LCD Display Prices Falling Due To Low Demand

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Itis an example that can be culled from any economics textbook: as demand for a commodity falls, so does the price of said commodity. is reporting that, due to a sluggish PC market, the demmand for LCD monitors have fallen and so have the prices for the monitors. From the article titled "Flat-panel prices sink on low demand":

After rising for nearly a year, the prices on components for flat-panel monitors have begun to drop. And, although consumers have yet to see the benefits of the component reductions, retail prices on finished monitors will decrease steadily as the year goes on, analysts say.

"The second quarter was not what everyone was expecting," said Rhoda Alexander, director of monitor research for iSuppli/Stanford Resources, a market research firm. "People are going to see some (price cutting) activity during the back-to-school and holiday season."

While the shift in pricing will be welcome news for consumers, it could mark the return to the bad old days for the manufacturers of finished monitors and components.

Many will remember Steve Jobs announcing a price increase of $100 across all models of the newly announced G4 iMac, which sports a 15" LCD display, at the MacWorld Expo held in Japan this past March due to rising component costs. At the recent MacWorld Expo in New York, Jobs lowered the prices of the top of the line 15" G4 iMac model to the originally announced price and introduced a model with a 17" monitor. Lower demand for Appleis flagship consumer computers is likely the cause, but the article points out that consumers have yet to see the benefits of the LCD display price drop, and that prices will likely continue to fall to the end of 2002. From the aricle:

Consumers so far havenit seen the effect of these changes because of the nuances of the panel market. When panel prices began to rise last year, monitor manufacturers largely sucked up the cost by reducing their margins. Monitor makers ended up eating about $40 to $45 per monitor because of component price increases during the rise.

Still, consumers will soon see the benefits. The average price of 15-inch flat panel monitors at retail was $398 in the second quarter. It will drop to around $388 in the third quarter and $368 by the fourth quarter, Alexander said [Rhoda Alexander, director of monitor research for iSuppli/Stanford Resources, a market research firm].

Meanwhile, prices on 17-inch flat panels will drop from an average retail price of $684 in the second quarter to $625 in the fourth, she said.

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