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When do New Technologies Become Economically Feasible?

The Case of Three-Dimensional Television

by

Pei-Sin Ng

Jeffrey L. Funk*

*Contact Author:

Associate Professor

National University of Singapore

Division of Engineering and Technology Management

9 Engineering Drive 1, Singapore 117576

etmfjl@nus.edu.sg; 65-6516-7446

Forthcoming, Technology and Society

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When do New Technologies Become Economically Feasible?

The Case of Three-Dimensional Television

Abstract

This paper analyzes the timing of a new technology’s economic feasibility using a simple

yet novel approach. While the conventional wisdom that costs fall as cumulative production

increases does not enable us to analyze this timing, the proposed approach enables us to do so

using existing technological trends in the components that form a new technology’s system.

For 3D television, although the concepts that form the basis of 3D television have been

known for many years, improvements in specific components within two-dimensional (2D)

televisions such as the liquid crystal display (LCD) are finally making 3D television

economically feasible. More specifically, improvements in the frame-rates of 2D LCDs are

making it economically feasible to introduce time sequential 3D, which requires special

glasses. Similarly, increases in the number of pixels per area (resolution) will probably make

auto-stereoscopic 3D LCDs economically feasible in the next five to ten years and thus

eliminate the need for special glasses.

Keywords: technological discontinuities; technology paradigms: geometric scaling; technical

feasibility; economic feasibility; three dimensional television: liquid crystal display

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1. Introduction

Understanding when a new technology might become economically feasible and begin to

diffuse remains an allusive goal. The economics literature focuses on cumulative production

as a key driver of diffusion in that the cost of a new technology falls as cumulative

production increases in a so-called learning or experience curve, According to such a curve,

product costs drop a certain percentage each time cumulative production doubles [1] [2] as

automated manufacturing equipment is introduced and organized into flow lines [3]. However,

if cost reductions primarily come from production, as the learning curve suggests, by

definition cost reductions cannot occur before production occurs thus making it very difficult

to use a learning curve to analyze when a new technology might become economically

feasible and thus begin to diffuse.

The management literature uses the term technological discontinuity to distinguish

between new and old technologies where products defined as discontinuities are based on a

different set of concepts or architectures than are the old technologies [4]. However, while

there is wide agreement on the descriptions and timing of specific technological

discontinuities, most research on technological discontinuities focuses on the existence and

reasons for incumbent failure and in doing so treats these discontinuities as “bolts of lightning”

[5] [6] [7] [8]. For example, the product life cycle, cyclical and disruptive models of

technological change do not address the sources of technological discontinuities and instead

their emphasis on incumbent failure implies that the timing of these discontinuities depends

entirely on cognitive factors and thus cannot be easily analyzed [9] [10].

This paper analyzes the timing of a new technology’s technical and economic feasibility

using a simple yet novel approach. This approach builds from the notion that technologies

can be thought of as a “system” of components [11] [12] [13] [14] [15] where new

technological systems often borrow components from existing technological systems [16].

Thus, this approach focuses on the concepts that form the basis of a new technological system

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and the levels of performance that are needed in the relevant components before new the new

concepts become technically and economically feasible. This enables us to utilize

technological trends in the relevant components to analyze the timing of economically

feasibility. Since data on technological trends are available for a wide variety of existing

components, the ability to utilize this paper’s approach primarily depends mostly on our

understanding of a technology’s system and components.

This paper demonstrates this approach using three-dimensional (3D) television, a

technology whose basic concepts have been well understood for many years. Building from

one author’s experience with televisions and a second author’s knowledge of technological

change, the key components in a 3D television are identified and analyzed. Such a system

includes LCDs, ICs, and other electronic components where improvements in these

components continue to be made somewhat independently of the existence or introduction of

