. Hardware and software vendors must assess how they fit into the 'connected age', identify the most suitable players to partner with, and decide which verticals offer the best opportunities and the most appropriate routes to those markets.

TO OBTAIN THE FULL REPORT FROM FUTURESOURCE CONSULTING CALL RESEARCH CONSULTANT CHRIS MCINTYRE-BROWN ON 01582 500 172 OR EMAIL HERE