Aris Silzars Display Technology Consulting

DISPLAY CONSULTING


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Where is the Bottom?…

“Ladies and Gentlemen, step right up!  Have I got a deal for you today!  Are you in the market for a new computer monitor?  Of course you are.  Well, I have an offer for you that you simply won’t be able to pass up.   Would you believe that I can sell you this beauty of a 20” full-color high-resolution computer monitor for just 79 dollars?  You heard me right – only 79 dollars!  I know this sounds too good to be true, but here they are.  Get yours while they last.”

Sounds pretty incredible, doesn’t it?  But it doesn’t take a high-pressure shady promoter to find this kind of a deal.  This was the advertised price in last Sunday’s paper for a 20” computer monitor from a well-known manufacturer being sold by a big-box store – no strings attached and no limits on availability.

It made me wonder.  Isn’t this getting a bit too cheap?  Where is the bottom?  It’s only been a few years since we in the display industry were debating if 20 inches would be the largest size LCD that we would ever be able to make given the complexity of the TFT process.  Then we debated whether the cost of making such a display could ever compete with a CRT because of the much greater cost of building a clean room and the need for sophisticated semi-conductor production equipment.  How could LCDs ever compete with CRT technology if the manufacturing plant’s projected cost was going to be ten times higher?  

And here we are.  Just a few years later and a 20” LCD monitor with excellent performance can be bought for less than a low-resolution monochrome CRT monitor of a few years ago.  That is an accomplishment that all of us in the display industry can be proud to have participated in.

On the other hand, is there a downside?   Are we pushing prices down to the point where the products loose their perceived value?  Will a further lowering of prices create a bigger market or are we simply going to sell more displays but generate less revenue?   We may not be able to get to a definitive answer but perhaps we can gain some insight by making a few comparisons.

For example, Microsoft has done quite well with its Windows operating system even though it seems the market should have saturated years ago.  Not so long ago, it was quite a special occasion when a family purchased their first personal computer.  Businesses were also just beginning to install computers but only for their most important managers and employees.  Today a typical family is likely to have at least one computer per each family member and in cases like my own there are at least ten computers in the house and lab serving various applications.  It is of course typical that each one of these installations has a Windows operating system.  And in business environments it would take some serious searching to find an office cubicle that does not have at least one computer.  So even though the earlier market analyses would have predicted that a saturation would occur, new uses and decreasing prices of the hardware allowed for a continuing proliferation of products.  Thus, Microsoft has been able to sustain a steady increase in revenue.  Will we see the same with displays?   For computer monitors the answer is a clear yes because each computer typically has a display associated with it.  And more recently, consumers are adding multiple displays to each of their computers. 

Can we go beyond that?  I think the answer here is also a yes.   Many homes now have flat-panel televisions in more than one room of the house.   I just returned from a business trip and the hotel where I spent a few nights had a second LCD built into the bathroom mirror.  Therefore, it’s reasonable to expect that the demand for displays can and will continue to increase until … until we have several in each room of every home and business?   Sounds interesting doesn’t it? 

So we have come full circle to the question I started with.  Are the prices for displays getting too cheap?  I really don’t think we will need to practically give them away like ballpoint pens.   It seems to me that the demand is out there and that in today’s world consumers don’t hesitate all that much when making buying decisions in the one-hundred dollar range.  Perhaps, we may have already reached the point where further price reductions will simply result in less overall revenue even as sales volumes continue to increase.  Personally, I’m very happy to be able to buy a nice 20” monitor for roughly $125 - $150.  Much lower than that and I begin to worry about what corners have been cut in design or manufacturing to get to the cheaper selling price.  That can actually lead to a negative buying decision -- passing up the offered bargain.  

I expect that soon we will reach a balance point.  We may already be there or at least close to it.  The next year or two should tell us for sure. 

Where is your price point?  I would enjoy hearing your thoughts on this topic and also how you expect to see new displays implemented in your future.  You may contact me directly from this site, by e-mail at silzars@attglobal.net, or by telephone at 425-898-9117.        

 

 

 

19916 NE 30th Ct. Sammamish, WA 98074 Call 425.898.9117

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