TFT-LCD monitor prices set to fall further

In what has been a dramatic contrast to its 2003 levels, prices of TFT-LCD monitors for PCs are recording a sharp decline brought on by excess capacity and soft demand.

The first indications began showing up in the last three or four weeks.

Industry sources expect the prices to drop by as much as 20 per cent in the period up to the first quarter of 2005 before stabilising.

The turnaround follows a period of extreme volatility when prices of TFT-LCD monitors rose 25 to 30 per cent from the second half of 2003 and well into this year as well.

In some cases, the firming up was even more dramatic.

For instance, a 15 inch monitor was retailing for as much as $500 at one time against an earlier average of $300.

"In the local market, it is quite likely that prices will drop in line with global changes, with some heightened activity in the run up and during Gitex 2004 in October," said K.S. Vasudevan, senior manager, Samsung Gulf Electronics.

"The local market does not have a high inventory of monitors, which will ensure that there will be no panic driven selling of stocks at sharply reduced rates.

"At the global level, what has happened is that manufacturers were caught unawares by the reduced demand for LCD panel televisions, which happened all of a sudden.

"In fact, this was one of the main reasons for firming up prices of TFT-LCD monitors since the second half of 2003."

Meanwhile, in the traditional CRT category, there could be a marginal increase in prices in the short term, primarily because more manufacturers are exiting from this business, said Vasudevan.

"Then there is also the shortage in picture tubes, which will again impact on prices. CRT manufacturers were also helped by demand coming in during the period when TFT-LCD prices were peaking, and end users had to look at other options.

"However, in the longer term, we expect to see more buyers getting back to TFT-LCD units since their prices are now on the decline. This will cool down the prices of CRT units."

Samsung has a combined worldwide market share of 22 per cent on the TFT-LCD and CRT lines.

Meanwhile, the company will not be following a policy of offering a five-year warranty on hard drives offered by some players in the market, the official added. "Even when some of the other manufacturers started to offer a one-year warranty, we stuck to three-year period. Even now, Samsung will stick to its policy.

"We do not see much of a competitive advantage offering a five-year period as technology changes so fast in this business."