Touch Screens Bring Big Value To The Tech Sector

Submitted by Morgan Smith as part of our contributors program.

The market for touch screens has been in existence for a number of years, given that such features have been used in ATM’s, as well as other types of kiosks and point-of-sales terminals. It was in 2007, though, when Apple (AAPL) adopted the projected capacitive touch screen technology for the iPhone that touch screen technology for consumer use really took off. In this article, I will discuss how global trends in touch screen technology could essentially triple the size of this market over the next decade.

Today, more and more existing and newly developed devices operate using touch screen technology – with screen sizes that range from just a few inches to more than 150 inches. Following Apple’s 2007 addition of touch screen to its iPhone, other global companies such as Samsung (SSNLF.PK) also began using touch screen in more consumer products as well, making this technology even more common in mobile consumer devices – primarily in smartphones and tablets.

Few mobile phones even have keyboards nowadays – and even fewer of these are considered top tier devices. Worldwide, as of mid-2012, touch screen devices are being used by an estimated 35% of mobile device users. However, in the U.S., touch screens account for nearly 47% of the market.

In 2012, overall revenue from the touch screen market was estimated at approximately $14 billion – with an expectation for that number to triple over the next ten years. Certainly, Apple is one of the companies driving this growth.

Thanks to its roughly 300 Apple Stores, the company’s ability to sell a sizeable number of its products directly to consumers plays a big part in the company’s role as the low-cost retailer. Although the final 2012 numbers are not yet available, it is expected that Apple was on track to sell approximately 25 million iPads worldwide. This being the case, it is likely that Apple will continue to grow its direct sales over the next few years.

In addition, while the fourth quarter 2012 numbers only cover 9 days of Apple’s iPhone 5 sales, the company sold nearly 27 million units of this product during that time – making this the third best quarter for iPhone sales. This equates to a 58% increase in sales over the fourth quarter 2011.

Apple’s retail stores, along with their heavy online presence, will help the company to boost its sales even more. If investors can pick up shares of Apple in the $300 per share range, it is likely that they could see significant appreciation over just the next 12 months.

Samsung has been yet another one of the leaders in providing touch screen technology on its devices. The Samsung Galaxy S2 was voted as the top touch screen phone for 2012 by techradar.com. This particular device uses Google’s Android OS, and it provides users with impressive color graphics on its 4+ inch screen.

Overall, Samsung is projecting a rise in its operating profit for the fourth quarter 2012, taking it from approximately $8.1 billion to $9 billion. The company’s shares are currently trading near their 52-week high.

Others making use of touch screen technology include Sony (SNE) and 3M (MMM). Sony’s new Xperia V phone uses a “sensor on lens” touch screen that puts the touch sensor on the top layer of display glass. This eliminates an excess layer of glass on the device, in turn reducing the distance to the screen. By doing so, it is thought that the reduced thickness of the screen will improve touch performance, along with enhancing the quality of the screen’s image.

Another coup for Sony investors is that the firm was also chosen in April 2012 to be one of six companies to team up with Walmart to provide an in-store digital service that allows customers to pre-select movies when they open a disc-to-digital account. Sony’s shares are projected to increase by nearly 9% over the next 12 months.

Likewise, 3M has also been offering innovative touch screen solutions for over 25 years through its MicroTouch brand. Just some of the areas in which 3M’s products can be utilized include digital signage, point of sale, food service, point of information, and hospitality. The company also unveiled an 84-inch multi-touch display prototype at the 2013 Consumer Electronics Show.

One company that has been buzzing with activity recently is Sollensys (SOLS). The company caught my attention recently with heavy trading volume after completing its acquisition of South Korean touch screen maker Sollensys. This company is making some big inroads in the touch screen technology arena – including the development of a wide range of single and multi-layer capacitive sensors and controller options primarily for mobile phones.

Using its multi-touch sensor module, the company has been able to offer specialized products like the multi-touch panel for government applications, the multi-touch medical chart, the multi-touch menu-order place, and the multi-touch 2-way remocon. Sollensys also provides consulting in the areas of touch sensor manufacturing and touch sensor design and service. Sollesys’ core technology lies in capacitive touch screens, which I will discuss below.

Resistive Versus Capacitive Touch Screens

The core difference between resistive and capacitive touch screens is that the way they register the presence of your finger on the screen. Resistive technology senses pressure, and is made up of several layers. The top layer flexes under your finger, which puts pressure on the second layer behind it. This tells your phone which part of the screen is being pressed.

Capacitive touch screens use electrodes to sense your finger, as opposed to pressure. Capacitive touchscreens will only react to certain objects that contain electrodes.

The use of capacitive touch screens is on the rise, which presents a big opportunity for Sollensys, which could potentially provide Apple and other firms with its touch screens in the future.

Taking a Look Ahead

As consumers are demanding more in terms of high clarity and high performance, the big game changer for touch screen manufacturers will likely be the touch screen sensor material indium tin oxide, or ITO. However, as this material tends to be somewhat costly, it is also probable that consumers will need to trade off more touch functionality with higher price for their devices.

Looking ahead, it appears that the next big markets for enhanced touch screen technology are mobile game consoles and ebook readers, along with car displays and navigation devices on the small screen side, as well as PC and laptop monitors on the 10-inch and larger screen arena – all contributing to a projected $40 billion plus in overall touch screen revenues over the next ten years.