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Apple (Nasdaq: AAPL) gets a lot of criticism for the seemingly high retail 
prices of its Macs. While the PC and Mac pundits alike can spec out competing solutions and argue over value in terms of software and operating systems, what about displays? Computer monitors don't ship with an operating system and free productivity software -- displays are about as pure a hardware play as you can get these days. So who's buying Apple displays, and why would someone buy an pricey Apple display, anyway?
Apple's cheapest option, the 24-inch LED Cinema Display, comes in at a cool US$899 -- ouch. It's possible to buy two PCs with two monitors for that price. Apple's second -- and only other -- option is the behemoth 30-inch Apple Cinema HD Display, which costs $1,799. It was first introduced way back in 2004.
Consumers can find displays of similar sizes for hundreds of dollars less from brands like Samsung or HP (NYSE: HPQ), yet someone is buying Apple displays, right? Who? Why? Are the displays just cool eye candy designed to look nice next to a new MacBook Pro? Or is there more here than meets the eye?
The Rise of the Notebook
"Like all Apple computer products, Apple's monitors use high-quality parts and are focused on working well with other Apple products," Stephen Baker, vice president of industry analysis for The NPD Group, told MacNewsWorld.
Still, monitors represent a small and declining segment of the computer industry. As notebooks gain market share over desktops, the need for separate monitors decreases.
"Consumers almost never attach monitors to notebooks, and since most of Apple's computer sales are notebooks, they don't see an opportunity to offer products to those segments -- they don't sell a lot of MacBook Pros into enterprises, where a lot of workers use a monitor in addition to the the notebook screen, so there's not a big opportunity there," Baker said.
"iMacs don't need standalone monitors, and Mac minis are positioned in such a way that Apple doesn't want to supply the monitor. Mac Pros, which are positioned more like workstations, clearly appeal to folks with high graphics sensibilities, and the high quality of the Apple display is a good match," he explained.
"But most of the rest of the market doesn't need, want, or won't pay for that level of quality, so Apple is content to let others satisfy that need given the pricing requirements, which are low, and the margins, which are lower, and the limited opportunity for sales volumes," he added.
Basically, Apple doesn't seem interested in competing in the low-end monitor space.
Enter the LED Cinema Display
"Obviously, there is a segment of the market who prefer to pair their Apple computer with an Apple display rather than a monitor which clashes with the design," Avi Greengart, research director of consumer devices for Current Analysis, told MacNewsWorld.
The 24-inch LED Cinema Display features the same clean aluminum looks as the MacBook and MacBook Pro, as well as the edge-to-edge glass framed with a black border.
Greengart has been testing a 24-inch LED Cinema Display with a MacBook Air, which in its first iteration served best as a secondary (and underpowered) "road notebook" Greengart said.
"With the new MacBook Air, Apple has upgraded the processor and graphics. When paired with one of the new monitors, the Air can act as both a desk machine and a road machine," Greengart explained.
"Apple seems to have had this scenario specifically in mind when it designed the new monitors, and Apple has outfitted the new monitors to serve as docking stations by including a power cord for the notebook and a built-in USB hub. By making three connections -- power, video, and USB -- the Air now has access to a huge monitor and whatever peripherals you have plugged into the monitor," he added.
The setup lets customers enjoy the benefits of a desktop system -- big monitor, extra peripheral ports -- without the need for a bulky docking station.
"Admittedly, this is still quite an expensive setup, but I can report that it works extremely well. Of course, this scenario works with the new MacBook Pro line as well," he noted.
Beyond the Elegant Style
While the older 30-inch Apple Cinema HD Display doesn't share the new MacBook and iMac looks, its aluminum design fits well enough. But strip away the style, and what's left? Overpriced visuals? Or are Apple's monitors priced fairly?
First, some specs: Apple's 30-inch display boasts a 2,560 x 1,600 pixel resolution, 16.7 million colors, brightness of 400cd/m2, and a contrast ratio of 700:1. It includes 2 USB 2.0 ports and 2 FireWire 400 ports, and it requires a strong graphics processor just to drive it. Graphics and photography professionals using Adobe (Nasdaq: ADBE) Photoshop have plenty of room for layers and palettes, and video pros using Final Cut Pro HD can see larger timelines and fit more controls on the screen.
This kind of screen real estate makes it easier and faster for a pro to get a job done, and the increase in productivity can easily eclipse the $1,799 cost of acquisition.
Indeed, Apple's 30-inch offering has generally gotten great reviews -- even today, the online reviews on the Apple Store and Amazon.com (Nasdaq: AMZN) both feature an enviable 4.5-out-of-5.0 star rating. Clearly, Apple is doing something right.
Stacking Up Against the Competition
"Of the nine or so mainstream 30-inch LCD desktop displays on the market, all use either an LCD panel from LG Displays or from Samsung with end-market prices ranging from $899 to $2,899," Chris Connery, DisplaySearch vice president of research of PC and large format commercial displays, told MacNewsWorld.
"Those indicated to be based on S-IPS technology are panels from LG Displays, while those indicated to using S-PVA technology use a Samsung panel. Each has a slightly different configuration in terms of feature set, but the biggest material cost component which comes into play for LCD monitors is the panel itself," he explained.
