Seize Opportunities In Emerging LCD Markets

You might think desktop and retail applications offer the best opportunity to implement LCD technology. Sure, there are plenty of corporate users looking to replace their CRT (cathode ray tube) monitors and retailers implementing LCDs in their kiosks. However, the advent of large-screen LCDs opens up the electronic signage marketplace to VARs. Manufacturers are producing 40- and 50-inch panels that can be used to create electronic information displays at airports, stores, and restaurants.

This electronic signage application creates a huge opportunity for VARs, says Andres Maldonado, director of product marketing at NEC-Mitsubishi Electronics Display (Itasca, IL). "These specialized segments such as digital signage will provide the fastest growth and the biggest opportunity for solution providers to differentiate themselves," says Maldonado.

Other developments in the LCD marketplace will create even more opportunities for VARs. Resellers have typically touted two main advantages of LCD monitors: their compact size and low energy consumption. LCD monitors take up 75% less desk space and consume about 1/3 the energy of CRT monitors. VARs can now include improved picture quality as another selling point to end users that require high-quality color representation. In addition, the price of LCD monitors is expected to drop late this year and into 2005. "Prices are continuing to decline, which is a real advantage to the end user," says Chris Neff, director of marketing for LG Electronics (Englewood Cliffs, NJ).

How much potential is there in the LCD space? According to the research firm IDI (Framingham, MA), 119 million LCD monitors will be shipped worldwide in 2007 versus 30 million CRT monitors. "Overall, I feel that LCD technology will be the dominant player in the display market," says Moises Alonso, product support director for SVA Group USA, Inc. (Commerce, CA).

Gain The Expertise Needed To Install LCD Signs
With improvements in LCD technology, manufacturers have been able to produce larger screens. Initially, LCD panels were used exclusively on portable computer models, but in the late 1990s full-screen, 14-inch models became available. Now, manufacturers are producing panels of up to 55 inches. These large screens have opened up LCD technology to new markets, and signage applications offer the best opportunity for VARs. "I see these large monitors becoming accepted at hotels, airports, and other places that need to put information on display," says Neff. "And these applications will pick up in acceptance as prices come down."

Instead of using standard signs, businesses can connect LCD monitors to a computer network so information can be updated in real time. NEC-Mitsubishi has partnered with VARs to install LCD monitors to display flight information at airports such as Savannah/Hilton Head International Airport. These monitors are larger than the CRT screens typically used at airports, and they also provide higher resolution than plasma displays, which are the chief large-screen rival of LCDs.

LCD monitors also can be installed to replace menu boards at chain restaurants, eliminating the need to produce thousands of new signs to advertise a new special or add menu items. "That's an area that restaurant chains are investigating heavily, and it's just a matter of time before we start to see this kind of signage take off," says Maldonado.

However, implementing this signage application for restaurant chains, airports, and retail outlets is more complicated than hooking up LCD monitors to PCs at banks and other businesses. VARs need to obtain new skills to integrate the hardware, software, and networking components of signage applications. To learn the skills needed to implement signage solutions, VARs should team up with vendors that offer strong training programs. "The way VARs can gain expertise is by partnering with manufacturers that can share that expertise with them," says Maldonado. "They need to determine if a vendor has a reseller program that they can tap into, or has the white papers and presentations that can teach them what they need to know."

Win Customers With Improved LCD Picture Quality
CRT monitors have traditionally outperformed LCD monitors in picture quality. But technological advancements are enhancing the brightness and color quality of LCD monitors. For instance, LG Electronics has developed the f-Engine picture-enhancing computer chip. The technology enables users to adjust brightness and color independently. "LCDs have been known to wash out if you adjust the contrast or change the brightness," says Neff. "The chip detects this and separates the contrast from the brightness."

LED (light-emitting diode) technology also will provide an alternative to the fluorescent tubes now used to provide backlight in most LCD monitors. "That LED backlight offers a much broader range of color capability," says Maldonado. Neff and Maldonado say improvements in picture quality will enable VARs to market LCD monitors to film studios, publishing firms, and other end users that rely on high-quality color representation.

In addition to seeking out products with enhanced picture quality, VARs also should be selective about the type of panels they provide to end users. "The most overlooked aspect of LCD monitors probably involves panel quality," says Young Bae, senior product manager at ViewSonic Corp. (Walnut, CA). "There can be huge differences in image quality, even between panels that come from the same production lot." He recommends that VARs partner with manufacturers that produce Grade A or Grade A-plus panels, rather than Grade B products.

Emphasize The TCO Of LCD Monitors
When marketing LCD products to end users, VARs should focus on the ownership value of the technology. VARs can promote the smaller footprint and lower power consumption of LCD technology versus CRT monitors. In addition, VARs should emphasize the higher residual value of LCD monitors. Since LCD monitors are worth more than CRT monitors, many vendors offer credit toward new purchases when end users trade in LCDs that are in working condition. In addition, VARs can offer long-term warranties of five years on LCD monitors compared with the three-year warranties that are standard on CRT monitors. "VARs will do well if their main focus is selling the product based on the entire return on the investment, the total cost of ownership [TCO], and warranty," says Alonso.

And the TCO will continue to decline. For instance, a 17-inch LCD monitor was selling for about $500 in September, a decline of nearly $100 from the price in June, says Neff. New manufacturing facilities with heightened production capacities will lead to further price decreases. "The newer generation factories have the capability to deliver larger glass sizes that can be split up into LCD screens, so you have greater production capabilities," says Maldonado. "There's much better supply, and we're starting to see prices come down." Maldonado predicts that prices will decrease by 10% to 30% over the next two years. "That decrease in price will open up opportunities to use this technology in more applications."