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...)

How long...

[aePrime]

How long will it be before this hardware becomes affordable?

The real question is, how much longer until my eBay scam pays off and I can afford one no matter what the price.

Even if I do have to move suddenly to Vermont.

Maybe....

[rice_web]

Ten minutes after you make a purchase.

As I've said before...

[swordboy]

We need an open laptop form factor...

Three requirements:
- Chassis spec
- DC power supply spec
- LCD spec

It sparked in my mind when I broke the LCD on my thinkpad... IBM wanted $900 to fix it but I was able to disassemble one of their desktop models and get the component that I required for less than $300...

Sheesh...

But can you imagine an open laptop? Neon and clear shit for days... Case modding to the extreme!

Re:As I've said before...

[s20451]

But can you imagine an open laptop? Neon and clear shit for days... Case modding to the extreme!

Indeed, I can imagine ... and what's the point? Most of the cool casemods take up power. With neon tubes everywhere, you would probably cut your battery life by a factor of two or three, which would defeat most of the point of getting a laptop.

I'm reminded of an acquaintance of mine from high school, who bought a Geo Metro and added so many car mods (ground effect, huge stereo, etc.) that his alternator couldn't keep up. He bought a new alternator, which destroyed the car's fuel economy, which is basically the only reason to buy a Metro.

Then again, this is probably the wrong crowd to ask "Why get a new gadget?".

Laptop screens selling at a loss?

[hobbesmaster]

Perhaps the cheapest laptop LCD screens are being sold at a loss, and the desktop ones are sold at a high profit?

Just a random guess.

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.

Buy a laptop and separate the base.

[baryon351]

Buy a laptop and take off the base. ta-dah, problem solved!. You have a flat-panel monitor AND a small headless server.

Of course, you do then need to make the interface to connect the flat panel to something useful, but thats where the fun comes into it :)

Old answer I'm affraid

[Zaffle]

A lot of it has to do with the old story of supply and demand. There is a very large call for LCDs for laptops, and the laptop manufacturers get them at almost cost, then intergrate them into the laptops.

However, there isn't much (comparitivly) demand for LCD computer screens, or even worse, TV screens.

When I was in singapore a few years ago, RCA input LCD screens weren't that bad a price, but the problem is that price hasn't drop that much.

It does take some more work to make a LCD screen take VGA or RCA inputs, so there is the cost the LCD is brought at (a lot more than the laptop manufacturers buy them at), and then the intergration of circuits to accept VGA or RCA input.

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:Old answer I'm affraid

[chunkwhite86]

It does take some more work to make a LCD screen take VGA or RCA inputs, so there is the cost the LCD is brought at (a lot more than the laptop manufacturers buy them at), and then the intergration of circuits to accept VGA or RCA input.

While this is true, it is not reflected in the real world price of an LCD display. The Digital flat panels (DFP's) which have NO analog converter always cost more than a comparable analog flat panel!

That analog display costs more to manufacturer since it requires the analog-digital convertor, but only high-end machines and enthusiasts will opt for the more elegant DFP - and thus are more willing to pay a higher price for what they percieve as a "better" solution.

Just my two cents.

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.

Where's the problem?

[mcrbids]

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.

Solution: Buy a laptop, nail it to the wall, and watch TV!

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.

It's all about the numbers...

[_Sharp'r_]

Many of the laptop makers either own their own monitor factories (Like Sony) or get incredible volume discounts doing their own importing (say, Dell).

Items that don't sell well in "retail" channels get a much higher mark-up to make up for the small volume. The same item in lots of 1000 or more over and over again will sell dirt cheap. Ever noticed the price per 1000 of your favorite cpu when it comes out?

It's a bit of a catch-22. When customers buy more via retail channels, the prices will come down. When the prices come down, customers will buy more...

Eventually the retailers will get there trying to compete with each other, but with "most" (me and you not among them) customers are perfectly happy with what's out there now, there isn't enough demand for a big retailer to start stocking larger quantities and begin the price death spiral we've grown to know and love about computer parts.

Re:Mirror :(

[friedegg]

I setup a mirror, too... In my bathroom. It's one of the new flat screen models.

Other ways the market should be working

[corebreech]

I might be willing to hand over the big bucks for one of the bigger flat-panel displays, but to do so I would have to accept a number of dead pixels in the bargain. For instance, there's the Samsung 240T which goes for about $3,000, regardless of whether the thing has dead pixels or not.

Why aren't the 240T's with, say, eight dead pixels sold at a different price? I understand the issues with the manufacturing of these displays, that if they were to reject all but those without dead pixels the cost would be prohibitively expensive, but why can't they just count the number of dead pixels and set a price accordingly.

Monitors are important; I end up looking at the thing most of the day for work and for play, I am willing to pay a premium for a very fine display. But to risk getting one with a bunch of dead pixels right in the middle of the screen, I mean, that would just suck really, really bad.

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)

Walmart?

[sfe_software]

I thought the same thing for quite a while, but then I stumbled on this at my local Walmart. For $400, I got an 18-inch LCD.

It has an analog VGA connector (a good thing for me; most of my PCs lack digital output), a 160-degree viewing angle (I didn't think that was even possible -- 180 would be viewing completely from the side), 1280x1024 native resolution, and does a great job resampling other resolutions. I can't prove it yet, but I am pretty sure it uses subpixel rendering when resizing lower resolutions.

So all the things I didn't like about LCDs a couple years ago -- limited viewing angle, bad resampling, digital-only connector, small size, and of course price -- are solved with this Walmart cheapo.

I'm sure it won't last all that long, but for the price, it's really nice, easy on the eyes, and much sharper than my last monitor (an aging Trinitron).

So, at one month old, mine has convinced me to never go back to a CRT.

