By Kim Yoo-chul
BERLIN ― Samsung Electronics continues to pummel its cross-town rival LG Electronics in the lucrative global market for flat-screen televisions. However, in the parts business related to liquid crystal displays (LCDs), a different LG unit appears to be earning Samsung’s respect.
Samsung is engaged in a head-to-head battle with LG Display, the digital display unit of the LG Group, over the title of world's leading LCD manufacturer.
This is obviously a more convincing rivalry than that in consumer electronics and mobile phones, which has become more lopsided year after year, and Yoon Boo-keun, the head of Samsung's flourishing television business division, admits his admiration for LG Display's surging competitiveness.
It's rare to see a Samsung executive having anything good to say about an LG-related company.
And there has been a series of verbal jabs between the two companies in the past months over some sensitive issues, such as who has better strategies for developing next-generation technologies and a better chance for securing China's approval to build production facilities there.
Samsung reaped 22.3 trillion won ($19 billion) in revenue from its LCD business last year for an operating profit of 1.38 trillion won. LG Display nearly matched the performance of its rival, posting 20 trillion won in sales and 1.01 trillion won in operating profit.
"It's uneasy to say something about the chief executive officer of one of our biggest rivals, but I think it's apparent that LG Display CEO Kwon Young-soo has changed a lot in his company in a positive way," Yoon told The Korea Times on the sidelines of the IFA conference in Berlin last week.
"Kwon's steady and powerful presence is providing leadership that is allowing LG Display to grow into a true world beater. LG Display's improving strength will be crucial to the Korean industry in maintaining its status as the world’s top LCD provider."
Since taking the helm at LG Display, Kwon has been developing a reputation as a bold decision-maker.
The LG Group, which looks to maximize LG Display's potential, is planning to spend 5 trillion won this year to boost its business for LCD panels, which are used in televisions, computer monitors and a growing number of mobile devices.
LG Display has been also attempting to leverage its presence in the components business to finish products, such as electronic book readers and computer monitors.
Predictably, Yoon didn't express the same kind of respect for LG Electronics in the television business, which he claims will continue to be dominated by Samsung this year and beyond.
Yoon expects Samsung's television sales will grow between 30 and 40 percent next year from the expected 45 million to be sold by the end of this year.
Samsung predicts it will close the year with a global market share of around 25 to 26 percent in televisions, which will be enough to secure the industry's No. 1 spot for the fifth-consecutive year.
"The demand for flat-screen liquid crystal display (LCD) televisions and light-emitting diode (LED)-backlit LCD televisions remains strong. We are also expecting improved demand for three dimensional (3D) televisions," Yoon said.
"We are targeting about an 80 percent share in the global 3D televisions sales this year, which will be achievable if we managed to sell about 2 million. Currently, we have an 88 percent share for those sold in North America and 79 percent in major European markets."
When questioned about Samsung's strategies for "smart" televisions, the sophisticated Web-connected products that allow users a wealth of personalized and interactive features atop of live television, Yoon said 3D and advanced network functionality will be key elements to Samsung's upcoming products in the category.
The company will invest to create customized content for these advanced, data-enabled televisions, with the early focus being on educational and life-related content.
Yoon, who is upbeat over the outlook in the global television industry in the remainder of this year, said the television division will post more profit in the third quarter from the previous quarter.
"It's too premature to commercialize TVs with organic LED or organic LED (OLED) panels due to strong price resistance. Consumers will not buy it without affordable prices, leaving small room for greater marketability," said Yoon.
OLED TVs are commonly regarded as the next-generation TV in terms of viewing quality.