According to a report on May 3, according to Reuters, Samsung's decision to stop production of OLED TVs in 2015 may be a mistake. Because of this mistake, it handed over the high-end TV market to competitors Sony and LG.
In 2013, at the Consumer Electronics Show in Las Vegas, the dazzling OLED TV debuted. Later that year, Samsung hyped the 55-inch TV, which was priced at $ 10,000 (63,622 yuan), in the TV market.
Among those promotions, one of them was a loft party in the Hyde Park community in London, which is known as the most expensive residential area in the world.
But by 2015, the company had 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 LCD screens, which are backlit and enhanced by so-called quantum dots. Semiconductor nanocrystals can emit different colors of light and can improve image quality. A TV using this screen is called a QLED TV.
Discontinuation of OLED TV seems to be a mistakeNow it seems that stopping production of OLED TVs is a costly mistake.
As production costs have fallen significantly, OLED TVs have become the dominant technology in the high-end market. Currently, high-end TVs refer to TVs with a size of 55 inches or more and a price of more than 2,500 US dollars (15,905 yuan).
Today, Samsung is the only large 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 businesses. But for it, losing its leading position in the high-end TV market is definitely a heavy blow.
Online reviews obtained in the past few years for OLED and QLED TVs show that OLED TVs from South Korea ’s LG Electronics and Japan ’s Sony have gained a lot of fans for their excellent image quality.
It is particularly worth mentioning that critics said that OLED TVs have more realistic colors, high resolution, attractive designs, and increasingly reasonable prices.
But this does not mean that Samsung ’s QLED TVs do not have their own supporters. Their image quality has also improved and prices have dropped, but they are not the first choice for reviewers.
Ross Young, CEO of the market research company 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 excellent image quality. Samsung may be in its 2017 There have been mistakes in the product strategy of 2014, and it should not overemphasize product design and neglect image quality. "
According to data from research company IHS Markit, in terms of dollar revenue, 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% of the market respectively.
Of course, Samsung is still the largest TV manufacturer in the world, and it has maintained this title for 12 years. Samsung also claims to be the largest manufacturer of high-end TVs. Data from market research company GfK shows that Samsung has more than 40% of the market.
Sony and LG for more efficient productionAccording to people familiar with the matter, Samsung Electronics decided to build its TV business on LCD technology. The decision was made after the company listened to the proposal of the company ’s strategic office that Samsung Group has disbanded.
The source said: "The office proposed that it would be more profitable to focus on LCD instead of turning to unproven OLED technology."
According to sources, the reason is that the TV business is fighting a decline in profits. The company believes that LCD technology may be more profitable than high-cost OLED technology.
The only problem is that when Samsung made this decision, LG was developing a more efficient manufacturing process to make OLED screens.
LG said that the retail price of a mainstream LG 55-inch OLED TV dropped from 15 million won (about $ 14,056) in 2013 to 3 million won ($ 2811) this year.
Samsung said its biggest reason for not producing OLED TVs is the problem of screen aging.
However, LG said on its US website that although aging may occur on almost any display, it has solved this problem through technology that can prevent damage to the screen and correct 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 fight on corporate performance became more apparent.
LG said on Thursday that in the quarter to March, its TV business unit's profits increased by 77%, and its profit margin also reached a record 14%.
Samsung Electronics announced on Thursday that its quarterly profit in the consumer electronics division fell by 32%, which sells televisions and household appliances. The company said that its quarterly revenue declined compared to the same period last year, partly because the company changed its product line and stopped selling some low-end and middle-priced TV sets.
Sony ’s TV business has accumulated a total loss of 800 billion yen (about 7.4 billion US dollars) in the past 10 years, but in the fiscal year ended March 2017, this part of its business realized a turnaround.
In order to turn losses into profits, Sony reduced the number of global markets and diversified the supply chain, while also providing OLED TVs and LCD TVs. In addition, it also abandoned the LCD joint venture jointly established with Samsung.
Sony's strategy worked. In terms of dollar revenue, Sony ’s share of the global TV market was only 10.2% last year, but it ranked first in the high-end market.
Shinhan Investment analyst John Soh said the company's operating profit margin reached 10.7% from September to December last year.
IHS data shows that Samsung's prospects in the high-end TV market may deteriorate further. This year it is expected that 71% of sales will come from OLED TVs, up from 51% last year.
Choong Hoon Yi, the head of OLED research organization UBI Research and former Samsung display engineer, said that it seems that Samsung made a mistake, but at the time this did not seem to be a mistake, because Samsung believed that OLED technology was too immature. When asked whether 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. "
Last month, Jonghee Han, president of Samsung TV, said: "Our strategy has not changed."
Some analysts said that Samsung may not fail because it can fight back in terms of price.
Data from online channels shows that the price of Samsung ’s Q7F 55-inch QLED TV launched in 2018 was initially $ 1900, lower than last year ’s $ 2500. At the same time, the initial price of LG ’s 55-inch C7 OLED TV last year was $ 3,500, while the starting price of the C8 this year was $ 2,500.
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