The Digital Signage Insider

The Remarkable Economics of Flat-Panel Displays

Published on: 2004-04-06

Recently, a customer engaged WireSpring to develop some prototype technology which bridges the gap between a typical interactive kiosk application and a typical digital signage application (I recently wrote about this type of convergence). WireSpring enters into development contracts like this from time to time to sharpen our creative edge, and to practice application development on top of our FireCast software platform.

What interested me, though, was the customer's request that we deploy the prototype on a large-format LCD display instead of a more traditional plasma. The perceived benefits of LCDs over plasmas have been widely touted by several major industry vendors, and include resistance to image "burn-in," longer product life, brighter output, and lower costs of operation. Of course, the price of a large LCD screen can typically be 2-3 times that of a comparably sized plasma display, so they area often shunned by price-sensitive customers.

I hadn't really thought much about the economics of the LCD situation until coming across this article in Smart Money. The construction of one of these mega-pixel screens consumes a tremendous amount of resources in the form of both materials and manpower, and as the article notes, the only way to get a bigger screen is to make bigger parts (unlike the microprocessor fabrication industry, which can get the same or better performance out of ever-smaller parts).

This irritates me. While many digital signage applications could certainly benefit from the advantages of LCD screens (particularly those signage apps that use a lot of still imagery, which could produce burn-in on plasma displays), their cost often becomes the limiting factor. After all, if a 42" plasma can be had for $2500, and a 40" LCD costs $6,000, doesn't it make sense to either a) run the plasma for 2 years, then throw it away and replace it with a brand new (and probably much cheaper) plasma? Smart Money says we haven't hit the top of the demand curve for LCDs yet, so their price will continue to stay high, even with increased production output. Plasmas seems to have a distinct advantage here, and if the projections are correct, they will continue to enjoy a comfortable lead in the digital signage arms race for some time to come.

Brief update: There is another article over at Forbes with additional information about plasmas vs. LCDs, though much of it is focused on the consumer home theater market.

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