By Vijaya George
The road to mainstream display may have been distressingly prolonged for liquid crystal display monitors but they finally made it. However, increased demand, shortage of supply and a factory accident threaten to rock their position in the market yet again. Windowssurveys the demand-and-supply situation for LCDs in the region.
I|~||~||~|When the first operating Liquid Crystal Display (LCD) was introduced by James Fergason in 1968, it was just another invention that could possibly fade into oblivion after the initial eureka. But it did not die out; rather it made an inconspicuous beginning playing minor roles as small-screen displays for calculators, mobile phones and handheld video consoles. Since then, LCDs have struggled long and hard to make an impact in the market that has been dominated by cathode ray tube (CRT) monitors for as far back as one can remember. It is only very recently that the balance has gradually shown signs of tilting in favour of LCDs. CRT monitors had a significant advantage over LCDs. For one, they promised better clarity and resolution and were affordable to the average consumer. LCDs had other advantages that were not considered important until the 90s when business models began to change rapidly. Portability became an important consideration, the dangers of radiation were highlighted and space crunches became an issue to contend with. More importantly, the price divide between the inexpensive CRTs and the exorbitant LCD was bridged significantly. If an LCD cost five times the price of a CRT two years ago, today it costs only twice as much, is easily affordable and has almost equalled the performance of a CRT in terms of clarity and resolution; almost being the operative word. ||**||II|~||~||~|As KH Kim, IT products manager, LG Electronics Gulf admits: “The way the two technologies (CRT and LCD) display images and the dot pitch size is very different. Clarity on LCD screens is constantly improving, but at the moment, you cannot compare it to CRT screens. However, continued investment in research and development will bring improvements in LCD technology. Very soon, clarity will become less of an issue.”Meanwhile, CRTs have their disadvantages as well — enough for consumers to think of LCDs as viable replacements today. CRTs, for instance, require high voltage for the emission and angle control of the electron beams, and it is difficult to slim-down the frames of CRT units. As a result, LCD technology, which easily accommodates flat panel designs, seems to be the perfect answer to demands for compact displays with greater energy efficiency and lower operating power. Moreover, they have come a long way since they were first used in small displays. Today, they have advanced beyond alphanumeric to graphic capabilities, monochrome displays to colour, still images to moving pictures and small screen displays to large screens. Therefore, a growing number of LCDs are being used for display screens of personal computers and televisions.Consequently, worldwide demand for LCD monitors rose to $6.4 million in the year 2000 and doubled to $13.5 million in 2001. LCD technology has been adopted widely in flat panel desktop computer monitors, laptop computers and multimedia projectors. According to Vasudevan, senior manager, Digital Information Technology Division, Samsung Gulf Electronics, this year the demand for LCD monitors is expected to top $23.5 million, although this still constitutes only 8% of the total demand for monitors. Sooner or later, it is expected that LCDs will replace CRTs. “In the Middle East region, demand for TFT LCDs has already grown by approximately 2.5 times in 2001 as compared to 2000,” explains Vasudevan. The surge in demand is said to have started in September 2001 when prices hit a record low. ||**||III|~||~||~|“Demand will increase due to the greater availability of LCD and broader range of products for the home and business user to chose from. Total cost of ownership calculations by the business user now favours most LCD solutions over similar CRT solutions,” agrees Ian Gobey, sales director, ViewSonic Middle East. “However, this can vary,” he is quick to caution. “Rising costs could impact the adoption rate although the momentum is clearly in favour of LCD in many segments of the market.”Reason for caution is well warranted. The increased demand for LCD displays has brought many new entrants into the region’s LCD market. Apart from long-term players like Sony, Viewsonic, Samsung, NEC, LG, Sharp, Benq, Hitachi and Philips (to name a few), the Middle East now plays host to relatively newer brands such as Everex, High Vision, Neovu and Proview as well. However, the sudden surge in demand for notebook PCs, PDAs and mobile phone devices has eroded the supply of LCD glass, the fundamental raw material required to manufacture an LCD panel. This, combined with an industrial accident in one of the major Japanese LCD glass manufacturing plants has deepened the shortfall and caused a steady rise in the price of LCDs. Samsung estimates that prices for LCD monitors will be up by almost 20%, from their lowest levels, by September 2002. “Prices have and will continue to increase,” agrees Gobey. “Simple supply and demand dynamics are at work here. LCD pricing predictions are in a bit of a mess at this time. Most market research companies are still stating that 15”/17”/18” prices will continue to rise throughout 2002 and even into 2003. The 15” version will increase the most, followed by 17” then 18”, the gap between 17” & 18” will continue to narrow, with 18” increasing price at a slower rate. However, many companies are saying that price increases will dampen demand. Once demand shows a notable decrease (Q3-02 or Q4-02) then prices must hold or decrease slightly. Again this is speculation.” K. H. Kim, IT products manager of LG