Shortage in components drives up monitor prices

PC prices increase by Rs 1,000

With monitor prices going up lately, the PC price has increased
by over Rs 1,000 in the last one month since three of the PC components are
running in shortage. In early April, RAM prices had gone up by Rs 1,000 (256 MB)
followed by cabinet for Rs 100. Currently, CRT monitors are in shortage piping
up the price by a minimum of Rs 200-250 in the entry-level 15-inch monitor. The
17-inch monitor price has also increased by Rs 250-300 and according to market
sources, the current upward trend will continue for another two months since
there is a shortage of components in the global market. However, TFT (LCD)
monitors are available at the old price without any change.

"The monitor prices have increased sharply in the last two
weeks and Samsung was the first brand to announce the price hike. Since Samsung
is a prem-ium brand, it has increased its price by Rs 200-250, while others are
keeping it below Rs 200. However, all the international brands such as Samsung,
LG, BenQ, Philips etc have ann-ounced the new prices, while domestic players
like Microtek and Proview are maintaining the old price. According to vendor
information, there is a huge shortage of glass shell, a critical component that
goes into the production of CRT monitors, in the international market. We expect
the new prices to continue or go up further for the next three months,"
said a leading sub-distributor operating in the Ritchie Street market who sell
all brands.

"Presently, Samsung 15-inch (white casing) is sold at Rs
4,700 while black casing is quoted at Rs 4,850. Similarly, 17-inch (white) is
priced at Rs 6,150 and black is fixed at Rs 6,350. The new prices will continue
for the next two months and if there is any increase, it would be in the range
of Rs 50-150," said Sushil Chouhan, Director, Acme Business Solutions.

"We have increased the price by only Rs 100 since we have
some inventory with us. However, during next week, we will increase it by
another Rs 100. Presently, we are offering LG 15-inch (white) at Rs 4,450 and
black at Rs 4,550. Similarly, 17-inch is being quoted at Rs 6,000 (white) and Rs
6,100 for black," said RM Rajesh, Director, Uniaccess Computers, an LG
sub-distributor.

"The sudden price increase has put resellers in a fix since
it is the peak time for college and educational institution orders. In many
cases, resellers have quoted the old price and we are under pressure to supply
in the same price. We are expecting some government orders to come in after the
announcement of election results."

"The price increase is mainly because of the raw material
shortage in the global market and further increase is based on the demand-supply
gap. According to information available to us, the situation will continue till
July and the price increase will be in the range of four to six percent,"
said a source close to Samsung.

"We believe that major ven-dors are engaged more into the
production of television sets to meet to the demand owing to Athens Olympics
2004 in Aug-ust. Most of the CRTs manufac-tured are going into the prod-uction
of television sets and the situation is expected to continue for another three
months. The basic cost has increased by $ 4 in 15-inch and $ 4.5 in
17-inch," according to a source close to LG Electronics.

Meanwhile, the market is abuzz with rumors that 15-inch will be
phased out in the next two-three quarters.

However, a section of re-sellers does not agree to it saying
that there is a strong demand for 15-inch in the local market and a long way to
go. "There is a great demand for 15-inch and it will continue to be the
entry-level product at least for the next one year. Most of the schools,
colleges, government institutions and other bulk buyers prefer to buy 15-inch
for cost factor. However, there is a noticeable shift in the home segment who
prefer 17-inch instead of 15-inch and the market share of 17-inch has increased
up to 35 percent in this segment," said G Arunkumar, Regional Manager,
Proview Electronics Ltd.

Talking about the domestic brands, Arunkumar said, "The
domestic brands have not increased the price since we have enough stocks to
manage for the next few months. However, we have to wait and see the market
movements before taking any decision on the price increase." Proview is the
only company to offer 14-inch in the market still and it is priced at Rs 3,700.
Proview 15-inch is quoted at Rs 4,100.

S Gopikrishna

Chennai