Australian monitor sales decline continues

Although LCD sales increased for both the Branded (formerly Open) and OEM (formerly closed) markets, this increase was insufficient to offset the fall in CRT sales, according to IDC.

The close correlation between sales of PCs and monitors means that this decline also parallels the year on year fall in PC sales (desktops, notebooks and Intel based servers), which was 5% lower than the previous year.

Monitor channels remained cautious following their excess inventory during the first half of 2001, and careful procurement throughout the second half of the year meant that vendors had to pull miracles in order to achieve reasonable buying on the part of the channel. A growing grey market compounds the headache of the mainstream monitor vendors, fighting for share in a saturated market which does not need more players.

Reuben Tan, IDC's market analyst said, "The total monitor shipments in the fourth quarter of 2001 was 359,295 units, a decline of 7% over the previous quarter, and exhibiting an un-abating 23% year-on-year downturn. The bright spark of the LCD phenomenon has been dimmed somewhat by escalating panel prices stemming from supply shortages. All-in-one PC form factors by global PC OEMs (IBM and Apple, for example), as well as an uptake of LCD bundling by these vendors have spurred OEM market sales of LCDs, but as a consequence have also put pressure on manufacturers which are struggling to increase production.

"IDC believes that vendors were pressured to lower prices yet again in an increasingly commoditised and price-competitive market. However many vendors did not have room to move in the LCD space, given the increase in panel prices- and hence continued the price war in the razor-slim margin CRT arena. This move, led by price leader LG Electronics, gave the Korean vendors their much needed volume and market share, but again profits suffered and for once certain Japanese and Taiwanese vendors decided not to follow in their footsteps, subsequently suffering losses in market share but maintaining a level of decency in margin.

"IDC anticipates that the traditionally slow start to the year for PC and monitor sales will not change in 2002, and it will not be till the second quarter of this year before the tender business starts picking up again (due to Wireless roll-outs in the corporate sector, for example). On the supply side, channels should be starting to run low on monitor inventory around the same period, and although any price drops throughout 2002 will be simply due to competitive pressures- not fall in manufacturing costs- channels will be forced to stock up in order to fulfil demand. Price points of smaller (17 inch and below) LCDs have risen early 2002, for example, as vendors are no longer able to absorb increases in production cost."

"Vendor-wise, there was a slight reshuffling of the top three positions, with Samsung capturing 16% of the branded market, LG Electronics 16%, Mitsubishi 15%, Philips 9% and Viewsonic 6%. The top five vendors together accounted for 62% of the total branded market for the final quarter of 2001."

In the CRT branded market, LG Electronics was the top selling vendor to the channel, with a 16% market share. Samsung was in second position (16%) and Mitsubishi in third (15%). The Korean vendors, especially Samsung, have also pulled ahead in market share for the now popular LCD form factor; Samsung, with 20% of the LCD branded market, maintains its lead, whilst LG with 12% has edged out Japanese vendors NEC and Mitsubishi for the quarter.