OLED TV Strategies
Three different approaches by Korea, China, and Japan towards the technology of Organic Light Emitting Diode (OLED) TVs are being spotlighted.
In Korea, two market leaders, Samsung and LG, are competing fiercely with each other. In China, market followers including Skyworth, Konka, and Changhong are cooperating to chase a market leader with OLED TV. In Japan, Sony is considering re-manufacturing. All three countries have different approaches to OLED TV.
In another perspective, while LG is trying to support their OLED TVs based on Chinese customers, Samsung and Sony, once allies in past, are stepping behind. Different companies and countries have different views on when to start OLED TV.
Yoon Boo-geun, CEO of Samsung Electronics’ Consumer Electronics (CE) unit, came back to Korea on July 12 after a business trip to Africa. He said at the following press interview, “Although we are continuously developing OLED TV, there is no specific plan for additional releases.” He denied a rumor that Samsung Electronics will release a new OLED TV. DisplaySearch, a market research company, previously disclosed a report saying that Samsung Electronics will release their new OLED TV this coming August, which attracted many eyes in the industry. On July 8, Park Dong-gun, CEO of Samsung Display, emphasized that the OLED TV market is premature, targeting LG, which focuses on OLED TVs.
Since 2009, both Samsung Electronics and LG Electronics made massive investments in infrastructure and R&D for OLED TVs, trying to lead the market. Both companies introduced 55 inch curved OLED TVs last year. However, Samsung practically stopped their investment and marketing in OLED TVs due to their low yield and high price, turning back to conservative movements. Now, two companies have totally different postures in OLED TVs.
LG is very aggressive in the OLED TV market based on LG Display and LG Electronics. LG lowered the price of its 55 inch curved OLED TV to 5 million won (US$4,907) from 15 million won (US$14,719) in a year. This is quite similar to their 55 inch curved Ultra High Definition TV priced at 4.2 to 5.7 million won (US$4,121 to US$5,593).
The production yield of LG seemed to improve greatly, as the price of Samsung's 55 inch curved OLED TV dropped only to 9.9 million won (US$9,716) from 15 million won (US$14,719).
An official at LG Display said, “The production yield of OLED TV panels continues to improve since the mass production last January. Actual profits will be able to be realized late next year.”
While the two rivals in Korea have chosen two different paths, TV set companies are entering the OLED TV market in China.
Middle-ranked (number four to five) Chinese TV makers such as Skyworth, Konka, and Changhong have recently introduced a 55-inch curved OLED TV with LG Display OLED panels. They aggressively chose OLED TVs to chase the leading companies. However, their products are not actually easy to find in stores. These Chinese OLED TVs cost around 8 million won (US$7,850), more like advertising products. The above companies are preparing OLED TVs for actual sales though targeting the Chinese National Holiday (October 1) season.
The Chinese National Holiday will be a milestone for the OLED TV market in China as products with better price competitiveness and technology will be released.
CEO Yoon said to the press at the airport on that day, “As Chinese companies and Samsung Electronics target different market segments, we are not concerned.” He explained that the product differentiation strategy is also working in Africa, where he spent time for market research. This is interpreted in that Samsung will continue to maintain a differentiated market strategy through high specifications and high-quality premium products.
In Japan's case, Sony is considering to start manufacturing OLED TVs again. Ubi Research, a market research company, disclosed a report last May saying that Sony will restart the OLED TV business in 2015. The recent actions of Sony seemed to support this assumption. Sony is under negotiations with LG Display to source big OLED panels, although nothing has been specified yet. Sony is the global market leader, who first released 11 inch OLED TVs in 2007. Even though Sony stopped producing and selling OLED TVs in 2010 due to poor sales, the company continued to come back to the market until the joint R&D project for OLED TVs with Panasonic foundered.
An industry source said, “Conflicts are in Korea, quick steps in China, and scaling in Japan for the OLED TV market. All of them are worried to be left behind in future competition, but profitability relative to costs is not guaranteed right now.”