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LCD prices falling fast

Intense price wars have broken out in the Japanese market for liquid crystal display monitors.

Intense price wars have broken out in the Japanese market for LCD (liquid crystal display) monitors, with some vendors dropping prices by more than 50 percent compared to a year ago.

The market trend is making it increasingly feasible for users to replace their bulky CRT (cathode ray tube) monitors with lightweight, space-saving displays.

Prices of large 14-inch active-matrix LCD monitors have been dropping rapidly since November of last year. At that time, Iiyama Electric introduced the first monitor to be priced below $1,400, according to report in Nikkei Personal Computing, a major Japanese computer publication. A similar monitor cost more than $2,000 in the spring of 1997.

By April, Iiyama was pricing 14-inch monitors at $1,060, forcing Nanao Corporation to respond by pricing a 13.8-inch monitor at $990. Other manufacturers have since joined in, the Nikkei report said, with plans to push the price of similar monitors to around $720 by summertime.

Most panel and monitor makers appear to be losing money in an attempt to gain market share. Survivors of the price wars are eyeing a market estimated by research firm Stanford Resources to grow from $1 billion in 1998 to $12.5 billion in 2004. The estimates also include sales of less expensive but lower-quality dual-scan LCD monitors.

Moreover, manufacturers continue to contend with excess production capacity.

Pricing is basically "irrational" at this point, said Dave Mentley, vice president at Stanford Resources. It could be 12 to 18 months before supply and demand even out, depending on when the inefficient factories are closed and plans for new factories are terminated, he cautioned.