LCD TVs more affordable for consumers

LG Electronics’ 65-inch OLED TV

By Kim Yoo-chul

A major paradigm shift in the global TV industry is unlikely to happen over the next few years as falling prices of liquid crystal display (LCD) TVs make them more affordable for consumers, said a market research firm.

This trend will fuel additional growth for Samsung's TV business as the global TV leader is enhancing the quality of its TV sets based on LCD technology.

In contrast, LG Electronics, second to Samsung Electronics in the industry, may have to wait for more.

DisplaySearch said in a report that major OLED TV producers suffered heavy losses during the fourth quarter of 2014 and it's unlikely that OLED TVs will turn profitable before 2019.

For comparison, the research firm said each unit sale of a 55-inch full high-definition OLED TV caused $581.8 in losses to the OLED TV manufacturer. The researcher said it expects a unit sale of an OLED TV to bring $158.9 losses in the fourth quarter of 2019.

Last year, the profit margin for a 55-inch full HD LCD TV and ultra high-definition (UHD) TV reached 40 percent and 17 percent, each, meaning that each set brought $540 and $71.4 profit.

The research firm said OLED TVs will remain more expensive than LCD TVs until 2019.

The recent industry-wide adoption of quantum dot (QD) technology, being pushed by Samsung, which also has many of the merits of OLED but costs less, will also undercut OLED TV sales.

UHD TVs and QD TVs are variants of LCD TVs that have some improvements in picture quality and energy consumption. These aren't completely new TV species.

OLED TVs are thinner, lighter, brighter and consume less energy compared to LCDs as OLED TVs don't require bulky backlight. Each OLED pixel itself emits light, thus making OLED TV contrast electroluminescent.

As the OLED TV market is still in its infant stage, Samsung is reluctant to promote OLED TVs as it believes OLED TVs don’t generate huge profits in utilizing a manufacturing advantage ― on-time delivery, better pricing and output commitment ― for the time being.

LG Electronics has shifted its focus toward OLED TVs helped by its display affiliate of LG Display. The two LG affiliates are in talks with leading TV producers in Japan and China to expand their "OLED TV Alliance."

Mentioning the high manufacturing cost ― a module price for a 55-inch OLED TV is $2,470, while that of LCD TV of the same size was $466 ― analysts say the OLED technology is not yet ready for mass consumption.

In March, LG Electronics said it sold 3,000 units of its OLED TVs in South Korea.

LG said it will secure price competitiveness through mass production and pursue an aggressive market strategy.

“LG Display's OLED TV panel business recorded 535 billion won in operating losses last year,” said Nam Dae-jong at Hana-Daetoo Securities.

While Samsung Display, a display unit of Samsung Electronics, is focusing on producing small-sized OLED displays to be used in Samsung's Galaxy S6 and S6 Edge, LG Display aims to boost its monthly production of OLED TV panels to 26,000 sheets at its cutting-edge M2 line in the local provincial city of Paju.

“The expected shipments of OLED TV panels in the first quarter will remain at 53,000 units, taking up 0.08 percent of the total in the industry,” said the research firm.