LG Electronics eyes rebound
Tech giant vows to reduce handset, TV gap with rivals
By Kim Yoo-chul
This year has raised questions over whether LG has been doing well in its key handset and television businesses.
However, the world’s second-biggest TV maker is looking for a winning streak to end next year.
The groundwork has already begun, according to LG. Since LG Electronics returned control to a member of the founding family in Koo Bon-joon as CEO, the company has been focusing more on technology.
One visible result is LG’s in-house three dimensional (3D) TV by using its film-patterned retarder (FPR) technology, also the result of collaboration with the group’s key affiliates including LG Display for panels, LG Chem for films, LG Innotek for parts and LG Electronics for televisions.
LG fared well to secure its last bottom line throughout this year thanks to impressive sales of its premium TVs in China, Europe, North America and Korea, though its smartphone business is still struggling.
Television chief Kwon Hee-won was the only executive within the entire LG community who became president of a division in a recent year-end reshuffle of top management.
``We are strengthening our 3D TV lineup. LG expects next year will be even better as we are one of the companies which can guarantee on-time delivery, output commitment and better pricing,’’ said senior LG Electronics spokesman Oh Sea-chun.
LG Electronics is currently offering 3D TVs from 20-inch to over 50-inch screens.
LG’s FPR 3D TV is much cheaper compared to those offered by by Samsung Electronics and Sony. Amid a lack of 3D-only content, LG TVs are rising.
LG was the second-biggest manufacturer of 3D televisions with a global market share of 14 percent as of the end of the third quarter followed by Japan’s Sony with 11 percent during the same period in terms of total shipments, according to data from DisplaySearch, a market research firm.
Its share in 3D televisions is improving. In the first quarter, its share was a meager 8 percent with Samsung Electronics and Sony boasting 34 percent and 27 percent, respectively.
But growth by Samsung has stalled, its share dropping slightly. However, Sony is sliding with its share in the second quarter dropping to 17 percent, hit by LG’s steep rises in the emerging segment, according to market experts.
``In North America, the most critical market for LG, we’ve seen steady market share increases thanks to favorable reviews by authoritative publications of our FPR 3D TVs. We have no big questions over further rises, there,’’ said Oh.
Daishin Securities, a local brokerage house, said in a report to clients that it will maintain its target on LG Electronics shares of 100,000 won per share as its 3D TV variants are receiving more attention from customers in developed markets.
``LG Electronics sold more televisions than expected during the critical Black Friday weekend in the United States. Its television business will help the entire corporation see a big turnaround in profit possibly from early 2012 with an additional back-up from LG’s smartphone business,’’ said Park Kang-ho, a Daishin analyst.
In North America, the firm’s 3D TV share was 19 percent by the third quarter of this year from 7 percent in the first, enough to clearly secure the No. 2 position, data from DisplaySearch said.
During Black Friday, Americans spent $7.4 billion more in stores than a year ago.
Global TV makers are speeding up efforts to restructure their key businesses and outsourcing production as stiffer competition and lower-than-expected demand squeeze margins.
Sony just warned of a fourth straight year of loses, with its TV unit alone set to lose $2.2 billion on tumbling demand and a surging yen.
Dutch-based Philips Electronics has recently agreed to transfer its loss-making TV business to a joint venture with Hong Kong-listed TPV Technology.
``Industry consolidation is happening but we will survive. LG Electronics’ supply chain management structure is improving, helping us cut logistics costs and we will roll out customized products according to markets. 3D will still be our key focus next year,’’ said TV chief Kwon by phone.
In Europe, LG’s 3D TV share was 16 percent during the July-September period from 9 percent in the first quarter, the data showed.
Kwon will have a dinner meeting with the South Korean media on Jan. 10 at a Korean restaurant in Las Vegas and unveil next year’s updated strategies for its television business, according to company officials.
The International Consumer Electronics Show (ICES) ― the world’s biggest technology exhibition Las Vegas will kick off in Las Vegas in the second week of January.
3D televisions are expected to account for 35 percent of total flat-screen televisions by the end of 2015.
OLED, smart TVs
``But LG Electronics will also spend heavily for next-TVs such as OLED and Internet-enabled televisions for sustainability,’’ said Kwon in a brief telephone interview.
LG along with market leader Samsung is tipped to launch large-scale TVs based on OLED technology, which is a simple organic light-emitting diode, at ICES.
Once believed to be the future of displays, OLED promises much, drawing less power than existing LCD or plasma screens.
OLED displays provide high brightness with impressive black levels, which combine to provide a contract level unmatched by any display technology save traditional, bulky CRT tubes.
LG Electronics is planning to exhibit a 55-inch OLED TV at its booth inside the Las Vegas Convention Center, the main venue for the exhibition, according to the firm.
``We still need more time, however. LG Electronics is planning to release TVs with these displays commercially in time for the London Summer Olympics, next year. Price will be the key drawback,’’ said another senior-level executive from LG’s TV development lab, requesting anonymity.
Amid the rising demand for Web-connected device solutions spiked by smartphones, the Seoul-based LG Electronics has decided to display its first smart TV that uses Intel’s Wireless Display (WiDi) technology.
The collaboration with the world’s biggest semiconductor maker will help LG Electronics better challenge Samsung Electronics in emerging Internet-enabled TVs.
Intel’s wireless streaming solution is allowing users to stream high-definition (HD) content to any HD TV through TVs, projectors and monitors.
Because WiDi also makes it possible to realize screens from laptops to televisions regardless of Internet connectivity, a simple approach to a laptop will enable users to see video footage on a large-sized screen.
``LG Electronics is aiming to give high-end and distinguished value to our customers by putting various content on our smart televisions,’’ said Nho Seok-ho, an executive vice president of LG Electronics’ television division.
At ICES, LG will hold talks with American Internet giant Google in accordance with its strategy to diversify hardware solutions, however, it seems unlikely it will announce any details for the dialogue.
Meanwhile, as another symbolic gesture for its new initiatives, the company is going to open its so-called ``bezelless 3D TV’’ at ICES, according.
The ultra-slim 3D TV will be less than 5 millimeters thick with a ``borderless’’ design, said market analysts.