3D televisions. For LCDs, costs have been falling quite rapidly as firms have gradually

increased the size of the substrate and production equipment. In addition, improvements in

their frame-rates and in the number of pixels are also being made in response to demand from

other electronic products and these improvements are gradually making 3D television

technologically and economically feasible

This paper first describes the ideas that form the basis of this paper’s approach, the

sources of these ideas, and their application to televisions. Second, it briefly describes the

research methodology. Third, it summarizes the improvements in LCD displays and other

electronic components that are making 3D LCD televisions technologically and economically

feasible. Third, it describes how these improvements are improving the technological and

economical feasibility of time-sequential and auto-stereoscopic 3D televisions, which are the

two most discussed methods of achieving 3D television. Time-sequential 3D displays

requires special glasses that include an active or passive LCD display while auto-stereoscopic

3D LCDs do not require glasses. Fourth, this paper speculates on a pattern of diffusion for 3D

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television

2. Key concepts

Technological discontinuities are typically defined and classified by the extent to which a

new product, when compared to a previous one, involves changes in the core concepts that

form the basis of a product or in the linkages between a product’s key components [4].

Radical innovations change both the concepts and the linkages, architectural innovations

change only the linkages between components, and modular innovations change only the core

concepts of a single component. Although some scholars also focus on a technology’s impact

on the linkages between a firm and the market [17], these types of discontinuities, including

so-called disruptive ones, can also be classified as either radical or architectural innovations

[7].

This paper focuses on radical innovations in televisions and in particular it focuses on 3D

televisions. Looking at the concepts that form the basis for electronic displays, the first ones

were cathode ray tubes (CRT) that were initially used in oscilloscopes and only later used in

televisions. In the cathode ray tube, one electrode emits electrons and electrons striking

phosphors cause the phosphors to luminesce [18]. By controlling the direction of the

electrons with an electric field, one can determine the specific phosphors on a glass tube that

will be struck by the electrons. By using three electrodes or so-called electron guns and the

right type of phosphors, color images can also be displayed on the television screen. Like

other forms of electric discharge tubes such as incandescent lights, many improvements in

cathode ray tubes came from finding better phosphors and better materials for the electron

gun. Nevertheless, limits to these improvements began to emerge many years ago. Their

miniaturization (and thus their costs) has been severely constrained by the size of electrodes,

glass bulbs and sockets, and the resolution of them is constrained by similar problems (an

ability to control electrodes, emitted electrons, and impacted phosphors).

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LCDs are based on a different concept than are CRTs. They use an electric field to control

the orientation of the liquid crystals. Although the properties of liquid crystals had been

identified by the late 19th

century, it was not until scientists were able to control them with an

electric field in the mid-1960s that interest in them emerged. Applying an electric field causes

them to align in the appropriate direction and thus either block or transmit polarized light

from an external source such as a so-called backlight. Applying different electric fields to

different regions, or so-called “pixels,” in a liquid crystal causes light to be either passed or

blocked by the different pixels and thus enables an image to be formed on a display. Finding

the appropriate liquid crystal materials along with materials for polarizers and color filters

took many years of scientific research in the 1960s, 70s, and 80s where these advances were

facilitated by the ability to use semiconductor manufacturing equipment to deposit and form

patterns in these materials. This semiconductor manufacturing equipment also facilitated a

change from so-called passive-matrix to active-matrix LCDs where cost reductions are now

largely driven by increasing the scale of this production equipment along with reducing the

thickness of the materials [19][20][21][22].

A variety of technological discontinuities have been envisioned by scientists and

engineers for television and other displays. One is the replacement of existing backlights,

which are so-called cold cathode fluorescent lights, with light-emitting diodes (LEDs) since

the LEDs are much thinner and have higher luminosity per watt than do cold fluorescent

lights. A second discontinuity is the replacement of the entire LCD with a display constructed

with organic light-emitting diodes (OLEDs). While most LEDs are made from semiconductor

materials, OLEDs are constructed from organic materials in which it is much easier to place

different color polymers on a single substrate (usually glass) using ink jet printing than to

place different color LEDs on a single semiconductor substrate. OLEDs are potentially

thinner, more flexible, and cheaper than are LCDs while the elimination of an external light

source enables OLEDs to use less power and have higher viewing angles than LCDs.

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A third possible discontinuity is 3D television. 3D television requires a new form of

display and new content. Although 3D televisions can be constructed from either OLED

displays, LCDs, or even plasma displays, this paper focuses on LCDs since they are currently

the dominant form of television display. Two of the most common ways of displaying 3D

images with an LCD are time-sequential and auto-stereoscopic. The first method requires

special glasses that include an active or passive LCD display while auto-stereoscopic 3D

LCDs do not require glasses.

