First there were TVs, then smartphones, but as those two markets mature the world's top screen makers are looking to the auto sector to drive future growth, with car display volumes expected to almost triple by 2018.
Manufacturers like South Korea's LG Display Co Ltd and Samsung Display are eager to boost their exposure to the sector, which promises bigger and more stable margins than their mainstay mobile and TV businesses.
"Previously, display makers saw little merit in auto displays because of their small volumes and slim margins ... but they are now revising their strategy as the market is growing," said Lee Byeong-hoon, a principal engineer at the South Korean unit of German auto parts giant Continental, the biggest buyer of automotive displays.
Luxury cars already carry two or three displays and could have as many as nine in the near future, as safety and convenience features proliferate. Kia Motors' K9 sedan, for example, has five displays - an instrument panel, a centre information screen, two backseat displays and a "head-up" display projecting information onto the windshield.
Future cars could add transparent side-window displays and replace rearview mirrors and side mirrors with screens, according to LG Display, the biggest liquid crystal display (LCD) maker.
Looking further ahead, self-driving vehicles in development by Google Inc and others will free up passengers to watch movies, play video games or check e-mails, meaning even more in-car screens, analysts said.
Samsung Display, a subsidiary of smartphone giant Samsung Electronics Co Ltd, is testing its organic light-emitting diode (OLED) displays with BMW and Continental in hopes of gaining a foothold in the sector, two sources familiar with the experiments said.
LG Display, which supplies smartphone screens to Apple Inc , intends to become the top auto display maker next year, leapfrogging Japan Display Inc, Sharp Corp, LG Display vice president James Shin said.
"Auto displays have a very bright future," Shin told Reuters.
Competition is heating up with LCD automotive display shipments forecast to almost triple to 174 million from 2013 to 2018, according to data from research firm IHS.
Auto display revenue will grow from US$4.6bil (RM16.3) to US$8.3bil (RM29.4bil) over the same period, it says. Even so, the sector is small by mobile standards, with global handset screen revenue estimated at US$28.9bil (RM102bil) in 2013, according to DisplaySearch.
But auto displays promise better returns than smartphones. They need to be more durable and carry longer warranties, so they are more expensive. Margins can reach 30% compared with as little as 5% for consumer electronics displays, IHS analyst Stacy Wu said.
Average smartphone display prices slumped almost 14% last year and another double-digit fall is likely in 2015, according to IHS Technology.
Late last year, BMW executives visited South Korea for demonstrations of display products by Samsung and LG, one source said, requesting anonymity due to the sensitivity of the matter. All three companies declined to comment.
"It may take a couple of years or three to four years, but Samsung thinks it needs to enter the market, whether it is OLED or LCDs," a person with direct knowledge of Samsung's thinking said, asking not to be named because he was not authorised to speak publicly.
OLED screens, offering more vivid colours and greater flexibility than LCDs, could be a key differentiator for LG Display and Samsung Display, the only firms currently capable of mass producing them.
LG's Shin said he expected OLED screens to be available in mass-produced cars by the end of the decade.
"The year 2020 is not in the distant future from the automakers' perspective," he said. — Reuters