MONITOR MARKET: You Win Some, You Lose Some

The monitor market has seen a negative growth in 2001-02 with 17,04,480 units
sold in comparison to 18,88,290 units sold in 2000-01 (Source: MAIT). However,
there is good news for the industry. Initial DQCI estimates arrived at from
various sources indicate a recovery of around 10 percent for the AMJ quarter
when compared to the same period in 2001-02.

DQCI estimates puts total monitors sale in AMJ quarter at around 4,70,000
units.

And here again Samsung leads the pack with about 40 percent marketshare
followed by LG at 24 percent, Microtek at 13 percent and Philips at six percent.
The remaining 17 percent is shared between Benq, Viewsonic and BPL.

Market feedback clearly shows that LG and Microtek are catching up fast with
Samsung. Whereas, ViewSonic is suddenly out of the scene because of its
world-wide decision to move out of the low-end monitor business. It is now
focusing only on high-end 17" flat monitors and above along with the niche
LCD segment.

Resellers selling Samsung monitors feel that though Samsung is losing out on
marketshare in the face of tough competition, it would still retain its
leadership position. According to them, Samsung continued to do reasonably well
in the AMJ quarter because of the excellent schemes that it rolled out during
this period for both channels and end-users.

"Samsung will certainly maintain its leadership in the market due to its
marketing initiatives. Also its pricing strategy has give it an added advantage
over its competitors," says Anil Kumar Singh, GM, Lampo Computers.

However, Umang Mehta, CEO of Roop Technologies, points out, "LG has done
an excellent job in the last few months both with regards to offers for the
channels and end-users and hence it will be soon running neck-to-neck with
Samsung in the monitor business."

Harish Kumar, MD, Connoisseur Electronics agrees that LG is catching up with
very interesting marketing initiatives, but stands by Samsung for its pricing
strategy, aggressive marketing initiatives, promotional campaigns, dealer
programs and support. "Samsung has become a major push factor for monitors
in the market. Also Samsung brand in itself has given the products an edge over
others in the market," he adds.

	Samsungontop, but loses marketshare to others
	LG fast catching up with aggressive campaign
	Microtek strong in the north, lags everywhere else
	Philips growing in south and east
	Viewsonic stops low-end monitors, concentrates only on high-end monitors
	Proview still struggling to create a mindshare
	Benq focuses very little on monitors

Microtek is doing well in the north and a little bit in the south, but is yet
to make a noticeable presence in west and east. Overall, Microtek ranks third in
the market. It has been sustaining its business despite the tough competition
from Samsung and LG on the pricing front.

Meanwhile, there are talks in the market that Samtel had stopped selling
monitors about two months ago and may opt out of monitor production too.

Philips has been in the market for quite some time. But it was only in the
last two years that it has become aggressive in promoting their monitors. Till
the end of JFM quarter Philips was reported to be doing good business with
around nine percent marketshare.

However, market sources report that the enthusiasm that Philips had generated
in the JFM quarter has died off due to internal re-shuffle and new appointments
of officials within the organization. While the company is tight-lipped about
their strategy for the next quarter, rumors have it that Philips will be soon
launching a fresh marketing campaign and continue with their regional
distribution model.

Proview has been trying very hard to sustain with aggressive marketing and
low price but is yet to create a mindshare among end-users.

SAMSUNG’S LOSS IS LG’S GAIN

Going by the present trend, monitor resellers in Mumbai are of the opinion that
by end of next quarter, Samsung and LG could be running neck-to-neck. In March
2002, LG took a major strategic decision by changing its national distribution
model to regional distribution model. The new model paid off well for LG, with
sales tripling in just two months.

During this period, both Samsung and LG launched a series of marketing
campaign with bundled offers. Samsung launched the Big Buy and Bol Baby Bol
offer in which Lexmark printer, IBM’s Via Voice software, headphone and mike
were being bundled with the 17" monitor. LG launched the Gol Pe Goal offer
in which trips to Seoul and Bangkok were offered to channel partners among other
prizes and then they announced the June Jalwa offer with prizes ranging from
wrist watches to refrigerators to air-conditioners. Recently, LG also started
bundling HP printer with its 17" Flatron model, and a webcam with 17"
normal model.

BIGGER THE BETTER

From the age-old green display to monochrome to color CRT to the present day’s
LCD displays, PC monitors have gone through a series of technological
innovations. As volumes and technology improved, prices too came down. Year 2001
saw the 14" color monitor giving way to 15" color monitors. This trend
continued for one full year. Market analysts predict that by this December,
15" will be phased out completely and 17" will take its place as the
entry-level monitor.

MAIT estimates show that in 2001-02, sales of 17" monitors grew by 20
percent and 15" grew only by 5 percent, whereas, the sales of 14"
dropped by 22 percent.

Further, with all the bundled offers with 17" models that have been made
by vendors in AMJ, the market forecasts for 2002-03 may well be proved right.

While the technology shift continues, another trend that is catching up among
corporates is the preference for the sleek TFT LCD monitors. When launched
initially, TFT monitors were considered as a niche product for the elite. Even
now it continues to be targeted at the premium class. But the declining cost in
this segment will see TFT monitors on many desktops in the not-too-distant
future.

What next? The next generation of monitors would have TV and video features
incorporated into them so that one can use the monitor like TV without switching
on the PC.

PRICING AND FEATURES

Monitor market is maturing and customer awareness has improved a lot. Now
you find customers buying monitors for their quality and features, and not just
price. The trend is that prices continue to go southward.

In AMJ, monitor prices dropped by 10 percent for most brands. Every vendor
has priced his product at competitive rates with equally comparable features.
This leaves customers to look at failure rates, warranty and support.

The failure rates for various brands have been found to be more or less
similar. All the brands put together, this ranges from 0.4 to five percent. Does
this mean all of them make reasonably good quality monitors? No, say market
experts. "Usually, a small number of monitors fail in the first two years
which is also the warranty period of most vendors. And it is this time period
that is taken into consideration for the failure rate," points out an
analyst.

However, the biggest problem is premature failures, says an industry expert
who does not want to reveal his name. Premature failure would mean the failing
of monitor for any reason within the first twelve months of purchase. The
failure rates in India are relatively higher because of usage and power
conditions in the country. While internationally it is 0.7 percent, in India
vendors look for a benchmark of 1.5 to 2 percent.

B AND C VENTURES

With metros getting saturated, vendors are rushing to B and C-class cities
to increase their sales. Dealers and resellers in these cities are finding new
business opportunities as vendors are keen to explore their business contacts.

Vendors find another advantage in these cities. They have an opportunity to
push entry-level monitors here, while metros are looking for high-end products.

In most of the C-class cities, the emphasis has been on market development.
Vendors like Philips, LG and Benq have found their stronghold in some of these
cities.

In fact, LG and Philips have a larger marketshare than Samsung in some of
these cities. According to these vendors, markets in the metros have reached a
point where it is difficult to gain marketshare. However, this does not mean
that they are shunning the metros totally.

IDC data indicates the strong emergence of small towns as far as IT business
is concerned. Understandably, monitor business would also witness a relative
growth. While demand for automation in metros is reaching a peak, there is still
a greater potential to be harnessed in cities with population between five and
10 lakh.

All these facts are indicative that PC penetration is yet to achieve a crest
in these cities. And with monitor business being directly proportional to PC
sales, the signs are more than just good. Accordingly, vendors can set their
sights to do a flourishing business in these cities and strengthen their
bottomline.

NELSON JOHNY in Mumbai with inputs from SUNILA PAUL in Bangalore and MOHIT
CHHABRA in New Delhi