Liquid crystal displays, the thin color screens seen on portable computers, are quickly falling in price--and they're dragging notebook costs down with them.
Although historically stable in cost, LCD screens have
been getting bigger, sharper, and less expensive over the past
Average active-matrix LCD notebook
panel prices
|
|
Size*
|
3Q 97
|
2Q 98
|
|
10.4
|
$416.25
|
$305.00
|
|
12.1
|
$599.33
|
$377.27
|
|
13.3
|
$887.08
|
$591.54
|
|
14.1
|
$1,045.00
|
$698.00
|
*inches
Source: Stanford Resources
|
few quarters. And the trend is likely to continue, said David Mentley, vice president of display technology at
Stanford Resources, a San Jose-based consultancy.
In the end, this will lead to more affordable notebooks--including those that fall to $1,000 and below, since the screen accounts for one-third or more of a notebook's cost.
Starting at the high end, notebooks with 14.1-inch active-matrix screens will come down about $1,000 from their lofty $5,000 level. In the mainstream of the market, a number of notebooks packing the popular 12.1-inch size will be well below $2,000, added Sweta Dash, another Stanford Resources researcher.
Only a few are now below that mark. Hewlett-Packard is already there, selling an OmniBook model with a 133-MHz Pentium processor and 12.1-inch active matrix screen for just under $1,600.
Only last year, 12.1-inch active-matrix displays were considered exotic and sold on machines in the $3,000-to-$5,000 range. Later this year, 12.1-inch displays could be on notebooks that are priced around $1,000, according to Mentley.
More than half of notebooks sold in the fourth quarter of this year will have once-futuristic 13.3- and 14.1-inch screens.
Active-matrix LCDs offer the highest quality image and ship on the majority of notebooks today, though the lower-quality passive-matrix, dual-scan LCDs are still popular.
At the same time, manufacturers will improve the technology so that screens will be brighter, consume less battery power, and have wider viewing angles. There is also a possibility that manufacturers will try to push for a 15-inch screen and a wider notebook form factor.
"It is accelerating," he said. "[The price situation] is changing on a monthly basis."
As with memory prices, the price declines come as a result of growing manufacturing capacity. The number of fabrication lines, or assembly lines, for LCD screens has increased to 38. By the end of the year, there will be 48 fabrication lines spread among the major manufacturers, an increase in capacity that will further fuel price drops.
"Sharp Electronics is still the leader with the most capacity. Sharp has eight lines. NEC is No. 2," he said.
Samsung, which Mentley refers to as "perhaps the most feared manufacturer," recently announced its intention to expand its presence in the market.
The South Korean giant has increased production of glass substrates for 13.3-inch screens in its plant in Chunan, according to the online version of Nikkei Business Publications, an Asian news service. With the new capacity, the Chunan plant is producing 280,000 13.3-inch screens a month, which could increase the pressure to lower prices on these screens dramatically.
The major manufacturers are also obsessive about capturing more market share, leading to "perceived" competition and even more price pressures.
Prices took a major dive between the third quarter and fourth quarter of last year because of a glut in supply, Mentley said. The average selling price of 14.1-inch screens in volume dropped 24 percent, from $1,045 to $794. 14.1-inch screens now sell for an average of $746, with high and low price ranges at $650 and $950.
Screens sized 13.3 to 12.1 inches with pixel resolutions of 1,024 by 768, meanwhile, dropped 23 and 12 percent, respectively, from $887 and $800 to $678 and $703 between the third and fourth quarters.
In the second quarter of this year, 12.1-inch screens with 800-by-600-pixel resolutions will be selling for a mere $377 in volume while 10.4-inch screens will be selling for $305.
The decline has slowed a bit this year, but continues downward. By the second quarter of next year, 14.1-inch screens will sell in volume for $698, while 13.3- and high-resolution 12.1-inch screens will be at $591 and $622. Those at 13.3 inches could even drop to $450 by the third quarter. The lower price on the 13.3-inch screens results from supply imbalances.
Beyond the second quarter, things will get worse for manufacturers, and better for consumers. "For the end of the year, we see more panic," Mentley said.
Standalone LCD monitors are shrinking in price as well, he pointed out. A 15-inch LCD monitor in the third quarter last year cost an average of $1,500. It will sell for $972 by the second quarter this year. Like all the prices listed, the prices refer to the wholesale, volume prices that computer vendors pay.
Ironically, other segments of the portable screen market are not suffering the same price declines. 12- and 13-inch "passive-matrix" dual-scan screens, while mostly selling in the $200 to $400 range, remain relatively stable. "There is actually a shortage," he said.
While functional, passive-matrix screens do not match the eye-popping glamour of active-matrix machines. Every pixel in an active-matrix screen comes with its own transistor. Color and lighting are adjusted on a pixel basis. Tone for passive screens is adjusted as a whole. Therefore, active-matrix LCDs produce faster images with richer color.