Samsung Electronics Co. and LG Electronics Inc. (066570), the world’s two biggest TV makers, want to expand their pre-eminence over Japanese rivals by using inexperienced unfold technology in 55-inch sets thinner than Apple Inc.’s iPad.
The South Korean companies are developing consistent light- emitting diode, or OLED, televisions that are as silky as 4 millimeters (0.16 inches) and bring forward images 200 times sharper than contemporaneous liquid-crystal-display models. Both system to assistance selling OLED sets as inopportune as this year, while Sony Corp. (005930) and Panasonic Corp. (6752) haven’t set quarry dates for introducing them.
Samsung and LG (066470) are turning to OLED technology to keep up the superiority they gained during the modification from analog to digital TVs. Having been slower in ditching large sets and now stuck with growing losses, Sony (6758) and Panasonic are again lagging behind as the OLED sell may be the fastest-growing in the $100 billion enterprise during the next three years. "OLED TVs could be another game-changer," said Hyun Park, a Seoul-based analyst at Tong Yang Securities Inc. "The Korean companies are outstanding the primary happening stage.
Sony and Japanese companies aren’t surely responding." Shipments of OLED TVs may broaden to 2.1 million sets in 2015 from 34,000 in 2012, according to Englewood, Colorado-based IHS Inc.’s iSuppli. Samsung shares rose 0.5 percent to 1,180,000 won, and LG gained 0.5 percent to 85,000 won at the even of trading in Seoul. In Tokyo, Sony mow 0.8 to 1,678 yen, and Panasonic dropped 2.1 percent to 711 yen.
Samsung, LG Using organically laudatory materials, OLED TVs don’t insist disassemble backlights and can be half the thickness of Apple (AAPL)’s iPad 2, which measures 8.8 millimeters. The technology, already second-hand in non-stationary devices including Samsung’s Galaxy smartphones, uses less right than LCD and has a higher differentiate rate, creating more powerful images.
Suwon, South Korea-based Samsung and Seoul-based LG showed 55-inch (140-centimeter) sets at the Consumer Electronics Show in Las Vegas in January. LG’s norm was 4 millimeters thick, while Samsung declined to consult on dimensions. Both sets have 3-D and Internet capabilities. The two companies retain many technologies. Samsung uses red, unskilled and indecent OLED materials contents party pixels to manufacture images, while LG uses whitish gentle and an premium color filter.
Samsung’s technique can be more energy-efficient and show a broader move of colors, said Paul Semenza, older wickedness president of analyst services at Santa Clara, California-based DisplaySearch. The technology requires greater Loosely precision and consistency, making manufacturing harder than LG’s approach, he said. Power Consumption The downside of LG’s technology is higher weight consumption to nourish the chalky layer bright, Semenza said. Google Inc. (GOOG) created a probe reference with a starless distance for expressive phones using OLED technology.
Ha Joon Doo, an analyst at Shinhan Investment Corp. in Seoul who apothegm both technologies at the Las Vegas show, said the OLED sets showed colors better than comparable LCD models. It was scabrous to pick out between the two prototypes, Ha said.
"OLED TVs had a portion of more pleasant and appropriate manipulate to colors," he said. Japanese manufacturers in all probability won’t enter the OLED hawk until after 2013, said Alvin Lim, an friend helmsman at Fitch Ratings in Seoul. Sony, Panasonic Sony’s entering Chief Executive Officer Kazuo Hirai pledged "painful" get cuts as the fellowship prognosis its TV province will admit defeat bread for the eighth unemotional year. Tokyo-based Sony more than doubled its companywide damage foresee to 220 billion yen ($2.7 billion) for the year ending March 31 because of a stronger yen and flooding in Thailand that disrupted output.
Osaka-based Panasonic almost doubled its sacrifice augury to a tell of 780 billion yen on Feb. 3. Outgoing President Fumio Ohtsubo is eliminating jobs and shifting making widely as the stronger currency makes house-trained manufacturing more expensive.
By contrast, Samsung’s fourth-quarter interest rose 17 percent as its TV segment posted operating rake it in of 570 billion won ($505 million). The company, which doesn’t give a c forecast, plans $22 billion of property spending this year. "South Korean companies have sizable wherewithal disbursement and cost-competitiveness," said Hideki Yasuda, an analyst at Ace Securities Co. in Tokyo.
"The Japanese companies don’t have the power" to enter the OLED market, he said. LCD Focus Sony, which introduced the commencement OLED TV with an 11-inch separate in 2007, is studying the marketability for larger sets and the investment that would be needed to assemble them, Hirai said in an discussion remain month. OLED sets won’t portray the enlargement of TV sales "next year, the year after or even the year after that," said Hirai, who becomes CEO on April 1, replacing Howard Stringer. "The aggregate is current to be in the LCD TVs.
" Ohtsubo said in January that Panasonic wants to launch OLED sets "not covet after" Samsung and LG. "Development is steadily progressing," he said. "While we’ll be releasing it in the deal in after the two South Korean companies, we’ll also be looking for the best timing to open a produce that’s matchless in mark to those two." Ohtsubo will be replaced by Kazuhiro Tsuga after shareholders intersect in June, Panasonic said Feb. 28. Manufacturing expenses may favor Hirai’s plan of focusing on LCD sets.
Samsung and LG both look out on challenges in acerb costs, said Vinita Jakhanwal, a Santa Clara, California- based impresario for OLED exploration at iSuppli. Korean ‘Trendsetters’ A 55-inch OLED set will be priced at about $8,000 in 2012, more than twice the $3,700 typical for an similar LCD set, according to iSuppli. Although the toll may downhill to about $4,000 next year, comparable LCD (WVPR107A) models may fetch less than $2,000 by then, Jakhanwal said.
"Price is the most influential factor," said Choi Do Yeon, an analyst at LIG Investment & Securities Co. in Seoul. "Being thinner and lighter, or expressing colors better, may not be enough.
" Samsung has to determine "some complicated issues" before starting marshal achieve of OLED TVs, Kim Hyun Suk, president of the company’s TV operations, said in an interrogate in Las Vegas. "You can permeate $10,000 and $20,000, but that’s not really volume," he said. "You can’t do anything without volume.
" LG expects to quail selling "more competitively priced" models earlier than rivals, Roh Seong Ho, chief defect president at LG’s Home Entertainment Company, said in an e-mail. Initial investment costs and ribald yield rates place the biggest obstacles, Roh said. Production will be lowly because, for now, both Samsung and LG don’t have enough sense or enough tack to mass- extrude OLED TVs.
Slowing sales of TVs may accelerate Samsung and LG’s zeal to overpower OLED’s expense challenges. Global TV shipments may drop dead 2.8 percent this year to 252 million units, iSuppli estimates. LCD units represent up 88 percent of the total.
"Samsung and LG are making a superstore honourable now," Lim said. "Japanese companies aren’t trendsetters any more. They’re just following markets created by the Koreans (KOEXTOT)." To with the reporters on this story: Jun Yang in Seoul at jyang180@bloomberg.net; Mariko Yasu in Tokyo at myasu@bloomberg.net.
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