In both types of televisions, a key component is a LCD. One reason for using the term

“component” is to distinguish between components and systems in what can be called a

“nested hierarchy of subsystems.” Systems are composed of sub-systems, sub-systems are

composed of components, and components may be composed of various inputs including

equipment and raw materials [11][12] [13] [14]. This paper will just use the terms systems

and components to simplify the discussion. For example, a system for producing integrated

circuits (ICs) or LCDs is composed of components such as raw materials and manufacturing

equipment.

Other reasons for using the term “component” is that some components experience more

improvements in performance and cost than do other components [23] and when these

components impact strongly on the performance and cost of a system, rapid improvements in

such a “key component” can lead to rapid improvements in the cost and performance of a

system. For example, some argue that improvements in the cost and performance of

computers came directly from improvements in the cost and performance of integrated

circuits (ICs) [23][24] and that increases in the recording capacity of hard disks or magnetic

tape-based systems came directly from improvements in the magnetic recording density of

platters or tape [23] [25]. Taking this argument one step further, some argue that

improvements in ICs, magnetic platters, and magnetic tape led to discontinuities in the design

of computers, hard disks, and magnetic tape-based systems [16] [26]. These arguments are

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consistent with Nathan Rosenberg’s argument that complementary technologies are often

needed to implement new discontinuities [27] [28] [29] [30].

There are several reasons why a specific component may incur more improvements than

do other components. These include a greater potential for: 1) improving the efficiency by

which basic concepts and their underlying physical phenomena are exploited; and 2)

geometrical scaling [31][32]. The first method includes finding materials that better exploit

the basic concepts and their underlying physical phenomena. Such materials have been found

for batteries [33], lighting [34], displays [19], vacuum tubes, ICs [35], and magnetic storage

[36] technologies. The realization and exploitation of each physical phenomenon that forms

the basis of these technologies required a specific type of material and finding the best

material has taken many years. The best material exploited the physical phenomenon more

efficiently than did other materials and this higher efficiency also often led to lower costs as

fewer materials were needed. For LCDs, there has been a search for liquid crystal materials

whose orientation better responds to electrical signals than do other materials where recent

searches have focused on crystals with fast response times in order to increase frame rates.

Geometric scaling refers to the relationship between the geometry of a technology, the

scale of it, and the physical laws that govern it. Or as others describe it: the “scale effects are

permanently embedded in the geometry and the physical nature of the world in which we live”

[32]. Some technologies such as integrated circuits (ICs) benefit from reductions in the scale

of specific features such as transistor gate length or metal line widths because these

reductions in scale lead to improvements in both cost and performance. For LCDs, the most

relevant form of scaling is increases in the scale of LCD substrates and their associated

production equipment where large LCD substrates, some are now greater than 10.5 square

meters, are cut into smaller panels for televisions and other electronic products [37] [38]. The

benefits from increases in this scale are somewhat similar to the large benefits that have been

experienced from increasing the scale of chemical and steel plants, engines, and oil tankers

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[30] [31] [39] [40].

3. Methodology

This paper uses the concept of a nested hierarchy of subsystems, an understanding of a

3D television’s system and component, and Eisenhard’s [41] case study approach to

understand the timing of 3D television’s economic feasibility. In particular, Eisenhardt’s

notion of cross-pattern search was used to interpret data from a wide variety of technical

journals, trade magazines, and technical reports. First, the analysis focused on the factors

preventing 3D television from being implemented. Second, it looked at the components in 3D

televisions and in particular the ones experiencing improvements. Third, to what extent could

these improvements solve the problems that were preventing 3D television from being

implemented? Fourth, when would the components reach the levels of performance and cost

that were needed to make 3D television technologically and economically feasible?

Eisenhardt’s notion of cross-pattern search was appropriate because these issues were

addressed in a recursive method in which increasing levels of details were considered.

