Smartphone Display Manufacturers Facing Pressure to Further Reduce Prices in 2015
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Smartphone Display Manufacturers Facing Pressure to Further Reduce Prices in 2015
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  • 승인 2015.02.03 17:48
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Even as smartphone panel resolution continues to rise, and as display sizes continue to grow, panel manufacturers are facing pressure to reduce prices. 
According to the Quarterly Mobile Phone Display Shipment and Forecast Report from IHS (NYSE: IHS), the leading global source of critical information and insight, total mobile phone display shipments are estimated to reach a new record high of 2 billion units in 2014. Average smartphone display prices declined nearly 14 percent year-over-year(YoY) from $22 per module in 2013 to $19 in 2014. IHS Technology forecasts another double-digit fall for smartphone display prices in 2015, resulting in a blended ASP of about $17. 

“While smartphone display resolution and sizes reach new milestones, panel makers are still being challenged to reduce display module prices,” said Terry Yu, analyst for small and medium displays and display technologies for IHS Technology, formerly with DisplaySearch. “Shipment and manufacturing of panels using various display technologies like a-Si, Oxide, LTPS and AMOLED continues to rise, while pricing continues to decline. The sharpest smartphone average panel price declines occurred in 2014, and this trend of double-digit declines is expected to continue in 2015.”

Panel makers(like Tianma, BOE, InfoVision, and Japan Display Inc. (JDI) via their subsidiary TDI) are all promoting their products to Chinese smartphone makers with aggressive pricing strategies. 

Chinese smartphone makers are agile enough to use economies of scale and their strong market position to better negotiate display prices. On the supply side, LTPS LCD manufacturing capacity is increasing in all regions. 

Taiwanese panel suppliers are aggressively shifting production of smartphone panels to Gen 5 fabs, as well. These factors are adding pressure to reduce prices.
According to the Monthly Smartphone and Tablet PC FPD Pricing Report, 5-inch LTPS TFT LCD FHD (1920x1080) smartphone panels with IPS/FFS LCD technology, experienced a decline of 30 percent YoY, from $30 in December 2013 to $21 in December 2014. 

“Smartphone ASPs will continue to drop substantially in the first quarter of 2015, which is a traditionally slow season for smartphone display panel purchasing,” Yu said.

The 5-inch 720 HD (1280x720 pixels) module is the most popular smartphone display size in China, helping the format to gain over 40 percent market share in the market global 5.x-inch space during 2014. 

“Most brands are promoting low-priced, high-specification models with these displays, especially on e-commerce platforms,” Yu said. “China is the major battlefield for 5-inch smartphone displays. Demand for these displays is very strong, but they face strong competitive price pressure in the set market.” 

▲ Smartphone ASP Quarterly Reduction

In China's open market, prices for 5-inch 720HD panels declined significantly to just under $12 in December 2014. Business agreements aside, market pricing for low-specification 5.x-inch panels is expected to decline to about $11 by March 2015. Prices of some low-grade specifications panels (lower brightness requirement) could decline to below $10 by the same period.

Due to the booming demand for LTPS LCD in China, panel makers are expected to continue expanding their LTPS manufacturing capacities & shipment. “By the end of 2016, new fab investments by AUO, BOE, China Star, Tianma, and Foxconn will result in at least five Gen 6 LTPS fabs running in China and Taiwan, which may induce more pressure to reduce smartphone ASPs in the future,” Yu said.
Another price-reduction pressure in the smartphone display market comes from aggressive smartphone end-market pricing by Chinese smartphone brands. 
According to the Monthly Smartphone and Tablet PC FPD Pricing Report, after the introduction of the iPhone 6 Plus with its 5.5-inch FHD display, more Android-based premium models are expected to come equipped with wide-quad high-definition (WQHD) (2560x1440) displays driving FHD models down into the mid-range segment with lower pricing. 

On December 23, 2014, Meizu, a rising brand in China, introduced its new ‘No Blue Note’ smartphone, which was equipped with a 5.5-inch FHD display from Taiwan, which sells for just CNY 999($161). This model and pricing has been cited by many in the industry as a warning for upcoming price competition in 2015. 
“Facing ASP pressures, display cost reduction will be the top priority for the panel makers, especially through more effective production yield rate management and improvements in component performance,” Yu said. 

The Quarterly Mobile Phone Display Shipment and Forecast Report covers the entire range of mobile phone displays and devices, including smartphones, shipped worldwide and regionally. 

The Monthly Smartphone and Tablet PC FPD Pricing Report provides subscribers with reliable market average prices for mainstream smartphones and tablet PC panels.



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