The Fast Track for LEDs into Large-Area LCDs: Leveraging Consumer Valuation of LED Features


What will consumers pay for the improved display features LED backlights bring to LCDs?  Are the price premiums enough to pay the added costs?  Are the price premiums modest enough to both attract early adopters and quickly build substantial sales in key LCD market sectors? 

These are the critical questions answered in this report using a sophisticated analytical approach that relies on a statistical analysis of display market data.

Investment in LED technology has led to continued improvements in LED performance.  Yet there is little market analysis that quantifies critical market issues:
            a) what will consumers pay for improved features?
            b) how do consumers value packages of features?
            c) how fast will consumers adopt the new technology?
For LEDs to penetrate large-area LCDs quickly marketeers must target the right applications with performance at the right price points.  Both the cost/technical side and the price/marketing side of the equation must be understood.

The time-line for LEDs’ replacement of conventional CCFLs backlights is of critical importance not only to the LED industry, but also to the LCD backlight industry, LCD panel makers and display branders.  The LED industry needs to follow a fast track path and command a significant share of backlight market in order to generate an acceptable return on the substantial investment in improving LED performance.  For LCD backlight, module and display makers, the timing and magnitude of the roll out is also critical since the companies that can successfully lead the transition to LED backlighting will gain market share and improved competitiveness.

MCG has developed a methodology to answer the key marketing questions and balance the equation between cost and price.  This report uses this methodology to find the fastest possible adoption path for LEDs in large-area LCD displays – the fast track.  The methodology is broadly applicable to all display products and markets.  MCG will continue to develop and enhance this methodology.


The report is a comprehensive tool for R&D, marketing and supply chain professionals to develop successful product development and market penetration plans for alternative backlights (LED and wide color gamut CCFL) for large-area LCD displays.  The metholodogy of the report allows trade off different performance feature improvements against each other as well as cost to develop the highest-value feature package for consumers.  It also enables sensitivity analysis for alternative cost and performance improvement scenarios for competing illumination architectures.

  • LED makers – Understand how to most rapidly take share from CCFL and wide color gamut CCFL:
    • Target markets by LED illumination architecture
    • Price and performance requirements
    • Fastest-possible market penetration strategy
  • CCFL and wide color gamut CCFL makers – Understand how LED makers will target the market and how to best position CCFLs to maintain share as long as possible
  • LCD Panel and Backlight Makers – Understand how and when to best introduce LED backlights to assure higher market share and profitability. 
  • LCD TV, monitor and notebook makers and branders – Understand how to leverage LED backlights to increase market share and profitability:
    • Target markets with recommended LED architecture
    • Ideal pricing and marketing to increase share and profitability
    • Exact timing for successful LED backlight introduction
  • Optical Film Makers – Anticipate the emerging sea-change in demand for backlights and films and position for success.  The report forecasts how the fast track for LEDs will affect demand for optical films.


The study forecasts cost and performance improvements 2007-2011 as well as consumer value for the forecast performance improvements.  The study forecasts winning illumination architectures within each market segment and recommends pricing to enable fastest market share penetration.   The study addresses questions such as:

  • What display improvements will consumers pay for?
  • Which of these improvements can LEDs deliver?
  • What level of improvement can each LED architecture deliver at what cost?
  • What is each improved feature worth to consumers?
  • What is the consumer perception of risk?
  • How much faster will market share grow if the feature is priced lower?
  • How much more will the consumer pay for the complete feature package delivered by each LED architecture?
  • Which LED architecture offers the best value to consumers for each market segment?
  • What consumer price premium provides the fastest possible profitable growth?
  • What is the overall fast track for LEDs?

 Illumination Architecture Scope. The following illumination architectures are included:

  • Regular CCFL (baseline)
  • Wide color gamut CCFL  
  • Edge-lit white LEDs
  • Edge-lit RGB LEDs
  • Area RGB LEDs

Market Scope.  Overall LCD panel demand, area demand for LED backlights and LED lamp demand for the fast track scenario for:

  • Notebooks
  • Monitors
  • TVs

The above markets are segmented into four notebooks market segments, two monitor market segments and three TV market segments.


The 234-page study consists of 217 pages of analysis including text, color graphs and tables, plus 17 pages of appendices, and includes:

  • Fast track forecast through 2011 for LCD panels, area of LED backlights, and sales of LED lamps into notebooks, monitors and TVs
  • Forecast through 2011 of increase in demand for prism and polarization recycling film associated with conversion from CCFL to LEDs
  • Detailed technical forecast of improvements in price and performance for each illumination architecture, including modeling and trade-offs of optical films against illumination sources to develop the lowest-cost architecture
  • Analysis of consumer value less cost (net value) for feature packages delivered by each illumination architecture
  • Winning illumination architecture for each market segment
  • Individual consumer value functions and market share growth functions for color gamut, high dynamic range/contrast, weight and thickness features for LCD displays
  • Consumer value and market share growth functions for the feature packages delivered by the winning architectures in each market segment
  • Price sensitivity analysis of impact of pricing on market share growth for LCDs incorporating LED backlights
  • Detailed appendix showing methodology applied to color gamut and how the consumer value function, consumer perception of risk and market share growth functions were developed
  • Detailed appendix on levels of performance in delivering high dynamic range
  • To view the table of contents click here


The MCG study is based on a combination of sources. Information was gathered via industry survey regarding expected technical performance and cost improvements. requirements and desired improvements.  Multivariate regression analysis and time-series regression analyses were utilized to determine consumer value for display features from past consumer behavior.  Recent industry, market and technology trends were also incorporated in the forecasts. For a fuller description of the methodology see the MCG white paper “Quantifying Consumer Value for Improved Display Features”.


Free phone consultation available from the study’s principal researcher for 30 days after report purchase. Purchasers of the study will receive free phone consultation about the report contents upon request. Addenda to the study for topics of interest to individual clients can also be discussed.


The report been developed with extensive technical and analytical support. Steve Marsland and Steve Jurichich (PhD) were the principal analysts.  Steve Marsland developed the consumer value methodology and Steve Jurichich developed the detailed technical and cost performance forecasts, including trading off optical films vs. LEDs to develop the lowest-cost implementation for each architecture. Carl Cobb was the supervising partner and editor for the study. Charles McLaughlin acted as senior author and final editor.

For more information contact: Steve Jurichich at 415-834-9462.

Purchase Information

  • Multi-user, Single-Site License, 1 pdf file: $7,500
  • Color Hard Copy (additional cost), Bound, Double-sided includes shipping: $250
  • On-site presentation, consulting services, Ask for quote