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Monitoring the market

Monitoring the market

When it comes to the monitor market, talk about town tends towards the sexiness and advancements of some of the higher-end monitor technologies. And although this may be true, the traditional CRT monitor still holds its owns in terms of sales, something which looks set to continue.

Joshua Velling, PC category manager at distributor Tech Pacific, said it was seeing the sales of both and 15 and 17 inch CRTs growing.

"It's interesting to note that although there's definitely increased demand in the 17 inch CRTs, the 15 inch ones are still selling very well," Velling said. "That's driven also by their [15 inch CRT's] price point and also the smaller size of the monitor - the footprint's smaller and that appeals to some organisations where desktop real estate is at a premium."

Analysing the market

According to figures from IT channel analyst Inform, in the third-party monitor market (when the monitor is sold separately from a PC, or with a PC of a different brand), CRTs comprised 98.5 per cent of total monitors shipped in the first six months of this year, accounting for 93.2 per cent by value. And according to senior Inform analyst Phil Burnham, this was a slight rise on the same period last year, when CRTs represented 99.2 per cent of units and 96.1 per cent of value.

Burnham also said the monitor market in Australia was surprisingly healthy in comparison with the poor performance of the business PC market. "However, there are only a couple of monitor vendors that are managing to increase their businesses significantly," Burnham said. "Samsung, in particular, has seen a substantial increase in shipments over the last four months, with strong demand coming from government sectors."

The reseller angle

Figures and market trends are all very well, but what does this mean for resellers? What should they be doing to target customers and potential sales? Burnham advises educating customers and staff on the importance of a good-quality monitor.

"The monitor is the window that allows a user to interact with a PC," he said. "It's the piece of equipment that most of us spend all day staring at and compromises in performance and screen size will cause eye strain and fatigue.

"Secondly, large monitors have higher prices which means more profit for the reseller, very important in a world of diminishing hardware margins."

He also commented that the pressure which some PC vendors put on resellers and distributors, particularly in the home PC sector, to keep PC/Monitor bundles from being split, was preventing the channel and end user from having more of a choice.

Tech Pacific's Velling believes it is important for resellers to discuss with their clients the applications the monitor would be used for. "It's really an understanding of what the customer needs."

He said it saw a broad spectrum of the channel-selling monitors, such as OEM and system integrators. "Also we see monitors certainly sold in conjunction with system units as well, so that's a driver."

Michael Mannasz, product manager, display technology at Hitachi in Australia, joined the company to help dealers and support staff understand and promote the vendor's new display technology products.

Asked by ARN whether decreased prices would create margin issues for resellers, Hitachi's Mannasz agreed they would. "I mean, there's a lot of pressure now and margins are starting to shrink, particularly at the lower end of the CRTs."

Mannasz's advice to resellers is to be "reasonably educated on the technical issues. They don't need to be technical experts, but they need to be able to say what the difference between one brand and the other [is]," he said. He uses the examples of refresh rates, the number of pixels on the screen, dot pitch and colour purity.

He said resellers will be selling monitors to customers either as part of a package or as an upgrade package.

"The sizes are definitely starting to change," he said. "More and more people are starting to go to 17 inches as an entry level now and a lot are upgrading to 19 inches if they're serious users."

A reseller's knowledge about monitors is something which Philip Newton, director and channel manager of the peripherals division at Mitsubishi Electric Australia, also believes is an issue. He said it was important for resellers to understand how monitors work. "CRT scanning frequencies are important, whether a tube is northern or southern hemisphere . . . , the level of quality assurance [QA] they can provide is particularly important . . ."

Newton said it was critical for resellers to assess the system a customer was running. "Are they running a system to play games or are they running a system to look at the Internet? . . . . How much disk do they have? Is it in a house, is it in an office? What sort of graphics card are they running? What are the applications they are running? . . ."

The overall picture

Yet, despite the hold CRTs currently retain in the marketplace, other monitor technologies are growing in popularity.

Inform's Burnham said he definitely sees a place in the market for flat panel monitors. "However, price remains the biggest restriction of growth. Unless we see a significant price decrease in the TFT screens, there isn't going to be a substantial increase in shipments next year."

He cites shortages of TFT screens and the high price of the screens as the main reasons why flat panels have so far failed to take off in Australia. Burnham also believes the difficulties associated with producing high-resolution flat panels (above 1280 x 1024 resolution) has also contributed.

Hitachi's Mannasz believes there are also benefits with technology such as LCDs and plasma, although he added that plasma "as a technology is probably about 10 times the price of CRTs".

"And most of the plasma stuff is being targeted at larger area presentations, such as train stations, airports, hotel reception areas, boardroom presentations - that sort of stuff," he said.

Mitsubishi Electric Australia's Newton said there were two big issues. "One is cost and the other is space. If you're in a situation where space is at a premium where you have no choice because you can't use CRT simply because there's not enough room, then you limit yourself to having to use a TFT. The other side of the picture is the cost - there is a significant gap still between CRT and TFT."

Newton sees this eroding over the next five years, but not significantly enough for TFT to take a lion share of the market. "We don't expect that TFT will be greater than about 15 per cent of the total market in the next five years, and it could be less than that."

The future

Vendors and analysts ARN spoke to agreed there were changes on the horizon for the monitor market.

Inform's Burnham expects the business PC market, especially the corporate dealer channel, to pick up again over the next six months. "This in turn will drive sales in the monitor market," he said.

"We also expect to see an increase in the number of third-party compared to bundled monitors being sold over the next 12 months," he said. "Some resellers are taking issue with PC vendors who bundle mediocre monitors with their desktops and charge over the odds for them when the reseller can source higher quality monitors for less money."

Tech Pacific's Velling said that "without a doubt" the demand for LCDs will grow, which he believes will be driven by their reduction in pricing, and also the appeal of their smaller footprint, and simply because people prefer LCD screens. "We're seeing . . . phenomenal growth in overall sales of monitors," Velling said. "We've had year-on-year growth of 85 per cent in monitors, so we're seeing growth in both CRTs and LCDs. We're also seeing strong growth in the 19 and 21 inch CRTs." He added that demand in these sizes was slightly different, driven by end-user applications.

According to Velling, there are two types of markets: replacement and new system. "And we'll see growth in both of those."

Hitachi's Mannasz thinks CRTs are here to stay for quite a number of years. He cites the higher prices of LCD flat screen technologies as a contributor to this scenario. "As you go into the future, market-wise, it's just going to shift to larger and larger sizes as the volume goes up and prices come down. Typical users are now starting to shift from 15 to 17 inches . . ." He also said that flat screen CRTs, cheaper than their LCD counterparts, were starting to take off in Australia.

Mitsubishi Electric Australia's Newton sees a positive future for this market locally. "The monitor market, and CRTs in particular, is strong and growing. There is a general shift from 15 to 17 inches . . . and I think 19 inch monitors will become very competitive over the next 12 months, from the home market especially."


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