4. Improvements in 2D displays and other “components”

2D displays have been and are still being improved in a number of ways and as discussed

below, these improvements facilitate the implementation of 3D displays. First, recent LCD

televisions with LED (light-emitting diode) backlights yield a more comprehensive color

spectrum than do previous LCDs (and CRTs). Second, the sizes of LCD televisions have been

gradually increased and one reason that LCDs replaced CRTs is that the size of flat panel

LCDs can be more easily increased than can the size of CRTs. This is because increases in the

size of CRTs require increases in the thickness of glass, which increases cost and causes

image distortion around the edges of screen. Another advantage of LCD panels is that they

can be produced in a variety of rectangular dimensions and thus are more easily matched with

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the widescreen format commonly used in films for cinema screens than are CRTs.

Third, increases in the substrate size of LCDs and other improvement in the LCD

production process have reduced the cost of displays. For example, the size of LCD

substrates used in making panels has grown by a factor of 1.8 every 3 years, and doubles

every 3.6 years where each doubling is often labeled by new generations of substrate sizes

and production equipment [42]. This doubling in substrate size is a major reason why costs

fall about 22% for each doubling of cumulative production in terms of area. The reason that

increases in the substrate size led to lower costs is that large LCD production equipment can

more quickly handle and process substrates on a per area basis and they have smaller “edge”

effects than do small equipment1 and thus have lower equipment costs per output than do

small equipment.

For example, the output (substrate area per hour) per dollar of capital costs for one type of

LCD manufacturing equipment was increased by 8.5 times as the substrate size was increased

by almost 16 times from 0.17 (Generation II) to 2.7 square meters (Generation VI) [37]. The

capital cost, this time for a complete facility, per area dropped by 36% as the substrate size

was increased from 1.4 (in Generation V) to 5.3 square meters in Generation VIII [39].

Generation XI panels are now being produced in sizes of 10.5 square meters. Furthermore,

the most important material in LCDs, glass, also benefits from increases in the scale of their

production equipment [37]. The result is that the average selling price of large LCD

televisions on a per meter squared basis dropped 18.8% a year between the first quarter of

1998 and the first quarter of 2007 [43].

Fourth, improvements in liquid crystal response time enable increases in frame rate (See

Figure 2) and these improvements facilitate the technical and economic feasibility for one

1 Like IC wafers, large LCD substrates have smaller edge effects than do small substrates since the LCD production equipment must be

wider than the substrate in order to have consistent processing across the substrate. Thus, the extra width of the production equipment as a

percentage of the substrate width declines as the width of the substrate is increased.

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form of 3D television called time sequential with active glasses. These improvements are

driven by the use of new materials and the use of higher voltages [44]. By enabling faster

frame rates in both televisions and glasses, these improvements eliminate the blurring that

can occur when an image for the left-eye is followed sequentially by an image for a right eye

and when these images are assigned to each eye by glasses that also contain LCDs. As shown

in Figure 2, a rate of 120 frames per second was achieved in 2010 and this is considered the

minimum necessary to prevent blurring.

Fifth, improvements in pixel density (See Figure 3) facilitate the technical and economic

feasibility for a second form of 3D television called auto-stereoscopy where pixel count has

increased by four-times every 3 years [42]. These improvements are being driven by the use

of better photolithography and etching equipment that are being borrowed from the

semiconductor industry. By reducing the feature sizes for transistors and thus pixels, this

better equipment enables improvements in pixel density and thus resolution where increases

in resolution are needed to implement auto-stereoscopy. The reason these increases in

resolution are needed to implement auto-stereoscopy is because pixel elements on the display

need to be divided into ones for the left and right eye and for each necessary “viewing zone”

(See details below).

Sixth, improvements in ICs such as graphic processing units (GPUs) (See Figure 4) and

digital storage facilitate the introduction of 3D television because 3D images require more

data processing than do 2D ones. For example, stereoscopy requires the processing of two

stereoscopic streams of video and thus requires more data processing than do 2D television.

Furthermore, improvements in GPUs enable the use of more complex software algorithms for

converting existing 2D movies into 3D ones. For example, Samsung 3D television includes

software programs for converting regular 2D content into 3D [45].

