LCD Price Fixing?

bilsaysthis asks: "Bill Kearney poses a really interesting question, one which I've been puzzled by for a while too: 'What's with prices on LCD displays? On one hand a laptop can be had with UXGA resolution display for $1000. Try buying that display alone and you'll find it's also around $1000. Then there's how much they're gouging for the same resolution in an LCD television.'" Sadly enough, as much as I want one of these for my wall, the market is willing to bear these prices. How long will it be before this hardware becomes affordable?

Comments

Fast Dirty Mirror of the Page in Question

[yeoua]

March 30, 2003
LCD price fixing?
What's with prices on LCD displays?

On one hand a laptop can be had with UXGA resolution display for $1000. Try buying that display alone and you'll find it's also around $1000. Then there's how much they're gouging for the same resolution in an LCD television.

There are, of course, manufacturing yield issues with LCDs. The bigger you make them, the harder it becomes to make one free from defects. But look at the price differentials between OEM panels in laptops vs that of standalone monitors. The disparity is quite wide. Balancing (subsidizing) one market on the backs of another is not a new thing. But it seems a reach to use that as justification for the LCD montior/TV prices.

So what's going on here? Are the monitor manufacturers pulling a fast one here? Are they gouging consumers? And why are they priced so similarly across the board?

# | Comments (3) | TrackBack (0) | 03:47 PM
Comments (scroll down to see all 3 comments...)
Hope it's okay but I submitted this to /. to see if any good answers come up. Who knows if it will get posted though, since none of my previous submissions have been.

Posted by: BillSaysThis on March 30, 2003 07:04 PM
It's been posted! I'm a slashdot subscriber and I see that this story has been posted, it will be up probably within 20 minutes

Posted by: Zach on March 31, 2003 08:35 PM
Brace yourself, here it comes. Its on slashdot, or will be in a few minutes. Hope you've paid you bandwidth bill! :)
Actually, as I am going to say on slashdot, a lot of it has to do with supply vs demand. There are a LOT of laptops sold, but comparitvily, not many standalone LCD screens. It does require some more work to make a LCD screen accept VGA or RCA input.

Posted by: Zaffle on March 31, 2003 08:39 PM

Re:Fast Dirty Mirror of the Page in Question

[Anonymous Coward]

Wrong! It has been estimated in 2004 that HALF of all display revenues will be from LCD Screens. By 2006, HALF of all displays sold will be LCDs.

Low volume is not the issue here. My guess is price gouging is running rampart, especially on LCD TVs...

P.S. Anyone out there know what the response times are on OLEDs? How do they compare to LCDs?

(This is docrobot posting, for some insane reason, I can't log into /. at work...)

From my days in Sales

[doorman]

I ran into this same question when I was made responsible for parts ordering for my company. I was told at the time by the manufacturer rep (Toshiba, I think) that some sort of tariff was responsible. LCD's connected to computers were not charged the tariff, LCD's separate were charged. This was the reason given to us why LCD's ordered for broken laptops costs as much as a new one.

This was 1995, and the answer comes from a sales guy, so YMMV.

Numbers Way Off

[Rashkae]

How long has it been since you examined prices on LCD displays?? A 15" Samsung SyncMaster 152B can be had for roughly $450US, and I doubt your $1000 notebook has a screen this good. (And I see various 17" models price at $600)

Re:Old answer I'm affraid

[MonkeyBoy]

Sure. But last time I checked the expensive bit for LCD screens wasn't just the # of pixels you cram on the screen, but the size too. UXGA, like the original thread discusses, is a pixel count, and doesn't take size into account.

I seriously doubt that the two items under question @ $1000 aren't going to have the same LCD part inside them.

LCDs are digital. Adding in circuitry to go analog->digital (VGA, with ALL the bizarro resolutions that it implies) or even traditional external DVI (with it's ability to drive long cable runs, unlike the typical short runs required inide a laptop) costs money.

Implementing straight VGA is kinda tricky because the conversion has to scale the signal up to the LCD's native resolution on-the-fly. With DVI (any form) the video chipset can handle this duty (and usually does a pretty good job of it), with VGA the entire onus is on this piece of hardware. Install a cheap piece of hardware and that expensive screen looks like crap - good luck selling them.

'course this is just my opinion, and probably an outdated one at that.

Re:It's not really price fixing....not really

[adzoox]

Samsung and Sharp (and their co owned LG Philips and ChiMei subsidaries) are the largest manufacturers of LCDs. Both Samsung and Sharp also make the largest number of consumer availible LCD TV/Monitors. They also use the same screen, contrary to some posts here. There's hardly a LCD TV out there that doesn't have a laptop screen counterpart, or at the least, a LCD monitor counterpart.

Prices are being somewhat fixed as the LCD industry is "getting their commodity while they can" much as the memory industry did years ago. The memory industry has learned that volume is the better equation, thus, the low memory prices. OLEDs will change this because they are much cheaper to produce, much brighter and much thinner. Kodak already has OLEDs with Palm soon to follow in a new color Zire from ramblings on the net as well as Apple computer for a new device yet to be announced.

