A new report from NPD DisplaySearch finds a sequential quarterly decline in flat panel LCD displays that are commonly used in public display applications, but the popularity of the same panels among consumers means the falloff in shipments isn't necessarily bad news for digital signage.

Global shipments of flat panel LCD displays used for digital signage and other public display applications declined in the fourth quarter of 2011, marking the first sequential quarterly decline in three years, according to recently released data from NPD DisplaySearch, a global research and consulting firm specializing in the display supply chain.

The decline comes after a two-year period of impressive growth for the public display (also called the "large flat panel display") category. Between 2009 and 2011, this market segment witnessed 65 percent growth in unit volume production, the display market research and analysis firm said.

The data, part of the "NPD DisplaySearch Quarterly FPD Public Display Shipment and Forecast Report," show LCD display shipments were pulled down by a dropped in the 26-inch to 37-inch category.

The decline raises an obvious question: "Is the public display market in general, and digital signage market in particular, sliding back into recession?" The answer, however, is far less clear.

As NPD DisplaySearch acknowledges, the sequential drop came in what it describes as "the least well-defined" slice of the market, namely the 26-inch to 37-inch space. Why is this the least well defined category? Simply stated, this segment is popular with the flat-screen TV buying public as well as with integrators who often install consumer TVs for digital signage applications. Many panels used for public display fall in the 32-inch category. Thus, without a clear delineation between the 32-inch displays used for digital signage and those used to watch television in the home, it's not possible to unequivocally attribute the sequential quarterly decline to digital signage and public display.

As Chris Connery, DisplaySearch VP of PC and Large Format Commercial Displays put it in a press release announcing the report, "The challenge comes when trying to fully quantify these markets since many times commercial installers use consumer-grade TVs for quick hang-and-bang solutions."

So, if it is not possible to tell from the data whether the sequential decline indicates a rocky road ahead for public display and digital signage, what information of value can be taken away from the latest NPD DisplaySearch findings for those with an interest in the digital signage market?

I would suggest the findings draw attention to the importance of affordable, flat-panel LCD TVs to the growth digital signage. To be sure, certain digital signage applications require higher-end, professional features, such as high brightness backlights, smaller bezels, and even touch-screen capability for hybrid, interactive digital signage. But a large number of applications don't.

Relatively inexpensive consumer flat-panel HDTV sets using LCD screens are more than adequate for many uses -particularly when compared to the heavy, boxy, low-resolution CRT-based displays they are replacing.

Rather than look at the sequential quarterly decline with fear about the road ahead, it may be more prudent to look at it with a bit of caution and also a recognition that the decline may be more attributable to a falloff on the consumer side of the equation.

It may also make sense to understand that there might be a silver lining for the digital signage market. After all, if the decline is occurring because consumers are buying fewer units, vendors will have an incentive to lower display prices, which will make it more affordable for businesses, retailers, corporations and other entities to consider adding digital signage to their communications strategies.