CRTs on Diet

At 14% market share, LCD monitors are expected to grow more than

50% share by 2008, denting a market dominated by CRTs

The

saying that goes in the display market-Monitor is the computer, holds good in

every sense. A ubiquitous symbol of computing is in the throes of change. When

we talk about computer monitors, the first thing that comes to anybody's mind

is those obese looking CRTs, but in the recent times a subtle transformation of

sorts is happening across the world-the ubiquitous CRTs are slowly giving way

to sleek and slim looking LCD monitors that weighs just about four kilos and

fits snugly on to the desk. While in a developing geography like India, the CRTs

still rule the roost, but what we are seeing now is the escalation of a trend of

LCDs challenging the CRT market. This according to the industry watchers will

happen by 2008 in India, with LCDs garnering a market share of more than 50% of

the total monitor shipment pie. As we look at the current penetration levels, of

the total monitor shipments, IDC estimates the LCD share at 14% during 2005 and

is expected to grow to 22% by 2006 end. Clearly the LCDs are the future of

display market and a burgeoning one.

Market Drivers



With technology characterized by rapid obsolescence cycles, the next logical

evolution of the monitor industry is favorable tilted towards the LCDs. Over the

years the CRT monitors have evolved and with the full flat CRT, the technology

has reached a saturation point, beyond this there is nothing new CRTs can offer

and this technological plateau is driving the LCDs to the limelight. The

prohibitive costs have limited the market adoption of LCDs in the past, but with

prices coming in the Rs 10K mark has expanded the consumer options. The market

right now for the LCD is the industry verticals' like healthcare, hotels,

airports, BPO, and IT. According to industry estimates these verticals consume

more than 80% of the LCD monitor shipments. Says Jitendra Kulkarni, ceo,

Redington India, “LCDs are eating into the CRT market for a variety of

reasons: First, the price gap between the two has come down. Second, the

tremendous space saving one can achieve in an office environment. Especially the

desk size can become smaller if one has LCD monitor instead of CRT.”

For labor-intensive

industries like BPO, the employee base runs into thousands. So space is a

premium and LCDs becomes an ideal option. Quips Ish Bawa, marcom manager, BenQ,

“LCD monitors growth is due to the fact that the technology is becoming more

affordable .We are seeing more industries and offices opting for the same

keeping in mind the obvious benefits it has over the CRT technology such as

minimal desk space, less power consumption, no radiation and better

durability.” Agrees Huma Ali, analyst-monitors-IDC India, “The LCD market

would surge ahead driven by widespread awareness, acceptance and affordability

of the technology.  Consumer markets

should pick up due to aggressive promotions, attractive exchange offers, and

increasing awareness about utility.  In

the enterprise segment, there should be a huge replacement due to falling

prices.”

"The cost differential between CRT and LCD is easily justified because of the shorter payback period of between two to three years, through saving in space and electricity consumption."    -Jitendra Kulkarni, CEO, Redington India

TCO and RoI



Whenever we talk about conventional technology, despite its limitations and

constraints the economies of scale has kept the market in the pink. This is

indeed the lifeline of the CRTs today but a closer look at the tangible and

intangible benefits LCDs brings to table indicate that large and mid size

enterprise monitor buying decisions will increasingly tilt towards the LCDs

during 2006. A CRT to LCD comparison puts the LCDs in the forefront for

instance: a 17-inch CRT costs today around Rs 6K and the LCD at Rs 10K. One

needs to pay a premium of Rs 4K in order to acquire a 15inch LCD. But the real

value of the LCD lies in the running costs as compared to CRTs over a period of

time. Reflecting on that Kulkarni says, “ The cost differential between CRT

and LCD can be easily justified because of shorter payback period of between two

to three years through saving in space and electricity consumption.”

The LCDs consume less

power compared to CRTs and on an annualized basis enterprises can save

significant cost savings on power consumption up to 40% savings on electricity

bills. With commercial per unit tariffs increasing every year, enterprises are

looking at ways to bring down the expenses on administrative costs, and here 15

inch LCDs are expected to gain market traction whenever a monitor buying

happens. Says V.R. Kirubakaran, national manager-display products, HCL

Peripherals, “LCDs help in down-sizing of UPS' and AC capacity which leads

to significant savings.”

Quips Sunil

Murlidharan, country product manager-TFT LCD Monitors, Samsung India “The

value proposition of the LCD Monitors lies in the power saving and the space

saving benefits that are quantifiable, in addition to other benefits like zero

radiation, zero glare properties that reduces eye strain, flexibility of viewing

posture, display and mounting makes LCD adoption promising”

In an Indian context,

the vendors are bullish that the inherent benefits will increase the volumes for

LCDs in the days ahead. The OEM is also pushing LCD with PCs. For instance all

PC vendors offer LCD, and position it as value add. The channels meanwhile are

evincing keen interest in pushing more LCDs. The aggressive focus channels on

LCDs are bound to benefit the enterprises. The reasons channels are focusing on

LCDs is due to the fact that there is a large replacement market, which is an

incremental business not available to those doing only CRT monitors.

For the same number of monitors sold, one gets almost 100% more revenue

than selling same number of CRTs and similarly the channel earns higher margin.

Meanwhile   LCDs take much

smaller space in the warehouses and in the transport vehicles so the logistics

costs of doing LCD business are lower than those for CRT business.

In all the escalation

of LCDs in the monitor charts looks imminent. We have already started seeing it

as in terms of visibility of LCDs-whether in hotels, airports, and whole lot of

places. Analysts see this LCD visibility as a healthy trend that will usher in

more awareness leading to more enterprises going the LCD way.

Shrikanth

G  



shrikanthg@cybermedia.co.in