Prices repel consumers from OLED TVs
OLED TVs 'too pricey,' sending Sony to abandon the plan
By Kim Yoo-chul
LOS ANGELES - It seems to be truly bad news for major TV companies. But the bottom line is that consumers aren’t ready to buy flat-screen televisions using the latest organic light-emitting diode (OLED) technology.
``I’ve heard that OLED TV is the main theme of this year’s International Consumer Electronics Show (CES) in Las Vegas and it’s getting more attention. However, they’re too pricey,’’ said one shopper who only identified himself as Brian in a BestBuy store on Weyburn Avenue, late Monday.
``Consumers are worrying about money and with their budgets squeezed aren’t going to buy new digital goods,’’ he said.
The world’s biggest television maker Samsung Electronics and runner-up LG Electronics are heavily promoting their large-sized OLED TVs in at CES, both believing they will be the next big thing in the global TV industry.
``I came to the store to buy a new LCD TV. LCD TV prices are drastically falling, giving me better chances. I have no deep knowledge of OLED televisions, though news reports say they promise vivid viewing and clearer images,’’ said another customer in the store who gave his name as Rodriguez.
Compared to the industry’s mainstream LCD and plasma sets, OLED TV is backed by electroluminescent organic materials and therefore much thinner, according to officials and industry watchers.
When activated, the materials emit light while eliminating the need for a backlight, as in conventional televisions. OLED TVs can also achieve deeper contrast levels than typical LCD sets.
The Korean companies are eager to induce more first-mover advantages in the nascent but high-potential segment, hoping OLED TV will become more common in households in the United States from this year.
LG has announced it will commercialize its 55-inch OLED television, possibly from the latter half of this year, while Samsung is gauging the right time to release its own 55-inch product, though company officials say it will be ahead of this year’s London Olympics.
Price matters as aggressive pricing means more market share, however, that also means lower profit and companies probably aren’t ready to take such risks.
Korean market research firm DisplaySearch is predicting LG’s 55-inch OLED TV will sell for around $8,000 when they make their debut later this year.
LCD TVs of the same size sell at around $3,000, sometimes less depending on the brand.
``OLED prices will drop by more than half as time goes by. But whether consumers will wait is a different question,’’ said an official from DisplaySearch.
Television prices have been declining in recent months. But struggling economies haven’t helped as consumers usually cut back on spending on consumer items in such times.
The television industry is also becoming saturated, meaning it is no longer an earnings booster for manufacturers.
An official from another market research firm, NPD, was quoted as saying that the majority of U.S. homes, perhaps more than 60 percent, already have high-definition TV and right now, consumers aren’t looking to upgrade.
Japanese TV maker Sony is feeling the pinch. It’s reported that Sony is halting the development of OLED panels for consumers, though it will continue selling the screens to corporate clients.
``It’s true that consumers are buying more smartphones and other products using smaller-sized OLED panels. It’s really good for playing games and accessing various multimedia content,’’ said Brian.
``Manufacturers are moving too fast towards OLED TV. I mean, 3D TV has only just taken off,’’ he added.
LG Electronics’ television chief Kwon Hee-won said its OLED TV has cut costs but didn’t provide any further details during a short conversation with The Korea Times at Los Angeles International Airport in transit to Las Vegas for the technology fair.