Recent years, the LED display industry is in the event of significant changes. The competition situation presents turning from incremental competition to stock competition. The so-called incremental refers to the market demand is rapidly increasing, the competition mainly exists in the increasing market demand, the enterprise growth rate is the greatest competitiveness. The so-called stock refers to that the market demand is no longer increasing, even is shrinking, the competition exists in limited market demand. One enterprise shares more, the other would share less.
Why to say the competition is turning from incremental competition to stock competition? The past five years is the golden years of LED display industry. However, accompanied with the industry development, we obviously feel some significant changes: First, the rental market demand is less than last year's 1/3. Second, the completion in ultra high definition market is much fierce. Ultra high definition display is a new market region. Overall, the market demand will keep increasing, but the price will keep falling. The final result is the shipment is growing, but the whole industry sales volume will be difficult to increase. The profit margin is less and less. All LED display enterprises will face a crisis of survival.
1. Competition Environment
We can use a metaphor to summarize the turning from incremental competition to stock competition. In incremental competition time, wolves eat sheep, wolves rarely eat each other. In stock completion time, wolves fight between life and death. The statistics show Chinese market demand is around 28 billion. There are over 400 medium and large suppliers in industry. But the top six suppliers' sales volume is less than 10% market share (Chinese market), meanwhile the shipment is less than 8%. Along with the rapidly competition, the bigger enterprise will growth to be bigger, the others will exit the market. We can foresee that 90% LED display enterprises will exit the market after 3 to 5 years.
2. Fully Competition Situation
In the competition age, only the person who is smooth and slick can win.
(1) Transparency of Information
In the Mobile Internet age, no a person can hide secrets, not mention to an enterprise. Each company's family property is exposed in the sun. This new environment is unprecedented and will change many of our business practices. Mainly as follows:
a.) Transparency of company capacity. For example, for the year company found, the employees quantity, project records… you can easily get this info by searching in Internet.
b.) Transparency of company integrity. What projects you have done, how much value of the projects, what kinds of problems occur during the project, if the company fund is tight or not, what person changes recently. Whenever there is a sign, all peers know.
c.) Transparency of price. The clients are much familiar about the price. Always one client would have price of several suppliers for one project.
(2) Product standardization. It is a trend that the large company would finally standardize the product line.
There are three advantages to standardize the product line:
--Quality assurance.
--Improve production efficiency
--Significantly reduce costs
(3)The Centralization of Industry
Winner-take-all, the strong stronger, is the law of competition, for the same applies to the LED display industry. For the market of around 30 billion, more than a dozen of large scale enterprises and distinct enterprises are enough. It will appear several multinational enterprises that can compete with the world big company such as Daktronics.
There is no one enterprise is expected to achieve annual sales of 3 billion now. But in the future, it would be possible. At that time, its sales mode, production mode, service mode would be much different from today.
4. Breakthrough of optoelectronic efficiency
LED is cold light source, but we never thought LED display is a green product, six years ago, maximum power consumption of P16 LED display is 1400W/m2, average power consumption is 700W/m2 , six years later—now the maximum power consumption of P16 is 750W/m2 , average power consumption is 360W/m2. Three years ago, big chips (14 * 14MU) were always used, so that each screen must be installed with air-conditioner. But at present, light-emitting chips are much smaller with good brightness.
Where did the superfluous power consumption go? Heat dissipation, the optoelectronic efficiency is too low at that time, and now it is improved a lot, but in the next few years, the optoelectronic efficiency will be higher, LED display will be more energy efficient. And what changes will it bring?
1) Higher optoelectronic efficiency means the same brightness, less power consumption, and less heat dissipation, and the temperature of the LED display will be much easier to control, the design process is also much simpler. Subsequent screens tend to lighter, sexier and more refined.
2) High definition series become possible after optoelectronic efficiency improved, so that now we have P2.5, P1.875. All these are impossible to realize one year ago.
3) Outdoor SMD become a mainstream, SMD LED display has an advantage of larger visual angle, higher contrast and better color mixture, but outdoor display has a heat dissipation problem with high brightness. Now optoelectronic efficiency, even if it is high brightness SMD can also be used in outdoor as DIP. This will be a revolution in LED display industry.
