First, Balda AG and its partner, TPK Holdings, won Apple Inc.’s business for the touchscreen module for the latter’s iPhone.
Now Balda’s shareholders are agitating for the company to spin off its touchscreen business to bring more visibility to that business’ value, according to German media reports. (Balda has not commented on the report.)
After all, Apple has said it intends to build a third business in mobile devices, beyond its Macintosh computers and iPod music players. It will develop a family of iPhone-related products, which indeed may bode well for the Balda/TPK venture.
Whether Balda’s shareholders have picked the best direction for the touchscreen unit is debatable. But their urgency reflects the amount of interest Apple has managed to generate over a technology that is more than three decades old, has a limited but established track record in wireless and is now firmly in the spotlight.
Another sign of touchscreens’ ability to capture the imagination:
The U.S. market will see a number of touchscreen-based handset launches after Labor Day, according to analyst Bill Morelli of IMS Research. Morelli declined to provide details but indicated that he had had vendor briefings to that effect.
Of course, such a forecast makes simple sense. Apple appears to have combined its touchscreen with its user interface to create an engaging, simple, even fun experience for iPhone users. According to Morelli, that advance should not be underestimated, especially when coupled with multimedia applications. But touchscreens have other, more practical advantages, he said, and they don’t need to be limited to high-tier devices.
The right touch
First, touchscreens in the post-iPhone-launch period will provide vendors with an attention-getting differentiator, the analyst said. The touchscreen approach can simplify the user experience and free up valuable device real estate, perhaps to increase the screen size, as with the iPhone. In multimedia applications, touchscreens provide the means for an interactive experience. Touchscreens excel at character recognition for Asian markets, where the number of characters in the alphabet far exceed the West’s 26 characters and are too complicated to work on 12-key pads or even QWERTY keyboards.
For mid- and even low-tier handsets, “resistive” technology-the technology most prevalent in handsets today-provides a cost-effective solution, Morelli said. Resolution remains modest, however, and power drain and screen durability are concerns. “Capacitive” technology-the sort employed in the iPhone and LG Electronic Co.’s Prada phone-is more expensive and must be operated with a human finger. But resolution,
durability and power use are much improved.
“As uptake increases, the cost will come down on these options,” Morelli said. “You’ll see a range of options and the lines between categories of handsets will blur. Resistive technology will be driven down into low-cost phones as capacitive technology captures a larger slice of the market.
“Keep in mind, however, that touchscreens currently occupy only a small slice of the smartphone market, perhaps as little as 2% of the overall handset market,” said Morelli.
The anticipated launch of touchscreen-based contenders in the U.S. raises the question of whether these products are an outgrowth of a trend merely exemplified by Apple’s iPhone, or whether they are a direct response to Apple’s challenge. Certainly few vendors if any would admit to the latter, but there’s evidence that they’re probably on solid ground.
The provenance question is difficult to settle, the analyst said. Last August, long before the iPhone had been unveiled, Silicon Valley-based Synaptics demonstrated a concept phone with a capacitive touchscreen that led to LG’s Prada phone. Whether Apple took its cue from Synaptics or already trod a parallel path is unknown, Morelli said.
“Dozens and dozens” of touchscreen display-related companies are already in the market, particularly in Asia and Silicon Valley, where firms with experience in sensor technology are moving into the handheld touchscreen space, Morelli said. Cypress Semiconductor, in San Jose, Calif., for example, has been a provider of capacitive sensors and now is logically making its way into touchscreens.
“Anything they’re doing in Silicon Valley, there’s a counterpart in Asia,” Morelli said. “And in Asia, it’s hard to keep a secret. Culturally, how information is shared is different than in the U.S. or Europe. So it’s entirely possible that many handset vendors had a sense of Apple’s direction well before the iPhone was unveiled last January.”
Thus vendors launching touchscreen phones next month will have had well over a year to develop their products, particularly if they worked from an existing handset platform and merely “bolted on” a touchscreen as the salient differentiator.
Another sign that touchscreens are a hot space right now? Ask Morelli for the names of the firms working in the space and he demurs. His report on the subject is in demand-for the exact same reason that Balda’s shareholders are getting agitated. (When you’re hot, you’re hot.) Furthermore, many vendors simply would not discuss their product roadmap or their partnerships-understandable in a land-grab moment.
Though only a small percentage of the overall handset market today sport touchscreens, IMS Research projections point to the possibility of prodigious growth: by 2011, just under 30% of the entire handset market will employ some sort of touchscreen.
