While most monitor makers are desperately dumping 14in stock in the UK to clear massive inventories in preparation for the demise of the product, the buying public has at last latched on to the idea that size is important.
Sales of 17in monitors are growing fast and the 15in is establishing itself as the preferred size for entry-level monitors. Hitachi?s 19in tube will add to market pressures over the next few months as Hitachi and companies such as ADI and Compaq start shipping product. This is expected to have some impact on both 17in and 21in sales, although all three product categories are expected to grow.
This is the kind of news that manufacturers want to hear. It means margins are healthier and, at the moment, prices are more stable. It is in the monitor makers? interest to throw in products that tempt buyers away from the safety of the cheap screen option.
Previous attempts by manufacturers to discontinue the 14in monitor in favour of higher specification, higher priced screens have failed.
The 14in is more than adequate for most first-time users and does not overstretch the IT budget. It has remained a strong seller, mainly because PC makers want to keep system prices down. But today there is a noticeable shift in the market to dangle carrot-like incentives and tease buyers into higher specifications. PC makers are shipping 15in and 17in monitors as standard, reacting as much to demand as to their desire to maintain margins.
As a result, the 14in market is falling through the floor. The introduction of the 15in as a standard monitor has gone some way to speed up this decline, but the main factor has been increased competition in the UK, while the buyers? demands for a larger viewing area from the start and not as an upgrade has confirmed the need to change.
Prices for 14in screens are being quoted at less than #80 by some makers. While in some quarters this is seen as the inevitable progression of the market, some companies that still include 14in products in their portfolios are placing the blame for the drop in price squarely at the door of Far Eastern companies.
This has prompted a number of tit-for-tat exchanges between monitor makers, all of which deny they have had anything to do with the price erosion and pass the buck to their nearest competitors.
Warren Miller, sales account manager of Taiwanese monitor maker Smile, denies his company is dumping product and blames other firms such as ADI Systems. ?ADI is discounting heavily,? he says. ?It has to clear more than 200,000 units before it can redesign for the new Vesa standard.?
ADI denies it is part of the current dumping frenzy. ?It?s not true,? says Matthew Gillard, ADI?s UK marketing co-ordinator. ?We are not responding to the Vesa announcement by dumping. In fact we are one of the few who aren?t.?
Gillard lays some of the blame on Far Eastern rival Samsung, saying that the arrival of new models has resulted in Samsung dropping the price of its Syncmaster 3 range.
Aaron Fright, monitor product marketing manager at Samsung, denies the dumping charges. ?With our Winyard manufacturing facility we can respond to the market quickly. We don?t have the problem of the 30-day time delay while product is shipped to the UK.?
Fright blames the Taiwanese, adding that the price pressures could force a number of smaller Taiwanese companies out of the 14in market.
?People are suffering,? he says. ?They can?t be making money.?
Alun Williams, senior product manager at NEC?s peripherals division, suggests that no one is really making money out of the 14in monitor and that is why NEC pulled out of the 14in market some 18 months ago.
?The 14in is in serious decline,? he says. ?The OEM business is still going OK, but the 17in is now dominant. Pricing on the 17in has fallen and we?re even seeing a vast increase in 21in sales.?
It?s a view shared by Romtec analyst Phil Burnham. He says: ?The upgrade market to the 17in is doing well, but we are expecting a big boom in the 19in, especially as it is a reasonable price for what is a better tube than the 17in.?
Despite Burnham?s suggestion that the 19in will put pressure on the 17in, some monitor makers have expressed reservations about the 19in market, saying it will not take off as predicted. Their reasons include the fact that users will not be prepared to pay extra for a screen that is not much bigger than the 17in.
?Growth of the 19in will depend on availability of CRTs,? says Rob Musson, product marketing manager in charge of Eizo at Professional Display Systems (PDS), Eizo?s exclusive UK distributor. ?But the 17in market will grow more than the 15in and 19in markets.?
Musson adds that one of the biggest influences on the monitor market is the number of manufacturers involved. The sheer scale of competition in the UK monitor market is enough to give anyone indigestion and there are no easy tablets to take to ease the pain.
Fright expects some sort of fallout by early next year. Without putting his neck on the line and naming names, he reckons that particularly at the low end, where suppliers have been caught with a 14in stock backlog, companies may start to disappear.
It?s no surprise. There are about 20 monitor suppliers in the UK, a number which has been bolstered over the past year by new entrants.
Companies such as ADI, Iiyama and Nokia have made names for themselves by being extremely competitive on pricing, to the extent that they are referred to as the cheap monitor makers. Top German brand Maxdata?s arrival in the UK added to this ?cheap? list and has helped to stretch the market that bit further.
Last month, however, ADI made a bold bid to try to shed what Gillard calls ?its traditional cheap Taiwanese clone tag?. The company has announced it is going to ship a 19in monitor in September and a Radius-style 17in portrait monitor.
