DISPLAYS Wider, Flat & Less Costly

If you've just woken up from a twelve-month coma, you might be surprised by the current prices for LCD monitors. The 15-inch flat-panel monitor you saw for $1,000 a year ago is now selling for $499. And instead of paying $3,000 for an 18-inch monitor, you can find one for $1,599. So what happened?

"All of a sudden there are a ton of people making these things," explains Bob O'Donnell, research director for device technology with IDC, based in Framingham, Massachusetts. "There's a whole new group of panels coming from Taiwan. Taiwan is just coming online, essentially, and Japan and Korea have increased their production. That has resulted in dramatic price drops in the raw panels; and that, of course, is being passed on to the consumer prices for the monitors themselves."

Will prices keep falling? Probably not, according to Rhoda Alexander, director of monitor research with Stanford Resources Inc, based in San Jose, California. "The manufacturers of the panels are pushing really close to their cost of production with the discounts that they've done," she explains. "We see an end to those cost discounts in the second quarter. There are some additional production cost changes they can implement, but at this point, even if they had further production costs implemented, they would be smart to just hold the line. They don't have enough profit margin left." Alexander sees the low second-quarter prices as an anomaly. "This is something that the end user should probably jump on at this time, because chances are these prices will bounce back up a little bit again by the end of the year and into next year."

Alexander says that purchases usually lag behind when prices drop this fast, since consumers don't want to jump in too soon and see the price drop again immediately after they purchase a monitor. "Consumers tend to hesitate until they see the pricing begin to level off," says Alexander. She states that North America will be the largest market for flat-panel monitors in 2001 for total units purchased, but both Japan and Europe have higher penetration rates. "Japan's penetration rate is pushing 50 percent," she explains. Her forecast models show sales of CRTs in Japan essentially disappearing in six years. "Once you get above a certain penetration rate with a new technology-particularly in a footprint-constrained environment such as Japan-it becomes a headache to even carry the older technology. You just make it available for niche applications, such as the graphics community, which still has a lot of issues with flat-panel monitors relative to CRT monitors."

Wider And Sharper
Another expected change is the availability of LCD displays with a 16:9 aspect ratio, according to Martin Reynolds, a research fellow with the Gartner Group, based in San Jose, California. "You can get more displays out of a single [fabricated] panel with the wider screen," he says. "It works a little better to build a big display. It's something like three 17-inch regular screens or four 17-inch wide-screens."

Reynolds also predicts that we'll see 150- and 200-dot-per-inch flat-panel displays in the next couple of years. "They won't be a lot more expensive than the current displays, but the small volumes might drive up the overall price. They're actually not much more expensive to manufacture. A lot of this stuff goes by area, but the acceptance is likely to be lower at first because Windows doesn't support high-resolution displays very well. That will keep the price up a little bit."

Further out, in about five years' time, Reynolds expects to see OLED (Organic Light Emitting Diodes) technology move into monitors. "It has the potential to replace LCDs in displays," he says. "They use light emitting polymers." The OLED screens are currently limited to small displays in consumer electronics devices. "We have a while before they're fully developed. After two years, you can throw the consumer devices away. You can't do that with a $1,000 screen."

What are the advantages of OLED display technology? "It's thinner and lighter than an LCD," says Reynolds. "It doesn't have a back light because it generates its own light." Reynolds says that LCD monitors are notoriously inefficient. "Start with the back, where we have the backlight, which we try to scatter across the entire back of the LCD. We have to do that evenly, so a certain amount of light gets lost there. Then we have to go through a polarizer that throws away something like 60 to 70 percent of the light. Then we have to go through the LCD itself, which is worth another 10 or 15 percent. Next it goes through a color filter, which throws away 70 percent of the light. Then it goes through another polarizer that throws away about 20 percent of the light. By the time all is said and done, only about 5 or 6 percent of the light energy from the back is getting out of the front."

Bargain Shopping
Rhoda Alexander describes the CRT market for monitors as a "bargain lover's dream." She says, "They're suffering from the same over-supply problem as the flat-panel guys." She sees the trend toward flat-face screens continuing. "It's interesting in that it's a change that the end user frequently doesn't understand. They just know that they like it better. It seems sharper, and they don't have to deal with the glare."

While NEC and ViewSonic have sold CRTs with both analog (VGA) and digital (DVI) adapters, Alexander doesn't think that this will be a widespread phenomenon. "It's an added cost, and there's no real demand for it from the end user" she says. "It's a very cost-competitive market. I deal with these guys who shop for products at the OEM level, and they're looking for savings of 50 cents when they buy these things. So if you add a cost that's $2.50 or $4 or $15, that's a huge cost as far as they're concerned. They mentally translate that up to what the end user will have to pay."