Flat-panel display market prepares to take off

After years on the market fringe, flat-panel displays quickly are becoming an affordable option for PC buyers who are tired of dedicating half their desk space to their monitors.

Until recently, buyers who demanded the small, lightweight screens paid a hefty price. LCD monitors cost 10 times as much as conventional cathode ray tube (CRT) monitors, and they were small, low-resolution devices. But that is no longer the case.

Improved technology has provided desktop flat-panel displays that are the same viewing size as the 15-inch monitors but have a clarity that lets them run at the same resolution as 17-inch desktop monitors.

More importantly, prices of these 14-inch displays have fallen dramatically. The street price recently has slipped to less than $1,000— still considerably more than a conventional monitor, but the difference now is a factor of three, instead of a factor of four or five, as it was not long ago.

"In eight months, prices have dropped 60 percent," said Matthew Red, senior analyst for ARS Inc., an Irving, Texas, research firm. "When you see that kind of price drop, you expect to see the market expand dramatically."

Feds in Front

Federal buyers have led the way in adopting flat-panel displays, joined by medical customers and financial analysts. The military, in particular, appreciates nearly every aspect of the flat panel's advantages over those of CRTs.

For starters, the displays not only do not generate magnetic fields, but they also are not harmed by them, unlike CRTs, which can be damaged by magnets. This is important in submarines because the subs are regularly "degaussed," or demagnetized, to reduce the potential for magnetic detection, he said.

And flat panels are solid-state devices, which are much less fragile than CRTs, so they are better-suited to rough treatment than the old screens. "We have a flat panel that has passed the light hammer-blow test for shock without resilient mounting," said Gary Lufriw, assistant vice president at Science Applications International Corp. "It is the standard for all 688 [Los Angeles]-class attack subs."

"They are used where you have a lot of vibration and impact," said Ron Jarmuth, chief of automation technology and security at the Pentagon. "There is no mechanical thing to get out of alignment," such as the "yoke'' on a CRT, which guides electrons from the emitter to the screen.

In mobile applications, the panel weighs dramatically less and uses less space, said Neville Wilkinson, president of Thin Display Technology, a Westford, Mass., integrator. His company developed a flat-panel replacement for computers that used several bulky 21-inch CRTs in Army vehicles. "We've gotten rid of 500 pounds and 10- to 12-cubic feet," Wilkinson said.

"More than 50 percent of the government market last year purchased 17-inch screens," said Bennett Norell, marketing manager for the Information System Products Division for LG Electronics Inc. "When you are talking about those kinds of sizes, you're talking about a lot of heat."

Size certainly is most important for many flat-panel users, especially in the Defense Department. "Right now we use a lot of 19-inch color [CRT] monitors," said Will Fitzgerald, head of hardware design for the Navy's Space and Naval Warfare Command. "The trend is going to be 20-inch LCD color panels," he said. "We have space issues, and in submarines we are going to hide equipment behind them." Fitzgerald said that uninterruptible power supplies are likely to reside behind the panels.

For now, most buyers will opt for the 14-inch size, said Ed Buckingham, an industry analyst with International Data Corp., Framingham, Mass. "You can run 1,024-by-768 [dots per inch] resolution on a 14-inch flat panel," he said. "You still get fairly crisp definition."

SAIC put a 13-inch CRT tactical display in a B-52 bomber and found that it gave the user headaches, Lufriw said. But with a 15-inch flat panel, the user "was able to operate with some comfort," he said.

The ideal solution will be 16-inch flat panels running at 1,280-by-1,024 dpi, he said. "The image world is going to be centered around 1,280-by-1,024 until high-definition TV comes out, so that is what my customers want me to do— especially the tactical customers."

"There is no such thing as too big a flat-panel monitor," said P.J. Johnston, marketing communication manager for Panasonic Computer Peripheral Co., at least for purposes of viewability, if not affordability.

Performance Trade-offs

However, while flat panels have some obvious advantages in some environments, users must make trade-offs.

