Lower Mobile Phone Demand in Q109

DisplaySearch Forecasts Segment Improvement Due to Smart Phones, Video Capability Demands and China Market

While mobile phone display shipments in developed nations such as the US, Europe and Japan slipped in Q1’09 due to seasonality and the weak economy, this segment is expected to improve through 2009 due to relatively strong demand for smart phones, video capabilities and the growing China mobile phone market. According to the DisplaySearch Q2’09 Quarterly Mobile Phone Shipment and Forecast Report, total mobile phone display shipments fell 11% Q/Q and 19% Y/Y in Q1’09 to 263 million units, but are forecast to increase to 306 million units in Q2’09 and 360 million units in Q3’09.

“Growth in mobile phone display shipments will be driven by demand from major mobile phone manufacturers such as Nokia, Samsung, LG, Sony Ericsson and Motorola, as well as Chinese brands including Huawei, ZTE as well as Tianyu and white box manufacturers,” noted Hiroshi Hayase, DisplaySearch’s Director of Small/Medium Display Research. “In addition, the availability of low cost mobile phones in these regions will also contribute to the anticipated growth for this segment.”

More than 20% of mobile phone displays were shipped to Chinese brands and white box manufacturers, who are mainly in China. White boxes are un-branded mobile phones designed to be similar to popular designs by top-tier brands such as Nokia, Samsung and Apple. Produced in China-based manufacturing facilities, these ‘knock-offs’ are sold at significantly lower price points. The total amount of mobile phone displays shipped for the China market is expected to exceed display shipment amount for Samsung Telecom. As a result, the demand for mobile phone displays will increase.

The number of mobile phone shipments reached 276.1 million in Q1’09. Nokia retained its top position with 31.7% share, up slightly from 31.2% in Q1’09. The #2 and #3 brands were Samsung and LG. Motorola continued a long-term share decline. Emerging China mobile phone brands including Huawei, ZTE and Tianyu increased their share of mobile phone displays purchased by 1.5-2%, increasing their mobile phone rankings.

Table 1: Q1’09 Mobile Phone Brand Market Share

Q1’09 Rank	Set Brand	Q1’09 LCD Purchasing Share
1	Nokia	31.7%
2	Samsung	18.5%
3	LG	7.2%
4	Motorola	5.1%
5	Sony Ericsson	5.0%
6	RIM	3.4%
7	Huawei	2.0%
8	ZTE	2.0%
9	Tianyu	1.5%
10	Apple	1.2%
–	China Local and White Brands	16.2%

Source: DisplaySearch Q2’09 Quarterly Mobile Phone Shipment and Forecast Report

Other key findings from DisplaySearch’s latest mobile phone display research include the following:

• MSTN LCD for mobile phones dropped to 12.9 million in Q1’09 from 22.1 million in Q4’08, primarily due to the adoption of white box commodity models and eroding TFT LCD prices in emerging markets. For example, Nokia’s entry-level 1200 model uses MSTN. Passive matrix LCDs (MSTN, CSTN and STN) are expected to drop from 448 million in 2008 to 369 million in 2009.
• Although total mobile phone display shipments are expected to drop from 2008 to 2009, the growing demand for video capabilities in mobile phones has boosted the outlook for TFT-LCD and OLED displays for this segment, and is expected to increase from 955 million units shipped in 2008, to 1.03 billion units in 2009.
• Nokia increased its purchase of nHD displays (360 × 640) to 4.0 million in Q1’09 from 1.1 million in Q4’08. nHD displays enable digital TV and video on mobile phones.
• Samsung Mobile Display (SMD), which manufactures small/medium LCDs and OLEDs, began production and led in both shipments and revenues for mobile phone FPD shipments–overtaking Sharp in revenues and Wintek in shipments.

Based on detailed supplier surveys, DisplaySearch small/medium display research examines shipment, revenue and pricing data by key metrics including market application, size, resolution, technology and supplier. Available research includes four quarterly reports focusing on different aspects of the market. The comprehensive Quarterly Small/Medium Shipment and Forecast Report provides full market analysis while the Quarterly Small/Medium Pricing Report, Quarterly Mobile Phone Shipment and Forecast Report and Quarterly Small/Medium Value Chain Report focus on ASPs, mobile phone displays, and market share data, respectively.

About DisplaySearch
DisplaySearch, an NPD Group Company, has a core team of 50 employees, located in Europe, North America and Asia, who produce a valued suite of FPD-related market forecasts, technology assessments, surveys, studies and analyses. Visit the DisplaySearch blog to read about how our top analysts are interpreting up-to-the-minute issues that impact the display industry, and join us in this discussion about technology and the flat panel industry. The company also organizes influential events worldwide. Headquartered in Austin, Texas, DisplaySearch has regional operations in Chicago, Houston, Kyoto, London, San Diego, San Jose, Seoul, Shenzhen, Taipei and Tokyo.