The past year has been one of surprises for followers of large format
displays (LFDs). Arguably the biggest came in Q4, when year–on–year
(YoY) unit (9.4%) and revenue sales (–3.7%) comfortably beat our
expectations. It means the market will carry some momentum into the
first three months of 2024; but nevertheless we expect a rather slow
start to the year.
What happened in Q4?
Sales growth for LFDs had been declining in every quarter of 2023
prior to Q4, so the final three months of the year certainly provided
a nice surprise for European distributors. It also cemented the
market’s reputation for unpredictability. In 2022, there was a big
swing from YoY unit sales figures in Q3 (+27%) to Q4 (–5%). The
following year the swing reversed, with a negative Q3 giving way to a
positive Q4.
At the end of 2023 it was the product categories of interactive
(32%), direct view (DV) LED (19%) and signage (–1%) which provided the
main foundation for growth. However, despite the quarter’s strong
performance, YoY unit sales fell –8.6% overall in the year, including
interactive (–11%) and signage (–8%). Although unit sales for DV LED
surged 21% YoY in 2023, the category has a share of just 5% of the market.
The main reason for negative revenue performance in Q4 2023 was
falling ASPs. They dropped by –18% YoY in interactive due to the
growing popularity of cheaper, entry–level products with limited
functionality. DV LED prices are also falling thanks to the popularity
of the category and changes in the underlying technology, which have
driven down the price of production. Prices are down in signage as
channel businesses try to stimulate market demand.
What happens next?
2024 will be another interesting year for the LFD industry. The
results of 2023 came as a shock to many, as the sudden drop in demand
was unexpected so many targets were not met. As a result, 2024 will
err on the side of caution but is still expected to be a better year.
As of the start of 2024, LFDs begin just above the index line of
our Index Revenue Trend. Delays due to Red Sea shipping challenges
will impact stock levels and sales. Many customers may also postpone
their purchases until they see what’s on offer at the Integrated
Systems Europe (ISE) conference in Barcelona next week.
So expect a muted start to the year in most major markets of
Europe except perhaps Poland, which ended 2023 at almost 200 above
the baseline on the Index Revenue Trend.
The Live CONTEXT Forecast Briefing webinar is
taking place for clients and partners next week and you can
register following the link:
https://content.contextworld.com/context_it_forecast or get in
touch with the team if you would like to know more or get
involved: forecasting@contextworld.com
