A downturn is looming in the desktop monitor market as monitor manufacturers struggle to make margins in an increasingly cut-throat arena.
According to market watcher iSuppli, LCD panel prices have been steadily rising for the past six months due to restricted supplies, but branded monitor manufacturers are not benefiting because raising prices will reduce customer demand.
As panel manufacturers are looking for another price hike this month, iSuppli has predicted that monitor makers will be forced to raise their prices to customers. This will result in a drop in demand and slower sales.
“Flush with success, panel manufacturers are pushing for further price increases in October,” said Rhoda Alexander, director of monitor research for iSuppli. “However, there are signs that end demand is softening. Inventories of finished monitors are rising, indicating that a gap is forming between factory output and user demand and the most expensive monitors manufactured this year are still on container ships sailing to end markets.”
She added: “To survive, branded monitor vendors will need to reclaim some profit margin, which will necessitate price increases for users. That will result in a market slowdown, a return to oversupply and a long period of adjustment during which panel pricing drops and overpriced inventories clear.”
The market share battle between the four major PC manufacturers, HP, Dell, Acer and Lenovo, is at the heart of the trouble for branded monitor makers. The quartet, which accounts for almost 40 per cent of all LCD monitor sales, have overstocked on monitors for the end-of-year sales rush, which will hurt supplies and force up prices.
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