By Matthew Rubin and Victoria Tselykh
Futuresource Consulting

B2B flat panel and front projection markets are on divergent trajectories, according to a series of new reports from Futuresource Consulting. While global flat panel market volumes increased by 3.1% year-on-year in Q3 2021, front projection fell by 13.2%. Yet market value figures tell the reverse story, with flat panel down 9% and front projection achieving a slight uptick at 0.1%.

Flat Panel Market Overcomes Challenges

“At 1.74 million units, the B2B flat panel market achieved its largest ever quarter in Q3,” says Matthew Rubin, Senior Market Analyst, Futuresource Consulting, “and that’s something worth celebrating.

“What makes this success even sweeter is the assortment of hurdles that have stood in the way. COVID-19 continues to cast its shadow, exploiting weaknesses in the market. Ongoing component shortages are making themselves felt, while escalating shipping costs are punching holes in profits. Yet the market marches on.”

The interactive flat panel market has been hit particularly hard, unable to supply enough displays to satisfy demand, and creating a backlog that Futuresource expects will last through much of 2022.

Smaller vendors have also taken more than their fair share of the impact, while their larger counterparts have escaped relatively unscathed. This has resulted in a spate of product redesigns to suit available componentry, as well as a shifting emphasis towards promoting premium lines, which carry a larger profit margin, at the expense of entry level devices.

China on the Wane, while USA Powers on

“While normally a driver of growth, the Chinese market faltered in Q3,” says Rubin. “This was predominantly caused by a drop in demand for interactive displays, due to already high penetration rates. Meanwhile, the USA picked up the slack, with total volume up nearly 30% year-on-year, driven by a combination of interactive displays and the mainstream market.”

Kiosks offer Future Opportunities

Moving forward, self-service kiosks will present a growing opportunity for flat panels, born from the changing consumer attitudes created by COVID-19. While the public has become comfortable using kiosks in quick-service restaurant environments, the use cases created by social distancing, and even legal requirements for reopening, are pushing kiosk technology to the fore. Watch out for kiosk proliferation across a wide range of verticals.

Front Projection Market Movements

The dedicated home cinema product segment, which declined nearly 17% in Q3, was the primary reason that the worldwide front projection market as a whole took a hit in volumes. However, ultra mobile, mainstream B2B, and B2B short throw also experienced some contraction in volumes, with installation and large venue the only product segment to post growth. This was largely due to prioritisation of higher margin products while the market continues to face chip shortage and stock challenges.

Museums Provide a Boost

“In much the same way as kiosks have risen to the occasion for the flat panel market, the installation and large venue projection segment has written its own pandemic success story for the projection industry,” says Victoria Tselykh, Market Analyst at Futuresource Consulting.

“Cultural institutions across the world have been subject to the longest closures since the Second World War, reliant on government subsidies and donations to stay afloat. Now museums are adopting technology that offers Instagrammable exhibits, immersive and experiential events to compel customers to return.

“The appetite to invest in this new trend has seen over 40 immersive Van Gogh exhibits open in the US alone. The experiences take shape as a series of high brightness projectors work in tandem to produce 360-degree digital animations of famous artwork that audiences can walk within. The combination of physical pieces and projected content give displays a distinctive appeal, with visitors able to interact with artwork in ways that have never before been possible.”

Exploring the Regional High Points

Despite overall volume decline in Q3, there were bright spots on the front projection landscape. Futuresource notes that Eastern Europe, and Middle East and Africa, reported growth of 5.4% and 4.6% accordingly. This highlights how developing regions with tighter budgets in education and corporate spaces continue to present a lucrative opportunity for the projection market, while more mature markets transition to flat panel and LED displays at a quicker pace.

The Future of Flat Panel and Front Projection

Looking forward, Futuresource expects the flat panel market to achieve a year-on-year increase of 22.9% in total for 2021. That’s the largest annual volume ever seen. Volume growth will continue across the forecast period, with a CAGR of 4.1% expected out to 2025. It’s a relatively strong performance considering the maturity of the technology, helped along by significant growth across the interactive space, as well as a positive outlook for digital signage.

Conversely, Futuresource expects the global front projection market to face long-term steady volume decline throughout the forecast period. This is partly due to a rising demand for collaboration functionality, which is generally integrated into flat panel display solutions.