LCD shipments for the first quarter of 2004 were higher than expected, but unit sales are expected to drop in Q2 as a result of rising costs and short supply.
In its latest market report, DisplaySearch said shipments of LCD monitors for Q1 were up by six per cent on the previous quarter and up by 49 per cent on the same period in 2003. Unit shipments of LCD monitors hit 15.8 million, more than 300,000 units higher than previous expectations.
However, Q2 shipment figures are already displaying a higher-than-expected decline, thanks largely to rising prices on certain sizes of LCD and the traditional slowdown in buying patterns for Q2.
"While historically the market has seen traditional seasonal negative growth declines of between one and three per cent in Q2, even in this category - one of the hottest growth categories in IT - continued panel price increases have led to street- price increases in a price-sensitive market," said Chris Connery, vice-president of DisplaySearch.
"This has caused the LCD monitor market to slow more than expected in June, with further weakness expected over the next few months."
However, according to Mike Farrah, senior business manager for audiovisuals and displays at Ingram Micro, Q2 has been a good quarter.
"Q2 sales were still good. There was some fall in pricing and products started to free up during the quarter. Products were a lot more scarce in Q1 but now there is no shortage of LCDs," he said.
"The actual cost for manufacturers to produce panels hasn't fallen dramatically, so price decreases have been more to do with trying to get rid of excess stock. That said, new manufacturing plants will be coming online later in the year, which should reduce production costs and lead to some price reductions."
Dell retained its global number-one spot in the LCD rankings, accounting for 16 per cent of all LCD monitors sold in Q1. It lost some market share since Q4 2003, thanks to slowing sales in Europe and other non-US regions.
Continued market expansion and innovation were also noted in Q1, thanks to the growth of standalone monitor vendors such as Samsung, which took back second place from Hewlett-Packard.
According to DisplaySearch, this reflects the fact that more and more attention is being paid to buying a monitor as a separate concern, rather than just being bundled with a newly purchased PC.
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