Threat from China
Chinese TV manufacturers are threatening the presence of Samsung Electronics and LG Electronics, the two largest players in the global TV market that have a combined market share of more than 30%.
Market research firm IHS Markit said on November 26 that TCL sold 4.53 million TVs and posted a market share of 8.3% in the global TV market in the third quarter of this year to come in third behind Samsung Electronics and LG Electronics. TCL has become the first Chinese TV manufacturer recording a global market share of at least 8% on a quarterly basis.
Hisense increased its market share to 6.3% and came in fourth. Sony’s share rebounded to 5.9% and Sharp, which was recently acquired by Taiwan's Hon Hai, also raised its market share by selling more than two million TVs in the third quarter of this year. The market research firm commented that the Chinese TV manufacturers including TCL and Hisense distinguished themselves in the global market in spite of a slow growth of the local market.
Challenged from Both China and Japan
Chinese and Japanese TV manufacturers succeeded in showing a substantial growth in the global TV market based on their outstanding performance in the North American market. TCL and Hisense raised their shares in the market from 4% at best to approximately 7% between last year and the third quarter of this year. Sony also increased its share by almost three percentage points by releasing ultra-slim OLED TVs in quantity.
“Chinese TV manufacturers’ shares in the North American and European markets were very low until last year,” said Samsung Securities research analyst Lee Jong-wook, adding, “However, TCL boosted its sales volume in the North American market with smart TVs developed in cooperation with Roku, a video streaming company, and Hisense is constantly increasing its share based on its trademark license agreement with the Sharp brand.”
In the third quarter, Samsung Electronics’ TV sales volume fell by more than 1.36 million units from a year ago and its market share fell to about 18%. During the first three quarters of this year, the volume decreased by approximately 2.8 million units year on year to 29.5 million or so. This year, Samsung Electronics’ annual TV sales volume is estimated to be less than 45 million units for the first time since 2009. An industry insider commented that this is because Sharp stopped supplying its TV panels to Samsung Electronics all of a sudden late last year, which resulted in an annual sales volume decline of about five million units.
Pursuing Premium TVs
Both Samsung Electronics and LG Electronics are looking to defend their market shares in the global TV market by adding more premium TVs to their product lineups.
Samsung Electronics is currently reducing the production of inexpensive 40-inch or less TVs by at least 10% while increasing the production of 75-inch and 80-inch products. This is to focus on profitability rather than its share in the market.
“We are currently enjoying a market share of more than 40% in the segment of the market that consists of 60-inch and larger TVs,” Samsung Electronics explained, adding, “Our performance is expected to be further improved in the fourth quarter of this year with our premium TV products such as QLED TVs hitting the market in earnest.”
LG Electronics, in the meantime, is increasing its presence in the market with ultra-slim OLED TVs. “In the third quarter of this year, the sales volume of our OLED TVs priced at US$2,500 or more amounted to more than 250,000 units to lead to an all-time high operating profit-to-sales ratio,” said LG Electronics.