"Of the panel, the backlight substructure attributes most to the cost of the display. Wide-Color Gamut CCFLs (WCG-CCFLs) are more expensive than regular cold-cathode fluorescent lights used in a backlight and do increase the color gamut of the display, allowing for a wider range of colors to be reproduced on-screen," he added.
"An alternative backlight structure, which uses red, green and blue (RGB) LEDs allows for the widest color range available on the market today but is the most expensive backlight substructure," he said. A Samsung display, the Samsung XL30, is the only 30-inch mainstream monitor on the market today that uses an RGB-LED black-light unit, he noted. It retails for about $2,899.
Meanwhile, the cheapest 30-inch monitor is the Gateway (NYSE: GTW) XHD3000, which sells for about $900. HP's LP3065 goes for $1,071, a Samsung SyncMaster 305T for $1,105, an LG W3000HBN for $1,224, and a Dell (Nasdaq: DELL) 3008WFP sells for $1,339. As for the Apple 30-inch Cinema HD Display: DisplaySearch pegs the average U.S. street price at $1,683. Rounding out the 30-inch offerings are a pair of NEC (Nasdaq: NIPNY) displays that sell for $2,101 and $2,449.
So is Apple's offering overpriced in the small land of 30-inch displays? Armed with these details, courtesy of DisplaySearch, it seems as though Apple's big display is reasonably competitive.
The 24-inch LED Cinema Display
The 24-inch LED Cinema Display, as Greengart noted, takes a more tactical turn -- it includes a built-in iSight camera, speakers, a mic, three self-powered USB 2.0 ports, and one cable with three connectors: a Mini DisplayPort (a burgeoning new display port standard), a MagSafe power connector that plugs right into Apple's new MacBook line up, and a USB 2.0 connector.
It features a solid 1,920 x 1,200 pixel resolution, 16.7 million colors, a 330 cd/m2 brightness rating, and a 1,000:1 contrast ratio. The screen is glossy and uses LED-backlit technology that provides instant-on full-screen brightness with high energy efficiency.
The 24-inch LED Cinema Display has been getting solid reviews for great color and image quality, with quibbles over the short cord length, lack of height adjustments, and glossy screen, which provides rich, vibrant color but can drive users mad if the lighting in their room reflects onto it.
Lots of Competition
DisplaySearch tracks more than two dozen 24-inch LCD monitors, and Apple's value proposition isn't quite as clear with its 24-inch LED Cinema Display. The main issue arises from the type of backlight technology, but it's coupled with a monitor that's positioned for MacBooks more than anything else.
"Of the 26 or so 24-inch WUXGA, 1,920x1,200, LCD monitors on the market as of February 2009, the average street pricing ranged from $249 to $2,307 with RGB-LED backlight units typically priced the highest," Connery said.
"Apple's 24-inch display uses a white LED-based backlight unit (BLU) which is quite different than an RGB LED BLU in that white LED BLUs do not offer the color depth that RGB LED BLUs do, but they typically do offer significant power savings over CCFL-based BLUs and typically reach full brightness quite quickly -- again, compared to CCFL-based BLUs," he explained.
So what does this mean? Apple's 24-incher is more energy efficient than most other 24-inch monitors on the market, which tend to use CCFL backlighting, and it's more expensive than most, too. Consumers can find at least a dozen options in the price-friendly range of $300 to $500, with a few options under $300 and several in the $500 to $700 range. There are only four RGB-LED backlit options on the market, and they range from $1,550 to $2,307.
So, at first glance, Apple's 24-inch LED Cinema Display is definitely priced higher than most 24-inch options, but it's also only one of two models that use white LED backlighting. The other option? The Dell G2410 boasts similar specs to the Apple 24-incher, but it costs an admirable $349.
Upon closer inspection, the Dell doesn't have a built-in camera, nor does it have those extra USB ports. Its brightness is lower -- 250 cd/m2. In addition, its resolution is 1,920 x 1,080, which is vertically smaller than Apple's 1,920 x 1,200.
Overall Market Share
Perhaps the most impressive numbers are Apple's overall market share. Even though Macs represent a minority of computers, Apple is selling displays at a decent clip. According to DisplaySearch, Apple's fourth quarter 2008 market share of the 30-inch monitor market was a market-leading 31.4 percent, followed by Dell with 29.0 percent and LG with 23.5 percent. HP came in at 6.5 percent, with Samsung at 4.4 percent.
In the 24-inch space, Samsung led all with a 30.6 percent market share, with Dell coming in at 27.7 percent, followed by HP with 14.5 percent, and Apple with 7.2 percent, which sounds respectable considering most consumer desktop Mac purchases are the all-in-one iMacs, which have built-in displays. Plus, the fourth quarter of last year was the first quarter that saw Apple ship its new 24-inch LED Cinema Displays.
All in all, Apple's two displays are solid contenders among the field, yet Apple's introduction of the MacBook companion 24-inch LED Cinema Display makes comparisons trickier. Like most Apple products, consumers can find cheaper options ... but one-to-one feature comparisons? Not very often. Will Apple ever try to compete with displays at the low end of the pricing scale? Probably not. Either way, the choice still comes down to whether a customer wants an Apple product that's specifically built to work with other Apple products, tends to be of overall higher quality, and usually puts a bigger dent in the wallet ... or something else.
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