Digital Frame Supply Fears Ease

-- TWICE, 6/9/2008 8:02:00 AM

Port Washington, N.Y. — Digital frame sales slowed during the run-up to Mother’s Day, easing holiday supply concerns.

The category grew 44 percent in units and 33 percent in dollars in the week leading up to Mother’s Day, according to The NPD Group.

That figure disappointed expectations, said Rey Roque, marketing VP, Westinghouse Digital.

“I think we’re seeing the consequence of a slowing economy,” Roque said. “We’re dialing down our expectations.”

The poorer-than-expected performance has eased a tight market for frame-sized LCD panels, said Vinita Jakhanwal, mobile displays principle analyst, iSuppli.

LCD manufacturers have expanded capacity to meet the growing demand for digital photo-frames and low-cost notebooks that use similar-sized panels, she said.

“The price of digital-photo-frame panels increased almost 50 percent from the fourth quarter 2007 to the first quarter of this year,” Jakhanwal said. “Prices have started to fall again due to capacity expansion and softened demand,” she added, with price declines impacting 7-inch analog panels the most.

There are fewer supply concerns surrounding the nascent market for smaller digital frames — those found in key chains or other novelty items, Jakhanwal observed.

“Most of the displays used in the small frames are not using TFT LCDs but CSTN [color super-twist nematic] LCDs that are less sophisticated technology in terms of color reproduction and pixel format,” she said.

“Capacity is more easily available for CSTN LCDs as it comes from older fabs, mostly in China that can make cheap displays. There is not much demand for CSTN LCD left in the market anymore and suppliers are willing to use up CSTN LCD capacity rather than letting the fab sit idle,” Jakhanwal said.