The importance of improvements in GPUs is also relevant for animation where millions

of motion control points and polygons are used to represent images. One expert estimated

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that the "reality threshold" (simulations indistinguishable from ordinary human vision) of

computer animation is about 80 million polygons per frame [46]. Polygon count generated by

leading video game hardware doubles roughly every 2 years. If these trends continue, the

reality threshold may be achieved by 2014.

Seventh, improvements in digital storage include improvements in magnetic (See Figure 5),

optical and semiconductor storage and these improvements enable the cheaper and more

compact storage of video. For example, while a DVD disc containing two hours of video

(720p, MPEG-2) contains 4 gigabytes of storage, a blue-ray disc containing 9 hours of HD

video has 50 gigabytes of storage. The result of these improvements is that the “street” price

per gigabyte of optical and magnetic hard disk storage had fallen below $0.10 per GB by

2010.

Eighth, improvements in Internet bandwidth facilitate the introduction of 3D television

because these improvements facilitate a move towards Internet downloads of both 2D and 3D

movies. According to Nielsen’s Law of Internet Bandwidth [47], the connection speed of

high-end Internet users grows by 50% annually, or double every 21 months. By 2011, Internet

bandwidth for high-end users would exceed 40Mbps, the average bitrate of high-quality 3D

HD video streams, enabling high-quality 3D-HD content to be distributed over the Internet.

Ninth, standardization of compression and digital broadcasting methods also facilitate 3D

television and this standardization is partly driven by the improvements discussed above. For

example, although many countries have adopted different forms of digital broadcast standards

(DVB/T, ATSC, ISDB-T, DMB-T/H), most of these standards include a common MPEG-4

video compression standard with an extension called Multiview Video Coding (MVC). This

means that most of the digital broadcast standards are “3D ready” [48] and since most

countries already broadcast partial or all in digital, a lack of agreement on standards will

probably not slow diffusion [49].

Tenth, since many of the above-mentioned improvements facilitate the introduction of 3D

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content, together they facilitate a growth in 3D content. As shown in Figure 6, the number of

3D movies has grown quickly since 2005. Although most of these movies have been viewed

in theaters with special glasses, these movies can provide the first content for 3D televisions

as the televisions become economically feasible. Similar things can be found in video games

where video game consoles typically include faster graphic processing units than do personal

computers and thus 3D content is probably diffusing more rapidly with video games than

with 3d movies. For example, in late 2010, more than 500 3D PC games titles were listed on

Nvidia’s 3D Vision website [50].

5. Impact of improvements in 2D displays on achieving 3D displays

While various methods of implementing 3D displays exist, this paper focuses on two of

them: 1) Time-sequential 3D with active shutter 3D glasses (or passive ones); and 2.)

Development of “Glasses-free” auto-stereoscopic 3D displays. 3D televisions using the first

technique were introduced in 2010 and they sold 1.1 million units and they are expected to

sell just under two million units in 2011 [51].

5.1 Time-Sequential 3D

In time-sequential 3D, a special LCD and glasses containing a similar LCD are used to

create the illusion of 3D images for the viewer. Separate streams of images for the left and

right eyes are displayed sequentially on the display, i.e., a frame for left eye followed by

another for the right eye, and by synchronizing the LCD television and the LCD in the

glasses, the appropriate images are presented to the right and left eyes. In order to prevent

blurring, improvements in the frame-rate of 2D LCD displays were needed before this could

be achieved. As shown in Figure 1, the frame-rate of 2D LCD displays surpassed the content

frame rate of 120 frames per seconds in 2010.

The shutter glasses incorporate a liquid crystal that selects appropriate images for the left

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and right eye. Faster liquid crystal response times were also needed for these glasses to work

effectively in that the active 3D glasses must quickly process the streams of stereoscopic

images to prevent blurring. The disadvantage of these glasses is that their estimated retail

price is about US$100 due to use of a display in the lens, an infrared or radio frequency frame

synchronizing circuit, and a power source to operate the shutter [52].

On the other hand, the falling cost of LCDs will probably reduce the cost of these glasses

and reduce the cost of the overall 3D television to a point at which the 3D television is

cheaper than current 2D televisions for the same size display. The estimated cost of adding

3D capability to an LCD television was about 10 to 30% in 2010 the cost of the television.

