The real meaning of LCD: Low-cost display

A drop in flat-panel monitor prices over the last several months will continue through the first half of the year until hitting record lows, according to new projections from market researcher DisplaySearch. Flat-panel monitors use LCD (liquid crystal display) glass, which had been in short supply, keeping prices high.

Unfortunately for consumers, flat-panel prices will begin creeping up again in the second half of the year as a current oversupply dries up.

The average price for a 15-inch active-matrix panel is currently $874, according to DisplaySearch. But by midyear, the company asserts, prices should drop to $499. Similar reductions in price are expected for 12.1-, 13- and 14.1-inch panels.

"We expect prices to drop even more than before," Ross Young, DisplaySearch's president, said Thursday. "The real message here is that prices for panels and notebooks will be very good for consumers over the next six months."

The price reductions are the result of a recent increase in manufacturing capacity. In the late 1990s, growing demand in notebooks, handheld devices and cell phones prompted manufacturers to invest in plants for LCD manufacturing. LCD glass is the main and most expensive component in a flat-panel monitor. Notebooks account for 61.4 percent of the LCD market.

Andy Klopstad, a manager of notebooks at Gateway, estimates that a flat-panel monitor accounts for about 35 percent to 40 percent of the cost of a notebook.

LCDs have been hitting the market en masse in a correction of what was previously an undersupply.

Young said the LCD supply will rise 10 percent this quarter from last quarter, while demand is expected to increase only 0.7 percent.

However, Klopstad said, don't expect dramatic reductions in notebook prices. Consumers should instead expect to get more features and bigger displays for their money.

Klopstad said that six months ago a $1,299 notebook in Gateway's (gtw) 1000 series would have come with a 12.1-inch dual-scan screen. But this year it's available with a 12.1-inch active-matrix display. Dual-scan screens are not as sharp or as bright as active-matrix screens but consume less power.

A year ago, a $1,999 notebook in Gateway's 5300 series would have come with a 12.1-inch active-matrix screen but now comes with a 14.1-inch screen.

Klopstad added that Gateway plans to use more 14.1- and 15-inch displays in its notebooks.