Print

Comment

Email

Digg

Del.icio.us

Reddit

Twitter

As the new generation LCD or TFT (thin-film transistor) technology took center stage replacing the CRT technologythe shift seemed almost complete in India. According to IDC, a total of 6.6 mn monitors were shipped in India during 2008. The contribution of LCD monitors was more than 70% (4.8 mn units), thus recording a growth of 29% over FY 08. The key reason was the reduced price gap (around Rs 1,200) between CRTs and LCDs, especially during H2 09.

While price of CRT monitors remained stable, price of LCDs have dropped significantly over the past one year fueling the demand further. The increase in adoption of LCDs is also visible from the increase in demand for standalone or non-bundled LCD monitors. The ratio of LCD & CRT stood at 70:30 last year in favor of LCDs. And with price of LCDs coming down, the market in India this year is expected to grow further taking the share of LCD screens to 95% compared to only 5% of CRTs.

Thin is In
FY 09 would always be remembered as the year when Armageddon struck CRT technology. Most of the leading monitor vendors in India including Samsung, AOC, and LG retrenched their CRT monitor production. As the volume and production efficiency of LCD screens increased over the years it was sensible for display majors to promote the new technology over the older one to offer users with the latest features and benefits. Consumer education has been a key focus area for most of the companies as they introduced fresh ideas on end user marketing campaigns. A clear example was set by LG with the launch of its maiden television commercial on LCD monitors featuring microscopic picture clarity. The action resulted in tremendous brand recall among end users and helped LG to increase its market share. Same was the case for TPV Technologies which successfully turned AOC into a brand to reckon with.

CyberMedia Research                                                                                              DQ Estimates

There was a decline in the Indian monitor market after many years. However, that did not impact the continuing transition from CRTs to LCDs. While enterprises have been the leaders in adopting LCD screens over CRTs, the trend is fast trickling down to the end user segment as well

LCD displays have come a long way and manufacturers have now started to look beyond aesthetics to packing their products with value added technologies and features. The latest industry trends include16:9 wide viewing angles, 50,000:1 or higher dynamic contrast ratios, resolutions supporting full-HD view, display interfaces such as HDMI, DVI, inbuilt webcams, speakers, faster response times (2 minutes) and wide viewing angles (170 plus). There has also been a shift to 2 lamp technology with even lower power consumption compared to the traditional 4 lamp. Refresh rates were also re-engineered and went up to 120 Hz, at which the monitors can support 3D view.

Another significant change that was visible in LCDs last year was the gradual phase-out of 15 or 16 inch screen size as the standard or entry level monitor. 17 inch was in high demand even though popularity of 19 inch and other bigger screens increased rapidly. In fact, as wide screens went on to become more prevalent, the newer trend in this segment started shifting towards odd sizes such as 15.6 inch and 18.5 inch and higher.

The year was also marked with some new launches by most of the display makers in the TFT category. Samsung launched 20 inch and 22 inch format LCD monitors and new rangesT Monitor and Myst Plus seriesto address the home and SOHO customer segments. Viewsonic came up with 24 inch 16:9 wide screen full HD 1080p monitorVX2433wmthat primarily targeted gamers, multimedia enthusiasts, and graphic professionals. As the concept of big and wide caught up with last years monitor trend, AOC also introduced its 24 inch screen modelAngelo.

CyberMedia Research                                                                                              DQ Estimates

Standalone monitors sold more with LG and Samsung continuing to rule the roost. The surprising emergence of Acer and AOC could, however, change the equation in future. Bundled sales obviously was a reflection of the PC marketthough with desktop sales going down significantly, especially in H2 09, the monitor market landed on a trough from which it has only just started recovering

A Roller-coaster Ride
The total monitor market stood at Rs 4,503 crore in FY 09. The overall contribution from LCD displays at the end of Q4 was Rs 3,914 crore, at 87% of the total market share of LCDs. Out of this, the non-bundled or standalone monitor segment contributed Rs 2,432 crore and captured a market share of 54%.

While Samsung completely phased out its CRT production by the end of Q3 09, companies like LG, AOC, Acer, and Viewsonic continued to ship-in CRTs albeit in limited quantities. The move helped these companies to cater to smaller yet existing segments and generate some additional bucks. Whereas, Samsungs total exit from CRT proved to be fatal for the company as its revenues were badly hit; particularly its Q3 sales were severely impacted and dragged down its average market share of 28% (recorded in the previous two quarters) to 20%. Samsungs loss has been a gain for its competitors like AOC and Acer who were jointly responsible for around 30% share in the overall monitor market during the same period.

On the other hand, FY 09 proved to be one of the most satisfying years for LG as it consolidated its position as the leader for display products in the Indian market. Its market share in monitor segment grew by 9% (from 11% to 20%). What was more significant was LGs increased growth from 19% to 30%, in non-bundled monitor segment.

Acer too witnessed tremendous growth over the last one year. According to IDC, it topped the overall LCD monitor market in India with a market share of 15% in Q3 08. It had grown almost 35% y-o-y from Q3 07, when its market share stood at 15%.

However, globally, FY 09 proved to be one of the most unfortunate years for the IT hardware industry and the monitor segment was no exception. Business was impacted for most of the principals, and Q3 was the worst in terms of performance. The fiscal started decently for most players with all of them recording a fair growth in Q1 compared to the previous quarter. The performance was carried through Q2. However, the blow came during Q3. Revenues came down drastically as the market shrunk like never before. The combined revenue earned during Q3 came down to Rs 446 crore from Rs 787 crore, indicating a sharp drop of 43%. While LGs business dropped by 23%, AOCs dropped by 44%. Acers revenue declined by 47% and Viewsonics by 45%. The worst affected was Samsung with a major downfall of 57%.

The key reason that could be attributed to this catastrophe is undoubtedly the economic slowdown which affected IT hardware sales globally. The shortage in supply of LCD panels across the world and reduction in price of LCD monitors at the same time, fueled the crisis. While LG managed to stay afloat amidst the debacle, thanks to its aggressive marketing policies, others could not hold on and bore heavy losses. The worst hit among all leading players in the monitor segment was clearly Samsung. Besides slowdown woes, internal restructuring at a time of economic meltdown seemed to have paralyzed the company further with the exit of Sanjay Sharma (ex VP, IT). While most of the other players could overcome the blow by Q4 09, Samsung continued to be in troubled waters. The opportunity was fully utilized by the likes of AOC and Acer as they ate up the market share left vacant by Samsung.

Similar was the case with the players addressing the bundled monitor market. The overall revenue generated by the bundled monitor market recorded a slump of 39%, coming down to Rs 394 crore in Q3 from Rs 643 crore in Q2. While HP still maintained its market lead followed by HCL and Dell, none of these players could evade the inevitable crisis. While HPs business declined by 46%, HCLs revenue dropped by 44% and that of Lenovos by 40%. Dell emerged to be the most steady player as it recorded the lowest fall of 33% compared to its competitors.

Q4 brought in little hope as the world economy seemed to be back on a recovery track. The IT display majors are also gearing up fully to make up for the loss incurred during the last fiscal. Meanwhile, as the technology revolution has gained ground, the current financial year promises to be a new battleground for the leaders to maintain their position and the wannabes to vie for maximum market share.

Piyali Guha
piyalig@cybermedia.co.in

Page(s)   1