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Trend
Flat panels will get pricey
Prices of LCD monitors had hit rock bottom. Now it’s
time for them to move northwards, forecasts Abhinav Singh
 During
the last two quarters, prices of 15-inch LCD monitors had crashed to an all-time
low—we are talking sub-Rs 12,000, and in one case hovering above Rs 10,000.
Just when everybody thought that a further drop was on the cards, the reverse
is set to happen as vendors expect an increase in LCD monitor prices by Rs 500-600
in the next two to three months. The upcoming hike in LCD monitor prices has
been attributed to a shortage in the supply of LCD panels—a phenomenon
that’s set to push panel prices by five to six dollars in the coming months.
Moreover, demand for 15-inch LCD monitors has shown a steady increase while
supply has failed to keep pace.
The LCD market has witnessed a steady growth in India because
the price points of 17-inch CRT and 15-inch LCD monitors have been converging;
there is still a gap, but it’s not as wide as it used to be. 15-inch LCD
monitors offer the same viewing area as 17-inch CRTs, except that the former
is easier on the eye. According to market sources, Philips sold about 2,50,000
LCD monitors in 2004, and over 90,000 in Q1 of 2005 alone. LG Electronics witnessed
a surge in the sale of LCD monitors with about 800 percent growth year-on-year.
Samsung also recorded a growth in its LCD monitor sales.
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Towards 2004-end,
there was an oversupply
of LCD panels which
led to a drop in
LCD monitor prices
Sunil Muralidharan
Country Product Manager,
TFT LCD Monitors &
Plasma Monitors,
Samsung India
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The demand for 15-inch LCD monitors is higher in India, unlike
in other markets where the demand is for 17-inch LCD monitors. According to
R Manikandan, General Manager, Sales & Marketing, PC & Peripherals,
LG Electronics India, “Prices of LCD monitors will not reduce any further
for the time being. They will increase marginally, which will not have any effect
on their demand. By 2005-end, the European market will be at its peak and the
demand for LCD monitors will increase. This will affect the global market, including
India.”
Supply not keeping pace
The supply of LCD panels has not kept pace with demand. LCD panels constitute
about 80 percent of the total cost of LCD monitors. LCD panels are not manufactured
in India; they are imported and then assembled here. The global supply of LCD
panels and their prices have a direct impact on the Indian market. Says Sunil
Muralidharan, Country Product Manager, TFT LCD Monitors & Plasma Monitors,
Samsung India Electronics, “Towards 2004-end, there was an oversupply of
LCD panels which led to a drop in LCD monitor prices, but in due course, the
profitability of LCD panel manufacturers was eroded, and they have cut back
supplies. This has a direct impact on LCD monitor prices.”
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BPOs and banks are expected to boost sales of LCD monitors.
BPO companies are entitled for 50 percent depreciation on hardware purchases,
and hence it is more meaningful for them to adopt flat panel displays
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Corporate sector driving sales
LCD monitor vendors are still bullish about corporates driving the market, but
they say that the home segment is yet to embrace LCD monitors in a big way.
This is due to the fact that prices have not reached a level where the home
segment is comfortable purchasing these peripherals. As sales are driven mainly
by corporates, many vendors have decided not to go in for schemes and offers
for LCD monitors.
BPOs and banks are expected to boost sales of the monitors.
ICICI Bank, EXL Service and WNS have all embraced flat-panel monitors. Vendors
say that BPO companies are entitled for 50 percent depreciation on hardware
purchases, and hence it is more meaningful for them to adopt flat panel displays.
BPO outfits are on an expansion spree, and they are expanding their headcount
at a faster rate.
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By 2005-end, the
European market will
be at its peak and
the demand for LCD monitors will increase
R Manikandan
General Manager,
Sales & Marketing,
PC & Peripherals,
LG Electronics India
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As BPOs expand, there is less space per workstation for many
employees. Since an LCD monitor is sleek and occupies less space, it is a perfect
fit for such workspaces; this explains why new BPO set-ups are going in for
LCD monitors.
Positive outlook
Vendors selling LCD monitors are optimistic about sales.
They do not think that a marginal increase in price will have much impact on
their volumes. Affirms Manikandan, “We are expecting a CAGR of 100 percent
as far as the sales of LCD monitors (including 15- and 17-inch) are concerned.”
Vendors feel that the home segment in India will only embrace LCD monitors once
the price point comes below the Rs-10,000 mark. Opines Muralidharan, “Once
the home segment embraces LCD monitors, we can expect a huge growth in the market
in India.”
LCD monitors account for just about 15 percent of the overall
monitor sales in India, which is far less than the 70 percent share enjoyed
by this product category in some European countries.
Though LCD monitor prices will never equal those of CRT monitors, for the time
being the momentum that’s built up is expected to carry on. For those in
the home segment who are thinking of buying 15-inch LCD monitors, this is the
right time as prices will rise in the near term.
abhinav@expresscomputeronline.com
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