We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Fri 9 Jan 2009 04:00 AM

Font Size

- Aa +

Monitor market ready to fight the next round

Resellers could be forgiven for wondering where the monitor market is heading next following a challenging period for those managing supply and demand. Display vendor Viewsonic is urging its partners to remain focused.

Resellers could be forgiven for wondering where the monitor market is heading next following a challenging period for those managing supply and demand. Display vendor Viewsonic is urging its partners to remain focused.

To say it has been a turbulent 12 months for the Middle East display channel would be an understatement of quite sizeable proportions.

Regarded as one of the most volatile product categories anyway due to the supply and demand dynamics that take place at production level, the market has seen recent analyst predictions blitzed by dramatic changes to the global economy.

With distributors and resellers endeavouring to understand how trading behaviour will pan out in the weeks ahead, display specialist Viewsonic is one vendor that insists it is committed to giving regional partners as much guidance as it can.

Like most of its competitors in the LCD monitor space, the company is fully aware that changes to any one of a number of variables can mean the difference between partners posting sky-high sales and being saddled with aging stock.

This time last year, Viewsonic was warning resellers to expect supply shortages by the end of Q4, and it certainly wasn't alone. Other vendors also urged partners to deploy proper stock management procedures or risk being unable to fulfil the kind of consumer and commercial demand that has led to double-digit monitor growth becoming customary in the Middle East.

As we all now know, that's not how the situation played out. The initial credit crunch and economic downturn that occurred in the West - coupled with high inflation in emerging markets generating much of the growth - caught panel makers by surprise.

"One thing that nobody projected - even the research companies that track the supply dynamics - was the economic situation and how it would actually affect supply to the point where we had the opposite of what was being originally predicted," admitted Aaron Fright, regional director for the MEA region at Viewsonic.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.

Arabian Business: why we're going behind a paywall

For all the latest tech news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Real news, real analysis and real insight have real value – especially at a time like this. Unlimited access ArabianBusiness.com can be unlocked for as little as $4.75 per month. Click here for more details.