LCD monitor supply is up but demand down

Analysts warn VARs to keep stocks to a minimum as prices of LCD TVs are expected to fall

Resellers and distributors need to ensure their stock levels of LCD products are at the bare minimum, or they could suffer when prices plummet later this year, an analyst has warned.

iSuppli has predicted a global oversupply of TFT LCD panels in the second half of 2005. Supply will exceed demand by five per cent in the third quarter, increasing to more than six per cent in Q4.

Andrew Murray, iSuppli director of displays research, Europe, told CRN: “The reason for this oversupply is that extra production capacity has come on board and will continue to increase. But, because of reduced consumer spending, a lot of growth targets aren’t going to be met.

“Sales of LCD monitors and TVs have been slower than many manufacturers had anticipated. This is good news for the consumer as prices will come right down. However, LCD TVs are already on a pretty sharp reduction curve, so the key for resellers is to make sure they hold the absolute minimum of stock, or they will get caught out when prices plummet.”

He added that 2006 looked better but “we still think prices will fall”.

Lee Baker, divisional manager for home entertainment and displays at Midwich, said: “It’s been quite a good year for LCD sales. We struggle to get as much stock as we can sell and have to forecast orders six months ahead to get the stock we need. Any LCD products we can get sell within a day. Our vendors are predicting price rises, but I predict we might start to see prices falling mid-way through Q1 2006.”