Who Will Be Final Winner?

Samsung Electronics and LG Electronics, which dominate the global TV market as the number one and number two players, are having fiercer competition over leadership in next-generation TVs. Samsung that has a strong confidence in quantum dot TVs, has put its new “QDED” brand front and center. Betting on organic light emitting diode (OLED) TVs, LG is planning to take the initiative in the popularization of OLED TVs by adopting the new OLED technology which will drop OLED TV prices to one third of current prices beginning next year.

Samsung Electronics, which carefully used the term Quantum Dot at the beginning of 2015, is now more confident in Quantum Dot technology. There are many internal and external evaluations that Samsung has made great strides in terms of image quality in the QLED TV sector, as the electronics giant developed the OLED TV on its own. Samsung Electronics, which has maintained its position as the world's No. 1 TV company for 11 consecutive years, is planning to expand its competitiveness in the premium market by pioneering the ultra-large TV market based on the quantum dot technology.

On the other hand, LG Electronics is showing its will to dominate the next generation TV market with OLED TVs whose prices will fall sharply thanks to advanced new cutting-edge technology. The price of an OLED TV is more than twice as high as that of an LCD TV so that OLED TVs account for less than 0.5% (about 800,000 units a year) of the current TV market. Therefore, LG believes that the price cuts of OLED panel will have a big impact on the status of OLED TVs in the TV market.

With the different approach to TV technology platform, the two home appliance giants are strengthening their TV product lineups as they try to expand sales in response to a variety of demand in the stagnant TV market at home and abroad.

Samsung Committed to Quantum Dot Technology

In January this year, Samsung Electronics unveiled its new metallic quantum dot-based light-emitting diode (QLED) televisions at a product unveil event at the Keep Memory Alive Event Center in Las Vegas. The company named the next-generation display, which will define new standards of image quality with Quantum Dot pixel technology, “QLED.” It showcased the 88-inch Q9F and 75-inch Q8C QLED TVs. Quantum dot TVs is based on 'quantum dot' technology. A quantum dot is a semiconductor particle, which is only a nanometer long (nm, 1 billionths of a meter).

At the event, Kim Hyun-seok, president of Samsung Electronics' visual display business division, said, “In 2017, QLED will change the paradigm of the TV market. Samsung’s QLED TVs have been optimized to support the high dynamic range (HDR), which is the key element of realizing a super high-definition visual experience, and will make further competition of visual quality meaningless."

Kim added, “How much a company can remove all the inconvenience of consumers in all aspects, such as usability and design, will be new standards for good TVs in the future. Samsung’s QLED TVs will create the standards.”

The company has improved the range of colors by introducing metallic ingredients to the quantum dot particles. In this way, the new televisions can perfectly realize the DCI-P3 color gamut, which is a content production standard adopted by many Hollywood film studios. The company highlighted it is the world's first TV that supports color volume, a display feature that distinguishes minute color variations by brightness, to 100 percent. The color volume is the capability of expressing minute color differences according to brightness. A leaf can be expressed with various colors depending on brightness, ranging from yellowish green to dark green.

With metallic quantum dot technology, Samsung’s QLED TVs can express even color differences that was difficult to differentiate in the existing 2-D color coordinate. They support 1,500 to 2,000 nits of brightness. Accordingly, the QLED TVs can express more natural colors. In addition, they can deliver deeper blacks so viewers will not be affected by ambient light when watching TVs. An official from the company said, “It is a core technology that breaks existing common sense that brightness should be lowered in order to extend the scope of color expression. The new models have overcome the technical limits that cause color inaccuracy when increasing brightness or viewing angle problems when expressing accurate colors.”

Samsung's QLED TV lineup is comprised of three variants - the flat Q7 and Q9 models and the curved Q8 model. Samsung said its new quantum dot-based TVs are capable of expressing accurate color and achieve a 100 percent color volume, bringing to life the tiniest details of a picture. Samsung’s QLED TV applies a quantum dot technology that coats the surface of existing LCD panels with cadmium-free inorganic substances. 

"Truly genuine QLED TVs can outweigh OLED TVs in terms of lifetime and price competitiveness by eliminating backlight and replacing luminescent materials with quantum dot particles," said a representative of the TV industry. “But it seems that Samsung Electronics has not yet reached that stage.".

