Sony is pulling out of the shrinking cathode ray tube (CRT) monitor market and several vendors are expected to follow suit this year.
The move has not surprised many industry pundits as demand for high-end CRTs has shrunk considerably over the past 12 months. In the first quarter of 2003, Sony offered 17-inch, 19-inch and 21-inch CRT models that were targeted at the high end of the market. In April, Sony globally withdrew its 17-inch and 19-inch models as mounting price pressure no longer made them a viable business proposition.
“Early last year there was a strong movement away from 15-inch towards 17 and 19-inch CRTs which led to significant price pressure in those sizes,” senior business manager of business displays, James Waldron, said. “Demand for high-end CRTs in those sizes fell and we saw volumes fall.”
Since April, Sony’s only CRT offering was the 21-inch Trinitron CPDG520 which is targetted at high-end customers such as serious gamers and graphic designers. Yet the majority of consumers are drawn to CRTs because of their low price points.
The CRT market will continue to shrink as LCD prices come down. Subsequently, Waldron expects to see several other vendors leave the CRT market in 2004.
According to preliminary figures from IDC, the CRT market shrank 3.9 per cent to 49.4 per cent of the total market from Q3 to Q4, 2003. The LCD market share was 50.6 per cent.
The LCD market would be significantly larger if it had not been plagued by recent panel shortages, IDC analyst, Mike Sager, said.
As the CRT market continued to shrink, so too would the number of vendors playing in that space, he said.
“I think we can expect to see other vendors that focus on the high-end CRT and LCD markets pull out of the CRT market,” Sager said.
Vendors such as NEC have been exhibiting similar patterns to Sony in the CRT market.
NEC focuses on the high-end monitor market and pulled out of 15-inch CRTs in the first quarter of 2003. Currently NEC has 17-inch, 19-inch and 21-inch CRT offerings.
Meanwhile, Auriga, Viewsonic and BenQ’s CRT sales have declined significantly over the year from the fourth quarter of 2002 to the same quarter in 2003, according to preliminary figures from IDC.
IDC said Viewsonic’s and BenQ’s CRT business declined 50 per cent year-on-year. Auriga’s CRT business declined 81 per cent.
Sager said vendors had to be in the top five in order to make its CRT business worthwhile.
The top players in the CRT market are currently LG, Samsung, Mitsubishi, Philips, Hyundai and Acer.
IBM’s launch of a new 21-inch CRT - scheduled for the second quarter this year - appears at odds with the current market trends and vendor plays, Waldron said.
Sager agreed: “IBM has done some things that are not in line with where the market is going. It’s a little strange that IBM’s product mix is strong in CRT considering they were the first identify LCD as the big growth area.”
IBM recently launched a new 19-inch CRT and will launch a 21-inch CRT in Australia in Q2.
IBM’s visuals, options and services brand manager, Rowena Jongejan, said IBM had rationalised its CRT product line over the past 12 months, dropping from 14 to five models.
“Currently our product mix is 55/45 [CRTs to LCDs] but early last year it was 80/20,” Jongejan said.
“We’re very commercially focused rather than retail focused and corporate customers are looking for the kind of value for money CRTs offer.”