by Kathleen Martin
What was once just a vision of the future, touchscreens are now all around us. Smartphones and tablets have become more modern, aesthetically pleasing and easier to use because of touchscreens. If you don’t already own a touchscreen operated device, chances are you have used one or know someone that has one. In this article, I will discuss how the advancement of touchscreen technology and corresponding global market growth could impact Nokia (NOK), Apple (AAPL), Samsung (SSNLF), 3M (MMM) and Sollensys (SOLS).
Behind The Popularity
The increase in popularity of touchscreen panels is due to its interactive human interface. Touchscreens have created a revolution in user interaction. They simplify communication with our devices, and create intimate engagement for us. Their adaptability is also a big reason behind their popularity. Touchscreens are currently used in smartphones and tablets of all shapes and sizes. But what about vending machines, refrigerators, washers, dryers, projector screens and cameras? We are seeing only the very beginning of touchscreen technology.
There are many advantages to using touchscreens over keypads, including space and mobility. If you have a desktop or a laptop, most will require a mouse and keyboard in order for it to be fully functional. Touchscreen technology was designed to be easier to use and easier to transport.
Some other advantages to virtual keyboards include:
Durability – texting and emailingfrom mobile devices means that a touchscreen will last longer than an external keyboards, have less wear and tear and less chances of malfunction.
Speed – touchscreens allow mobile devices to work faster when opening apps, closing or downloading information and make texting and emailing faster.
Comfort – touchscreens are more comfortable, resulting in less strain on the user.
Language - touchscreens are universal.
The touchscreen market is experiencing rapid growth along with the expansion of the global mobile phone market. IDTechEx forecasted revenue from the touchscreen market to be $14 billion in 2012, and predicts that this will triple in the next decade.
Digitimes is a highly regarded information source for readers looking to gain knowledge about the supply side of the semiconductor, electronics, computer and communications industries. According to Digitimes, global touchscreen shipments are expected to top 1.75 billion in 2013, a 17.2% increase from 2012. 1.28 billion units, or 73% of these shipments are estimated to be for handsets, which would be a 14.2% increase year-on-year. The total number of touchscreens used in tablets is expected to jump 38.2% to 233 million units in 2013. Touchscreens shipments for PCs are expected to reach 26.33 million in 2013, an increase of 251.3% from 2012. Analysts expect total global touchscreen shipments will jump 17.2% to 1.75 billion in 2013.
Nokia, one of the largest users of touchscreen technology, is expected to use more capacitive touchscreen technology in its handsets going forward. This means that shipments of touchscreen panels for handsets and resistive touchscreen shipments will likely decrease this year.
DisplaySearch, a provider of reliable information, highly insightful analysis, and industry events in the display supply chain and display-related industries released its 2010 Touch Panel Market Analysis. According to the analysis, total touchscreen module revenue is expected to grow from $4.3 billion in 2009 to nearly $14 billion by 2016.
In addition, Jennifer Colegrove, Director of Display Technologies at DisplaySearch, said:
Touch screen penetration is rapidly increasing in portable devices like mobile phones, media players and navigation units. Over the next several years, touch screens will undergo strong growth in large-size applications such as all-in-one PCs, mini-note/slate PCs, education/training, and kiosks for point of information and self-check in. The touch screen industry is already a multi-billion dollar industry, and still has great growth momentum. This is what makes it so attractive.
Touch Technologies: Resistive & Capacitive
Resistive touch is currently the leading technology in terms of units shipped, with 90 companies currently engaged in manufacturing. However, projected capacitive technology has given rise to a number of new players, with 56 companies currently manufacturing. These two technologies combined made up roughly 98% of the total touchscreen market share in 2010. These two technologies are expected to account for 82% of unit shipments in 2016.
DisplaySearch projects that capacitive shipments have seen huge growth and will continue down this path. The popularity of projected capacitive touchscreen technology was brought about by Apple’s iPhone and iPod Touch back in 2007. The iPad and iPhone 4 started using capacitive touch technology in 2010. DisplaySearch forecasts that projected capacitive touch will soon overtake resistive touch technology in revenue to become the leading touch technology.
DisplaySearch predicts that the penetration rate of touch in mobile phones will jump from 25.6% in 2009 to more than 50% in 2016.
The driving factors behind market growth are the strong demand for sensors in the consumer electronics market and reduction in sensor size. Apple, Nokia, and Samsung are using capacitive touch sensors for the touchscreens in smartphones as well as for the input devices like buttons, sliders, keypads, and touchpads.
Nokia unveiled two new models in its Asha Touch family this past summer which it claimed as its most affordable capacitive touchscreen devices. The Asha 308 and 309 are 2G-enabled devices. They feature a 3.0-inch Wide QVGA capacitive display, along with multiple home screens, a stereo radio, loud speakers and up to 32GB microSD card support.
Going forward, Nokia stands to benefit immensely from global touchscreen market growth, especially in China. Nokia’s venture capital arm, Nokia Growth Partners (NGP), which invests in mobile-related ventures in the U.S., Europe and Asia, has launched its third fund. Nokia has backed this fund with a $250 million long-term commitment. The venture capital firm is looking to expand its presence in China. Nokia Growth Partners described China as an “important market for Nokia.”
