Flat panel screens conquering the digital world

Updated: Mar 27 2006, 05:30am hrs
The world is getting flatter, everywhere you look. From big-screen TVs to tiny digital music and video players, flat panel screens are taking over the world. As they do, they are pushing venerable cathode ray tube (CRT) televisions and computer monitors the way of the transistor radio.

It is a flat world, said Ross Young, founder and president of Austin, Texas-based research company DisplaySearch, which tracks the booming flat-panel business.

By the end of this year, nearly 90% of all computer monitors and more than 40 % of all televisions sold in North America are expected to have flat-panel screens, according to figures released last week by DisplaySearch.

At least in North America, those hulking CRT monitors that were a staple of the computing industry since its infancy will probably disappear by the end of the decade, Young predicted.

Tube TVs, which have their roots in the 1920s, will likely be all but gone by 2015.

CRTs are big and bulky. Flat-panels are sleek and sexy, Young said at an industry conference his company sponsored here last week. He said there may be a market for cheap, small CRT televisions and monitors in developing countries in the next decade but not much of one.

Along with wide consumer appeal, whats driving the surge in slim screens is declining prices as more flat-panel factories gear up overseas. Many manufacturers, meanwhile, have slashed profit margins in reaction to cutthroat competition.

In 2005, the average price for a 42-inch LCD (liquid crystal display) television was about $3,100, about a third what it was just a year earlier, according to DisplaySearch.

By the end of this year, prices on some 42-inch TVs, a popular size for a familys main set, are expected to fall another 20 percent or so to about $2,400. By the end of the decade, some 42-inchers are expected to go for less than $1,000. Also fostering the flattening of the TV business are Federal Communications Commission rules requiring all new TVs sold by next March to contain a digital tuner. Adding such capabilities to traditional CRT televisions can make them nearly as expensive as flat-panels.

Meanwhile, some basic desktop computers now sell for less than $400, complete with a 15-inch flat-panel monitor. Just a few years ago, the monitor itself could cost that much.

Those beefy CRTs, which can still cost $50 to $100 less than flat-panel versions, are not going away without a struggle.

At Round Rock, Texas-based Dell Inc., the biggest seller of computer monitors in the world, about 10 % of all monitors sold are still CRTs.

But thats down from about 25% just a year ago, and is expected to keep dropping, said Gerry Smith, vice president of Dells display and imaging business. We are trying to kill them off to make production easier and more profitable, Smith said. But there are some customers who for whatever reason still want them.

Most buyers who choose CRT monitors are commercial customers trying to save money on big orders, according to Smith. Flat screens are cheaper than ever because supplies are plentiful, thanks to several big new factories that have opened recently in Asia.

And even more factories are on the way. At DisplaySearchs conference in San Diego last week, Panasonic, LG Philips, Samsung and Sharp all boasted of plans for giant new flat-panel factories in Asia.

In China alone, at least three new factories are planned next year. No flat panels are made in the United States, according to DisplaySearch. Everybody is building new factories, said Vincent Sollitto, CEO of LCD television maker Syntax-Brillian(cq).

Partly, flat-panel makers are adding capacity because if demand keeps growing as expected, they dont want to run out of supplies. Fresh in their memory is a major flat-screen shortage two years ago that sent prices soaring and left computer and TV makers scrambling. The demand for flat-panel displays is expanding along with the popularity of devices such as iPod digital music players, portable DVD players and digital cameras.

About 41% of all consumer electronic devices now have some sort of flat-panel display built into them, said Steve Baker, analyst at tech consulting and research firm NPD Group, which recently purchased DisplaySearch. Thats up from about 27% just two years ago.

And were really just on the cusp of the whole digital revolution here in the US, Baker said.

While the added supply from new overseas factories may be good for consumers, it may not be entirely good for the flat-panel manufacturers themselves. Some financial analysts are predicting a major shakeout, due to the potential of oversupply to drive already sinking profit margins down even further.