Monitor prices shoot up following component demand

With monitor prices going up lately, the PC price has increased by over Rs 1,000 in the last one month, with the shortage in
three components. RAM prices had gone up by Rs 1,000 (256 MB) in early April, followed by an
increase in cabinet prices for Rs 100. 

Currently, there is a shortage of CRT monitors, with prices going up from Rs 200 to Rs 250 in the entry-level 15-inch
monitor. 17-inch monitor price has also increased by Rs 250 to Rs 300 and according to market sources, the
current upward trend will continue for another two months since there is a shortage of components in the global market. However, TFT
(LCD) monitors are available at the old price without any change. 

"Monitor prices have increased sharply in the last two weeks and Samsung was the first brand to announce the price hike.

Since Samsung is a premium  brand, it has increased its price by Rs 200 to Rs 250, while others are
keeping it below Rs 200. However, all international brands have announced the new prices, while domestic players like Microtek and Proview are
maintaining the old price. 

According to vendors, there is a huge shortage of glass shell, a critical component that goes into the production of CRT
monitors, in the international market. "We expect the new prices to continue or rates to go
up further for the next three months," says a leading sub-distributor operating in the Ritchie Street market, who sells all brands.
"Presently, Samsung 15-inch in white casing is sold at Rs 4,700 while the black casing is quoted at Rs 4,850. Similarly, 17-inch white is priced at
Rs 6,150 and black is fixed at Rs 6,350. "The new prices will continue for the next two months and if there is any increase, it would be in the range of Rs
50 to Rs 150," says Sushil Chouhan, Director, Acme Business Solutions. 

"The sudden price increase has put resellers in a fix since it is the peak time for college and educational institution orders. In
many cases, resellers have quoted the old price and we are under pressure to supply at
the same price. We are expecting some government orders to come in after the announcement of election results," states RM Rajesh, Director of Uniaccess
Computers, an LG sub-distributor. 

"The price increase is mainly because of the raw material shortage in the global market and further price increase is based on
the demand-supply gap. According to information available to us, the situation will continue till
July and the price increase will be in the range of four to six percent," says a source close to Samsung.

"We believe that major vendors are engaged more into the production of television sets to meet to the demand following
Athens Olympics 2004 in August. Most CRTs manufactured are going into the production of television
sets and the situation is expected to continue for another three months. The basic cost has increased by $4 in 15-inch and $4.5 in 17-inch," says a
source close to LG Electronics.

Meanwhile, the market is abuzz with rumors that 15-inch will be phased out in the next two or three quarters. However, a
section of resellers are not agreeing to it saying there is a strong demand for 15-inch in the local
market and a long way to go. "There is a great demand for 15-inch and it will continue to be the entry-level product at least for the next one year.

Most educational and government institutions prefer to buy 15-inch for cost factor. However, there is a noticeable shift in the
home segment who prefer 17-inch instead of 15-inch and the market share of 17-inch has increased up
to 35% in this segment," says Proview Electronics' Regional Manager, G Arunkumar. 

Talking about the domestic brands, Arunkumar adds, "Local brands have not increased prices since we have enough stocks
to manage for the next few months. However, we have to wait and see market movements before taking any
decision on the price hike." Proview is the only company to offer 14-inch still in the market and it is priced at Rs 3,700. Proview 15-inch is
quoted at Rs 4,100.

S Gopikrishna

Chennai