2. Disclosure—
Neither BizWitz nor myself invest in technology companies
or recommend their securities.
BizWitz and its analysts have provided and seek to provide
confidential assessments of business value, technology value,
strategic threats and opportunities.
Project valuation and due diligence
Cross-border ventures or acquisitions
Public offerings (IPO) or syndicated loans
Debt restructure or company reorganization
Competitive assessment for regulators (government agencies)
03 Feb 10 DisplaySpace 2015 2
db@bizwitz.com http://www.bizwItz.com
3. Scenarios—
Stories we tell ourselves about the future
Companies seeking capital may tell one kind of story.
Companies providing capital may prefer a different story.
“If you don’t test your strategy, your competitor will.”
Five stories about the future you should consider…
LCD Legacy — display prices in 2015 will be 71% less
Blurry Edges — market segments will converge
No Goods — hardware value will depend on services
Bottom Down — growth will be greatest at the bottom
Brand News — OEM/ODM will become brands in your market
“So, what’s my budget?”
03 Feb 10 DisplaySpace 2015 3
4. LCD Legacy—
New AMLCD makers use old technology
03 Feb 10 DisplaySpace 2015 4
Transfer of AMLCD know-
how to China perpetuates
the historical rate of price
development.
Areal price declines of 19%
a year continue. Per unit
prices remain misleading .
By 2015, a typical panel
may sell for 29% of what it
did in 2009.
What does that imply for
your cost target?
How might that affect your
stakeholders?
Large AMLCD Price Trends
Source: BizWitz analysis of DisplaySearch data
$0
$100
$200
$300
$400
2001 2002 2003 2004 2005 2006 2007 2008 2009
Price/unit –8%
Price/ft² –19%
5. Blurry Edges—
Market segments converge; niches disappear
03 Feb 10 DisplaySpace 2015 5
Distinct market segments
we see today blur together.
Convergence continues.
Single purpose products
such as eBooks fade away
much like PDA did.
What if smart phone chips
make all devices alike?
What if PC tablets and
netbooks morph into large
hand sets?
How will your products be
differentiated?
Millions of Square Meters of Handheld Display
Source: BizWitz analysis of DisplaySearch data
0.0
0.5
1.0
1.5
2.0
2.5
2001 2002 2003 2004 2005 2006 2007 2008 2009
PDA Area MobilePhone Area
6. No Goods—
Great hardware isn’t good enough anymore
03 Feb 10 DisplaySpace 2015 6
Services affect consumer
experience as much as
electronics do, already.
Cloud computing will
make hardware goods
differentiation more
difficult, which will
accelerate the shift from
goods to commodities.
What services will create
value for your goods?
Who will subsidize your
hardware with services or
with subscription sales?
Best Buy Sales Contributions
Source: BizWitz analysis BBY disclosures for quarters ending in November
41%
34%
6%
8%
0%
10%
20%
30%
40%
50%
Q3'FY08 Q3'FY10
Consumer Electronics Services
7. iPhone LCD Cost: 9% Subsidized, 5% Unlocked
iPad LCD Cost: 8% Unlocked
03 Feb 10 DisplaySpace 2015 7
IC
$76
LCD
$25
Electro-
mech
$20
Camera
$11
ProCap
$11
Battery
$5
Other
$26
IC
$66
LCD
$61
Electro-
mech
$25
Camera
$14
ProCap
$39
Battery
$15
Other
$66
Source: BizWiz analysis, iSupply via the Economist Source: BizWiz analysis, BroadPoint AmTech via ComputerWorld
Smartphone BOM: $173 iPad BOM: $287
8. Bottom Down—
Poor countries provide poor profit potential
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Races for market share
will take brands to poor
markets and force cost
reductions.
More activities will be
outsourced to ODM/EMS
with global reach.
The importance of trade
barriers will decline.
Who will be your direct
customer?
How will demand in rich
countries support your
product plan?
Millions of LCD TV Sets
BizWitz analysis
0%
10%
20%
30%
40%
0
50
100
150
200
2007 2008 2009 2010e
Global AP x-Japan AP Share
9. Brand News—
Offshore assemblers to onshore competitors
03 Feb 10 DisplaySpace 2015 9
Today’s supplier will
become tomorrow’s
competitor.
Regional brands will
become global brands. If
you can’t beat’em, join’em:
joint ventures might
reduce risk of IP loss.
How will this affect your
supply chain?
Where will discounters
change the ground rules?
What will happen to your
value proposition?
From Assemblers to Competitors
BizWitz analysis
10. Closing Thoughts–
“So, what’s my budget?”
$50B more may be invested in AMLCD by 2015.
Aim at where the cost-price will be, not at where it was.
Enable distinct, recognizable service-based value propositions .
R2R processing implies demand for lots of surface area.
Much of product cost is unit driven, however.
Sheet-fed plastic may be a viable alternative.
Less dependency, more flexibility
More cost effective in moderate volumes
Compare past stories to histories and test your assumptions.
03 Feb 10 DisplaySpace 2015 10