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Report: CRT revenue to plunge

After decades of growth, revenue from cathode-ray tube monitors is expected to drop over the next several years, market researcher Stanford Resources says.

There's no light at the end of the tube for CRT makers.

After decades of growth, revenue from cathode-ray tube monitors is expected to drop significantly over the next several years--from a high of $19.5 billion in 1999 to just more than $10 billion in 2007, according to a new report from market researcher Stanford Resources.

"A combination of price erosion, a slowing in the movement to large screens, and a gradual shift in market opportunities from developed regions to developing regions is causing the drop in revenue," Stanford Resource analyst Rhoda Alexander said Tuesday.

The growing popularity of flat-panel monitors will also have an effect on CRT revenue, she said. As liquid-crystal display (LCD) prices continue to drop, there is the threat that PC makers will continue to shift to flat-panel displays--instead of the CRT monitors that currently ship with most systems.

In early May, for example, Apple began to ship all its systems with LCD monitors. Many analysts consider this reminiscent of other technological movements that Apple led, such as the inclusion of DVD drives or of wireless networking capabilities in notebooks.

Still, Alexander isn't completely writing off the CRT monitor market. While revenue may drop, she doesn't expect the overall number of units to fall drastically worldwide between now and 2007.

As PC penetration in high-margin regions, such as North America, has increased, sales of CRTs have slowed. At the same time, PC sales have increased in developing regions, such as Latin America and China, though those areas tend to be especially sensitive to price.

In the second quarter of this year, 652,000 flat-panel displays were shipped in the United States. That number is expected to triple by the same quarter next year, according to Stanford Resources. At the same time, shipments of CRT monitors in the United States are expected to drop from 8 million units in the second quarter to 7 million in the same period next year.

Alexander also predicts more consolidation among the manufacturers, such as the recent merger of Royal Philips Electronics and LG Electronics.

"The CRT market is a shrinking pie," she said. "And the remaining companies will be taking bigger and bigger pieces by consuming their competitors."