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In Depth: The recession - who is hurting worst?

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Demand for outdoor LED displays has been hit far harder by the economic downturn than the market for indoor digital signage, according to new research.

In Depth: The recession - who is hurting worst?IMS Research says that the overall market for digital-signage technology continues to grow, albeit at a slower pace than before the recession. “LED arrays for outdoor advertising have faced the most difficult environment, while flat-screen displays for emerging markets such as the medical and education sectors have been the least affected” it says. However, the outdoor LED market – where display prices are measured in the tens of thousands of dollars, rather than the hundreds typical of smaller indoor screens – should soon be pulling its weight again.

Over the five-year period from 2008 to 2013, “LED arrays [will] account for the most display revenues but LCD displays will account for the most unit shipments”, according to the report, entitled World Market for Digital Signage. The major markets for outdoor displays are sports stadia and on-street, said IMS analyst Jamie Fox, while the buyers of indoor digital-signage screens are predominantly in the retail, transportation, leisure and hospitality sectors.

The report also suggested that despite the publicity they receive, innovative digital-signage technologies might remain relatively rare. “Intelligent technologies, such as video content analysis and motion interactive signage, are already in use, but only in low volume. Their use is forecast to increase steadily but remain a small part of the digital-signage market for the next few years,” it said.

Indeed, for suppliers the big issues are not technological, the IMS report observed. Although they do need to offer “products and services that help viewers to make decisions”, the other major challenges they face are more concerned with the structure of the market – “how to tackle projects of widely differing size, how to manage the complex supply chain, how to develop purchaser understanding”.

The top suppliers of displays – other than LED arrays – are Samsung, NEC and LG, said the IMS report, while among software suppliers it identified Scala and Stratacache as significant names. “The leading supplier of media players for digital signage was estimated to be AOpen,” the report added, but warned: “This market is very fragmented”.

The worldwide digital-signage technology market was worth $4bn last year, the report concluded. Software is predicted to be the fastest-growing category in revenue terms, at 23.5 percent annually until 2013, followed by media players and set-top boxes at 21.7 percent, with the market for displays moving ahead more sedately at 15.1 percent a year.