Controversy over Technologies

As Samsung released its new QLED television, it has led to a technology confrontation with LG Electronics, which is focusing on organic light-emitting diode (OLED) televisions. When Samsung Electronics showcased its new QLED TV this year, Kim Hyun-seok, president of Samsung Electronics' visual display (VD) business division said, “Further competition of visual quality is meaningless." Responding to this, LG Display vice chairman Han Sang-beom said, “The QLED is still a liquid crystal display (LCD) television.”

Vice chairman Han said during a press conference at the CES 2017 in Las Vegas on January 4 (local time), “The only change in Samsung Electronics’ the new products is luminance. In quantum dot, luminance can vary according to backlight, adding, “It is true that Samsung improved the efficiency of quantum dot, but it is a very small part of it. It is still a LCD panel.” While Han gave credit for the color reproduction range of quantum dot, he said that LG also has its own technology to realize white color solutions using IPS Nano.

Han also added, “There is no need to compare QLED, which is not a self-light-emitting device, with OLED, which is self-emissive. QLED and OLED are clearly two different displays.”

In the meantime, another controversy over the burn-in of OLED TVs has resurfaced. Burn-in is a phenomenon in which an image of a previous channel remains on a TV screen even if a TV channel is changed.

The burn-in controversy has been steadily aroused since the early 2000s when OLED TVs came out. It has been pointed out as the biggest shortcoming of OLED TVs.

US IT review company Rtings recently conducted a test by showing images of its logo on TVs for 10 minutes and then checking when the remaining images disappeared. Scores were given to the TVs according to the degree of their image retention. 

Rtings conducted the test on 29 TVs of internationally popular brands including Samsung Electronics, LG Electronics, Sony, TCL, LeEco and Sharp. "OLED TVs have the ability to remove image retention. But it takes about an hour to execute the function, and consumers have to turn off OLED TVs to initiate the function," Rtings said. "We also tested the function to move screens slightly to mitigate image retention but failed to remove it"

Popular OLED TVs

The global organic light-emitting diode (OLED) TV shipments in the third quarter this year are expected to be doubled in a year. This is because the price of OLED TVs, which had lower consumer demands due to higher prices than liquid crystal displays (LCD), has significantly reduced and an increasing number of companies have entered the OLED TV market.

According to market researcher IHS Markit on September 10, the global OLED TV shipments are expected to amount to 341,000 in the third quarter, showing a whopping 140 percent growth from 143,000 units last year. It is the steep increase considering the fact that the total TV shipments, including LCD and OLED, increased 14 percent over the same period. The figure will also rise 20.8 percent from 282,000 units in the second quarter. This is largely due to the increase of shipments from LG Electronics that leads the OLED market.

Industry watchers expect that LG Electronics’ OLED TV shipments in the third quarter will grow 86.7 percent to 247,000 units compared to the same period last year.

In addition, Sony and Toshiba have started shipping OLED TV products from March, while Panasonic has begun shipment in June. China’s Changhong and Skyworth, which have released their OLED TVs for the first time in 2014, are expected to boost their shipments by 53 times, 3 times and 2 times, respectively, in the third quarter compared to the same period last year.

TV manufactures are increasing their shipments one after another because the price of OLED display panels are continuously decreasing through scale economies. The average sale price (ASP) of OLED TV panels as of the first quarter of this year went down by nearly 14 percent compared to the third quarter in 2015.

The price of TVs is also falling. LG Electronics set the price of its 55-inch full HD OLED TV at some 150 million won (US$13,299) in 2013 but lowered the price of its 55-inch ultra HD (UHD) OLED TV to 3.69 million won (US$3,271) earlier this year. The company also cut down the price of its 65-inch UHD OLED TV from some 110 million won (US$9,750) early 2015 to 7.4 million won (US$6,559) earlier this year.

In addition, TV producers are expected to carry out aggressive markdown marketing campaigns that will boost OLED TV shipments to 400,000 units in the fourth quarter. The share of OLED TV products in the global TV market will increase from 4 percent this year to 11 percent in 2020 in terms of sales, according to IHS Markit.

