Samsung, LG jostle for first place in washer market

Amid struggles, appliance business is ‘last card’ for LG

By Kim Yoo-chul

The race is on between Samsung and LG Electronics to claim the top spot in the washing machine market in the United States as demand is high in the summer season.

Last week, Samsung Electronics insisted it became the No. 1 manufacturer of drum washers in the United States for the first time in nine years since the company entered the market.

About 20 minutes before the Samsung announcement, LG released a press release to local reporters saying that it has been leading the U.S. drum washer market with a 5 percent market gap over its rivals.

According to market data, both companies have reason to claim the crown. LG’s quick response comes at a time when its main businesses look to be in trouble.

Data from Stevenson, a market research firm in the United States, shows that LG Electronics was the top supplier in drum washers with a share of 24.3 percent in the first half of this year. In the premium segment, with a unit price of more than $900, LG’s share was 30.1 percent.

LG was therefore found to be the sector leader for the sixth straight year.

Taking only the second quarter into account, Samsung was the top drum washing machine manufacturer for the first time in nine years since the country’s most valuable technology company started selling the products in the United States.

TraQline, another market research firm, said Samsung was the top seller of drum washers for the second quarter this year with 22.3 percent in quarterly sales.

“Samsung’s strategy to sell value-added drum washers to consumers in the United States has paid off. Samsung will release a greater lineup to meet consumer needs in the United States. The company is ready to have more share,” said Park Byeong-dae, a senior executive at Samsung’s home appliances division.

All about pride

LG’s statement underestimating the achievements of its bitter rival Samsung was mostly due to LG’s desperation to keep its appliance business from coming under attack by its rivals.

For the second quarter, LG Electronics’ overall results were disappointing as its two main divisions of mobile and TV continued to show a weak performance.

Only its home appliance division enjoyed seasonality, generating sizable profit and expanding sales.

“LG Electronics has no option but to keep focusing on its appliance business. If its appliance business falls similar to its TVs and smartphones, then the situation will be get much more serious,” said an official at LG.

Citing the continued pressure in LG’s core operations, Mark Newman at Bernstein Research said it has lowered its target on LG Electronics stocks to 50,000 won.

Market analysts are saying it’s highly unlikely that LG will see huge improvements in profits for the remainder of this year as competition will be getting fiercer in the mobile sector with Samsung Electronics and Apple releasing their new models in the third quarter.

Also, LG’s shift toward brighter and pricey OLED TVs is yet to take off as the market is still nascent due to the high price of the TVs and lukewarm response by other TV producers and distribution channels to promote them.

The latest battle between the top two Korean tech firms also represents Samsung Electronics’ attempts to beat its long-time rival in appliances, in which Samsung has a relatively weak presence compared to its firm position in semiconductors, displays, televisions and mobiles.

LG’s appliance business is led by Cho Sung-jin, who is an expert in white-goods.

Cho doesn’t have a bachelor degree because he joined LG after finishing a local high school. This is the first time in LG’s history to name a president that did not attend college.

Cho’s position is being challenged by Yoon Boo-keun, one of the co-CEOs at Samsung Electronics who contributed significantly to Samsung’s becoming the global leader in TVs since 2004.

Yoon, considered as one of the top confidants of Samsung Future Strategy Office Head Choi Gee-sung, was moved to lead its appliance business.

Samsung will present its new strategy for home appliances during this year’s IFA fair in Berlin, Germany.