Some good news here.
In theory, I totally agree with everything you just said. However, in practice, I just tried my polarized sunglasses with my 3VO, and they have (almost) ZERO effect on the screen. I can turn my head any which way and still see the screen perfectly. It's only as much darker as you'd expect from wearing, well, sunglasses. So if there's polarization from the LCD, I guess the conclusion is that it's not quite so simple as a simple linear polarization. I actually thought about waiting for an OLED display like a hypothetical SGS2 just because of the polarization problem, but it turns out it's no problem at all with the 3VO.
(I say "almost" zero effect because at extreme angles I see some prismatic/diffraction effect, but it's not pronounced, and I mean literally looking at the screen from the side.)
My sunglasses are horizontally polarized and neutral filtered. When holding the phone looking at the home screen in portrait mode, it's just slightly darker. Rotate 90 degrees to landscape while looking at the big flip-clock/weather widget - the colors shift - but the top portion of the flip-numbers (already a slight gray) darken quite a bit and the lower half of the numbers go off-white.
So - the AVS panel isn't a simple linear polarization but like most all LCDs it is polarized light coming off it.
Try it like that and see if you can reproduce my results.
When I get a chance, I'll the same in 3D viewing - however, the parallax barrier for 3D is simply an active linear polarizer, so I'd expect a bigger change. And - when rotating the glasses to the display by 90 degrees, a good part of the 3D effect is lost.
Yep, I didn't know if the polarization was linear or circular, or both (i know next to nothing about how the parallax barrier works, especially since I observe 3 different states that it's in.
But I DO know that with my circularly polarized filter for my camera lens, I can completely block out an LCD monitor and HDTV. Neat little party trick to take a pic of the TV while it's on and show people a TV that looks off.
So I guess that means we're dealing with circularly polarized light coming from the LCD panels, and even though a linearly polarizing filter can't line up with that, it probably still has an effect, as both of you are describing.
Kinda like seeing that egg carton pattern on car windows when you wear polarized glasses.
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