LCD boom is here!

An LCD boom is staring us in the eye. The market is growing in breadth as
well as depth. The latest entrant in the India market Kores' Kino TFTs sold 45
units within 20 days of the launch. The product distributed by Aar Vee in West
India is currently available in 17-inch only. "By June 20 Kores will bring
in 14, 15 and 19-inch as well," informed Vinod Mulchandani, CEO of Mumbai-based
Aar Vee Computers.

Graphic and line intensive applications are driving the 17-inch market, said
Ankan Biswas, General Manager, Multimedia Display & Digital Network,
Consumer Electronics at Philips India Ltd. He mentions that even though the
absolute numbers in the 17-inch category are small the category is growing at
least 300 per cent year-on-year. Biswas admits that at times he himself is
surprised at the market response. In April this year Philips sold 3,000 TFT
monitors while the company sold the same number in the JFM quarter of this year.

More and more channel partners are getting into the segment. Reason: This is
the simplest of all IT products and margins are assured, as of now. The insight
came from Anish Kurup. He is the product manager for the Umax range at Neoteric
Informatique. "Given that panel manufacturers are so few, you cannot go
very wrong with the quality," elaborated Kurup. Since panel is the only
QAcritical component that goes into the monitor anybody who can source and put
it all together can get on to the bandwagon and launch a brand. However,
building a brand and making inroads into the market is a different story.

Pitted against brands like Samsung, LG, Acer and BenQ, Umax is finding the
"battle to market share" tough. The increase in the number of players
in the space makes staying competitive tough even though the market is growing
at what is being termed — an explosive growth rate.

According to IDC, 2.42 lakh units of LCD monitors were shipped in 2004.
"This is more than 100 percent growth over 2003," said Sanjit Sinha,
Senior Manager, Hardware Research at IDC, India. While IDC estimates that the
number of units shipped is likely to touch 17 lakh by 2009, given the dynamic
market, the real figure could well surpass the estimates.

According to VR Kirubakaran, National Manager-Display Products at HCL
Peripherals, LCD industry is growing at more than 200 percent. STPIs, call
centers, BPOs, SOHO segment are all opting for the LCD monitors over CRT.
"In another three-four years the LCD monitors will dominate the
market," he said.

However, building brand value remains the key. Recently, D-Link announced its
decision to phase out its Digiview brand. The company is bringing Gigabyte brand
LCD monitors along with other Gigabyte products to India. "This would help
the company garner market share faster as Gigabyte commands greater brand
equity. Gigabyte commands greater brand equity," stated Rajan Sharma,
Product Manager at Gigabyte India. Sharma forecasts a sale of 3,000 Gigabyte
monitors in the next quarter. However, the company is still fine-tuning the
business dynamics. Given the competition in the market not only the pricing has
to be competitive but also the product should have a wide range and value adds
on offer.

"It is not the price differential of a few hundred rupees that
determines consumer choice but brand value, design and aesthetics," said
Ashish Bakshi, Country Head, India Operations, BenQ. The company has won
accolades for its model FP 783 which has inbuilt speakers and web cameras.

As brand value becomes an important determinant in the purchase decision the
vendors are competing on giving value to the customer. Kensington security, wall
mounting feature, multi-language support, operation at wide temperature ranges,
picture rotational control, low radiation, lower response time, additional
option for speakers all make it to the rank of value adds. "Benq has
intergrated a touch screen panel in all its LC monitors. This has been done
particularly in view of its usage in service Industry," added Ish Bawa,
Marketing Head, BenQ.

Finding a niche in this constantly evolving market is tough but at the same
time it is important for players to find their niche or they will find market
consolidation a difficult phase. LG IT products head G Manikandan, talking about
the USP of LG monitors, lists out the company's 17" model 1730S, which
boasts of the f-Engine technology. "This is the only LCD monitor in the
world to have f engine tech, he said adding that the response time of some of LG
LCD monitors is 12ms and some have even 8ms.

With so many players in the fray it is all about product positioning now.
Umax is trying to push its 14-inch monitors in 15-inch space with a price
advantage proposition. The premium brand Sony has introduced a 15-inch model in
April after much deliberation. "It was done to complete the range Sony is
offering," said Sachin Thapar, Head, IT Products at Sony India.

There is no doubt that 15-inch continues to rule the market. According to IDC,
15-inch constitutes a little over 75% of the total LCD market. The major driver
for the segment 'CRT to LCD shift' has been the price drops that has
happened in the last six months making available sub 10K LCD monitors in the
15-inch category and sub 15k in the 17-inch category.

In an effort to boost sales early this month Samsung dropped its LCD monitor
prices by 10 percent. While the competition between the frontrunners LG and
Samsung picks up steam, vendors refuse to speculate on the extent of further
price drops expected this year. However, the channel market — which is
currently enjoying what is being termed a "decent margin" in the
segment — is expecting a drop and a consequent boost in volumes.

NANDITA SINGH