Focusing on Premium TVs
Samsung Electronics Co., which has the largest share of the global television market, has made a sharp cut in its TV sales target for next year.
According to electronics and parts industry sources on December 5, Samsung Electronics set up its TV sales goal at 40 million units in the global market for next year. The industry expects that Samsung Electronics’ television sales would amount to 42 million to 43 million units this year, down 10 percent from 48 million last year. However, the company’s sales target for next year is lower than this year’s sales figures.
Samsung Electronics say that it cannot avoid the decrease in sales due to its strategy focusing on large premium products. An official from Samsung Electronics said, “It is natural to see the company’s sales decrease when concentrating on large premium products with over 50-inch displays. The total sales can drop by lowering the proportion of small products but the profitability will improve further.” In short, the company will not cling to numbers of “sales.”
In fact, Samsung Electronics has continuously “restructured” its small television lineups, which has a lower profitability, in the past one and two years as the cutthroat competition with its Chinese counterparts has become intense.
Market watchers consider Samsung Electronics’ television business turnaround strategy a desperate countermeasure to break the crisis caused by the sluggish growth in the global TV market. According to market research firm IHS, the size of the global television market has been at a standstill from 227.34 million units in 2013 to 234.92 million in 2014, 226.21 million in 2015 and 222.73 million in 2016.
As Samsung Electronics has made a dramatic cut in television sales goal for next year, the ceiling of the annual market share of 20 percent, which has been maintained for nearly 10 years, is expected to break. According to the data from IHS, Samsung Electronics’ market share in terms of the number of units stood at 18.4 percent in the third quarter, falling short of 20 percent. The company still has the largest global market share but it saw its figures keep dropping from 21.6 percent in the first quarter to 20.8 percent in the second quarter. The market share that Samsung Electronics lost went to Chinese firms, such as TCL and Hisense, and Japan’s Sony.