Different classes of screens

[tshak]

Notebook screens differ from desktop LCD's in that,

* Their viewing angle is usually a lot worse

* Their contrast ratio and brightness is usually worse

* They're smaller by at least an inch or two

* Their response times are generally a lot slower

Re:Old answer I'm affraid

[Osty]

Prices rise as demand increases relative to supply and fall as demand decreases.

That's not how I remember my economics. You have your basic supply/demand curve, with price on the Y axis, and units on the X. As price goes up, more units can be supplied, so the supply curve has an increasing slope. Conversely, there is more demand as price drops (units become more affordable). In other words, the demand curve has a decreasing slope. In ascii art (please let this look decent ...):

p |\ d /
r | \ /
i | X
c | / \
e |/s \
+-------------
units

d = demand curve
s = supply curve

(the curves aren't very curvy in this example, but they could be depending on the supply and demand dynamics)

Price is always determined by the demand curve, with the supply curve denoting how many units can be built at a given price. If the price is high, the demand is low, and although many units can be supplied at that price, that's only theoretical -- nobody's buying, so there's no money to manufacture those units. There are always the economincally-enabled few that can afford anything at any price, and the bleeding-edge early adopters that will pay a premium for being the first on the block, but most people won't buy until the price has dropped. When the two cross, you're at the optimum price (for a non-monopolistic competitive market). After that point, more units can't be supplied because the sales won't cover costs, and before that point fewer people will buy because the price is too high. This is where you get into loss-leader (selling to the right of the optimum point, below cost, to generate more demand) and monopoly (selling to the left of the optimum point, because nobody can compete with you to keep your prices down -- there's a point where the price is high enough to allow others into the market, but so long as the monopoly keeps the price below that point, it's got the market to itself).

Now, what the original poster was suggesting (I believe -- and if not, it's what I'm suggesting) is that laptop LCDs are being sold at a price on the demand curve to the right of the optimum point (lower price), but the manufacturers can afford to do so by selling non-laptop LCDs (desktops, TVs) at a price on the demand curve to the left of the optimum point. If things are ideal, the merged graph should come out with the combined demand and supply crossing properly at the averaged price. I doubt that's the case. It's likely that the price is higher than that, but it shouldn't be by much -- if it were, then competitors would lower their prices to gain more marketshare.

And just to CMA, it's been 3-ish years since I've had an economics course, so my analysis may be off, but my graph (ugly as it is) should be correct for a baseline S/D graph.

Example of price vs cost

[sx10]

I recently bought an 18" LCD for myself from *insert major computer manufacturer here*. I am a purchaser for a university and our inside sales rep was nice enough to provide me with their approximate cost. No guarantees here by any means, just what our rep told me.

For this 18" panel retail is $599, the university's price is $480, and cost is in the neighborhood of $375. About a 60% retail markup.
In comparison, a 19" CRT retails for $249, discounted is $211, and cost is around $205. About a 20% markup.

I don't expect the huge markup to end anytime soon, everyone is picking them up like hotcakes regardless.

Re:Naturally it IS price fixing

[wwwillem]

I agree, it all has to do with competition, or in this case a lack of competition.

In 1992/94 I worked for Philips in the Netherlands to build the first (and last :-) mass-scale LCD factory outside of the Far East. For the geographically less developed folks (those that think that Netherlands is the capital of Denmark :-), this means no company in the US or Europe. Please think a second of the consequences, like the US having to rely on Japanese GPS technologies.

At that time, Philips (world leader in CRTs and TVs) saw it as a threat that the possible successor of this product (LCD's) was built nowhere in the Western World. However, three years later they solved this in a differnt way by making an alliance with LG.

But, the important part is that no US manufacturer (Motorola, Intel, Zenith, RCA, etc.) has started LCD plants, and no European company (Siemens, Thompson, etc.) has done it either. That's asking for being dependent on only a very small group of companies, mainly in South Korea and Japan, that can very easy make a deal and keep prices up.

So, it's easy to say: We need competition. Someone must start that competition, even when you are the David against Goliath. Same is true with the MS domination of this world. Yes, it keeps the prices up, but you (the custumer) asked for it when you swapped your WordPerfect for Word4Windows.

So, when all that has happened, don't complain later!!!

Re:Laptop screens selling at a loss?

[Rolo Tomasi]

I bought a 172T too, and to be honest, I was disappointed. The manufacturing quality was a bit shoddy (uneven edges where the front part meets the back, flimsy foot), the ghosting was barely tolerable (e.g. text would disappear completely when scrolling on pages with a black background, CS was virtually unplayable), and worst of all, it whistled! It produced a sort of high-pitched whine, the frequency and intensity of which was dependent on the type of image displayed; while showing the desktop it would be almost silent, but e.g. while displaying a CS screen you could hear it from the next room. Of course, I sent it back and got a refund.

Strangely though, the ghosting was unnoticeable with movies, but here another annoyance came up: in a dark room, playing a dark movie (e.g. Alien), the supposedly black bars on the top and at the bottom of the screen are annoyingly bright, so bright that it's really distracting. Yes, I tested all kinds of different monitor settings, and I know that this is a problem all LCDs have, but it still sucks.

I'm a bit baffled, as this LCD has a high-class PVA panel and is supposedly one of the best 17" LCDs currently available. The picture quality is really great, but there are some big drawbacks.