On May 3, according to Reuters, it may be a mistake for Samsung to decide to stop producing OLED TVs in 2015. Because of this mistake, it has handed over the high-end TV market to rivals Sony and LG.
In 2013, at the Consumer Electronics Show in Las Vegas, the dazzling OLED TV debuted. Later that year, Samsung advertised the 55-inch TV, which sold for $10,000 (63622 yuan), in the TV market.
One of those promotions was a loft party at the Hyde Park community in London, which is known as the world's most expensive residential area.
But by 2015, the company has stopped producing OLED TVs. The company claims that the market is not ready to accept high-cost technology. Instead, it decided to focus on developing liquid crystal displays that are backlit and enhanced by so-called quantum dots. Semiconductor nanocrystals emit light of different colors and improve image quality. A television set using such a screen is called a QLED television.
Discontinued OLED TV seems to be a mistakeIt seems now that stopping production of OLED TVs seems to be a costly mistake.
As production costs have fallen dramatically, OLED TV has become the dominant technology in the high-end market. Currently, high-end TV refers to a TV that is 55 inches or more in size and sells for more than $2,500 ($15,905).
Today, Samsung is the only major TV manufacturer that does not produce OLED screens. Although the profit of its TV business is less than 3% of Samsung's total profit, Samsung's profit mainly comes from its semiconductor and mobile phone business. But for it, losing its leadership in the high-end TV market is definitely a heavy blow.
Online reviews of OLED and QLED TVs in the past few years show that LG Electronics of South Korea and Sony's OLED TVs have won many fans due to their excellent image quality.
In particular, critics say that OLED TVs have more realistic colors, high resolution, attractive designs, and more and more reasonable prices.
But that doesn't mean Samsung's QLED TVs don't have their own supporters. Their image quality has also improved and prices have dropped, but they are not the first choice for commentators.
Ross Young, CEO of market research firm Display Supply Chain Consultants, said: "The significant increase in the share of OLED TVs in the high-end TV market is a direct result of its outstanding image quality. Samsung may be in its 2017 There were mistakes in the product strategy of the year, and it should not over-emphasize product design and ignore image quality."
According to research firm IHS Markit, Samsung’s share of the global high-end TV market last year was only 18.5%, down from 54.7% in 2015. At the same time, Sony and LG have surpassed Samsung, accounting for 36.9% and 33% respectively.
Of course, Samsung is still the world's largest TV manufacturer, and it has maintained this title for 12 years. Samsung also claims to be the largest high-end TV manufacturer. According to market research firm GfK, Samsung accounts for more than 40% of the market.
Sony and LG for more efficient productionAccording to people familiar with the matter, Samsung Electronics decided to establish its TV business on LCD technology. The decision was made after the company’s advice on the company’s now-defunct corporate strategy office.
The source said: "The office proposed that focusing on the LCD instead of turning to unproven OLED technology would be more profitable."
According to sources, the reason is that the TV business is fighting the decline in profits. The company believes that LCD technology may be more profitable than high-cost OLED technology.
The only problem is that while Samsung made this decision, LG is developing a more efficient manufacturing process to make OLED screens.
LG said that the retail price of a mainstream LG 55-inch OLED TV has dropped from 15 million won (about $14,056) in 2013 to 3 million won ($2811) this year.
Samsung said that the biggest reason for its failure to produce OLED TVs is the problem of screen aging.
However, LG said on its US website that although aging can occur on almost any display, it has solved this problem with technology that prevents damage to the screen and corrects short-term problems.
Profit data shows that Samsung lags behind Sony and LG in the high-end TV market
Last month, the impact of this struggle on corporate performance became more apparent.
LG said on Thursday that its TV business unit's profit increased by 77% in the quarter ended March, and its profit margin reached a record 14%.
Samsung Electronics announced on Thursday that its consumer electronics division's quarterly profit fell 32%, the department sells televisions and household appliances. The company said its quarterly revenues fell compared to the same period last year, in part because the company changed its product line and stopped selling some low-end and mid-priced TV sets.
Sony's TV business has lost 800 billion yen (about 7.4 billion US dollars) in the past 10 years, but in the fiscal year ending March 2017, its business has turned into a profit.
In order to turn a profit, Sony has reduced the number of global markets and diversified its supply chain, while also offering OLED TVs and LCD TVs. In addition, it also abandoned the LCD joint venture established with Samsung.
This strategy of Sony has worked. From the perspective of US dollar revenue, Sony's share of the global TV market last year was only 10.2%, but it ranked first in the high-end market.
John Soh, an analyst at Shinhan Investment, said the company’s operating margin for September-December last year reached 10.7%.
According to IHS data, Samsung's prospects in the high-end TV market may deteriorate further. This year, 71% of sales are expected to come from OLED TVs, up from 51% last year.
Choong Hoon Yi, head of UBI Research at OLED research institute and former Samsung display engineer, said that it seems that Samsung made a mistake, but at the time it did not seem to be a mistake, because Samsung believes that OLED technology is too immature. When asked if it plans to restart the production and sales of OLED TVs, Samsung said it will focus on QLED and micro LED technology to lead the high-end market. â€
Last month, Jonghee Han, president of Samsung TV, said: "Our strategy has not changed."
Some analysts say that Samsung may not fail because it can counterattack from the price side.
According to online channel data, Samsung's Q7F 55-inch QLED TV launched in 2018 initially cost $1,900, down from $2,500 last year. At the same time, the initial price of the LG 55-inch C7 OLED TV last year was $3,500, and the starting price for the C8 this year was $2,500.
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