One aspect of flat-panel technology that makes it more user-friendly is the fact that they do not flicker; CRTs flicker 30 times a second. Instead of refreshing an analog image, flat-panel displays just update the pixels on the screen as they change, which is easier on the eyes. But those pixels do not change as quickly as the phosphors on a CRT, and the lag is noticeable when running full-motion video applications.

Another downside of LCDs is an intolerance for temperature extremes, said Capt. Marc Ohmer, program manager for airborne broadcast intelligence at Hanscom Air Force Base, Mass. "What has not improved is their sensitivity to temperature," he said. "If it gets down below 32 degrees they crystallize, and that ruins them; and if it gets too hot, the display blanks out."

A long-standing problem with LCD panels has been the limited viewing angle. If viewed other than straight-on, they can darken or distort colors. In a display that shows green for good and red for bad, having red look green when viewed from the side is unacceptable.

NEC Technologies Inc. has developed a technology called XtraView for some of its displays that widens the viewing angle to 160 degrees. "NEC does have a very good viewing angle," Lufriw said. "But the display sacrifices other attributes for that viewing angle," including a slower response time, which makes it even less suitable for full-motion video applications, he said.

Falling Prices: Deep Impact?

Despite the advances in technology, interest in flat panels for desktop purposes has not taken off yet, according to Randy O'Bruba, manager of the Navy's PC LAN+ contract for Electronic Data Systems Corp.

"For PC LAN+, we currently do not have any demand," he said. "If demand was there, we could very rapidly respond." The Air Force does buy flat panels from EDS on other EDS contracts, however, he said.

But prices are still falling, and the market is waiting to see how customers respond. In particular, vendors believe the new price points finally should increase the potential for business in the civilian agencies.

"Everyone is watching to see what happens when you get under $1,000," said Rhoda Alexander, senior market analyst at Stanford Resources Inc., a San Jose, Calif., consulting firm.

Increased competition among vendors is driving prices down, Alexander said. "Two years ago there were five or fewer serious contenders in the market," she said. "Now I find it almost impossible to keep up with the number of new companies and new displays entering the market on a daily basis."

Also, manufacturing techniques have improved, providing a much better yield of acceptable panels from each production run, which drives the unit price down, said James Chan, flat-panel product manager for Viewsonic Corp. "When we began manufacturing 14-inch displays three years ago, the rejection rate was as high as 50 percent."

Nokia Display Products Inc. recently did research to find out what impact pricing has on the flat-panel market.

The company found that if flat panels cost four times as much as comparable CRT displays, very few customers will choose the flat panel, said John Grundy, Nokia's vice president of marketing. And at three times the price, fewer than half of his customers would consider a flat panel. But for twice the price, most customers would be interested, and for a 20 percent price difference, virtually everyone will buy one, according to Nokia's survey.

Other market observers have found similar results. "The price needs to drop in half again, to 20 to 30 percent over standard monitors for flat panels to become mainstream," said ARS' Red.

"As prices come down, it opens new doors," said Jeff Geis, national marketing manager for displays for Samsung Electronics America Inc. "In the past, the market for flat panels was driven by need-to-have-it applications," he said. IDC forecasts that 8 percent of the 110 million monitors sold in 2001 will be flat panels, and that percentage will grow to 10 to 12 percent the next year. "Price has been the primary barrier in the mainstream segment," Buckingham said. "When the 15-inch and 16-inch monitors get under $1,000, then we've got something."

By the height of the summer buying season, prices for 12.1-inch displays could fall as low as $500, and the popular 14-inch models could be in the $700 to $800 range, said Charles Root, vice president and general manager of displays at Hyundai Electronics America Inc. "We think it is going to take off," he said.

"There is a high interest in the product, but because of budgets, not a lot of purchases," said Ed Schrader, government and corporate sales manager for Samsung. "We'll probably see a lot more purchases of flat panels toward the end of the fiscal year."

-- Carney is a free-lance writer based in Herndon, Va.

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