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- February 2005 -
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CE vs. IT for TVs
The confusion in regards to resolution and the statistics about how monitors are being used are both good arguments for larger screens with lower resolutions as the best convergence products for meeting the price point expectations of the market.
The Battle Continues
Over the past year you have seen many report from DisplaySearch and many different presentations regarding the CE/IT convergence happening at the display level with traditional PC manufacturers such as Gateway, Dell and HP now all offering TVs. The industry also continues to see its share of hybrid products that DisplaySearch defines as Multi-Function Monitors (MFMs). To refresh your memory, this chart shows the DisplaySearch definition of a desktop monitor vs. a TV vs. an MFM:
Table 1: DisplaySearch MFM, TV, MFM-TV, Monitor Definition
One of the key issues remains the hybrid products in the MFM category and their placement at retail. You may recall hearing about the ability of the IT channel to deliver monitor products with TV functionality to the market at a much lower price because these products usually come from monitor or PC companies that have learned to live with much smaller margins over the years. This has not been the case in the TV marketplace, were sizable margins are still expected from both the manufacturer's and the retailer's standpoint. Nowhere is this more evident with two of the market leaders: Sharp and Samsung.
Sharp is far and away the top supplier of LCD TVs, but Sharp also has a line of products from their monitor group defined by them as LTMs or LCD TV Monitors. These products include the 15" LL-151MU, the LL-171MU and now the IT-23M1U, which will be discussed in detail later. They are totally separate from the Aquos line of LCD TVs. In a retail environment, these products are usually merchandised on the monitor wall and purchased by the retailer's PC purchasing agent rather than their TV purchasing agent. The retailer's PC purchasing agent is required to meet a much lower margin expectation than the TV buyer, so while some within Sharp would like to have these products merchandised with the Aquos line of LCD TVs, the retailers simply won't allow it because it would lower the margins in the TV category.
Figure 1: Sharp's Line-up of LTMs
In a similar fashion, Samsung also has a line of multi-function LCD monitors that are entirely separate from their LCD TV products. These products include their MP line of LCD monitors with Samsung arguably as one of the first and most successful vendors in this category. Products in this category include the 510MP, the 710MP, the 192MP, the 173MW and the 241MP-all within the SyncMaster line of desktop monitor products and brought to market by their desktop monitor group.
Figure 2: Samsung's Line-up of MFMs
While this situation may not be news to some, the current pricing war in the LCD industry and the battle for the American TV set upgrade and replacement market is far from over. In fact, with more and more LCD TVs and more and more LCD monitor being showcased on retail shelves, customers are getting more savvy about their purchases-doing more homework before they purchase-than ever before.
Let's take a look at a case in point from a November Sunday flier from Best Buy with both 15" LCD TVs and 15" MFM products displayed almost side-by-side.
Figure 3: Best Buy November LCD TV Ad Page
Looking at this ad, you seem to simply have to make a choice in brands between a 15" Sylvania and a 15" Samsung LCD TV. Taking a closer look at the specifications shows that the Sylvania (a brand best know for light bulbs, which clearly has a lower brand perception for the US consumer for TVs than Samsung), is a VGA display while the Samsung is an XGA display. To the average US consumer, $250 is A LOT for a 15" TV especially if they have no idea what 640 × 480 or 1024 × 768 means, especially in regards to TVs. (Doesn't SDTV look better at VGA than at XGA?)
As the consumer flips the page, they see an alternative from Samsung, their preferred band, on the monitor page.
Figure 4: Best Buy November PC and PC Peripheral Ad Page (Same Flier as Above)
As shown on another page from the same flier, the consumer can get a 15" XGA TV and a monitor for $279? How can this be? Certainly the informed consumer will purchase the SyncMaster 510MP for $279. But here in lies the confusion. PCs are thought to be complicated devices which often require technical support or the kid next door to help you to operate or set-up, so consumers don't think to go over to the PC section to look for a TV.
The Plot Thickens; Lower Resolution, Larger Displays for TV/PC
Even if the PC/TV convergence isn't happening, all major PC manufacturers are still promoting this dual functionality with a entirely new crop of hybrid MFMs now reaching the market.
Previously one of the key defining points of what makes a TV vs. a monitor was the Resolution/VIS (Viewable Image Size) trade-off. In order for DisplaySearch to define a product as an MFM TV, it had to have a size and a resolution that was appropriate for both desktop computing as well as TV viewing. With so much confusion about HD Capable, HD Ready, HD Resolutions (720p, 1080i, 1366 × 720, 1280 × 768, 1280 × 720, 1920 × 1080, etc) the way that newer hybrid products are being marketed now seems to go against this definition.
Since the LCD monitor market began, the idea of higher resolution displays has often times been debated with such displays as 15.4" SXGA or 19" UXGA really only having any success in Japan or other regions which require a finer detail for producing the character set of a given language. With all of that said and debated, many companies have now taken a hard line stance on the subject, with the most notable case being Apple, which clearly indicates that 100ppi is the optimal pixel pitch for a desktop display.
Figure 5: Apple's Stance on minimum specification for Desktop Monitor ppi
For some time it seemed that the industry would be moving in this direction with resolutions like 1920 × 1080 being a fine resolution for convergence, allowing for 100ppi up to 22". With the aforementioned confusion about the definition of HD (most evident in today's consumer TV market with the marketing of ED and HD PDP products), more and more lower resolution LCD MFMs are being introduced. A case in point is the Sharp IT-23M1U product shown above. The product is being promoted as a new breed of IT-TV products.
At 23" with a native resolution of 1366 × 768, it boasts of being a high quality LCD computer monitor and a full function LCD TV (HDTV-Ready). But with a ppi (dpi used interchangeably here) of 68ppi, is this appropriate for desktop computing? While some would argue no, let's take a look at one more benchmark that may be of interest.
As participants in the display industry, we can all get caught up in every little specification but to most users, it is "just a monitor" or "just a TV" or "just a display." In fact, most users have NO IDEA what resolution their monitor is running at, having been trained over the CRT years to lower their resolution to increase their font size, something which is still happening today. Even with LCD monitors out-selling CRT monitors this year, the installed base is still greatly skewed towards CRT monitors. Patterns like these are hard to change as is evidenced by some recent statistics of web viewers and the resolution at which that they had their monitor set. As shown in the following figure, a visitor base of over 2.2 million unique visitors in October 2004 showed that 51% were using 1024 × 768 and 34% used 800 × 600, so over 86% of the users were at XGA or lower resolution, regardless of screen size or technology (CRT or LCD). With 17" SXGA displays being the vast majority of desktop monitors sold in 2004, many of these users are running a native SXGA display in an XGA or VGA mode. There is even a note to web developers to still make sure that they are designing content for 800 × 600 resolutions.
Figure 6: Web Browsing Statistics from W3 Schools
This confusion in regards to resolution and the statistics about how monitors are being used are both good arguments for larger screens with lower resolutions as the best convergence products for meeting the price point expectations of the market, as well as the desire to use the same product for both traditional PC computing as well as TV viewing.
Figure 7: Other Hybrid/MFM Products Recently Introduced with Lower PPI Counts
One irony in this trend is that many of these lower-resolution, larger-size hybrid products are originating from Japan, one of the few regions that appreciated the higher resolution LCD monitors in the past. It seems that the convergence of the TV and the PC for space-saving in the Japanese home environment is more important that the higher resolution enjoyed by some in the past. In any event, DisplaySearch is in the process of determining if a change in how we define some of our categories is in order based upon sales trends, so stay tuned.