Gillard refers to the portrait screen as ?a technical statement? and says it will help portray ADI as a company that is interested in more than just high-volume markets.
Confirming ADI is not just about volume, Gillard adds: ?We have no intention of making and selling high-priced, technically perfect screens either. We are more interested in value for money. We are about to set up a European manufacturing facility and are aiming for a #24 million turnover this year. With LCD screens also due at the end of the year, we feel we have a strong case for painting a better picture of ADI.?
That may be the case but it is an uphill struggle to try to escape being typecast ? just ask any former Eastenders actor.
ADI will have to try harder, according to a Romtec quarterly report on the monitor market. For Q1, in a category which includes direct, indirect and OEM sales, ADI didn?t feature in the UK?s top 10. Gillard is aware that the company needs to evolve, something which Musson believes is essential for monitor suppliers to survive.
?Some of the existing monitor players will feel the pinch unless they go through some kind of metamorphosis,? he says. ?I?m not sure whether companies will disappear but they may start looking towards more niche markets.?
Eizo has been one of the shrewdest performers in the UK . Over the past couple of months, Romtec figures have shown that Eizo is number one in the volume of monitors sold through dealers.
Eizo has overtaken Sony and Taxan, and Burnham says it is taking market share from Taxan. Musson explains that the company?s high-end positioning has helped it gain ground and that its success proves that hardware costs are not the driving factor.
?We don?t lead on price,? he says. ?We lead on overall cost of ownership and that includes support and services.?
Musson adds that a lot of Eizo sales go to the City and that will put it in a good position when the company starts selling LCDs. ?We reckon that by 1998 there will be 15,000 to 20,000 LCDs in the City.?
This will generate a much-needed new market for the monitor industry. Traditionally a slow-moving item, monitors are about to become interesting as the technology moves away from the TV-style box to something a little more flexible and pleasing to the eye.
But until this happens, manufacturers will stick to their CRT guns. Over the past few months, most of the big monitor makers have been busy launching new ranges and talking about market domination.
Samsung, Hitachi and NEC have all released products this year, but Samsung has so far failed to deliver its flat panel screen. The company is planning major launches over the next few months, including an LCD and possibly specialist ranges such as video conferencing models.
With talk of CRT tube prices rising and the pressures to reduce product prices increasing, margins on monitors will continue to be squeezed. The 14in monitor is on its way out and the 15in may not have much of a future if the 17in market continues to grow at its present rate.
There will be casualties and this may be a good time to start running a book on who is first to pull out of the UK. What price will anyone give me for it not being a UK brand?
Since Philips launched its unsuccessful and now defunct mono flat-screen monitor in 1989, not one manufacturer has tried to pick up the baton and run with it. At least not until now: Compaq and NEC have jumped with both feet into the LCD monitor market. Each company also claims to have both eyes open and does not expect the standalone LCD monitor to be a serious competitor to the CRT until at least the end of the century.
Well that?s only two-and-a-half years away. NEC LCD screen product manager Simeon Joseph admits that the future of the LCD monitor market is ?not easy to predict?. But he says it?s a product that can be sold ?anywhere where size, style, weight, emissions and power consumption are concerns?.
Bryan Norris, senior partner at research company Bryan Norris Associates, says: ?LCDs will take about 20 per cent of the monitor market when they are about twice the price of equivalent CRTs.? He predicts that this may not start to happen until about 2001.
As with any new technology, it?s all about pushing products through vertical markets and waiting for the benefits to filter down to the mainstream market when the price is right.
Norris believes that financial dealing rooms, where desk space is at a premium, are willing to pay over the odds for flat screens. He also reckons that banks and building societies and the Ministry of Defence are early adopters of the LCD screen.
It?s a view that?s supported by Joseph, who sees the City as the major early adopter for LCDs. He believes that hospitals, laboratories and travelling sales people will also be interested.
Compaq has already found that the City is prepared to put its money where its mouth is and has struck a major deal with investment bank BZW for 1,200 screens.
?For some of our high-end customers, this product will allow them to revolutionise their use of computer systems, eliminating the space restrictions imposed by CRTs,? says Neil Dagger, options product marketing manager at Compaq.
As well as taking up less space than a conventional monitor, LCD flat panels consume a third of the energy and emit a third of the heat. Their emissions are also thought to be less harmful to users. At the moment, their only disadvantage is price.
?We?ll probably have to wait more than two years before the price comes right down,? says Romtec analyst Phil Burnham. ?It has got to come down a long way. While a lot of one-off corporate deals will raise the profile of LCDs, the cost is still crucial to most of the IT market.?
Burnham agrees that as more manufacturers get involved ? and most monitor makers including Samsung, ADI and Eizo are expecting to launch LCD products over the next few months ? price pressures will start to emerge and we can get a better idea of how this market will start to take shape.
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