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LCD Shortage Threatens Digital Frames

8/06/2007 02:00:00 AM Eastern

New York — Tight supply in 7-inch LCD panels could make the popular 7-inch digital photo frame scarce this holiday season, according to vendors and analysts.

The 7-inch panel size was in sharp demand over the past several years thanks to its use in portable DVD players. As that market constricted last year, manufacturers shifted capacity away from the 7-inch size just as two other categories — digital frames and automotive video — spiked, causing the shortage, said Vinita Jakhanwal, mobile displays principle analyst, iSuppli.

Prices for 7-inch panels were as low as $19, and now they’re at $25, she added.

“We’ve seen the costs go up $5 a unit in the past three and a half months,” said Dean Finnegan, CEO, Pandigital. The higher price however will stem the price erosion in the 7-inch category, he added.

“There is a bad situation with 7-inch panels in particular and small-size panels in general,” said a spokesperson for Smartparts. According to the spokesperson, prices for a 7-inch panel have jumped 35 percent since January and while there is a “similar situation” brewing for 8- and 10-inch panels, “it’s not quite as bad.”

Frames with 10.2- and 14.-1-inch screens also compete for panels with another growing category, notebook computers, said Rey Roque, marketing VP, Westinghouse Digital. The supply shortage has also led to some questionable practices, Roque said. “We’ve seen recycled panels being marketed to retailers as new,” Roque said.

Retailers may be in for an unpleasant surprise if they’ve jumped on second-tier suppliers promising “unlimited” inventory in 7 inches, said the Smartparts spokesperson.

All the vendors interviewed indicated that they had secured adequate supply for the forthcoming holidays and beyond.

According to The NPD Group, 7-inch digital frames accounted for more than half of all digital frame sales through April.

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