Samsung Suffers Slow Sales

Samsung Electronics is, however, stuttering along. In the first half of the year, the company posted less than 20 million units in TV sales in the first half of this year, which resulted in some forecasts that the company may record a market share of less than 20% after recording an annual market share of 20% or higher (in terms of quantity) over the past five years. Also in the premium TV market, the market share between quantum dot TVs and OLED TVs are narrowing.

According to industry and market researcher IHS Market, during the second quarter of this year, quantum dot TV sales in the global market slipped 48.2% from 671,000 units in the first quarter to 351,000 units in the fourth quarter. Meanwhile, OLED TV sales in the same period increased 29.4% from 212,000 units to 282,000 units. Although quantum dot TV sales more than tripled in the first quarter compared to OLED TV sales, the gap narrowed to 70,000 units in the second quarter.

This announcement is a painful result for the QLED TV camp led by Samsung Electronics. This is because the decline in sales in the premium TV market will be directly linked to a decline in brand image and profitability. Lowering premium product prices due to sluggish sales can affect low-end products’ prices, which may undermine overall profitability.

Samsung QLED TV is a representative quantum dot TV. Currently China's High Sense and TCL are rolling out TVs based on quantum dot technology. Unlike them, LG Electronics is producing OLED technology-based TVs. At present, 12 companies around the world are developing OLED TVs with LG Electronics and the number of those working on QLED TVs with Samsung is slightly less than that. The 12 include Panasonic, Sony, Toshiba, Philips, Bang & Olufsen and Changhong and Skyworth of China.

Samsung Tries to Seek Solutions

Samsung Electronics, which aims to maintain the number one spot in the global TV market for 12 years in a row, is seeking to find a solution to increase the sales of Quantum Dot TV, which is considered its next-generation TV as the growth is slower than expected.

According to industry sources on September 19, Samsung Electronics released its first ever ultra high-definition TV using the quantum dot technology in 2015 but the Quantum Dot TV has shown poor sales. So, the company is seeking out the ways to boost the sales.

Samsung Electronics is considering whether to open its cadmium-free quantum dot display technology and expand the ecosystem, to provide cadmium-free quantum dot displays to partner companies at a cost or to maintain the technical gap by waiting for other TV makers to develop their own cadmium-free quantum dot displays. However, the company hasn’t made the final decision yet.

Cadmium is generally used to produce quantum dot displays but it is a toxic heavy metal and its use is restricted under European and other environmental law because of its threat to both human health and the environment. So, companies are banned from selling electronics products that contain cadmium.

Currently, the Quantum Dot TV bloc consists of a small number of companies such as Samsung Electronics, China’s TCL and Hisense and Europe’s Vestel. In contrast, the OLED TV bloc is formed by a relatively large number of companies including LG Electronics, China’s Skyworth, Konka and Changhong, Japan’s Sony and Panasonic and Europe’s Philips, Grundig and Loewe.

An official from Samsung Electronics said, “Only few companies can produce cadmium-free quantum dot displays so the Quantum Dot TV market is not growing. Samsung is in a dilemma in opening its self-developed technology because the technical gap with TV producers that got into the business late can be easily narrowed while the company cannot create any profits.”

According to market research firm IHS Market, the share of Quantum Dot TVs in the total TV market stood at 1.5 percent in the first quarter and 0.8 percent in the second quarter this year.

Usually, a market leader releases a next-generation product and late starters follow the move. Previously, other TV manufacturers has copied Samsung Electronics’ products when the electronics giant launched new TV products, including curved, smart and UHD TVs, even without opening its technologies to them, creating the market together.

However, other TV producers cannot manufacture Quantum Dot TVs because cadmium-free quantum dot displays developed by Samsung Electronics is not easy to realize.

Starting with China in April this year, Samsung Electronics has held the QLED & HDR10 Summit, which exchanges quantum dot TV technologies, in the United States and Germany but it is not enough to expand the bloc.

The company is trying to expand the Quantum Dot TV bloc because the QLED brand can gain popularity when more and more TV producers around the world introduce quantum dot TV technologies, taking the leadership in the market.

An official from the industry said, “The number of OLED TVs has been rapidly increasing from the beginning of this year but it is difficult to expand Quantum Dot TVs. LG Display can supply OLED panels to TV makers but there is no firm that can supply quantum dot displays which are high technologies of materials.”