February PM Released

The month of January is behind us, and with it the colossal Consumer Electronics Show (CES), in Las Vegas. Insight Media sent four analysts to comb the aisles for the new and interesting at the show, generating a whopping 150+-page Projection Monthly for this month.

The importance of a show like CES comes from beyond all the unique booths and products on display (and, in some cases, not shown). Stepping back from the enormity of the show, we think we've found some very interesting technologies and innovations with the potential to change the competitive landscape in terms of reception, storage and display in this transition from analog to digital broadcast in the consumer's home.

The first item of note came not at the show, but just after; Sony dropped a CE bombshell by indicating a plan to concentrate resources on LCD-TVs while abandoning PDP production. This is in line with Sony's repeated statements that it will focus its flat-panel TV business on LCD- and rear-projection TVs. The second and third bombs hit when Toshiba and Fujitsu announced its plans to exit the PDP-TV market . Toshiba will focus on surface conduction electron emitter display (SED) panels for flat-panel TVs 40 inches and larger , while Fujitsu will sell its stake in FHP (Fujitsu Hitachi Plasma Display Limited) back to Hitachi. The 30% price errosion of PDP pricing in 2004 and corporate losses were too much for Fujitsu to continue. And others, like JVC, will de-emphasize PDP-TV lines in 2005.

Are we starting to see the first moves in the anticipated "squeeze play" on PDPs, as LCD and projection conspire to squeeze plasma out of the market? Are we moving toward consolidation of PDP production into just a few large players?

In LCDs, Sony, Sharp, LG Electronics, Samsung and others all have plans to commercialize LCDs greater than 40 inches. Prices will come down rapidly as Gen 6 and Gen 7 LCD fabs pump put volumes of panels.

Squeezing from the other end are projection products, which are already priced below plasma in equivalent screen sizes, and offer a much better cost basis for larger screen sizes and 1080p systems.

Plasma's advantages in contrast, brightness, response speed, color saturation and viewing angle are all being eroded quickly by LCD and projection technologies. And plasma makers have reduced prices dramatically to remain competitive.

At CES , we saw LCD-TVs with 8-12 ms response times, 170-degree viewing angles, 1200:1 contrast, and color saturation that can now exceed the NTSC standard.

Enabling such advances are a host of technologies that are coming together to make for compelling - and competitive - products. Micronas frame rate converter technology, for example, uses vector-based motion estimation and compensation, calculating the shift in position of every object on the screen between each frame. It then uses this information to precisely interpolate the object's location in intermediate frames, resulting in smooth motion display of fast-moving objects.

Other LCD image enhancements came from backlight innovations. Philips introduced a 32-inch LCD with improved motion sharpness and contrast, using what the company called "Aptiva" - a hot cathode tube technology (versus standard cold cathodes). The technique improves the LCD image at the light source by cycling on and off extremely fast, and darkening the screen for a portion of each frame, rather than keeping it lit for the entire (1/30 to 1/60-per-second) cycle. This reduces the "hold" time and sharpens the image. It also combined this technology with a technique to reduce light leakage, especially in dark scenes viewed in low ambient light.

LED backlights were also combined with LCDs, offering significant advantages over CCFTs (cold cathode fluorescent tubes) as a light source. These include extended lamp life (100K hours vs. 60K hours); improved backlight response time (20 ms vs. 500 ms); and, more importantly, eye-popping images displaying colors never before seen on television. LEDs extend the color range with illumination that exceeds the NTSC color pallet by 105%. Both Sony and panel maker Samsung showed a 46-inch version of this marriage of technologies with absolutely amazing results.

But that's not the end to PDP's woes. LCD technology is going after the Achilles heel of plasma - an inherent cell structure that limits pixel density. PDPs will have a hard time extending the 1920 x 1080 resolution to smaller screen sizes. This is no problem for LCD and projection technologies.

Projection products are pushing hard too. There were lots of 1080p demos and product announcements at CES in all three microdisplay technologies (LCOS, DLP and 3LCD). Contrast in some of the best sets is pushing beyond 5000:1, and new screen technologies are coming to improve viewing angles. Thinner form factors and more "plasma-like" styling are coming too, which will make projection systems look more and more like flat TVs in a few years.

To plasma's credit, contrast in some of the newer-generation models is hitting 5000:1 - very impressive, and with 12-bit video processing, billions of colors can be rendered. Lifetimes have improved to 60K hours for the best producers, and problems with lifetime appear to have been addressed in the latest versions too. We think the image quality of these sets is second to none - and there are many believers in the technology. Panasonic, in particular, is pushing PDP in a big way and making the investments to support it.

But, in the key 40-50 inch segment, plasma will see increasing threats from LCD, while larger sizes will be challenged by projection systems. This may be why Sony, Toshiba and others are taking a hard look at further investment in PDP technology and opting out - especially in the case of Sony with no significant investment in PDP manufacturing.

We believe that 1080p will emerge as the new HD standard for all consumers. This will be driven primarily by consumer preference in not wanting to be "burned" from buying into a technology too soon. No one wants to buy a product that eventually devolves into a "stop-gap" solution with "limited" display resolution. Never mind the present content void, or the fact that very few consumers can discern the difference between the formats - the 1080p display spec will become a check-box line item required to "future proof" their purchases. Imagine plopping down $4, $6, or even $8K for the hottest new display only to learn 9 to 12 months later that a 1080p broadcast or Blu-Ray HD DVD movie is "downrezed" to match your lower display resolution.

Well, that's a wrap for this review. For much more coverage and specific details, just look inside this month's issue.

About Insight Media
Insight Media (www.insightmedia.info) is a full-service market research company specializing in microdisplay-based products in the projection and near-to-eye segments. It tracks the full supply chain, finished products and distribution of these microdisplay-based products through its various newsletters, technology reports, forecasts, conferences and custom consulting activities. Headquartered in Norwalk, CT, Insight Media has a core of 8 analysts and associates to cover the microdisplay industry in a comprehensive manner.