Yesterday's Lessons Inform the Decisions of Today and Tomorrow
by Elliott Schlam
When we started arguing about which was the best display technology back in the late '60s and early '70s, the word "business" never came up. I recall long and heated discussions with the leading technology proponents, analyzing in great depth issues such as luminance, contrast, viewing angle, addressability, etc.. Every now and then, the subjects of market, applications, and manufacturability came up. Flat-panel displays (FPD) were a technological wonder and, as bold as we were in those days, no one would make the outrageous claim that someday the annual display market would reach $80 billion on its way to exceeding $100 billion.
Flashing ahead to the year 2002, it was difficult for me to convince SID management to run a "business conference" at the SID 2003 Symposium and that anyone would actually come. After all, SID is a technical society and did not want to ruin the Symposium by interjecting "business" into what had always been a technical conference. The argument that this conference would well-serve SID members, since the business of displays now supports the technology, finally prevailed. Attendance at the inaugural Business Conference in 2003 was about 400. The two subsequent Business Conferences in 2004 and 2005 drew about 700 attendees each, far exceeding the attendance at any other event, except the technical Symposium and exhibition itself.
Still, many in the North American financial community lament the fact that the business of displays is centered in Asia. That is certainly where the display panels are manufactured, but hardly the center of business, since most of the displays are sold throughout the rest of the world. FPDs, which already dominate the monitor market and are on their way toward taking over the world's annual 165 million TV-set market, have sparked a fascinating phenomenon. There are in excess of 100 organizations producing and selling flat-panel TV sets from a panel-manufacturing base of an order of magnitude smaller than that. The phenomenon of manufacturing display modules is only a partial step in the ultimate sale of TV sets. Adding significant value in the form of contrast enhancements, backlights, adjunct electronics, and packaging is essential. Placing the sets in physical and virtual sales sites, finding out the factors that make the public buy them, and then cycling back to enhance public acceptance is also critical. This must all be done while continually adding technological enhancement in an economic framework that creates acceptable price points and profits (sometimes, and to some and not others) to complete the business enterprise. The business of displays has expanded, and in some cases created a worldwide entrepreneurial merchandising network.
An example of one of the merchandising organizations that steps in after the display panels have been manufactured is Westinghouse Digital, a California-based company. They have successfully traversed the maze of acquiring flat-panel modules, adding value, and placing Westinghouse Digital branded TV sets in consumer-electronics retail stores. But how Westinghouse got to this stage is an interesting case study in the business of displays.
As a U.S. Army program manager in the mid-'70s, after having successfully completed R&D projects at the corporate research arm of Westinghouse Electric Corp., I persuaded the government to award a series of manufacturing methods and technology (MMT) contracts to Westinghouse. These contracts were the first of their kind applied to FPDs. Part of the rationale for these contracts was an economic analysis based on the intended usage of these flat panels in specific military systems and the savings that would result from the price reductions evolving from the manufacturing methods to be developed. The subject technology was the first real exploitation of thin-film-transistor (active matrix) addressing! Through the course of the program, I tried to convince top Westinghouse management to expand this activity with an internally funded project. I informed them how much money they would make in manufacturing and selling such FPDs to both military and civilian users. They could not be convinced. These MMT programs were only a first step, and the technology ultimately drifted to Japan, where billions more dollars were spent (with no guarantee of financial return) and brilliant materials and manufacturing innovations were developed, leading to the great active-matrix liquid-crystal-display (AMLCD) business that we know today.
Westinghouse Electric eventually disappeared until recently, when insightful entrepreneurs acquired the name and world-class brand. They now sell flat-panel TV sets under the Westinghouse Digital brand using AMLCD panels from a giant manufacturing facility in Taiwan that developed its capability as an outgrowth of the creative concepts developed at Westinghouse Electric 30 years earlier. If a different business decision had been made back then, the entire display business landscape may have looked different today. I had a recent conversation with a high-level executive from Westinghouse Digital. He knew nothing of this irony and backdrop to his success.
This anecdote serves to underscore how much more complex and sophisticated the business of displays is today. It goes well beyond the issues associated with the high-volume low-cost manufacturing of FPDs. While these issues – such as learning where the upper limit to motherglass size is and how close we are to it, and when will we revert back to one-up high-speed in-line systems to meet the substantial price reductions that are still necessary – are thoroughly captivating, there is more. Flat-panel TV is the first overwhelming market challenge for our industry. Notebook computers were a no-brainer killer application for FPDs, one creating the other and vice versa. FPD monitors and the vast range of mobile products followed. Although it can be argued that the monitor market was a replacement market, these three huge markets grew out of the functional marketability of the platforms, with the FPD being an important I/O device, but just an I/O device nevertheless. However, the purchase decision for a television is based almost solely on the buyer's impression of the display. I suspect that our vast knowledge of the display/eye interface and image-quality issues will need considerable rewriting when it comes to predicting the performance/price mix in television that will turn shoppers into buyers once reality overtakes the current buying frenzy.
The Business of Displays, which is a new department in Information Display, will be devoted to bridging the gap between technology innovations and the enterprises required for them to be commercially successful, in all phases of the display business. The myriad outside influences affecting the markets for display-based products and their applications, such as the challenge of substantial manufacturing cost reductions and economical performance enhancements for FPD televisions, will be examined by scrutinizing and analyzing key industry sectors such as materials, tools, devices, and packaging techniques, along with distribution and sales channels. Outside influences from other markets, applications, and technologies, both new and old, will also be examined, with an eye on how they could impact the display world. •