Resellers dominate in the LCD market

After strong early sales from high-street stores, VARs now dominate LCD sales. Ben Tudor looks at the changes

LCD monitors are now the officially domain of resellers, despite strong early sales by high-street retailers. Anecdotal evidence has been around for a while, but analyst GfK has put meat on the bones of this supposition. However, it has found that, while LCD sales are growing, the same cannot be said for the value of sales.

According to the research firm, the LCD market increased unit sales in July by 51 per cent year on year, compared with July 2004. But Tracy Goodfellow, senior account manager at GfK, pointed out that in the same period, value declined by 2.3 per cent.

Whether this fall in prices is to do with oversupply or commoditisation is a moot point. Five years ago, LCD panels started appearing in the same retail stores as computer monitors and flat panel TVs, and suppliers moved to accommodate this. A secondary boost to the market has been the massive increase in sales of laptops.

So, there’s more demand, but there have been a variety of oversupply issues, with manufacturers of panels making more than they could sell on. The effect of this has been a fall in prices. Of course, the final factor is that economies of scale also apply – the more that are made, the cheaper the unit cost becomes. Cheaper manufacturing prices are eventually passed on to business and consumer buyers.

GfK reported that, in the last year, reseller and IT mail order sales of flat panels have moved into first and second positions as channels respectively, replacing retail sales. Business-to-business channels accounted for 65 per cent of LCD monitor sales in July this year, compared with 60 per cent in July 2004.

The good news is that, according to GfK, prices stabilised in July, with only a £3 overall drop compared with prices in June.