Samsung, LG jump into each other’s flagship areas to survive recession

LG Electronics Inc.’s QNED mini LED. [Courtesy of LG Electronics]

South Korea’s Samsung Electronics Co. and LG Electronics Inc., the top two local players in the TV market, are scrambling to expand their presence by penetrating into each other’s flagship areas in an attempt to overcome the steep economic recession. The strategy to enter new markets and blur boundaries is proving fruitful, with both companies posting earnings surprises in the second quarter this year.

According to market research firm Omdia, LG Electronics rose to world’s No. 2 position with a 17.5 percent market share for the first time in the quantum dot (QD) liquid-crystal display (LCD) TV segment in the first quarter. QD LCD televisions are premium models with QD films added to the LCD panel. Their contrast ratio and color rendition have been upgraded from conventional LCD panels.

Originally, the leader in the field was Samsung Electronics. By 2019, the company had a market share of nearly 90 percent. However, LG Electronics become a game changer in 2021 when it strategically entered the market with its QNED brand. Within two years of entry, LG Electronics expanded production to 22 models in six series globally, overtaking its Chinese rivals to rise to the No. 2 spot.

Samsung Electronics took the top spot in the QD LCD TV market with 2.15 million units shipped in the first quarter despite a decline of 15 percent from a year earlier.

Although a latecomer, LG Electronics is emerging strong by utilizing nanocellular materials as well as QD films.

Meanwhile, Samsung Electronics has been aggressively targeting the organic light-emitting diode (OLED) TV market, which had remained a home turf of LG Electronics. In fact, Samsung Electronics had launched OLED TVs in 2013 but switched its flagship models to LCD due to an issue with defect yield rates. The company had focused on its QLED TV lineup based on LCD panels since, but made a U-turn in late last year to showcase OLED TVs overseas.

This year, Samsung Electronics expanded its OLED TV models to include 55, 66, and 77 inches and even obtained electromagnetic wave certification for commercializing up to 83 inches.

The company even chose to collaborate with display manufacturer LG Display Co. because Samsung Display Co. does not produce panels larger than 77 inches. It is determined to pursue the OLED TV market aggressively even if it takes joining hands with a competitor.

Such an aggressive move has helped Samsung Electronics rise to top three player in the OLED TV market with a market share of over 10 percent in the first quarter this year, in just one year after launch.

“Premium demand is relatively robust even during the recession, so the strategy is to secure market share by advancing into rivals’ premium flagship models,” said an official from the industry.

The efforts have paid off in earnings announcements.

Samsung Electronics recently reported an operating profit of 740 billion won ($573.4 million) on sales of 14.39 trillion won from its Video Display (VD) and Home Appliances divisions.

The operating profit has doubled from a year ago although sales were down 3 percent.