In Your Face: A Look At Monitors

No matter what angle you look at it from--pun intended--monitors can be lucrative sales items for VARs. That's especially true if resellers focus on hot products, such as flat-panel and wide-screen displays, which offer the highest margins.

Among the latest trends making monitors more favorable to the channel: a shift in demand toward higher-priced larger screens and LCD monitors, faster response times in larger-screen products, and the growing popularity of wide-screen and touch-screen monitors.

"We're seeing people step up to the larger screens, including 17-inch and 19-inch," says Monica Islas, product marketing manager for monitors at Samsung Electronics America, Irvine, Calif. "The pricing has come down to where they're affordable, but a VAR can still make money on them."

Keith Grabel, president of Westwood Computer, a Springfield, N.J.-based firm that provides systems integration and IT consulting services to businesses and federal government agencies, says many customers are moving from traditional monitors to larger-screen flat panels, such as 19-inch displays, as the prices drop.

"We're seeing more demand for larger screens because [customers] have the budgets [to buy them]," Grabel says. He says flat-panel displays are particularly attractive to organizations that have limited office space because they take up less space on the desktop.

Westwood does a lot of business with the federal government, Grabel says, and he expects demand for the larger, flat-panel monitors to rise significantly among government customers as the prices continue to drop.

Grabel says there's also an increasing demand for very large screens--32 inches and up--that organizations are using for such applications as videoconferencing and training.

"Overall, the [monitor] market is growing," Grabel says. "When you can move from regular monitors to flat panels, there's going to be growth" in revenue for VARs. He says Westwood's sales of products from Samsung--one of the many monitor manufacturers whose products it carries--doubled from 2003 to 2004.

One of the technological improvements that is making larger screens more popular among end users is faster response time. Bigger screens have been inherently slower, rendering them inefficient for such applications as streaming video, graphic design and computer games.

But vendors, including Samsung, have been working to improve response times. That, plus the fact that prices of the larger-screen products are coming down, will help make them more appealing to buyers, giving VARs more types of products to sell and generating higher margins than smaller monitors, Islas says.

ViewSonic, Walnut, Calif., also has focused on improving the response time of its monitors, including LCD panels. More buyers are switching to flat-screen panels as they become more affordable, but they are noticing that the response time is not as good as with CRTs, says Sally Wang, director of business product marketing at ViewSonic. The company is planning to launch a series of 17-inch and 19-inch products with improved response times by the end of the second quarter, Wang says.

Meanwhile, VARs are seeing an uptick in flat-panel sales. "There is definitely increased demand for 17-inch-plus flat screens. CRTs are slowly fading into the sunset," says Peter J. Thelen, regional vice president of sales at Pomeroy IT Solutions, Hebron, Ky. "Customers are willing to pay more for that advanced technology because of the clarity, but more specifically because of the [more convenient] size."

Although LCD monitors give VARs another option to offer customers besides CRT products, solution providers need to be aware of the impact falling LCD prices are having on the marketplace. The average price of a 17-inch LCD monitor dropped from $292 last June to $158 in January, says Rhoda Alexander, director of monitor research at iSuppli, a technology research firm in El Segundo, Calif.

"The challenge to resellers is managing their inventory [of CRT and LCD monitors]. A lot of them got caught in the summer of 2004," Alexander says, referring to when demand for CRTs spiked and many VARs didn't have enough products in inventory. Now that demand for LCDs is rising rapidly--particularly 17-inch and 19-inch models--VARs need to have adequate supplies on hand and yet still maintain stocks of the CRT products that some customers want, Alexander says.

Although LCDs are selling well, Alexander says monitor vendors still have issues to address, such as contrast levels and brightness. "We'll see some new products in 2005 with different backlighting schemes to address these issues, and that will offer a whole different level of LCDs," she says. "VARs need to watch that space."

NEC-Mitsubishi Electronics Display, Itasca, Ill., is developing backlight technologies, such as LED backlight, to provide enhanced color representation and longer life spans for displays. It says large LCD formats are being used for new applications, such as digital signage.

Vendors also see a growing demand for wide-screen panels. Much of the content that's available on the Web or in business and entertainment applications is well-suited to the wide-screen format, and the ratio aspect of the screens makes it easier for people to view objects, such as word-processing documents, Wang says. ViewSonic's latest wide-screen product is a 23-inch monitor that it released in February.

ISuppli's Alexander says large-screen and wide-screen monitors give VARs a "tremendous opportunity to upsell customers to larger displays."

NEC-Mitsubishi reports increased demand for wide-screen monitors in 23-inch, 30-inch, 40-inch and 46-inch sizes. Part of this is due to HDTV's becoming more mainstream, says Andres Maldonado, director of marketing.

Touch-Screen Opportunity

Another potential growth market for VARs is touch-screen monitors. The products have been popular in the retail and hospitality sectors, and experts expect sales to increase in markets such as health care, industrial manufacturing and transportation. Sales of LCD touch screens are expected to be especially robust.

Whereas regular monitors today are largely commodities and price is often the determining sales factor, that's not the case with touch-screen displays, says Bill Nulf, director of channel sales at Elo Touch Systems, Menlo Park, Calif. "We are at the point where the monitor business was in the late 1990s, approaching commodity but not quite there yet," Nulf says. "There can still be value added."

The market has changed in a way that could be favorable for VARs, Nulf says. Four or five years ago, most touch displays were sold directly by manufacturers to engineers who would configure the products for their companies. "Now, instead of engineers making the purchasing decisions, it's the IT group, and that opens the doors for the channel because they're the ones calling on that group," he says.

Reflecting that change, Elo last year formed a channel division and signed up five distributors, some focused on VARs. "We would rather have all our business go through VARs," Nulf says. "We see a big growth opportunity. We still get one or two sales through an end user or small reseller, but [for the most part] we're not going to sell direct anymore."

Elo's latest product, which shipped last month, is a dual-display monitor that has a 15-inch screen on one side and a 12-inch screen on the back. Potential customers include supermarkets, where shoppers could use the products to watch as items are being rung up.

Much of the R&D in touch-screen technology involves making the products easier for people to use, Nulf says, "so it's true plug-and-play where you take it out of the box and don't have to do any calibration." Another aim is to have the products support the Linux operating system as it becomes more popular in enterprises.

Bob Violino ([email protected]) is a freelance writer based in Massapequa Park, N.Y.