LCD Prices Just Keep Falling

If you covet a 15-inch LCD monitor, now's the time to buy one. NEC-Mitsubishi announced today a price cut on its 15-inch NEC MultiSync LCD1530V to a street price of about $500--and it's just the latest major vendor in a recent flurry to offer a display at that magic price point.

ViewSonic announced Monday a price drop to $499 on its 15-inch VE150 ViewPanel, the same time Dell began offering its 15-inch LCD for $499 with special system purchases (it costs $549 if you buy it alone).

Add to that Samsung's March announcement that its 15-inch SyncMaster 570b TFT now sells for $499, and that IBM's latest LCDs start at $600, and you have a serious LCD market movement.

"This is a very exciting time for the LCD market--this is a price point we've been waiting to see," says Rhoda Alexander, director of monitor research at display market firm Stanford Resources.

Selling at $500, 15-inch LCDs could easily move into volume sales, as more mainstream and corporate customers consider buying them, she says. Even so, don't expect the prices to stay low forever. The current drop is brought on by a combination of factors that could change--and while the prices aren't likely to go much lower, they'll probably begin creeping upward again by this fall.

"Jump now is my advice," Alexander says. "Get 'em while they're hot."

Supply Up, Demand Down

A year ago, LCD manufacturers couldn't make enough products to satisfy demand. With supplies tight, most LCD products went into notebook PCs, so the price of desktop LCD monitors remained high.

Today, more companies in more countries are making LCDs, and those companies are becoming more efficient at making them every day, Alexander says. But just as supply began to ramp up, demand dropped at the end of last year, causing an oversupply today. Analysts predicted lower prices, and now they're here.

The price differences are staggering. According to Stanford Resources, the average price of a 15-inch LCD in the first quarter of 1998 was $2600. In the first quarter of 1999 it dropped to $1100; it inched up to about $1199 in 2000; and in 2001 it dropped to $750. The second quarter of this year shows the average price at $699, but headed downward as industry leaders such as NEC-Mitsubishi, Dell, ViewSonic, and Samsung lower their prices.

Size Matters, Too

While most buyers will probably consider a 15-inch LCD for their first flat-panel monitor, existing users--and those using larger CRT-based monitors today--will want to consider larger screen models. While the prices on larger LCDs haven't dropped as low as 15-inch units, they too have seen some dramatic cuts.

NEC-Mitsubishi is announcing a price cut to $1149 from $1899 on its 18-inch MultiSync LCD1800, resulting in a street price of about $1000.

"The 18-inch announcement is where we'll shine," says Al Giazzon, vice president of NEC-Mitsubishi Electronics Display. It's a major price drop, and one that should spur major adoption by corporate buyers, he says.

Unlike traditional CRT monitors that fall into convenient standard sizes such as 15, 17, 19, and 21 inches, LCD sizes are more varied. NEC-Mitsubishi offers an 18-inch LCD because its research shows fonts displayed on an 18-inch screen are 13 percent larger than the same font, at the same resolution, on a 17-inch display, Giazzon says.

That's a noticeable difference, and people like the 18-inch size, he says.

Stanford's Alexander says the screen-size issue is very interesting to watch, but expects that as 15-inch entry-level displays gain prominence, 17, 19, and 21-inch sizes might become more standard, too.

NEC-Mitsubishi's dramatic new price on its 18-inch product could change that, she says. "NEC's 18-inch means all bets are off."

LCDs Are Power-Friendly

In addition to falling prices, another reason more people and companies may purchase LCDs is for power savings, Alexander notes. LCDs not only save desktop space, but the good ones use much less power than a comparably sized CRT-based monitor, she says.

"Vendors have to get smart about energy savings," she says. Energy savings were a selling point for desktop LCDs when they first appeared years ago, but at the time U.S. buyers weren't worried about power. Now, with the price of electricity going up, and states such as California facing rolling blackouts, power savings is a popular idea again, she says.

NEC-Mitsubishi's 18-inch LCD monitor offers about a 35 percent energy savings over a comparable 19-inch CRT, Giazzon says. And its 15-inch LCD product offers a 45 percent savings over a comparable 17-inch CRT.