It’s not easy being caught in a 100 year cyclical "depression". At least that’s what was recently reported by Japan’s Nikkei News service quoting Panasonic COO and Finance director, Makoto Uenoyama. He said in a recent interview "As it is said to ‘come only once in a hundred years,’ the current depression significantly differs from the last one in the sense that we can’t see its bottom. I feel that both finance and actual economy are contracting. Automobiles, PCs, mobile phones and audio-visual products, all of these industries are becoming smaller. Their comeback will take one to two more years, I believe."

Steve Sechrist
Senior Analyst and Editor

There is no doubt the world does look like this from the chair of Panasonic’s finance director. The company is hot off a 2007 spending spree on new plant and equipment that has recently backfired into 70% of its restructuring cost ($3.65B) reportedly due to "TV related costs." Panasonic’s response of course, announced delays in factory expansion, and worldwide lay-offs to weather the storm.

Don’t get me wrong, no one (but the market) can fault Panasonic for pursuing an investment policy in major plant and equipment that kept the company thriving, even during this past crystal cycle of double digit growth in the rival LCD category. It was precisely because Panasonic’s past investment in capacity that lowered per unit cost–that allowed the company to survive while others in the PDP realm (i.e. Pioneer and a host of others) perished.

Now, we are hit with one headline after another–proclaiming the woes of blue chip display companies. "Panasonic, JVC Realign US Operations", "Pioneer to end TV Production", "Hitachi Warns of $7.8B Loss — Restructure", "Mitsubishi Suspends Production of LaserVue HDTVs" and that’s just this week! Sony, Sharp, Samsung, LG Display and the Taiwan Tigers all undergoing some form of change / response "due to the economy."

But to help put things in perspective, Quixel Research principal Tamaryn Pratt announced news from Quixel Research saying "The LCD-TV category defied economic woes and saw significant unit and revenue increases from 2007 to 2008. Quixel’s Market Review report said: "Overall LCD-TV market increased 14% in value to $22.7B in 2008 over 2007 results of $19.9B. Quarter-to-quarter revenues rose 7% or posted $6.3B in sales for the fourth quarter 2008." Pratt commented "The LCD-TV category saw another fantastic year of growth in 2008, with double digit increases in both dollars and units."

This belies something deeper going on. Perhaps the real question here is how much of this doom and gloom is due to recessionary forces, and how much is due to a real restructuring of our economy? What we may really be witnessing is a fundamental shift brought about by this "digital era" everyone has been talking about in all industries. We’ve all heard, read and may even spoken about "everything being different", or for example how "the Internet is changing everything" well doesn’t that include the economy–the fundamental way goods and services are generated, delivered and even consumed and (hopefully) enjoyed?

Stuck right in the middle of it all is the display industry. The suppliers of one of the most fundamental technologies of the digital era–the display (literally–what you are looking at) but steeped in the processes and ways of the previous manufacturing era.

Since the digital era, life has changed mostly for the better in all fields including business, communications, advertising (if you consider that an improvement) and social relationships from personal to extended. In particular, for us in the display industry, exciting change in how the images are being presented include HDTV with LCD and PDP improvements; flex displays and e-book readers; and 3D in theaters, home and even on cell phones. And don’t forget those coming attractions such as pico projectors, OLED displays and so much more.

You decide, recession, depression, or the growth pains that come about due to a fundamental shift that ushers in a new time for us and succeeding generations. Then again, perhaps it is the next generation (not us) that will make that call.