China's Branded LCD Monitor Shipments Drop In 2Q 2008 To 2.6 Million

China's Branded LCD Monitor Shipments Drop In 2Q 2008 To 2.6 Million
August 7, 2008

Shipments of China's branded LCD monitors reached almost 2.6 million in 2Q 2008, down 5.4% YOY. Growth of notebook sales, especially to China's college students, has cut into branded LCD monitor purchases. Price drops of bundled PCs have also cut into branded LCD monitors.

Shipment share for 19” LCD monitors is the largest at 65.3%, but growth of above 19” sizes was a dramatic 157.4%, reaching 19.3% shipment share. Above 19” sizes will be the future growth prospect.

Branded LCD Monitor Size	2Q08 Shipment (thousands)	2Q08 Shipment Share (%)	YOY Growth (%)
15"	12	0.5%	-41.9%
17"	384	14.9%	-66.8%
19"	1,679	65.3%	24.5%
Above 19"	497	19.3%	157.4%
Total	2,573	100.0%	-5.4%

Source: CCID Consulting, july 2008

China's LCD monitor prices have dropped, and CCID Consulting expects prices to continue its decline. While upstream LCD component and panel prices have increased, appreciation of the Yuan has compensated such effects. The net result is that prices continue to drop aggressively. For example, 19” widescreen average prices have dropped from 1,607 Yuan in January 2008 down to 1,393 Yuan in June 2008. Above 19” widescreen LCD monitors have dropped from 2094 to 1953 Yuan during the same period.

Branded LCD Monitor Average Prices (Yuan)	2008 Jan	Feb	Mar	April	May	June
19"	1,710	1,701	1,696	1,651	1,725	1,666
19" Widescreen	1,607	1,588	1,544	1,467	1,436	1,393
19" Combined	1,626	1,609	1,562	1,487	1,455	1,414
Above 19"	4,318	4,246	3,994	3,087	4,048	2,340
Above 19" Widescreen	2,094	2,062	1,948	1,920	1,836	1,953
Above 19" Combined	2,196	2,175	2,047	1,963	1,874	1,961
Total Averages	1,727	1,712	1,670	1,591	1,551	1,543

Widescreen and larger LCD monitors are trending towards the mainstream in China. 7th and 8th generation LCD panels are offering more flexibility for LCD monitor sizing, while inexpensive TN (twisted nematic) displays are getting larger into 20”, 22”, and 24” screens. Vendors are also promoting larger and larger screen sizes.

Demand has also been spurred on not only by lower prices, but also with the advent of high-definition TV and film content, and increased PC performance in China. Multimedia applications are better viewed in widescreen, whether for business or the consumer.

2Q08 Branded LCD Monitor Shipments (thousands)	19"	19" Share (%)	Above 19"	Above 19" Share (%)
Normal	142	8.4%	12	2.5%
Widescreen	1,537	91.6%	484	97.5%
Total	1,679	100.0%	497	100.0%

With a decreasing branded LCD monitor market in 2Q08, vendor competition has further intensified. Leading vendors, with control of upstream supplies and technologies, have strengthened their position through aggressive price drops. Second tier vendors have the disadvantage of having less control of costs, but still competing in an aggressively priced environment. Regardless, vendors will have to be careful in their heretofore aggressive pricing strategies to account for costs and market demand.

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Unless otherwise specified, all information provided is sourced from CCID Consulting.