Hi Meathead; About those expensive monitors...
The basic problem with monitor pricing is that the
technology predates the transistor era. Yes, tech
fan, that high-resolution monitor you bought recently
uses tube technology.
I remember a time when CPU memory technology was
dominated by something called (magnetic) "core". It
took a while to be replaced by semiconductor, but it
eventually happened, and prices dropped. I think the
same thing may be happening in display monitor land.
Here are some links to EE-Times articles of interest:
LCD prices nosedive & replace monitors. EETimes 5/4/98:
techweb.com
techweb.com
Another technology, reflective LCD:
techweb.com
There are also a lot of other technologies out there that
are likely to reduce the cost of displays. Do a search
through the last year's EE-Times to see em.
But the basic fact is that there are no inherently
expensive parts in a monitor anyway. If TV tubes
were like catalytic converters and required a
certain amount of precious metal, then you could
expect that their cost of production would be
driven by the cost of materials. But picture
tubes don't have anything particularly expensive.
Making those shadow masks and pixel arrays align is
kind of touchy. But it is one of those production
problems that can be solved.
To get an idea of the true cost of production of
monitors, take a look at historical pricing of
obsolete monitor sizes, like 14 inch.
One thing that is guaranteed to bring down the
price of computer monitors is higher production.
But I don't expect the number of computers sold to
expand enough to drive monitor prices that low.
Instead I expect TV display devices to go to much
higher resolutions, and the extra production line
capability to also pump out computer monitors.
This will probably take some years, as it will be
a while before the picture tube makers will have
satisfied the public with HDTV tubes. (There are
probably some investment opportunities here
in SEAsian companies...)
I guess all investors are following the digital
TV news. For instance:
HDTV article in EETimes 2/25/98:
techweb.com
When digital TV causes consumers to upgrade
their TVs, the increased resolution will allow
the set-top box makers to sell a lot more equipment.
In fact, I expect the usual retail TV sellers to
sell TVs that include a PC as well. Its going to
be great to play computer games on a 60 inch high
resolution screen! (Maybe I'll finally actually
buy a TV!)
Now sales of PCs by the retail TV sellers will take PC
sales away from the current PC sellers. This will be
associated with the final conversion of the average
PC to be a true commodity. As I have said before,
computers are not yet commodity priced. You will
be able to tell when they are commodity priced.
Wheat is a commodity. Wheat is piled in the open
on the ground, when room runs out in silos, in the
midwest US. When you see companies doing the
same thing with PCs, then you will know that you
have finally seen commodity pricing in PCs. :)
By the way, when prices get that low on PCs,
the companies that make the most expensive
part of the machine, (probably the CPU, possibly
the motherboard or hard disk) will have the advantage
over their competitors in putting together the box.
At that time, all the box makers will be put out of
business.
I know the above statement will seem a little silly
to long term bulls on DELL. But take a look at TVs.
All the major manufacturers make their own picture
tubes... If a TV "box maker" had to buy tubes from
somebody else, the mark-up would prevent them from
competing in the commodity market. You just haven't
seen PCs reduced to a commodity market yet. It
will happen, and the reduction in ASPs, is your first
clue. By the way, the action I am describing here is
called "vertical integration".
The fact is that a high-end computer will always cost
more than semi-obsolete technology (like 3.5" floppy
drives or power supplies). But that fact does not mean
that computers are automatically going to go over to
commodity pricing. Instead, you have to watch for
when the consumer quits buying high end, and starts
buying low end. When the bulk of the market shifts
to low end, its over folks. That defines the end of
computers as a high profit business, and defines the
beginning of vertical integration.
My suspicion is that a phase of vertical integeration
is approaching the personal computer industry, and
the companies to bet on are IBM and HWP. INTC
doesn't seem to want to make boxes, and its chips
are easily copied by its high tech competitors, anyway.
-- Carl |
