Standing Out Amid the Clones

No field in information technology is more crowded or more competitive. It's the single largest category in our Annual Report Card (ARC) survey. That's because the barrier to entry in this market is so low; many competitors don't even make their own systems but instead buy them from others that do. There are more me-too companies than in almost any other computing category, and that includes some very big names. In what other electronics category, for example, is Sony merely another rival fighting for shelf space? Today, the likes of AOC, BenQ, Dell, Hewlett-Packard, IBM, KDS USA, LG Electronics, NEC-Mitsubishi, Philips, Planar, Samsung, Sony, ViewSonic and others slug it out month-in and month-out for market share. Take away the shape of a bezel or some colored plastic, and you can't tell most players apart.

What's interesting is that unlike other product categories where vendor consolidation is the order of the day, the display market seems to grow each year. BenQ, for example, has blossomed at a time when macro-economic theory would suggest that the company wouldn't stand a chance to make it--not with PC makers trying to increase the attachment rates of their own products, price wars and even component shortages.

Despite these and other prevailing realities, more companies appear willing to toss their hats into the ring than ever before. Some think they can take advantage of the switch from CRT-based to LCD-based systems. Others believe they can increase the penetration of previously overlooked niche markets, such as public display and/or kiosk systems, and use those as launch pads to grab a share of mainstream markets. Several months ago, I met with a vendor executive who said he would be content if he could grab just 1 percent of the market. "One percent?" I wondered. "Sure," he said. That could be worth $100 million in annual sales--nothing to sneeze at. (So much for the GE model that says you need to be the No. 1 or No. 2 player in a market, or else.)

Amid that backdrop, T.J. Trojan now has taken over as president and COO of NEC-Mitsubishi Electronics Display of America, the largest standalone player in LCD systems. A 15-year veteran of the company, Trojan is the first American-born executive to head the Japanese company's efforts here in the United States--a milestone when you consider Japanese technology companies' longstanding preference to hire executives from headquarters to run U.S. operations. Trojan takes over the reins from Sadao Yamazaki, who is retiring as president after a long career at NEC-Mitsubishi.

Recently, I asked Trojan what he plans to do now that he is in charge. Although his company slipped in the 2003 VARBusiness ARC--from first to second place--Trojan plans to make no major changes to the management team. The top four managers, after all, have a combined 70 years of industry experience.

But that doesn't mean NEC-Mitsubishi isn't planning big changes. For example, the company expects to launch new CRT products, even though it's virtually impossible for anyone (except, perhaps, Superman) to look at a CRT monitor and distinguish it from another brand. That NEC-Mitsubishi is launching new CRT products is interesting for two reasons: Industrywide, CRT shipments are expected to decline 10 percent this year, says Trojan, and NEC-Mitsubishi has become known as an LCD company. The world leader in LCD shipments, it has emerged as the biggest beneficiary of the technology move from CRT to LCD systems. This year, for example, industrywide shipments of LCD systems are expected to overtake shipments of CRT systems for the first time, he says; NEC-Mitsubishi reached that point two years ago.

So why buck the trend? Simple, Trojan says. Four out of every 10 monitors that will be sold in the United States next year are expected to be CRT units. Like others, Trojan has no intention of leaving any market-share points on the table--not when each one could be worth $100 million.

That's why the company, which sells 100 percent through the channel, chases down nearly every opportunity it sees. White-box makers? Just one year after launching a program to target them, NEC-Mitsubishi figures it captured 15 percent of their sales. CDW? Covered. High-end niche markets such as CAD and document imaging? Covered. Rebates, MDF and trade-in programs for business partners? Covered, covered, covered.

In monitors, there's room, it seems, for everyone--even those trying to be many things to many people.