LCD monitors are set to continue to show year on year growth according to the latest forecasts from Meko's DisplayCast market research service. In an update to its forecast, Meko reports that the European desktop monitor market is now expected to show around 4.7% growth in volume in 2004 compared to 2003. As previously forecast, sales in central and eastern Europe are expected to grow more strongly than in the west of the region with demand for LCD monitors rising quickly.
The total volume of monitors sold in 2004 is expected to be in excess of 38m units with more than 39m forecast for 2005."We have not significantly changed our forecast this time round but there are some movements in terms of share by screen size", noted Pete Gamby, research director at Meko. "In particular, we have raised our estimates for large size LCD monitors".
Sales of the larger screen sizes has been limited by prices being too high for the more mainstream applications but this situation is changing quickly. Sales of 20" and larger LCDs were much stronger than expected in Q4 2003 and Q1 2004 and this has led the researcher to put forward an improved forecast.
"Specifically, prices in the 20.x inch LCD monitor category fell sharply over the last three months and this should stimulate further growth despite the seasonal slowdown that is expected for Q2 and the start of Q3", added Gamby.
In addition, the DisplayCast research shows that some areas of Europe are still struggling to come to terms with changes in desktop monitor pricing and availability that are not market driven. "We've noted before that the LCD panel makers in the Far East are keen to maximise profits whilst demand outstrips supply", said Gamby. "This is continuing and despite there being end-user demand for smaller screens, the panels for those screens have been made increasingly more expensive".
With suppliers under cost-price pressure and seeing margins eroded as street prices continue to fall, the result has been for some to give up promoting 15" LCD monitors altogether. With vendors having to persuade customers to switch to 17" LCD monitors, there is now some evidence that the 15" segment will decline quickly in some parts of the market - corporate buyers in particular are deciding that the situation is not going to change and are specifying 17" screens where budgets allow. Still, if prices for 17" monitors fall as expected, this size category will account for more than 50% of all European monitor shipments by the end of 2005. The next largest "sweet spot" screen size is 19" and this will grow
to take more than 10% of the market by volume at the start of 2006.However, prices for 17" LCD monitors are not yet at the point where LCD penetration in all countries in Europe can suddenly accelerate to saturation point. "We are still expecting CRT monitor shipments to account for about 20% of the market volume at the start of 2006", said Gamby. Market saturation has been achieved only in wealthy countries such as Luxembourg and Switzerland - here LCDs outsell CRTs by more than 9 to 1.