Electronics Gulf, meanwhile assures consumers that by the second half of 2002, prices of LCD monitors will stabilise.This, however, is dependent on correction measures being taken in terms of any boost in LCD panel production. Investments in new mother-glass plants are underway from few major LCD panel manufacturers such as Samsung and Philips. Although this will help ease the shortfall, both factories will take several months before they become fully operational and give the desired production yields. Nevertheless, vendors feel that the hike in price will not cause any significant dip in LCD sales. Space saving features, portability, sleek design, low power consumption and flat panel designs has stood LCDs in good stead. According to Vasudevan, “the market and the buyers of this category of monitors are more rational and for them price is not the first priority. Corporate and individual buyers are already switched on in their minds in favour of LCD monitors as a substitute to CRT monitors.”||**||IV|~||~||~|However, as prices become more affordable, manufacturers are moving beyond basic functionality and sleekness of design to pack more sophisticated features into LCD monitors to attract the average consumer. Korean giant LG, for instance, is focusing on improvements to design as well as providing higher specifications. New LG models come with a sleeker casing, giving the monitors a broader look. Moreover, most of them are multi-media enabled and in future, will see a strengthening of the audio/visual features as well. LG is also focusing very heavily on perfecting its LCD monitors for dual purposes —computing as well as television viewing. In the future, consumers can expect to see LG coming up with monitors that afford picture-in-picture (PIP) viewing, which means users will be able to work and watch television simultaneously on the same screen.This trend towards digital convergence between computer systems and televisions in home entertainment systems will eventually indicate better economies of scale, reliability and convenience for the user. “But not yet,” says Vasudevan. “Digital convergence may be the key to addressing the growing consumer demand today,” he explains, “but we do not see many products in the market addressing these needs yet. This will become a true reality only when the benefits become affordable to the common man.” However, he adds that Korean manufacturers have come closest to achieving this convergence in terms of innovation and economies of scale.||**||V|~||~||~|Some LCD vendors are focusing on improving other features. Benq, for instance, is pondering further improvements in terms of size, weight, picture clarity, and cost. Viewsonic, which has a broad LCD product line that includes 26 models, is unveiling a new series that will feature a fold-up base, which will allow the user to wall mount the monitor without removing the base. This form factor will allow for smaller packaging, which will, in turn, reduce retail and freight costs. Unfortunately, the vendor does not believe in adding what it calls “typically unused features such as USB.” Sony has a range of LCD monitors to cater to the average consumer and the lifestyle user. Likewise, Samsung also believes that vendors will need to introduce LCDs with different specifications to cater to different segments of consumers. Samsung’s own range includes the Modigiliani series and the slim series for the design-conscious buyers, the multi-function series for solution-seekers, the normal TFT series for small-office-home-office users and businesses, and 21” and 24” TFT monitors for the professional segment that has specific demands on screen size and resolution. The Korean vendor foresees technology breakthroughs in terms of LED-based screens as well that, it says, could be the next generation display screens. Despite all the hype that surrounds LCD monitors, one cannot deny that there are some issues that seek quick resolution. Rishi Tayal, marketing officer for computer display & peripheral marketing at Sony Gulf, which has achieved a growth rate of 2,800% for LCD monitors from the year 2000 to 2001, cites some of the drawbacks associated with poorly-made LCD monitors. Some LCD monitors are best viewed from certain angles and sometimes give ghost images. Imperfect LCD screens have dead cells that can’t be rectified. Gamers are still disinclined to purchase LCD monitors as they do not offer the clarity that CRTs afford. More importantly, DVD is possibly an area where LCD does not yet offer optimum performance. Moreover, the life of an LCD monitor is considerably shorter than a CRT. Tayal also admits that professionals like software programmers and architects prefer CRT monitors because “they need in-depth colour separation or for CAD/CAM applications.” Despite being plagued by such problems, LCD monitors have forged ahead into office spaces and homes. In fact, LCD monitors have become an important consideration not just at the front office and in executive offices, where image is important, but in homes as well. As more children begin to use computers on a daily ba sis, concerned parents are opting for LCD monitors to prevent the effects of radiation. As space becomes an issue in homes, the portability and lightness of LCD monitors are beginning to be given due consideration. Additionally, 15” LCD monitors give the same viewing comforts as a 17” CRT monitor and have become affordable to the common man. The advantages of LCD monitors outweigh its disadvantages. Extensive research and development are gradually helping LCD vendors to eliminate issues that have upheld the virtues of the CRT. Sales figures of major vendors in the region on LCD monitors seems to indicate that, rough as the path to mainstream display may have been, LCDs will eventually assume the role that CRTs are currently fulfilling.||**||