Nokia Growth Partners has invested in companies like Morpho, Swype, SponsorPay and rocketfuel in the past. John Gardner, managing partner of Nokia Growth Partners said, “Nokia Growth Partners is delighted with Nokia’s continuing commitment, which recognizes strong financial performance since our formation in 2005. We are excited about our existing strong portfolio of companies and their potential impact globally.”
According to recent rumors, Apple is said to be adopting new touch panels with “Touch on Display” technology for the upcoming iPhone 6. This new technology is aimed at recognition problems, including diagonal screen swiping. Apple’s iPhone, the most popular phone in the world in recent years, uses a capacitive touchscreen which helps give the phone its ‘light touch’ interface. Capacitive screens do not require much contact to work, and a light swipe is all that is needed, as opposed to a full finger drag. Conversely, most resistive touchscreen phones normally will not react at all to a light swipe. Recent resistive touchscreen phones have increased the sensitivity of their displays. While this has helped make the two technologies more similar, resistive touchscreens are still much different.
Apple’s opportunity in China is enormous. With over 1 billion wireless subscribers and a huge opportunity in 3G adoption, Apple has a lot to gain. China Mobile (CHL), the world’s largest carrier, has yet to sell the iPhone. With 700 million subscribers, the opportunity for Apple is enormous. While China Mobile has 82.4 million 3G subscribers, 3G adoption is rocketing. 3G subscribers grew 88% year-over-year in November 2012, to 222 million.
Samsung has used touch sensitivity to develop optical touch technology and interactive whiteboards. This has improved touch reliability and responsive touch, specifically to the edges and corners of touchscreens. This technology enables screens to be clearer and brighter.
Samsung unveiled two new monitors at the Consumer Electronics Show in January 2013. The first is a touchscreen for use with Windows 8, and the other can be rotated a full 90 degrees. These multi touch display monitors are geared toward the optimization of Microsoft’s touch driven Windows 8 operating system.
While China is also a hot growth market for Samsung, an even bigger market opportunity may be brewing for the global brand. Samsung Electronics reported another record quarter in the Gulf region of the Middle East. Samsung recorded a whopping 214% increase year-on-year in mobile-device sales for 2012. This was primarily due to sales of the Galaxy S3, Note 2 and comprehensive lineup of tablets and mobile phones. Samsung recorded a 340% increase in the United Arab Emirates year-on-year within mobile communication devices sales.
Samsung expects demand for tablets and smartphones to increase significantly in 2013. According to Young Woo Jun, Director of Telecommunications for Samsung Gulf Electronics, “2012 has been an outstanding year, globally as well as regionally as customers across the Gulf have responded positively to the launch of our flagship products, the Galaxy SIII and the Galaxy Note II. We expect smartphones and tablets to continue driving the market share in 2013 as we continue to launch new and innovative products that are in-line with our customer’s expectations in the region.” Samsung generated $25.47 billion in revenue from worldwide sales of its mobile devices in the most recent quarter, up 4% from the previous quarter.
3M has over 150 patents related to touch technologies. 3M Touch Systems has significant expertise in this industry and is growing its knowledge every day. 3M manufactures touchscreen accessories that are used in drawing, painting and writing applications in the business realm. 3M also manufactures screen protectors. The company makes privacy filters for the iPad and iPad mini.
3M’s biggest opportunity lies in touchscreen films for use in tables and e-book readers. The company currently supplies components to Apple, Intel (INTC), Nokia and Samsung. 3M estimates that the global market value for touchscreen materials stands at $2 billion. The company is ramping up its production capacity for optically clear adhesives.
3M’s touchscreen films are used to join panels between the liquid crystal display (LCD) on smartphones and tablets, and the swiping surface of the devices. 3M has a huge opportunity for growth, as its electronics unit reported $1 billion in sales for 2012. With compound annual growth of 24% for its electronics markets materials unit, sales could potentially triple by 2016 to $3 billion.
Sollensys caught my eye recently after experiencing higher trading volume. The company completed the acquisition of Sollensys Corporation, a touchscreen panel manufacturer based in South Korea. The company has appointed Frank Woo as CEO. He has extensive experience in the touchscreen panel business.
Sollensys manufactures multi-touch sensor modules for use in the government, education, medical and consumer technology sectors. The company’s goal is to be the leading global provider of small to medium sized capacity touch sensors to the high quality and advanced technology spectrum of the touchscreen market. Through consultation with customers, Sollensys designs, develops and delivers the best possible touch sensor technology for its products. Much like Apple, Sollensys provides a high quality product through excellence in design, advanced process and production techniques, and quality control. Sollensys aims to be a leader in the capacitive touch industry, which is the company’s core technology. The company’s goal is to create value for its customers through the introduction of new technologies, advanced materials and process technology. Sollensys could potentially manufacture its touchscreens for Apple, Research in Motion (RIMM), Samsung, LG and Nokia in the future. With that kind of potential, Sollensys is well positioned to provide touchscreen innovation to the mobile device industry.
There are new and different applications for touchscreen technology emerging every day. Companies engaged in the development, design and manufacture of touchscreens for use in mobile and other applications have a tremendous opportunity to capitalize on the rapid global growth of devices using touchscreen technology, particularly in the area of capacitive touchscreens. All of the companies discussed above have a big opportunity to capitalize on this impressive growth.