By Sanju Khatri, iSuppli [Friday, October 20, 2006]
Despite expected rapid price declines for displays in the next four years, the digital signage and professional display market will grow to US$13 billion by 2010, a 3.6% compound annual growth rate (CAGR) from US$10.9 billion in 2005, iSuppli predicts.
As hardware improves and the technology matures, display manufacturing costs will decline from their presently high levels, leading to steep price declines across the board for flat-panel display (FPD) manufacturers. However, the shipment opportunity in the digital-signage market is substantially higher than the moderate revenue growth forecast. Digital signage and professional display unit shipments will rise at a CAGR of 24.1% between 2005 and 2010.
Following the typical seasonal pattern, the worldwide market for signage and professional displays reached US$2.6 billion in the second quarter of this year, a 5% increase from the first quarter. This is consistent with the digital signage market's predicted revenue CAGR of 3.6% between 2005 and 2010.
Moving indoors
However, revenue growth will not be driven by increased unit shipments alone, as new opportunities have emerged for display manufacturers to sell their products for higher margins in less-crowded markets, iSuppli believes.
These new opportunities are centered in the indoor venue segment, which consists of restaurants, museums, hotels, casinos, movie theaters, auditoriums, trade shows and banks. iSuppli forecasts the indoor-venue application market will garner about US$4 billion in revenue by 2010, up from US$2.9 billion in 2006.
During the second quarter of 2006, the indoor venue segment generated US$659 million in revenue, driven mainly by installations across the hospitality display market. iSuppli believes hospitality will displace the conference room market from the top spot in the indoor venue segment in the third quarter of this year. In preparation for the holiday season in the fourth quarter, there also will be increased installations at lodging, retail and recreation facilities.