Since the cost of large screen LCD televisions fell 18.8% a year between 2003 and 2007 [43],

it is likely that 3D televisions will become cheaper than the current 2D televisions for the

same display size over the next few years even if this rate of price reduction falls.

Another option is passive glasses that do not require a power source and that are expected

to cost less than 10 USD. Although images for the left and right eye are displayed

sequentially on such a display as in time-sequential 3D, the images are polarized by an

additional active polarizing filter before leaving the LCD displays. These filters also depend

on improvements in the frame-rate of the displays so that the displays can process the images

fast enough to prevent blurring. Polarized glasses then filter the images for each eye thus

creating an illusion of 3D images. Polarize-filtered 3D glasses are smaller and lighter and

thus more comfortable and affordable to users.

5.2 Auto-stereoscopic 3D

Improvements in pixel density are needed to make auto-stereoscopic 3D displays

technically and economically feasible and thus eliminate the need for glasses. In

auto-stereoscopy, pixels are divided into two groups -- one for displaying left-eye images,

another group for displaying right-eye images. A filter element in the LCD is used to focus

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left and right images into appropriate “viewing zones” where respective eyes of the observer

should be located, as shown in Figure 6.

Manufacturers estimate that more than 128 million pixels per square inch are needed to

make auto-stereoscopic 3D technically possible. This is because 8.3 million pixels are needed

to enjoy the full benefits of high-definition television and an auto-stereoscopic 3D television

should have about eight viewing zones in order to accommodate head movements. Since each

viewing zone requires two sets of pixels, about 128 million pixels per square inch are needed

before auto-stereoscopy 3D television is technically feasible.

The best auto-stereoscopic 3D display panel exhibited at the Consumer Electronics Show

in 2011 [53] had a pixel density of 8.3 million pixels per square inch. If pixel density

continues to increase four-times every three years, it will be two more cycles or 2017 before

pixel density reaches 128 million pixels per square inch and thus auto-stereoscopic 3D

displays become technically feasible. As for economic feasibility, this depends on the

incremental cost of the higher densities. If the incremental cost is small, they will probably

become economically feasible before 2020.

6. Diffusion of 3D Televisions

The cost of 3D televisions and both the cost of making and distributing of 3D content are

gradually falling and thus becoming more economically feasible as the cost and performance

of 2D displays, ICs, various storage technologies, and the Internet are gradually improved.

The cost points at which 3D televisions and 3D content begin to diffuse is more difficult to

analyze. The fact that 3D movies are popular in theaters, albeit that popularity has dropped as

the quality of 3D movies have fallen [50], suggests that many consumers would like to watch

3D programs in their homes. But how much do they want to watch them? And how much are

they willing to pay for these 3D televisions and content. These questions are difficult to

answer and are not addressed by this paper’s approach.

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A second set of questions revolves around the interaction between the availability of 3D

programs and the diffusion of 3D televisions. A large body of research suggests that a critical

mass of users, content, and hardware must be created for growth to occur in those industries

in which strong network effects exist [54][55][56]. Will the availability of 3D movies for

theater viewing reduce the challenges of creating a critical mass by making a sufficient

number of movies available before 3D televisions begin to diffuse? The answer is probably

yes but to what extent? Furthermore, even if the availability of 3D movies for theater viewing

reduce these challenges, significant increases in the amount of 3D content are still needed for

most consumers to purchase 3D televisions. How fast might these increases occur?

A third set of questions revolves around whether users will be willing to wear glasses to

watch television. Surveys of consumers have found that users do not like glasses and worry

about eye strain, nausea, and fatigue [50]. Thus, the diffusion of 3D television may have to

wait for auto-stereoscopic ones. The second and third sets of questions are not addressed by

this paper’s approach

Nevertheless, it is likely that 3D television will diffuse over the next 5 to 10 years (from

2011). Improvements in frame rate, pixel density, and overall costs continue to be improved

since they are being made for 2D LCDs and thus these improvements will continue to be

made even if 3D television is not implemented. In other words, 3D television is benefiting

from spillovers from 2D displays and the economic feasibility of 3D television will continue

to improve even if 3D television is not implemented. In particular, as long as the prices of

large screen LCD televisions continue to fall through increases in substrate size, reductions in

material thicknesses, and other improvements, consumers will upgrade to larger screens,

higher-definition, and eventually 3D televisions. At the same time, as more movies and

television programs move to the Internet, it is likely that 3D displays will begin diffusing in

the personal computer market and thus drive a move to 3D content for many media.

