Netbook Vendors May See Drop in Profits Because of Rising LCD Prices

At one time, making and selling netbooks was a particularly profitable venture, and it still is, but said profitability may actually be heading for a low, now that liquid crystal displays are getting more expensive.

It appears that tablet PCs aren't the only factor that makers of netbooks will have to deal with, though analysts have been speculating on just how strong their influence will be.

Basically, slates have begun to make analysts think they are going to steadily eat away at the market share that entry-level mobile PCs have secured for themselves.

This is understandable, in a way, considering that the slate and nebtook feature sets are at least partially similar, physical keyboard or no.

Still, while tablets might prove troublesome for suppliers of low-cost laptops, said companies may have to cope with a certain other phenomenon.

Apparently, liquid crystal display (LCD) panel prices have begun to visibly rise, or so says a new report published by Digitmes.

Not only is Apple's new MacBook Air making demand for 11.6-inch screens rise, but the arguably common 10.1-inchers are also getting pricier, for more or less similar high demand reasons.

Basically, the situation is opposite to the one on the DRAM and NAND segments, where oversupply has been driving contract quotes dangerously low for months.

Regardless, it appears that netbook displays are getting expensive enough that the possibility now exists for suppliers' profits to be negatively influenced.

Not only that, but with the holiday season in play, promotions should see netbook prices drop even lower, further damaging profits.

Combined with how tablet PCs (set to reach shipments of up to 50 million next year) are expected to steal 10 to 15% of the netbook shipments for 2011, it will be interesting to see just how things develop and how vendors prepare for the future.