Samsung’s New TV Strategy?
Samsung Electronics has decided to review the OLED TV business from scratch. This means that the OLED TV business which has been discontinued will be restarted. The decision was made under an instruction of vice chairman Lee Jae-yong of Samsung Electronics. OLED panels are different from LCD panels that create pictures with light from the back sides of panels. Samsung Electronics has been using OLEDs only in smartphones and only LCDs in TVs.
According to the Korean business community on February 20, vice chairman Lee who was recently released from prison was briefed on the current status of each business division. In particular, regarding the TV business, vice chairman Lee reportedly gave the instruction to review the OLED TV business. Samsung Electronics' equipment supplier said, "Samsung Electronics asked us about facilities germane to OLEDs for TVs," said a representative of a partner of Samsung Electronics.
Vice chairman Lee's instruction was given for Samsung TVs, which are on a downward spiral. Samsung is still the strongest player in the world TV market, ranking first in the market for 11 consecutive years. But observing the inside, there is a sense of crisis felt among employees at Samsung. Samsung enjoyed a market share of more than 50 percent in the premium TV market, its stronghold for a long time but now Samsung is behind Sony and LG Electronics rising with OLED TVs. Although there are differences among market research companies, a market researcher said that Samsung recorded a share of less than 10% in the market of US$ 2,500 or more expensive TVs in the fourth quarter of last year. The premium TV market is 'the way to survive' chosen by Korean TV companies in a price war with Chinese counterparts.
Samsung Electronics is now putting QLED TVs front and center. QLED TVs which have evolved from LCD technology. Last year, the Korean TV giant strived to make a change in the TV industry by even changing SUHDs into QLEDs. However, due to QLED TVs’ limitations in thickness and an emphasis of TV screens’ flexibility, there is a strong voice to admit Samsung’s defeat inside Samsung.
Samsung used to make OLED TVs, too. At the Consumer Electronics Show (CES) in 2013, Samsung took the wrap off a 55-inch curved OLED TV at the same time as LG Electronics. But Samsung gave up mass production of the model. This is because unlike smartphones, TVs that play videos for a long time, so OLED TVs had a burn-in problem and Samsung believed that TVs’ life should be at least ten years. Thus, Samsung chose quantum dot TVs instead of OLED TVs.
On the other hand, LG has persistently made up for OLED TVs’ shortcomings pointed out by Samsung. OLED TVs’ burn-in problem was addressed with LG’s own algorithms to ensure good picture quality and their lifetime has been extended to more than 10 years (when watching OLED TVs for eight hours per day). Prices of OLED TVs, which are the most important factor in choosing TVs are on a gradual decline. Thanks to OLED TVs, LG Electronics recorded the highest sales ever last year.
However, Samsung is unlikely to immediately put a halt to QLED TVs and switch to OLED TVs. Next month, Samsung will launch a new QLED TV model for this year and a huge investment is underway in research on the evolution of QLED TVs. The evolution of micro LEDs, a next-generation technology released some time ago, is also a variable. Another challenge is to avoid patent disputes by developing large-scale OLED panels through a different method.