As ultra-high definition (UHD) TVs have been widely populated in earnest this year, Samsung Electronics and LG Electronics, leaders in the UHD TV market, will accelerate a “premium centralization” strategy to increase the sales ratio of UHD TVs to over 50 percent.
To brace for Chinese TV makers expanding into the global market, the domestic companies are planning to prevent Chinese brands, which are not a threat yet, from overtaking them with a UHD TV centralization strategy and quality differentiation.
According to industry sources on January 21, both Samsung Electronics and LG Electronics, the number one and two companies in the global TV market, have set their strategies with premium product centralization this year and focused on expanding the output of UHD TVs from the beginning of the year.
According to market research firm IHS, the share in the UHD TV market of Samsung Electronics and LG Electronics increased from some 3 percent in 2013, when they started the business, to 36.7 percent last year, chasing down 46.7 percent of full HD TV market share. It forecasted that the ratio of the UHD TV market will grow to 49 percent this year, surpassing 36.6 percent of its full HD TV market.
As of the second quarter last year, Samsung Electronics and LG Electronics had a 48.6 percent share in the global UHD TV market in terms of sales.
Samsung Electronics is targeting the global UHD TV market with SUHD TVs with Quantum Dot technology, while LG Electronics is doing so with the two track strategy – OLED TVs and super ultra HD TVs. As the ratio of UHD TVs, which have higher unit prices than full HD TVs, is expanding, the profitability of the two companies can be improved. This is why Samsung Electronics and LG Electronics are focusing on increasing the ratio of UHD TVs in total TV business sales to over 50 percent this year.
When the two companies lead the popularization of UHD TVs this year, they will also be able to cut the ground out from under Chinese makers. The Chinese TV industry is still hugely dependent on the domestic market of lower than full HD TVs.
IHS said that 81 percent of sales from Chinese TV makers as of the third quarter last year occurred in the domestic market. In contrast, the North American and Western European markets, which are advanced, had 5 percent and 2.5 percent shares during the same period.
However, Taiwanese electronics marker Hon Hai Precision Industry Co., or Foxconn, is currently seeking to take over Sharp, the Japanese TV marker. With Chinese companies pursuing M&As of global companies, domestic TV makers are still tense.