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Follow UsMENLO PARK, USA: LED lamp sales can reach $1B for large-area LED backlights (notebook, monitor and TV) for LCD displays by 2011 according to a newly-released study by the McLaughlin Consulting Group.
The key to the "fast track" is the value consumers place on the display features LEDs deliver. Leveraging the consumer value means answering these key questions:
a) What will consumers pay for desirable display features such as wider color gamut and higher dynamic range/contrast?
b) How do consumers value bundles of features?
c) How can feature bundles be priced to enable rapid growth?
MCG has quantified the price consumers will pay for improved display features. The methodology enables effective market segmentation, targeting the best markets first and reveals the right price points and timing to generate rapid consumer adoption. The report shows when and how to penetrate the target markets to assure profitable rapid growth.
The consumer value is balanced against detailed cost and performance modeling. MCG's proprietary cost models were built up using light management components previously developed for the Brightness Enhancement Films Report and the Projection Cost Model. The cost of optical films is balanced with the costs of backlight architectures including edge-lit white LEDs, edge-lit and area RGB LEDs, CCFLs and wide color gamut CCFLs.
Although the fast-track forecast assumes the ideal scenario for marketing and sales rollout, it also incorporates the most competitive environment. The forecast scenario assumes that LCDs with wide color gamut CCFLs will be sold at the lowest possible profitable pricing (brands don't position WCG CCFLs as a premium product). In this conservative scenario of wide-gamut CCFL competition, MCG forecasts:
a) area RGB LEDs will achieve greater than 50 percent market share in 46-inch LCD TVs in 2012
b) edge-lit RGB LEDs will achieve greater than 50% market share in dual-use (data and video) portable notebooks in 2011
c) white edge-lit LEDs will be achieve greater than 50% market share in portable data-only use notebooks in 2012
A key finding of the report is that consumers are very price-sensitive to the features that LEDs deliver in displays. If the display industry attempts to introduce LCDs with LED backlights at a price premium even slightly above MCG's recommendations, mass adoption of LEDs could be delayed by up to five years.
The price premium for each market segment must not only cover the higher costs for LEDs. It must also motivate both the supply chain (through higher margins) and consumers (through a better value proposition than CCFLs). And the better the value proposition to consumers compared to CCFLs, the faster consumers will switch to TVs, monitors and notebooks that incorporate LEDs.
The time-line for LEDs to replace CCFLs is of critical importance not only to the LED industry, but also to LCD panel and end-product makers. The LED industry wants a fast transition to maximize its return on investment to date in improving LED performance. The time line is also important for LCD panel and LCD TV, monitor and notebook makers since the companies that can successfully lead the transition to LEDs will gain market share and improved competitiveness.
The model includes both cost and consumer value and allows companies that incorporate LEDs into LCDs to do detailed cost, performance and pricing tradeoffs to enable the wisest investment of R&D and marketing funds to ensure the highest return as quickly as possible.