DisplaySearch: LCD Desktop Monitor Shipments Flat in Q3'08 (December 11)

AUSTIN, TEXAS Findings from the DisplaySearch Q4'08 Quarterly Desktop Monitor Shipment and Forecast Report, released December 3, reveal that Q3'08 LCD monitor shipments of 42.8M units were only fractionally greater than Q2'08 results—marking the first time since 1999 when we started tracking this market segment that LCD monitor shipments have not seen unit volume shipment growth from Q2 to Q3.

"Typically, brand shipments rise in Q3, as vendors load their regions and channels with products for the upcoming holiday season for consumers, as well as end-of-year buying from commercial customers," notes Chris Connery, Vice President of PC and Large Format Commercial Displays for DisplaySearch. "Additionally, leading indicators such as panel production for such devices as well as contract-manufacturing OEM production also indicate that major brands are poised to ship even fewer LCD monitors in Q4'08 than in Q3'08. That would mark the first time in the LCD monitor market history that Q4 shipments were below Q3 shipments and that fewer units were shipped in a quarter compared to the same quarter the prior year.

"With 41% of all large area LCD panels shipping in 2008 projected to be used for desktop monitor solutions (including stand-alone and bundled monitors, as well as all-in-one LCD PCs), the health of the large-area LCD market still depends greatly on the LCD monitor segment," Connery added.

Unlike devices such as TVs, LCD monitors have two major markets: consumer (B2C) and commercial (B2B). In Q3'08, brands with diverse portfolios which marketed to both consumers and commercial customers fared better than those who were uniquely focused on consumer sales or those looking to build their consumer presence. Of note, HP fared quite well compared to its competition due to its diversified portfolio with reportedly strong sales in the commercial sector in the period. Dell did not fare as well, as it continued to expand distribution beyond its traditional direct-only strategy with retail initiatives put in place some time ago to focus more on consumer sales.

While PC companies that typically sell most of their monitor products as part of a bundle get most of the attention, stand-alone monitor companies such as Samsung an LGE continue to drive the market, showing that displays purchased as an accessory or an upgrade still represent the largest part of the overall market. Samsung was the worldwide leader in LCD monitor shipments in Q3'08, having regaining its lead over Dell in Q2'08.

Also of note, emerging markets such as Latin America and China continue to play a large role in Samsung's growth; these two regions are their second- and third-most popular regions, behind EMEA but ahead of North America. LGE, which showed the largest sequential growth in the period, increased its share mainly through increased shipments into EMEA, the region which remains the world's largest consumer of desktop LCD monitors.

The trend toward mobile computing in both the consumer and commercial markets is impacting the traditional desktop monitor market. Since the inception of the personal computer industry, the PC + monitor bundle has been a mainstay, but since notebooks and mini-notes have displays built-in, the question of the need for larger, external—especially in the home—continues to be heightened in a weak economic environment. The screen size of many notebook PCs is "good enough" for at-home consumers with low attach rates for notebooks + external monitors being reported. Many consumers are foregoing the purchase of this larger, external display due to consumer spending cutbacks.

The needs of workers in traditional office environments are different. While notebooks have become standard for many companies, multi-tasking and workflow (from spreadsheets to presentations) often require a larger display or even multiple displays. The growing popularity of "Cloud Computing," in which office workers have a dumb terminal on their desk to access data stored elsewhere within the work environment, still requires a monitor. With commercial purchasing still representing about 60% of all LCD monitors purchased worldwide, the LCD monitor market is not expected to completely collapse with reduced consumer spending, but indications are that a premature maturation of the market may have occurred due to the impact of reduced consumer spending.