MARCH 21--DisplaySearch (Austin, TX; www.displaysearch.com) indicated in its latest Quarterly Desktop Monitor Shipment and Forecast Report that worldwide LCD desktop-monitor shipments grew 11% Q/Q and 48% Y/Y to 31.4M units in Q4'05. While quarterly results were on par with most recent expectations, the LCD monitor market witnessed growth far in excess of prior-year expectations for 2005, with unit volume shipment increasing 54% from 2004, making 2005 the year of the LCD monitor. With Q4'05 revenues increasing 9% Q/Q and reaching greater than $10B for the first quarter ever, revenues generated from the shipment of LCD monitors topped $35B for the year, an 18% revenue increase over 2004.

Dell remained the worldwide leader in the shipments of desktop LCD monitors in Q4'05, capturing a 19.2% market share with a solid Q/Q growth rate of 24.3% in a quarter that only witnessed a total worldwide growth rate of 11%. Samsung remained the No. 2 vendor worldwide, despite a drop of 1.2% for the quarter. Of the additional vendors in the top five, HP, Acer, and LGE remained in their respective positions, with Acer showing the most sizable Q/Q growth with an increase in unit volume shipments of 35.9% from Q3'05 to Q4'05.

Fifteen-, 17-, and 19-in. models remained the most popular sizes, collectively accounting for 95.5% of all LCD desktop monitors shipped in the quarter; the 17-in. monitor was the most popular category by far, with a 59.2% shipment share in Q4'05. Of these three mainstream sizes, the 17in market showed the greatest Q/Q growth, rising 13% from Q3'05 to Q4'05 with the 19in mainstream category close on its heels, showing a quarterly growth of 12%. The area of biggest unit volume growth Y/Y was the 19-in. category, which witnessed a Q4'04/Q4'05 growth of 153% with the 17-in. market increasing 56% Y/Y and the 15-in. monitor market showing a decline of 25%.

Continuing two consecutive quarters of Q/Q street level price increases, the 15in category witnessed its average street price climb from $228 in Q2'05 up to $242 in Q4'05 as producers looked to move away from this unprofitable segment. The 17in category saw an average street price of $286 in Q4'05, remaining below the magic $299 price point for a desktop display and allowing this category to continue to grow. The 19in category continues to witness quarterly consecutive street level price erosion, falling to below $399 on average in Q4'05 to $396 with spot and promotional pricing well below average during the holiday season, which helped it to achieve its explosive Y/Y growth, seeing its ASP dropping 25% Y/Y from an average of $528 in Q4'04.

Regionally by brand, Dell was the top vendor for LCD monitor shipments into Japan with a 13.7% share, Latin America with a 19.9% share and North America with a dominant 37.2% share. Samsung was the top vendor in the world's largest market for LCD monitors, the EMEA region, where it enjoyed a 13.4% share for the quarter despite seeing a sequential decline of 2.0% in unit volume shipments into this region. Samsung was also the top vendor in the Asia Pacific region in Q4'05 with Lenovo remaining the top LCD monitor vendor in Greater China for the quarter with an 18.0% share.

While Dell's market share presence in North America remains most impressive, HP, Acer, and Gateway all witnessed sequential growth rates in the region above those witnessed by Dell. Acer continues to impress the North American market, having become the top stand-alone monitor vendor in Q3'05 and keeping this position in Q4'05 with a 28.5% Q/Q growth rate. Gateway also had a surprisingly strong quarter in Q4'05 in NA, jumping into the No.4 position ahead of Samsung due to strong retail growth, especially through its aggressive sales of bundled 21-in.-wide desktop LCD monitors.

Q4'05 worldwide penetration rates for LCD monitor shipments ramped up to 73.3%, and penetration for all of 2005 was 68.2%. This seems high, but it is mostly concentrated in more mature markets. North America and EMEA, for instance, showed penetration rates reaching 75.8% and 80.0%, respectively, in Q4'05, while emerging markets such as Latin America and Greater China still saw most of their shipments in the CRT desktop monitor form factor. With penetration rates of only 34.8% for LCD monitors shipped into Latin America in Q4'05 and 48.1% of the total desktop display solutions shipped into China in Q4'05, manufacturers look to focus their attention on these emerging markets in the coming years.

Additionally, just as the industry begins to talk of saturation rates for LCD monitors and the potential for limited growth, manufacturers are innovating yet again, bringing to market a new crop of wide desktop

Tue Mar 21 09:34:00 CST 2006