Monitors: Slimline growth

The monitor market pulled through another year with LCDs further climbing the
charts. The monitor indus­try underwent an interes­ting change in the last one
year. On one hand, there was a shift from the CRT to TFT-LCD monitors, and on
the other, there was a marked preference for larger screen sizes, from 15 to
17" and above in both CRT and TFT monitor categories. On the whole, the
industry has grown in excess of 36 percent.

The display market in India underwent rapid changes. The TFT-LCD mar­ket is
outpacing the growth of CRT monitors and there is a sharp shift towards 17"
LCD moni­tors. Gro­wing awareness of LCD tech­nology and dec­line in the
price differential bet­ween CRT and LCD moni­tors have contributed to the
growth of LCD monitor market growth in India.

According to the indus­try estimates, LCD monitor market in India stood at
around eight lakh in unit terms by the end of the fis­cal, a huge rise from
around three lakh units last year. If we take CRTs alone, the contri­bution of
15" moni­tors was 56 percent while that of 17"-and-above CRTs was 44
percent. This year, in the first five months, the contribution of 15" CRTs
has dipped to 42 per­cent, while the contribu­tion of 17"-and-above CRTs
has grown to 58 per­cent. In LCD, the 15" monitor sales have reduced from
around 70 percent last year to 50 percent this year, while the contribution of
17" and 19" LCD monitors has grown from 25 percent last year to around
45 percent. 

Bullish Growth

The CRT has reached its saturation point with its full-flat version. Prohibi­tive
costs had limited the adoption of LCDs in the past, but a decline in its price
has expanded the consumer options. Verti­cals like healthcare, hotels,
airports, BPO, and IT are the key markets for LCD at present. According to 
estimates, these verticals consumed more than 80 percent of the LCD
shipments.

A close look at the tan­gible and intangible bene­fits of LCDs indicates
that large and mid-sized enter­prise-monitor-buying decisions are increasingly
favoring LCDs. For insta­nce, a 17" CRT monitor today costs around Rs
6,000 and the LCD monitor Rs 10,000. One needs to pay a premium of Rs 4,000 in
order to acquire a 15" LCD monitor. But the real value of the LCD lies in
the lower running costs, and shorter payback period of between two-to-three
years through saving in space and electricity.

Increasing number of Players

The end-user price of LCD monitors dropped by 15 percent during FY 2005-06,
improving affordability. Samsung, one of the lea­ding vendors in the moni­tor
space, alone shipped close to 1.1 million monitors during the year (including
CRT). The share of Sam­sung LCDs of its total monitor sales is around 11
percent in unit terms. Meanwhile, LG too flooded the market with a number of
offerings. Other leading players like BenQ made significant inroads in the LCD
space with a slew of offerings. BenQ was one of the first to reduce display
response time to 12 ms and introduced the 2-ms-response-time LCD moni­tors
aimed at enhancing the multimedia experience. BenQ shipped around 55,000 LCDs.
The buoya­ncy in the market has led to the entry of new players like Zenith.

HCL registered a good demand for its LCD offe­rings. HCL went into an ex­pan­sion
spree and increa­sed its reach across the country making significant inroads in
the B and C class cities. ViewSonic and Philips also upped their ante during the
year. View­Sonic, which had kept a low profile in the Indian monitor space by
catering only to the niche market for high-end LCDs, firmed up its expansion
plans to foray into the CRT space soon.

Going Forward

In the Indian context, the vendors are confident that the inherent benefits
will increase the volumes for LCDs in the days ahead. The OEMs are also pushing
LCDs with PCs. The chan­nels also evinced a keen interest in pushing more LCDs.
For the same number of monitors sold, one gets almost significantly more revenue
than by selling the same number of CRTs, as the channel earns higher margins.
Meanwhile, since, LCDs take lesser space, the logistics costs of doing LCD
business are significantly lower. In all, a further climb of LCDs in the moni­tor
charts looks imminent.

Global Trends

According to IDC India, the PC monitors market totaled 39.8 million units in
2005, registering an increase of 15.6 percent over the pre­vious year. Branded
market for standalone monitors grew by 9.1 per­cent in unit shipments, and OEM
(bun­d­led) monitors grew rapi­dly at 25 percent over the same period. Strong
LCD growth in the OEM market in 2005 was a major high­light, with shipments ex­ceeding
CRT sales, which remained flat over the same period.

Although the CRT form-factor was stronger than LCD across Asia-Pacific in
2005, IDC expects overall LCD sales to over­take CRTs in the first quarter of
2006, mirroring the trend already seen in the OEM market.

Focusing on the growing countries will be the key to secure margins. India,
Indo­nesia and the Philip­pines are expected to show a positive CAGR for CRTs
through 2010, as the domes­tic manufacture is able to fulfill the local demand
by cost-conscious buyers, despite regional plants slowing down the CRT
production.

Shrikanth G

shrikanthg@cybermedia.co.in