Tablet Boom to Strain Display Industry

iSuppli predicts that tablet makers will place extravagant orders for displays for their devices, buoyed by forecasts that the global tablet market will more than triple in 2011, rising to over 57 million units.

In some cases, this will result in overproduction of screens based on overly optimistic orders. Shortages could also result, as orders could go unfulfilled because display makers have committed their capacity elsewhere.

"Because the tablet market is so new and volumes are unpredictable, display suppliers will be forced to gamble production capacity on the unrealistically high projections of their tablet customers", said Joe Abelson, vice president of displays at IHS. "The industry should expect to see significant inventory shortages and excesses potentially accompanied by heavy discounting and scrapping of unused displays".

The tablet market, ignited by Apple's iPad, is now packed with players. Samsung, Dell, Toshiba, Motorola, Hewlett-Packard, Microsoft, Asus and Research in Motion have all announced tablets or are expected to soon, and a host of off-brand options are also available.

Apple's dominance of the emerging tablet is expected to continue for the near future, but the sheer size of the market leaves plenty of room for the competition, which is eager to capitalize on expected rising consumer interest. A recent survey found that while only 3 percent of participants had purchased a tablet last year, 8 percent planned to buy one in 2011.

The tablet category languished for years, hampered by hardware and software limitations, until Apple found the winning balance with its break-through iPad in 2010. Millions of consumers now use the devices to browse the Web, watch videos, and read books, newspapers and magazines.

The number of tablet users is expected to grow, but that growth may strain the computer display industry in unpredictable ways.