Aris Silzars Display Technology Consulting

DISPLAY CONSULTING

Hundreds of CRTs and One Plasma Panel...April 2003

Let's suppose that a large manufacturer of flat panel displays has appointed you to be in charge of their new business development activity. Your assignment is to find one or more new markets of significant size where your company's broad line of FPDs (both LCDs and Plasma panels) can be successfully introduced. Top management has told you that they do not care if this market is one where CRTs are currently dominant or if it is a completely new application of displays -- as long as it is not simply an expansion or extension of existing FPD product markets. Obviously, that eliminates such lucrative growth areas as laptop computers, PDAs, and cell phones.

Haystack Rock

Taking the scientific approach to your challenge, you decide to begin by creating a list of criteria for why someone might choose to use a flat panel display. Then you decide to also consider some less scientific criteria such as recently exemplified by the success that FPD makers have been having in displacing CRTs in the desktop computer monitor market. Even at significantly higher prices and with image quality that is no better than -- and sometimes not as good as -- a CRT, the market appeal of "these great new flat-panel displays" has been surprisingly strong -- an interesting consumer behavior not all that easy to quantify based on purely technical criteria. Clearly, you will somehow have to take into account consumer buying decisions that are made through certain perceptual processes that are not all that easy to uncover, predict, or quantify.

Nevertheless, charge ahead you must -- even with all this doubt and uncertainty creeping in. Where could there be a new target market for your company's FPDs? Where could there be that ideal undiscovered environment where FPDs would be the solution of choice? By all measures, the best historic example is the laptop computer. Without an FPD -- no matter how modest it's performance capabilities -- the laptop computer could not have come into existence. In fact, as you quickly recall, the first laptops had monochrome displays of limited resolution, and contrast ratios so low that they were barely readable. But at the time, this was the only way you could have a computer that you could take with you. As the years passed, and as the demand for these products grew, virtually every FPD performance problem yielded to at least an adequate solution. This of course served to encourage even broader acceptance.

Perhaps it would be too much to expect that you can find another market that has all of these favorable dynamics, so you set your sights on something more modest. Where might there be a new market that contains that ideal set of needs that can best be met by an FPD? After several weeks of frustrating searching, using the typical information sources such as industry market survey reports that have mostly verified what you already knew, you find yourself at breakfast one morning reading the morning paper while having your bowl of cereal and glass of orange juice. An article that catches your eye is describing a University of Michigan survey about why people own Recreational Vehicles -- typically known as RVs.

According to this survey, nearly one in 12 US vehicle-owning households now owns an RV. That turns out to be nearly 7 million households -- a 7.8 percent increase in the past four years and a 42 percent gain over the past 21 years. Now that's a nice size market, and also a growing one. You begin to wonder if these folks use any kind of displays in their RVs -- besides those on the dashboard of course. Apparently, more of these RVs are owned by the "baby boomer" generation (35 to 54 year olds) than any other age group. And most of these families have several children who most likely need to be entertained while traveling. This survey then goes on to state that the approximately 7.2 million RVs on US roads are utilized by approximately 30 million people, including those who may just rent one for a specific vacation trip. With this many potential display-watchers, perhaps you have just found that significant new market that you have been searching for.

As you continue reading, you learn that the purpose behind this article is to promote an upcoming RV show at the Seattle Exhibition Center. Bingo! Two days later you are among the first visitors to buy a seven-dollar admission ticket. Wow! The giant exhibition hall is filled with hundreds of these vehicles. They range in size from the very modest, that are more like camping trailers, up to the largest that are the size of cross-country tour busses. The typical size range could be described as that from a small truck up to a moderate size bus or a very large van -- with a living area, a kitchen/eating area, a bath, and a sleeping area. And yes, there are displays everywhere. The average size RVs each have one television installed near the roof above the driver’s seat. The larger ones have several -- one in the living area and one in the bedroom. The most expensive tour-bus-size one has a total of four. This vehicle has a selling price of over $360,000.

And of all these hundreds of displays at this RV show -- except for one – there are no flat panels. They are all CRTs. But these CRTs are not even the newer ones with flat screens. The uniformly accepted approach by the manufacturers of these "homes-on-the-road" seems to be to use the most inexpensive TVs available. And what about that one exception of a flat panel display? That one was in the $360,000 "grand-daddy" of all RVs. In addition to three conventional CRT-based televisions, there was a 42-inch plasma panel in the living area. And of the three CRT televisions, one was in a sliding drawer underneath and behind the front wheel-well where is could be accessed from outside this vehicle for evening watching while "sitting around the campfire." Now, that's really taking the comforts-of-home with you on the road!

In spite of the demands for careful space utilization in these "homes-on-the-road," not one LCD could be found at this show. Therefore, doesn't it make sense that this is one incredibly great market opportunity for FPD manufacturers? Well, maybe YES and maybe NO. From the scientific market analysis standpoint, it should be a resounding YES. The space and weight constraints make this an ideal environment for flat panel displays. Furthermore, the RV is a discretionary purchase and entertainment value is one of the major reasons for its acquisition. Attractive displays should be what the manufacturers would want to offer to enhance the image of their products. Therefore, this must be that great new FPD opportunity that you should propose to your company. Are you the first one to have discovered it?

Well, here comes that maybe NO part. There is one unexpected peculiarity that you noted as you toured the show floor that is now beginning to give you some concern. There was a certain consistent design and construction "style" that seemed to pervade the RVs from all manufacturers—a certain sameness. All the furniture and decor in these vehicles had an almost identical look that seemed to be some adaptation of a traditional U.S. western motif but mostly constituted from artificial materials—perhaps a "plastic-colonial." Within this environment, the older-style spherical-faced-CRT televisions seemed to fit right in. The interior space utilization and layout of the various RVs was also nearly identical. Why is there so much uniformity in appearance among the products from all these different manufacturers? To an "outsider" like you, this was most puzzling and definitely merits more study, you decide.

With this narrow and inflexible decorating style, it may be quite a few years before we begin to see significant flat-panel utilization in this seven million plus RV market. Given that many of these RVs had two televisions, the total market opportunity is for over 10 million displays. But for the next few years, they many continue to be CRTs. Exactly when the obvious benefits of size and weight of FPDs will become important to the RV manufacturers and to their customers is a question that does not have an easy answer. For right now at least, well over 99% of the RV users seem to be quite content with the $200 TVs that the manufacturers are installing in their $50,000 to $300,000 vehicles.

Is there an RV with an FPD or CRT in your future? Are you dedicated to life on the road? As always, I am interested in hearing your thoughts on this topic or others. You may reach me by e-mail at Email, by telephone at 425-557-8850, or by FAX at 425-557-8983. Happy traveling and happy reading.