Monitor market ready to fight the next round

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Viewsonic’s Aaron Fright still expects to see some oversupply of panels in the market during the first quarter and says it is important for the company’s partners to ensure high levels of operational efficiency.

Distributors in the wider desktop monitor space that were expecting difficulties in sourcing stock during the last couple of months have instead seen the channel struggle to digest a surplus, as well as deal with sharp price erosion on popular 17-inch and 19-inch models.

With market visibility for the coming weeks still hazy, Viewsonic is advising its partners to remain focused on the task of pushing out inventory and preparing for second-quarter sell-in. It has also warned them to bear in mind the impact that the Chinese New Year has on factory output. "In terms of displays, January is going to be important," said Fright.

Factories are not necessarily going to want to overproduce or drive production too hard until we see a steadying of the ship in terms of stock that is in the channel - or at least panels that are available for consumption in the channel," he added.

Furthermore, there is a danger that Middle East channels could be burdened with stock diverted from Europe and the US if those markets have proved to be softer than expected during the holiday period. Figures attributed to research house MEKO put the capacity of the Middle East and Africa during Q3 2008 at around 1.4 million units so those that see the region as a saviour need to judge their actions carefully.

Viewsonic insists its focus now is on assessing the ways it can work with partners more efficiently this year, particularly when it comes to forecasting, planning and inventory management. "We have got some systems and processes that we are putting in place with some of our distribution partners," explained Fright.

"Part of what we are looking at is how we can align ourselves to help them make their business more efficient because for some-sized segments there is certainly a slight oversupply of panels available from the factories. And that is probably going to continue to have an impact during the early part of the first quarter."

Resellers would do well to heed such advice at a time when calling the market correctly promises to have a major impact on cash cycles and profitability.

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