Manufacturers of touch screens are witnessing a surge in demand, as Apple's iPhone drives competing manufacturers to fight back.

Growing demand has sparked a flood of competition and innovation in the space, iSuppli claims as reported by DigiTimes. iSuppli predicts shipment revenues for touch-screens will reach $4.4 billion by 2012, up from $2.4 billion in 2006.

"Catalysed by Apple iPhone, sales of touch screens using projected-capacitive technology are growing dramatically," said Jennifer Colegrove, senior analyst for emerging displays at iSuppli.

Projected capacitive touch screen technology is more durable and has better transmittance than the more commonly used resistive technology. More touch-screen manufacturers are developing and commercializing this type of screen. Furthermore, the average pricing gap between the capacitive and resistive display types is dwindling, making the technology more attractive."

The analysts note the debut of new touch technologies from N-trig, Sony, Sharp, TMD and Samsung. They also note an explosion in competition in the market, with several companies beginning to make such screens. Early signs of consolidation within the increasingly competitive market have also been noted, with several mergers and acquisitions emerging.