LG Sells OLED TVs for $10,000 to Counter Declining Demand
LG Electronics Inc. (066570), the world’s second-largest TV maker, started selling a 55-inch set in South Korea that uses new display technology and is thinner than Apple Inc. (AAPL)’s iPad as it tries to overcome falling global demand.
The model featuring organic light-emitting diode, or OLED, technology costs 11 million won ($10,300) and is only available to domestic customers, the Seoul-based company said in a statement today. LG will expand sales to North America, Europe and other Asian markets during the next three months as it gets the technology to market before Samsung Electronics Co. (005930)
LG and Samsung are counting on OLED technology to widen the sales gap with Sony Corp. (6752) and Panasonic Corp. as industrywide demand falls amid consumer shifts toward portable devices for watching video. OLED technology uses less power than current liquid-crystal displays and shows more vivid images, while costing more than double the average for an equivalent LCD set.
“The key issue here is how LG could possibly narrow the price gap between the new OLED TVs and the conventional LCD TVs,” said Seo Won Seok, an analyst at Korea Investment & Securities in Seoul. “The price for OLED TVs should come down to about $5,000 to $7,000 to open up the initial market, which is expected about late this year at the earliest.”
Samsung, the world’s largest TV maker, planned to sell its own OLED models last year before saying Dec. 21 it will delay the launch to 2013 because of high prices and sluggish market conditions. Both companies unveiled prototype OLED sets at last year’s Consumer Electronics Show in Las Vegas.
LG Electronics rose 5.3 percent, the most since July 26, to 77,500 won at the close in Seoul trading, while the benchmark Kospi index climbed 1.7 percent.
OLED TVs are expected to be the fastest-growing segment of the $100 billion TV industry. Shipments of OLED TVs may rise to 2.1 million sets in 2015 from 34,000 in 2012, according to an estimate last year by Englewood, Colorado-based IHS Inc. (IHS)’s iSuppli.
“LG is prepared to ramp up quickly to take the lead in the OLED segment,” LG said in the e-mailed statement.
Samsung and LG employ different OLED technologies. Samsung uses red, green and blue OLED materials inside individual pixels to create images, while LG uses white light and an extra color filter.
LG’s new TV is 4 millimeters (0.16 inch) thick, compared with Apple’s iPad Mini at 7.2 millimeters.
Sony, which introduced the first OLED TV with an 11-inch screen in 2007, and Panasonic announced a partnership in June to develop more OLED sets. Tokyo-based Sony (6758) is headed for a ninth year of losses from TVs, and Panasonic forecast a 765 billion- yen ($8.8 billion) net loss for the year ending March 31.
Global TV demand is expected to remain little changed this year after shipments of all TV types declined more than 4 percent in 2012, researcher DisplaySearch estimated in October.
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