High-End LCDs Can Mean Profits For Solution Providers

"At the lower end of the spectrum there are a lot of very similar speced monitors. The fact is that most [manufacturers] are purchasing panels from one of the large TFT LCD panel suppliers and only assembling their monitors, which demonstrates the ease of entry into the low-end of the LCD monitor market," said Al Giazzon, vice president of the Digital Display Group at BenQ America.

Monica Islas, product manager, monitors at Samsung added, "There are many brands of displays, but few panel sources. Many display companies are focusing strictly on entry-level markets, which causes the surge of the similar entry-level products with similar specs." ViewSonic sees this as an opportunity to produce and provide displays with unique user enhancements and features such as multi-panel configurability, multi-platform inputs, and ergonomic adjustability, according to the company.

"At first glance, it may appear that the LCD industry has become saturated because the manufacturing of LCD is so much simpler than CRT and thus many newcomers have begun selling products with little differentiation," said Young Bae, senior product LCD specialist at ViewSonic.

"Many of the apparent similarities occur when one only looks at panel specifications. However, when an LCD purchase is being evaluated, the entire package needs to be considered from the panel and performance to the support available," Bae said.

Solution providers discouraged by the sameness in the LCD market should heed Bae's words. By taking into consideration many factors when choosing displays to offer their clients, they can provide an LCD to meet customers' specific needs. Optional slots for networking, wireless and television tuners, and USB hubs allow manufactures to offer full-featured solutions that not only enhance a user's PC experience, but also opens the door for digital signage and professional display business.

"In addition to performance enhancement in color, focus and refresh [rate], we see continued evolutions in industrial design, making the monitor the hub of the desktop experience," said Giazzon.

Companies like Sony have leveraged new technology such as this and expanded into the hospitality and business display markets, providing products and services that go beyond simply selling the displays themselves and offer content and asset management. BenQ also offers new technologies with their LCD solutions such as Senesye technology. Senesye generates blacker blacks for better picture contrast and blazing response times. These higher-end displays offer plenty of room for differentiation and customizaton, and great opportunity for resellers to upsell from entry-level solutions.

Speaking of blazing response times, many of the larger display vendors are shipping LCD displays with 8-millisecond response times. Samsung, for example, recently introduced the new SyncMaster 915n with an 8-millisecond response time.

"There are many advantages to the [faster] response time, the first being with motion video technology," said Islas. "This is great for gaming applications, streaming video or watching DVD's. The other great advantage is for scrolling text applications such as Word documents or spreadsheets. When scrolling, you can get a lag time for the text to catch up."

Viewsonic has offered its VP171s and VP171b LCD displays with 8ms panels since January. Both have an ESP of $379. With the faster response times, these products are obvious choices for gamers and anyone dealing with motion video, but also meet the needs of users who want to be prepared for the next generation of high speed data and streaming media.

James Neal, general manager for display product marketing, Sony Electronics' Home Products Division said, "Eight-millisecond refresh rate is here now for a reasonable cost with 5-millisecond right around the corner. Faster rates benefit those who rely on demanding applications such as the gaming and military industries or those who need an affordable solution for high-end video performance."

Tremendous advancements in response time are not the only technology trend sweeping the LCD community. LCDs as large as 19 inches are quickly being adopted in the industry and for good reason. Samsung sees the 19-inch market as the biggest growth area for 2005.

"We have already seen the transition happening when the 19-inch street price went sub-$500. Samsung has recently launched the SyncMaster 915n which has an 8-millisecond response time. This technology advancement opens the door to a whole new market for the 19-inch space," Islas said.

Sony believes that 19-inch LCDs are the step-up size for business applications. However, due to several factors including the cost-sensitive nature of the business-to-business market, there is less of a productivity benefit for users moving to 19-inch from 17-inch displays than was seen during the transition from 15-inch to 17-inch displays. Therefore, the transition is proceeding at a slower pace, according to the company.

"Nineteen-inch LCDs will continue to grow in share as price points begin to come under $350. This is especially true for home applications that tend to blend usages from home finances to gaming," said Giazzon. Samsung offers solution providers a wide array of large screen LCDs and provides many opportunities for solution providers to increase margins on large screen products since they have not become commoditized products, the company said.

ViewSonic places a premium on solution provider training to ensure that the right product is selected for each customer, thereby minimizing returns and maximizing both satisfaction and profit. The company states that this approach increases repeat sales and the corresponding additional margin.

The overall industry outlook is promising for solution providers and with the emphasis on large screen displays, profit margins are encouraging. But perhaps the easiest way to enhance margins is to include accessories. Whether solution providers offer keyboard and mouse sets, speakers designed to match the dcor in a given setting, or the brackets needed to configure a multiple display setup, there is almost always an opportunity to add a high-margin accessory sale to an existing deal.

More and more resellers are also starting to get into the digital signage market, moving into an area previously dominated by professional A/V dealers and installers. Samsung, for instance, offers LCDs ranging in size from 21-inches to their newest 46-inch displays. Sony believes that the LCD market will eventually stabilize, with low-end suppliers controlling entry-level products and traditional high-end manufacturers adding more and more feature innovation. According to Viewsonic, pricing of LCD screens will continue to decline for the first few months of 2005, but at more subdued and orderly rate than the market has seen recently.