Display industry to experience pain as manufacturers scramble to meet tablet demand

The display industry will see disruptions in 2011 resulting from the rush of some technology companies to compete with Apple for their piece of the tablet market, according to new research from display market authority IHS iSuppli.

The research firm foresees the fierce competition creating periods of shortages and excess inventory as display makers try to satisfy demand from companies making tablets.

This year, global tablet shipments are expected to reach 57.6 million units, up from 17.1 million in 2010. Apple, which is expected to continue dominating the market with 70.4 percent share of tablet shipments next year, will face mounting competition as new tablet rivals, including Samsung Electronics, Hewlett-Packard, Research in Motion, Dell and others, battle for customers. For the next two years, however, Apple is expected to dominate tablet sales, IHS forecasts.

According to Joe Abelson, IHS vice president of displays, the demand for netbook and notebook displays will soften.

“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,” he said. “With different panel sizes and specs in play, the industry should expect to see significant inventory shortages and excesses to occur at the SKU level throughout 2011, potentially accompanied by heavy discounting or scrapping of unused displays.”