Touch panel makers face falling revenue thanks to faltering touchscreen PC sales
Despite rising overall sales, manufacturers of touchscreen components are set to feel the squeeze in their bottom line as more players enter the market and shipments shift toward lower-margin parts for tablets and smartphones.
"Increased competition among the growing number of touch-panel makers is causing overall ASP and revenue declines, even as shipment volumes continue their upward trajectory," NPD DisplaySearch research director Calvin Hsieh said. The revelation came as part of NPD's most recent quarterly analysis of the touch panel industry.
According to the report, industry revenues are expected to decline by 1 percent in 2014 despite a 15 percent increase in shipments. That juxtaposition, Hsieh believes, will spark a wave of consolidation in the industry.
"Some touch module makers will not survive the coming shakeout, but others are already preparing for new opportunities, including increasing production of new indium tin oxide (ITO) replacement materials," he said.
Much of the problem is though to center around a surplus of materials originally destined for touchscreen PC production. Demand for those products -- which former Apple CEO Steve Jobs famously called "ergonomically terrible" -- has been weaker than expected.
"We've done tons of user testing on this, and it turns out it doesn't work," Jobs said of touchscreen-equipped laptops at an event in 2010. "Touch surfaces don't want to be vertical."
Software giant Microsoft has been a major proponent of such devices in recent years, with its flagship Windows 8 operating system controversially designed to cater to that market. The strategy has largely failed, however, as consumers instead opt for more traditional components and Windows 8 adoption remains low.
"Unless applications for 10-inch-and-larger screens can grow faster to create a new and growing market, it is inevitable that touch module makers will continue to compete fiercely, which will lower ASPs and revenues in the smartphone and tablet PC markets," Hsieh added. "Windows 8 has not convinced end users to pay the premium for touch screen use."
"Increased competition among the growing number of touch-panel makers is causing overall ASP and revenue declines, even as shipment volumes continue their upward trajectory," NPD DisplaySearch research director Calvin Hsieh said. The revelation came as part of NPD's most recent quarterly analysis of the touch panel industry.
According to the report, industry revenues are expected to decline by 1 percent in 2014 despite a 15 percent increase in shipments. That juxtaposition, Hsieh believes, will spark a wave of consolidation in the industry.
"Some touch module makers will not survive the coming shakeout, but others are already preparing for new opportunities, including increasing production of new indium tin oxide (ITO) replacement materials," he said.
Just 15% of laptops are expected to ship with touchscreens in 2014, NPD says
Much of the problem is though to center around a surplus of materials originally destined for touchscreen PC production. Demand for those products -- which former Apple CEO Steve Jobs famously called "ergonomically terrible" -- has been weaker than expected.
"We've done tons of user testing on this, and it turns out it doesn't work," Jobs said of touchscreen-equipped laptops at an event in 2010. "Touch surfaces don't want to be vertical."
Software giant Microsoft has been a major proponent of such devices in recent years, with its flagship Windows 8 operating system controversially designed to cater to that market. The strategy has largely failed, however, as consumers instead opt for more traditional components and Windows 8 adoption remains low.
"Unless applications for 10-inch-and-larger screens can grow faster to create a new and growing market, it is inevitable that touch module makers will continue to compete fiercely, which will lower ASPs and revenues in the smartphone and tablet PC markets," Hsieh added. "Windows 8 has not convinced end users to pay the premium for touch screen use."
Comments
Gee, no one wants to touch their laptops. How strange…
Hm...touchscreen PC sales are down. Why am I not surprised?
Where are those who think Apple should have made a touchscreen iMac???
When I am on the PC, I want to sit back and use a mouse. Not lean forward and finger print the hell out of my screen.
This is what everyone ends up doing. I'd like someone here to honestly say they use a touchscreen on a daily basis and end up using the touch controls all day long. Nobody will reach across the screen all day long. Thats just plain silly and there's no real benefit to using your finger, vs pointing and clicking on something.
Where are those who think Apple should have made a touchscreen iMac???
Still here. I just know better than to want a vertical touchscreen iMac.
I still think Apple should make a touch screen iMac. With the two patents they have for sliding stands for an iMac, or equivalent, it would work just fine. I'd love a monitor that could slide from vertical to just slightly slanted. That would be the best of two worlds. And if it were able to enable high quality pressure sensitivity as well, it would be perfect for Photoshop, and other drawing applications, such as Illustrator, and my CAD software.
The truth is that I'm so used to my iPad, that sometimes when I'm standing next to someone, and have to show them something, I teach out to the screen before I realize that it's not touch. The option would be great, as long as it's not the only thing available.
I'd be willing to pay an extra $500, or so, for that.
