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Korean Giant Setting Global Trends With TVs, Phones
By Kim Yoo-chul
Staff Reporter
Samsung Electronics has been boosting its corporate image by injecting massive capital into computer memory chips and flat-screen panels.
The Suwon, Gyeonggi Province-based consumer-electronics company is now shifting its top corporate focus to highly-advanced electronic gadgets such as LCD TVs with light emitting-diode (LED) backlights and mobile phones equipped with the next-generation display of AM OLED panels.
Samsung executives say the time is ripe for Samsung Group's most powerful unit to set up a new global trend in consumer electronics markets as its decades-long efforts for the leadership in chips and flat panels have already been paid off.
 "Samsung has realized economies of a scale in both the memory chip and flat-screen sectors thanks to aggressive investments and faster decisions. As we are approaching a decision on pricing for our bigger clients, it is evident and natural to shift focus on to new segments," a senior Samsung Electronics executive told The Korea Times.
Samsung is the world's top vendor in DRAM and NAND flash memory chips which are used in PCs and high-end handheld personal gadgets such as mobile phones and car navigation devices respectively.
 It is also the world's biggest producer of LCD panels ― the components used in everything from TVs to phones.
For chips, Dell, Hewlett-Packard and other major computer companies are Samsung's clients, while the South Korean company has been supplying LCD panels to Japan’s Sony via the joint venture in Tangjeong, South Chungcheong Province.
"On top of the transitional shift, there are LED TVs and AM OLED-embedded phones. With the two items, Samsung is hoping to create a new global trend. Considering the current buoyant moves, we are positive on the eventual success of the products," the executive said.
"TVs and mobile phones are the must-have items for general consumers. The key points are how we will lead the markets and how to effectively read the minds of consumers. Coupled with our proven know-how in component-technologies and marketing and research capabilities, we will take a more stronger stance toward the new shift," another executive handling TV marketing for Samsung said.
LED Dream
 Samsung's LED TVs, which are the result of such an acknowledgement, are continuing to sell well since their introduction in March this year.
The successful launching of the products which Samsung dubbed as "New TV Species" is forcing its followers to jump into the market.
Attracted by the impressive track record, Samsung's local rival LG Electronics is following a similar route, while American and Japanese TV companies are planning to introduce similar sets in the fourth quarter of the year.
"Samsung should have little problem in further expanding sales of premium LED televisions. So far we are dominating the market. The global LED TV market will soar thanks to the early participation from our followers," Kim Se-hun, a Samsung Electronics spokesman, said.
 "Samsung should enjoy significant sales of LED TVs with the 'first-mover' advantage into the market. Meanwhile, LG will also look to notch up sales of LED TVs, while other entities are seeking a bigger stake following Samsung’s perception and ambitious strategy," Harrison Cho, an analyst at KB Investment and Securities, said.
LED TVs use LEDs as a backlight, creating a clearer image on the screen than mainstream LCD TVs.
They save energy during operation and the sets take up less space and are more environmentally friendly with no mercury content.
DisplaySearch said Samsung was expected to have a 59.8 percent global market share in this market in 2009, with Japanese rival Sharp following with 27.9 percent.
Samsung aims to sell 10 million LED televisions in 2010 from an estimated 2.5 million this year as the demand for the sets is showing steady and strong growth.
Samsung executives say moves are underway to make the sets the industry's mainstream.
"We expects our LED TV segment to grow to the same size as our traditional LCD category by 2012," Yoon Boo-keun, president of Samsung's visual display division, said.
As of the end of September, Samsung has been sold 1.4 million LED televisions globally.
The company's LED TV market share in the United States reached over 95 percent in the first half of this year, while Japan's Sony trailed with less than 3 percent, according to data from market research firm NPG Group.
"Although higher prices are still considered the main drawback, consumers will have more chances to buy LED televisions at a reasonable price from next year thanks to price competition between makers. That's a scenario that Samsung hopes for because Samsung is a pathfinder," an analyst said, asking not to be identified.
The global LED market, which was worth $5.2 billion in 2008, is forecast to grow at an annual average of 20 percent, reaching $12.7 billion in 2013.
The market size is expected to rise to $24 billion in 2015, according to Robert Steele, director of the LEDs unit for Strategies Unlimited, a California-based market research firm.
On the market for televisions using active-matrix organic light-emitting diodes (AM-OLEDs), touted for their extreme thinness, superior picture quality and energy efficiency, Yoon said much more time was needed for commercialized models to become profitable.
AMOLED Magic
 Samsung is fully set to narrow the handset market gap with industry leader Nokia, but this time, it's not LCD screens on phones.
The world's second-biggest mobile phone manufacturer is aggressively pushing handsets equipped AMOLED panels.
AMOLED screens, which Samsung is betting on as a future growth engine in the display industry, feature a thinner display with clearer images and consume less power than conventional screens.
Toward that path, Samsung created a 50:50 joint venture ― Samsung Mobile Display (SMD) ― for a stable AMOLED panel supply.
Samsung has already launched Haptic-branded AMOLED mobile phones on the local market and sold over 360,000 over the past few months despite higher phone standards expected by South Korean consumers.
Samsung's "Jet"-modeled AMOLED phones have so far been introduced into some 70 countries across the globe and analysts are generally expecting the company to have a bigger penetration as the AMOLED phone market grows thanks to similar moves by Sony-Ericsson and Motorola.
 "Our Haptic-branded AMOLED phone is a product presenting a new paradigm in the global mobile industry. Samsung will lead the new segment," spokesman Shin Young-june said.
In June, Samsung launched the Jet phone in London, Dubai and Singapore, which the company expects to be well received by the market with its "affordable" price tag on top of the AMOLED flat-panel display.
As a back-up plan, SMD plans to build an additional AMOLED line here after its shipment mark exceeds 2 million dollowing the start of production in July this year.
According to market research firms, the adoption rates for AMOLED screens by handset makers will expand by 40 percent in 2015, as general consumers are seeking picture quality as one of their top priorities in buying a phone.
"SMD currently controls most resources and Samsung Electronics has the capability to drive the phones. That’s an ideal structure for Samsung to effectively expand the mobile phone market with AMOLED displays," Lee Ka-keun, an analyst at IBK Securities, said.
"But mobile phone with AMOLED display will account for just a 5-percent market share due to the higher cost. I agree with the big picture of Samsung's mobile business. But the key question is how Samsung will realize economies of scale in its AMOLED phone business as early as possible," Lee added.
It is widely expected the recent "two-tier" focus on nurturing the new segments will still need some more time for a jack-pot, but officials and analysts have generally agreed that such transitional efforts pushed by the nation's top consumer electronics company will help.
yckim@koreatimes.co.kr
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