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LG Electronics concentrates on ‘product competitiveness not price competitiveness’ in the premium TV market

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LG Electronics reported that they plan to focus on product competitiveness rather than price competitiveness in the premium TV market in future through the conference call in Q1 of 2017 which was held on 27th, April. During the Q&A session on ‘the sales strategy of OLED and premium TV’, Jin-ho, Ha, the director of HE (Home Entertainment) said that “we will continue to expand OLED position in the premium TV market and also in future what the competitiveness we need in the premium TV market is product competitiveness rather than price’s.”

The performance in Q1 of HE in LG Electronics was 4 trillion 3261 billion won of sales volume and 3822 billion won of sales profit. It has been reduced 4600 billion won versus previous quarter under the influence of off-season. Nonetheless, YOY (Year on Year) has been kept at the same level. The sales volume was grown up in the area of North America, South Korea and Latin America for the reason of sales expansion of premium TV, though the market in Asia was decreased versus QoQ for the lack of sufficient demand.

Jin-ho, Ha, the director of HE in LG Electronics said that “We improved the profitability versus previous quarter by expansion of premium product sales, improvement of cost structure and flexible management for the panel price rise.” He also expected that the stagnant demand in whole TV market would be continued, but the demand would be increased in the area of North America, Latin America and Asia where are holding relatively high sales ratio.” In addition, “We would maintain sound profit structure and strengthen premium position by diverse global launching of products which leads the market such as ‘LG Signature OLED TV W’.”

He answered the questioning of in future panel price expectation and OLED TV line-up idea, “The panel has been significantly rising from in Q4 of 2016, and it has reached up over 60% versus June where is the lowest point last year”, and “We will design completive line-up composed of ‘premium, best, middle and low’ to aim the premium market within OLED TV group.”

For the question of the strategy in TV market in future, “In present which panel cost is increasing, we would operate the strategy based on the profitability by avoiding a simple volume competition, and we think that the market share in low price TV market is not meaningful. So that we plan to go forward the improvement of quality as a response based on the premium TV market having over 2000~2500 dollars.”

The strategy in TV market of LG Electronics announced at the conference call in Q1 2017 is consistent development of premium TV lineup which brings better profitability with high value-added product. They also expressed that will firmly build their position in the premium TV market with product competitiveness by image quality and technology rather than price competitiveness related to panel price.

LG Electronics, OLED TV volume of sales 2 times in the 3rd quarter

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LG Electronics revealed that OLED TV volume of sales was enlarged two times than last year through the conference on the third quarter performance having been progressed on the 27th, and currently OLED TV occupied over 10% among total TV sales. Also they expect that volume of the fourth quarter will be increased two times vs. the third quarter.

Regarding countermeasures on quantum dot TV of Samsung Electronics, they have no notion of competing prices with OLED TV, and emphasizes that they will strengthen recognition such like best TV is OLED TV by thoroughly sustaining premium strategies. They explains that market position of OLED in the market of over USD 200, or USD 300 has been actually increasing rapidly

HE Business Division achieved operating incomes (381.5 billion won) and sales profits of top levels (9.2%) in the third quarter. Sales amount was 4 trillion and 141.5 billion won, and there was not large change with previous quarter (4 trillion and 157.2 billion won).
LG Electronics forecasts that TV demands will be increased due to entering high-demand season in the fourth quarter, and needs on premium products such as OLED TV and UHD TV will be expanded further vs. previous quarter centering on the advanced market especially. Though profitability is expected to be decreased vs. previous quarter owing to effects from increases of panel price and expanded marketing expenses, they reveals their willingness such like responding to seasonal demands on large-size premium products including OLED TV and UHD TV etc. will be made successfully.

Meanwhile, according to UBi RESEARCH, they forecasts that OLED TV in premium TV market will achieve high-speed growth while forming the market of 69.1% in 2012 from 16.7% in 2016.