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7. Discussion

This paper analyzes the timing of a new technology’s economic feasibility using a simple

yet novel approach. While the conventional wisdom that the cost of a new technology falls as

cumulative production increases cannot address economic feasibility until a technology has

been introduced, this paper’s approach enables us to analyze economic feasibility long before

a technology has been introduced. This approach builds from the notion that technologies can

be thought of as a “system” of components [11][12] [13] [14] [15] where new technologies

often borrow components from existing technologies [16]. Thus, this approach focuses on the

concepts that form the basis of new technologies and the levels of performance that are

needed in the relevant components before new concepts become technically and

economically feasible.

For a 3D television “system,” key components include LCDs, ICs, hard disks, and the

Internet. Key dimensions of performance for them include the frame rate and pixel density of

the LCDs and various dimensions of performance for ICs, hard disk storage, and the Internet.

In particular, we were able to identify specific levels of performance that are needed in the

frame rate and pixel density of LCDs before time sequential and auto-stereoscopic 3D

televisions will respectively become technically feasible. Based on this analysis, we were

then able to identify other improvements in costs that are occurring and that might

compensate for the cost disadvantages that may result from the implementation of higher

frame rates and pixel densities.

This paper’s approach to understanding economic feasibility highlights two problems

with the economics literature’s use of learning curves. One problem is that many applications

of learning curves assume that all of the components in a new technology’s system are unique

to that technology and thus any cost reductions in these components come from production of

this technology’s system. This is clearly not the case in 3D television and in many other

electronic products such as computers and mobile phones [15][16][26][30].

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A second problem is that many applications of learning curves assume that the cost

reductions come from activities in a factory [1] [2] [3].. Building from other research, this

paper considered several other ways in which 3D television related technologies are being

improved. These include: 1) improving the efficiency by which basic concepts and their

underlying physical phenomena are exploited; and 2) geometrical scaling. For the first

method, there has been a search for liquid crystals whose orientation effectively responds to

electrical signals where recent searches have focused on crystals with fast response times. For

geometric scaling, LCDs have benefited from increases in the scale of the production

equipment for them where increases in substrate size have facilitated the realization of these

benefits. In showing how these improvements are being made in LCDs, this paper also shows

some of the limitations with assuming that cost reductions are mostly from cumulative

production as automated equipment is implemented and organized into flow lines.

Some readers might argue that this paper’s approach is too simple. However, the author’s

argue that we need simple approaches that can be used by managers and students to

understand technological change and how this change leads to the emergence of

technological discontinuities. In particular, we need simple methods that students can use to

look for opportunities in the university courses that are intended to help students look for

opportunities. This paper (and a forthcoming book) provides a simple method for analyzing

the economic feasibility of new technologies and thus provides a simple method that students

can use to look for new opportunities. It demonstrates the method using an analysis of 3D

television, which is the type of near-term technology that we would like students to analyze.

Furthermore, by going beyond the notion that costs fall as automated equipment is

implemented and organized into flow lines and illuminating two other methods of achieving

improvements in cost and performance, this paper can help students and managers analyze

other technologies. A forthcoming book by the one of the author provides additional details

on this methodology.

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8. References

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[2] Argote L, Epple D. Learning Curves in Manufacturing, Science 1990; 247(4945): 920 –

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[3] Utterback J. Mastering the dynamics of innovation. Boston: Harvard Business School

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Figure 1. Improvements in display frame rate. Sources: [44], [57], author’s analysis.

Figure 2. Increasing pixel density for LCD. Sources: [42] and author’s analysis.

25

Figure 3. Increasing performance of graphic processor units. Source: [58]

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26

Figure 5. Increased 3D Content. Source: [62]

Figure 6.Concept of Auto-Stereoscopic 3D Display. Source: [63]