Industry sales could top $130 million in 2002The market for medical display monitors has turned upside down over the past year, as once-dominant cathod ray tube (CRT) sales have given way to flat-panel sales. Liquid crystal
Industry sales could top $130 million in 2002
The market for medical display monitors has turned upside down over the past year, as once-dominant cathod ray tube (CRT) sales have given way to flat-panel sales. Liquid crystal displays (LCDs), which accounted for only 20% of sales in 2001, will capture 80% of new purchases this year, according to industry estimates.
Hoping to solidify its position as a leader in this market, Planar Systems has signed a definitive agreement to acquire Dome Imaging Systems, a major provider of display systems optimized for diagnostic imaging. The cash deal for the publicly held Waltham, MA, company is expected to close in mid-April. It is valued at $61 million, approximately 2.1 times Dome's 2001 revenues.
Dome holds a leading share of the market for high-performance flat-panel monitors and display controllers. Over the past 18 months, the company has shipped about 1500 monitors, a phenomenal track record in a traditionally slow market, said Karen Miller, vice president of sales and marketing.
The company's strength has been its advanced product line. Last year Dome introduced the first 5-megapixel flat-panel monitor for medical imaging applications. The monitor provides 3.1 line pairs per square millimeter, surpassing ACR/NEMA's 2.5-line standard. The company also supplies a 3-megapixel flat panel in both gray scale and color. Both product lines use active-matrix LCD technology, which provides sharp, bright images that do not degrade over time.
These products complement those of Planar, which manufactures the Vital Screen family of medically certified flat-panel monitors. The combined line of Dome and Planar products will cover the full range of OEMs' and healthcare institutions' imaging needs, according to Kevin Renner, medical business unit director for Planar Systems of Beaverton, OR.
The Dome-Planar union promises a more rational supply chain for the buyers of image displays who are looking for a single source of full-range flat-panel products from low-resolution, 1-megapixel units for patient monitoring to 5-megapixel diagnostic displays for radiology and other clinical departments, including orthopedics, cardiology, and emergent care.
"We will have customizable components, platforms, and a scope that covers everything in the hospital from the desktop to digital imaging and everything in between, from the administrative side of the hospital to the patient bedside," Renner said. "That's all part of a strategy to position ourselves and build our company as the medical world's gateway to clinical information."
Renner estimates that the worldwide market for high-end, 2 to 5-megapixel diagnostic- and clinical-quality display units will reach about $105 million this year. Controller boards will account for an additional $25 million. The total market will approach $500 million in 2005.
"The diagnostic medical imaging monitor market is starting to expand rapidly as PACS networks proliferate throughout the medical infrastructure," said David E. Mentley of iSuppli-Stanford Resources, a display industry research firm. "While this application has been one of the last strongholds for the monochrome CRT, these specialized CRT monitors are bulky and expensive, and they generate excessive heat and have short operating lifetimes. High-resolution LCD monitors have great features that will solve all these problems and will help radiologists and patients alike."
Technology is driving this marketplace. Barco, another leading vendor of flat-panel monitors, is experiencing strong demand for LCD products from key customers and distributors such as Richardson Electronics and Dell, said Mike Feinstein, North American division manager for medical imaging systems. In response, the Duluth, GA, company has launched a major R&D effort to develop flat-panel-related products. Underlying the surge in development is a critical mass of capability that has enabled flat panels to achieve image quality on a par with the best CRTs.
At the same time, the price of flat panels has declined to the point that they are now competitive with CRTs. Factoring in the cost of acquisition, maintenance, and their longer life cycle, flat panels-even with a $25,000 to $35,000 price tag-are less expensive than CRT monitors, Renner said.
Flat panels have other advantages over CRTs, including a smaller footprint. The 5-megapixel Dome product has a footprint 80% smaller than that of a CRT. Flat panels also generate less heat than CRTs and use 30% to 40% less power.
Because of their solid-state technology, flat panels produce images that are stable in both quality and luminescence. Software and hardware can be automatically calibrated. A Barco flat panel, for example, has an integrated photo sensor called I-Guard built into the lower corner of the panel. This sensor "sees" what the observer's eye sees, and instantly compensates for any variation not only in the performance of the backlight but in the panel itself.
"So for 100% of the time the panel is turned on, it is displaying DICOM-conformant images; there's no warm-up time or user intervention required to ensure that for the entire life of the product it is DICOM-conformant," Feinstein said.
Barco has also developed a software offering that allows medical administrators to maintain the DICOM conformance of every display in the reading room and to handle calibrations and quality control from a remote location, he said.
These strengths are making medical imaging more appealing to physicians outside the radiology department, according to Renner.
"There's a very strong desire by physicians to be able to view images without having to go to radiology, but because of space constraints you can't have a CRT monitor in those environments," he said. "Diagnostic-quality CRTs are extremely bulky and very heavy, so it hasn't been feasible to put them into other departments."
Flat-panel monitors have no such limitations and could therefore dramatically expand the boundaries of diagnostic imaging. Merged, Dome and Planar will be ideally positioned to take advantage of market opportunities, Renner said.
Planar has developed a point-of-care computing workstation called Invitium that has two USB ports, two serial ports, a built-in Ethernet network card, 128 to 256 MB of RAM, a 700-MHz Intel Pentium III processor, and a 30-GB hard drive. Now that Dome is onboard, Planar may be able to use Dome components to transform Invitium into a PACS workstation, he said.
"There is a tremendous convergence of technologies taking place in the hospital right now," said Matt Harris, vice president of Planar's medical business unit. "Hospitals are insisting that information be displayed on common pieces of equipment, and radiology, as well as informatics, is driving that convergence. Physicians want the ability to access all the information about their patients from a single location. This combination of Dome and Planar technologies will enable that convergence to occur."