iSuppli Reports Record LCD Shipments in 2009; Sees Innovation Driving Sales This Year (MSFT, AUO, more)

LCD manufacturers may face a challenge in 2010, according to data today from iSuppli. The research firm reported that, despite a recession and a 15.9% decrease in PC shipments in 2009, LCD shipments rose 3.8% from 2008 to 176.5 million units.

iSuppli says that some of the growth was related to the final flicker of the CRT market and cutthroat pricing encouraged consumers to make the switch to a flat panel display. For 2010, they continue, innovation will be a critical factor.

Also, vendors may be trying harder to push into the emerging mobile PC market while retaining their bread-and-butter desktop user segment.

iSuppli forecasts LCD shipments to grow to 211.5 million units by 2013, with a CAGR growth rate of 4.5% from 2008.

Business customers are expected to play an increasing role in 2010 as most businesses are running on bare-bones operations and have retained wads of cash for an extra rainy day (i.e. a double-dip recession).

Other factors influencing growth in the business sector, according to iSuppli, are improved connectivity, job growth, and operating-system shifts. Improved connectivity likens to a mobile PC user that may want to connect to a larger desktop at the office. Job growth alludes to expansion, and the need for more equipment. Operating-system shifts refers to corporations' potential to shift from Microsoft (NASDAQ: MSFT) Vista to the improved Windows 7.

Microsoft announced their intention to cease support of the XP operating system in 2010.

iSuppli sees the move to 16:9-format as making a bigger movement, and vendor's are introducing monitors with slim LED back lights which are touted as environmentally friendly, and better quality. Of course, the LED manufacturers may already be feeling a pinch in 2010, so output for these products may be capped at some point.

One final point is a possible expansion of the all-in-one PC, which houses the majority of a PC behind a touch-screen. The compact nature and ergonomic posibility may make this a bigger than expected segment for LCD shippers.

Companies of note include:

• LG Display (NYSE: LPL);
  
• AU Optronics (NYSE: AUO)' and
  
• Hitachi (NYSE: HIT).

Others not listed include Samsung and Sharp Electronics.

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