Oh, and in games or full-screen video it rocks. You still only get 60 actual refreshes a second, but that's more than enough (and unlike a CRT the light is constant anyway). Fast motion can be a tiny bit blurry, but nothing like my crappy Compaq laptop... and in games, the blur actually looks better in my opinion -- more realistic (or I'm just goofy)...

Re:Gouging?

[molarmass192]

Price-gouging is also called profiteering. Merriam-Webster uses this definition:

one who makes what is considered an unreasonable profit especially on the sale of essential goods during times of emergency

Ok, LCD screens are not an essential good and even though this is this a time of emergency for some, it's hardly relevant to the need for an LCD monitor. I'm not even sure they're making that much profit since there's such a high waste ratio in making LCDs. Besides, LCDs are just priced at what CRTs used to be ... so in retrospect were CRTs being price gouged?

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

About time

[NMerriam]

I've been wondering about this for over a year, ever since I got a ThinkPad A22p, which has a GORGEOUS 15" LCD that runs native at 1600x1200.

I have a 19" CRT at home and a 21" at work, and this LCD beats both of them for quality, so i looked around to try and buy one. It literally did not exist -- you can but 19" LCDs with 1280x1024 (I suppose some people enjoy large pixels) but trying to buy one of these beautiful small LCDs was impossible. IBM doesn't sell them, nobody sells them.

I'm totally baffled by this. We would love to buy these LCDs for our desktops if we could get them for $1,000+ but as it is we keep these huge 21" 75 pound monitors on peoples desks, and most of those are run at 1280x1024 to stay readable.

I'm actually thinking about buying a cheap IBM and ripping it apart if I can get the screen cabling to go to the digital out on a GeForce card.

Not a fair comparison

[Thai-Pan]

There are a few things that you're not considering. They are the key differences between a laptop LCD screen and a desktop LCD.

Desktop LCDs are made to have a very high brightness and high contrast ratio. Laptop LCDs are made for low power consumption, and thus don't need as powerful lighting units.

Desktop LCDs are built to have a very wide viewing angle. This uses some fancy technology and manufacturing processes that are pretty expensive to accomplish this task. Laptop LCDs are made on purpose to have a narrow viewing angle so the guy next to you on the airplan can't see your screen. A narrow viewing angle makes the LCD's requirements much cheaper to achieve.

Re:Naturally it IS price fixing

[Squareball]

Not price fixing. How could that be? If it was possible to sell 19" LCDs for $250 and still turn a profit, some one would be doing so. I think we need to look at a deeper reason. The same companies making LCDs are the same companies that have large stocks of CRT TVs and monitors. If they sell an LCD for $100 what are they going to do with that 17" CRT that they have time and money invested in?
I don't know if that is indeed the reason or not.. but it's something to think about.

In capitalism any one can cut prices and drive down the cost of a product. If coke started selling 12packs for $2.00 what would pepsi do? They would have to compete to survive. Of course Coke can't do that cause they will lose money. I suspect the same is the case with LCDs.

Re:Naturally it IS price fixing

[captainktainer]

I'm not sure you understand- price fixing is *exactly* the situation as described. You see, when manufacturers fix prices, all the manufacturers collude to set prices far above fair market value. In the modern world, they feel they can get away with it because if someone tries to undercut them they can revoke licenses and sue for patent infringement.

The point he's making is that this is a corruption of capitalism, and that the situation you're describing- lowered prices- is not occurring because of illegal collusion among competitors. This is encouraged in Japan (for an excellent fictional discussion of the topic, see Michael Crichton's novel "Rising Sun"), but frowned on in the United States. Unfortunately, stupid patent laws and unenforced hole-filled antitrust laws are what make this possible.

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.

Get real

[djupedal]

.....when you buy an LCD monitor, the price is artificially low. When you by products that aren't in that league, you come closer to the actual costs involved.

We all know that an automobile, in parts, is worth more than what you pay for a complete car off the lot. Try pricing the entire car, part by part, over the part's dept. counter, and then go to 3rd party suppliers, and watch how prices fluctuate. It is easy to imagine fixing if you don't understand how the market works.

Nothing's fixed, beyond the normal markets forces (supply/demand) causing prices to level for certain products, etc.

Re: Inferface??

[Jah-Wren Ryel]

I believe the interface is almost always an LVDS thing, very similar to that used in one of the greatest desktop LCDs of all time, the SGI 1600W. The problem is that each different panel has a different set of parameters that you need to set/use with an LVDS controller and

1) the parameteres ain't easy to find publically documented
2) LVDS controllers for regular PCs (like an Nvidia card with an LVDS interface) are few, far between and not very cheap

I would desperately like to be proven wrong on this - I'd especially like to find a dvi2lvds box for a reasonable price that I could use with any of the thousand or so bare laptop LCD screens that are offered on ebay every day...

Re:Naturally it IS price fixing

[jagger]

the downside is that you have to drink crap

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!!!

A Quick Economics Lesson

[gradji]

Every instance of a good being sold above its cost (or, more precisely, its marginal cost) is *not* an example of price fixing. In general, such mark-ups occur when supply is inadequate to cover existing demand. In the textbook models, it is always assumed that there are competitors with no real capacity constraints who are willing to undercut the imcumbent firms when prices are higher than cost.

But in real life, especially in electronics markets, firms can face binding capacity constraints. A mark-up in the LCD market is an example of price-fixing only if the existing firms are creating an artificial shortage: i.e. they are explicitly or tacitly colluding to keep supply artificially low. The classic example of such efforts is OPEC and oil. However, if all firms are providing their capacity *and* the price at which quantity demanded equals quantity supplied is greater than cost ... this is not price-fixing; it's just the firms earning a short-run rent until more capacity is added.