Yes, for a vertical screen. But that really narrow thinking. It doesn't have to remain vertical. There are many times when touch is vastly better than a mouse and keyboard. But then, you really need to use some serious software that enables this for a while to appreciate it, so I understand why some don't get it.
Surprise surprise! (Gomer Pyle voice)
ALL laptops screens will be touch enabled at some point. Those who do not think so will be proven as wrong as when they quote Steve Jobs about tablet size and phone size. Younger generations have come to expect it. I have come to expect it.
Propped up by its flashy kickstand.
Exactly what I thought.
This would explain why the Surface is outselling... Nothing.
Unless the OS is built for touch, touch won't occur on a laptop.
Just because these companies sold some of these touch screens PC they think there is a markets. just there are few people who bough them for reason that, they were a geek, it appeal to their geek factor, they were talked into it because they did not have a mind of their own, or they bought it without knowing what they bought. So the entire industries jumps on it since the think their is a market for the product. Only to find out when the rest of the population actually saw, played with, or heard the complaints and decided to for go the purchase. Thus the reason you have surplus of touch screen no one wants.
The problem there are so many component companies who are interested in making a sale and never questions the wisdom of the product they are making and whether they should make the investments. Ask Hitachi what happen to there $100M's of investment they made into 1.8" HDD for portable MP3 markets thinking that it was going to boom only to have Apple switch most everything to Flash.
Yes, for a vertical screen. But that really narrow thinking. It doesn't have to remain vertical. There are many times when touch is vastly better than a mouse and keyboard. But then, you really need to use some serious software that enables this for a while to appreciate it, so I understand why some don't get it.
I can not think of too many situations where I would agree with you. Now, everyone has there preferences but when I get in front of my computer, I like the mouse. It is easier and more accurate than a finger (IMO) given that a pointer is much smaller than my finger.
I do a lot of 3D drawings and can't imagine reaching to the screen every second. I can see some use for simple games. Maybe a tiny bit of use of touching the save button rather than clicking it with the mouse but if I were that worried about time, I would just learn the keyboard short cut to save.
While everyone will have their opinion and preference, my understanding is that currently, the touch screen a gimick and will stay that way for quite some time.
Children like the touchscreen because it allows a more interactive game. I just don't see use for it in a productive setting. Having to lean up to a screen to control the computer, particularly with multiple monitors, it would be like having to workout while using the computer but maybe America needs that.
Given that some still claim that they like touch screens. Personally I seem them as an anti improvement to the user experience with the current desktop operating systems an touch screens. They are so bad in fact that I see it as a very difficult thing for Apple to deliver. I can see Apple holding out for a workable 3D gesture based system. From my perspective anything that requires direct user contact with the screen is a niche solution.
Actually there are lots of disadvantages. Of course there are always the niche uses that can benefit but I don't see Apple going after this market and they certainly wouldn't do so with the current Mac UI. They problem here is if a feature only works well for a few users those that can't leverage a feature willed up unhappy with their purchase seeing the feature as broken. Frankly if you look at the Microsoft world this is the problem many see with Windows and touch - it is seen as broken or useless by most users.
Hm...touchscreen PC sales are down. Why am I not surprised?
Where are those who think Apple should have made a touchscreen iMac???
Also known as the "toaster+frig" combo here
The problem here is what good would such a Mac be to the majority of users? It is a given that niche users can leverage a screen laid out horizontally, in fact for some industries it could very well be a huge improvement. However if you look at the overall Mac landscape most users would find that the feature is worthless.
Now if Apple wanted to make a modern draftsman type table / computer for a niche market I'd say go for it. Just don't expect it to replace normal Mac usage nor see a huge number of users jumping on board. Honestly though I don't think the technology is there yet as you would need a retina quality screen 36" wide and ideally even bigger. It is an interesting concept but might also be seen as a regression as many engineers, designers and such saw the move away from the draftsman table as a huge step forward. Creatives might like the machine though.
When I am on the PC, I want to sit back and use a mouse. Not lean forward and finger print the hell out of my screen.
Very good point! With bigger screen, your eyes want to be further from the screen to be comfortable.
Your understanding is incorrect. It's true that there will always be people who can't get newer things. After all, when the mouse and pull down me he's first came out, and everyone was using two and three key commands to do everything, it was said that a mouse and drop down me yes were fine for newbees, but for serious work, it wasn't any good because you had to remove your hand from the keyboard.
So we're seeing the same thing here now. You seem to be a perfect example of someone who can't change their habits. Good for children, you say, and there's is truth in that. But by you relegating it to children, you are unsuccessfully attempting to denigrate it. Obviously, you haven't use touch very much.