Monitors: Visual Revolution

Once again in 2006-07, LCD monitors outpaced CRT growth by a
huge margin. Even though CRT still rules in terms of units sold, there was a
marked swing in favor of LCD monitors. The shrinking price difference between
the two form factors is making LCD a more affordable option amongst both
corporate and home users. Enhanced technical features and aesthetic appeal
further helped sustain momentum.

Globally, the market for 17 inch and 19 inch LCDs is dominating
consumer preferences. In India too, with a growing preference for higher
resolution and wider screens, the 19 inch LCD monitor attained a rising star
status during the year. And as 19 inch monitors became mainstream both globally
as well as in India, prices dipped 30% over the previous year.

The Dominator

At the moment, of the total LCD market in India, 75% goes for commercial
usageincluding enterprise, education and government. Industry surveys
forecast that this trend will hold for the coming year. Within enterprises, BPOs
and financial institutions were driving the LCD monitor sales in 2006-07. For
BPOs especially, energy and space saving turned out to be the primary catalysts
to drive LCD sales. The LCD popularity graph also showed an upward curve in
education, hospitality and the healthcare verticals.

The Vista business opportunity too is expected to gradually add
a push from the second half of next year by further stimulating the overall
monitor market demand, especially in wide and large size.

On the other hand, the LCD was an object of desire in the home
segment too; here, it was the affordability issue, thanks to falling prices,
coupled with the craving to adopt a digital lifestyle. For Samsung, the LCD was
a key driver for home theatre sales to go up. While LCD and plasma TV sales
stood at 140,000 sets during 2005-06, it is expected to reach 400,000 by this
year. Demand in the SOHO segment too picked up as the price gap between CRT and
LCD kept on narrowing.

How did this domination translate into business? According to DQ
estimates, the contribution of LCD monitors to total monitor sales in the
domestic market was close to 28%, and expected to touch 40% this year. Says
Riyanka Patra, analyst, Computing Products Research, IDC India, "In the
present scenario, shipments are showing a definite shift in favor of the LCD
form factor which is eating into the share of CRTs." IDC expects LCD
monitor shipments to surpass those of CRT monitors in the year 2007-08.

Koreans Fight it Out

It seems, for now, that Korean giantsSamsung and LGare here to rule.
With the two grabbing a combined market share close to 66% of the total LCD
sales in India, its as good as it gets for the Koreans. Samsung tops with 36%
market share, while LG stands at 30%. Clearly with Samsung, in the lead, LG is
concentrating on pushing LCD monitor sales with increased focusgearing up to
take the lead by end 2007.

At Samsung, the leading player with a market share of over 36%,
LCD sales have left behind CRT sales. The company expects LCD sales to fetch 45%
of its total monitor sales during the current fiscal. For the calendar year
2006, it was around the same level as that of the domestic industry. As a part
of its strategy to grow the LCD business, Samsung plans to create consumer
awareness and encourage upgrades to LCD monitors, lured by technology and
feature enhancements in its new range.

According to internal estimates, Samsung expects the share of
the 17 inch monitor segment to touch over 50% and the 19 inch and above segment
to be around 13% this year. Toward the end of FY 07, the 15 inch LCD segment
shrunk while the 17 inch became mainstream. Also, wide screen monitors were
getting accepted in the home segment, while the corporates and institutions
preferred the 4:3 form factor.

The contribution of the 15 inch LCD monitor is expected to
further drop to a 40% level, while the 17 inch monitor is expected to grow from
47% last year to around 49%. The total contribution of the 19 inch and above LCD
monitor segment is expected to double this year.

During the year in the Indian market, Samsung introduced three
new series of LCD monitors Myst, Mendel and Mobius. While the models in the
Mendel series are optimized for Windows Vista software, the flagship Myst
series of LCD monitors scores on account of its unique design: it comes with a
"soft minimalist design", with a new ball hinge mechanism, offering a
response time of 5ms and contrast ratio of 700:1. Available in 19 inch (932 B),
20 inch (206 BW) and 22 inch (226 BW) screen sizes, the monitors have a 16:10
wide format.

Putting LCD displays in multi-brand outlets, setting up LCD
brand shops, availability of interest-free finance and other promotional
activities have enhanced awareness of Samsung LCD monitors. The company also
plans to focus on strengthening its channel in B&C towns.

For LG, FY 07 was a good year, as its total monitor sales
touched the one million mark during the year. Its LCD monitor volumes showed
400% growth over last fiscal. LG currently has eight models of LCDs and five
models of CRT monitors in the market. It recently launched an LCD monitor with
"F-Engine" technology, which corrects and enhances the picture to make
it look closer to real life images.

The company further plans to enhance its market share and is
looking at strengthening its product portfolio as well as introduce more
channel-friendly schemes. As the battle between the two electronic consumer
durable giants further intensifies, the market should continue to see a further
fall in LCD prices in 2007-08, as a result of which sales will jump.

Others in the Fray

The year also saw other players making headway into the Indian market with
newer multifunctional LCD launches, and going for a wider operational channel
network. Niche player Viewsonic launched its LCD model, ViewDock, with an
integrated display with an iPod dock. It also recently launched a 22 inch wide
screen multifunction HD LCD with an integrated 1.3 Mpxl webcam with microphone.

Whats in Store

The CRT monitor market in the overall monitor category saw a substantial
decline. According to industry estimates, in another two years the CRT market
size is expected to reduce to about 25-30%, with the rest contributed by LCDs.

The LCD market is expected to grow to 5.5-6.0 mn units in two to
three years. The falling prices of LCD monitors in the beginning of the Q4 FY
07 further caused CRT monitors to fall out of favor.

Industry observers say that though there is a price hike on LCD
monitors due to an increase in panel price (with effect from May/June 2007),
which might help put CRT monitors in their original place for the next one or
two quarters, the larger trend shows that CRT monitors have started paving way
for LCDs in India.

Further, the growth of consumer durables like mobiles, iPods,
DVDs, gaming consoles have also been indirectly having a positive effect on the
growth of LCD monitors sales: the raison de tre being that display is becoming
the key element in all forms of digital entertainment.

Not just monitors, LCD screens are becoming all pervasive. For
instance, as phones become multifunctional, issues of picture clarity and better
resolution are going to be the big drivers. Nokia for instance is believed to
switch to LCD screens across its models very soon. Samsung will start supplying
LCD screens for Nokias mobile phones. Samsung is likely to start selling them
as early as the second half of this year, and is expected to continue initially
to provide more than 20mn units a year.

iPods too seem to be impacting on the LCD front. Apple had
introduced high definition LCDs for iPods last year. It is expected to bring
into the market, built-in high definition LCD display as an accessory for iPods.
Improved response time of LCD screens combined with availability of innovative
features like iPod docking monitors would make them interesting buys for the end
users.

According to analysts, there will be a huge replacement market
in place by FY 08, helping push the LCD market even further. As the visual
revolution further creeps in and the market matures, aesthetic values,
environment friendliness, power saving, and space saving features of LCD
monitors are likely to push the case against CRT monitors. Most CRT users, say
industry observers, will seek to upgrade to an LCD, for the inherent advantages.

Urvashi Kaul

urvashik@cybermedia.co.in