It was basically bad decision making by Samsung, as they thought OLED was too immature for TV's because of potential burn in issues...
https://www.reuters.com/article/us-...and-lg-in-the-premium-tv-market-idUSKBN1I24K2
MORE EFFICIENT MANUFACTURING
Samsung Electronics’ decision to base its TV business on LCD technology was made after it took the advice of Samsung Group’s now-defunct Corporate Strategy Office, a source with knowledge of the matter said.
“The office made a suggestion that it would be more profitable to focus on LCDs than switching to less-proven OLED,” said the source, who declined to be named due to the sensitivity of the matter.
The reasons: the TV business was battling falling profits and the company felt LCD technology could be more profitable than high cost OLED, the source said.
The only problem was that around the time this decision was being taken, LG was developing a much more efficient manufacturing process to make OLED screens.
The retail price of a mainstream LG 55-inch OLED TV has dropped to just 3 million won ($2,811) this year from 15 million won ($14,056) in 2013, LG said.
It is not the first time decisions involving Samsung’s Corporate Strategy Office have been questioned. The office was closed after it faced criticism during the political scandal that led to the arrest of the group’s heir Jay Y. Lee last year on charges of bribery and embezzlement. Lee, who denies any wrongdoing, walked out a free man in February after an appeals court suspended his sentence.
Samsung told Reuters the biggest reason it is not making OLED TVs is the issue of screen burn-in, referring to a form of image retention when an image has been on the screen for a long time.
“We concluded that OLED is unfit for large screens, as it can shorten product life when tasked to produce bright images,” said Samsung’s Chu.
LG, though, says on its U.S. website that while burn-in is possible on almost any display, it has addressed the issue through technology that protects against damage to the screen and rectifies short-term problems.
PROFIT FIGURES TELL THE TALE
The struggle’s impact on corporate results became clearer last month. LG said on Thursday its TV division recorded a 77 percent jump in quarterly profit and a record profit margin of 14 percent in the quarter ended in March.
Samsung reported a 32 percent quarterly profit decline last Thursday for its consumer electronics division that sells TVs and home appliances, saying that earnings fell from a year ago, partly because it had changed its lineup and stopped selling some lower and mid-priced TVs.
Sony, whose television business incurred losses totaling 800 billion yen ($7.4 billion) over ten years, swung back to a profit in the year ended in March 2017.
To return to profit, the Japanese company reduced the number of markets around the world in which it sells, diversified suppliers and offered both OLED and LCD screens. It also ditched an LCD joint venture with Samsung.
The strategy paid off. While Sony had just 10.2 percent share in the global TV market last year in dollar terms, it was No. 1 in the premium market. Its operating profit margin reached 10.7 percent in the September-December quarter, according to John Soh, analyst at Shinhan Investment.
The outlook for Samsung in premium TVs could worsen as 71 percent of sales this year are expected to be OLED TVs, up from 51 percent last year, according to IHS.
And this is all happening with the 2018 FIFA World Cup starting in June. The month-long soccer competition, which is being held in Russia this year, is consistently the most watched TV event in the world and provides TV makers with a great opportunity to boost sales.
Choong Hoon Yi, head of UBI Research and a former Samsung display engineer, said that it now “looks like Samsung made a mistake” though it did not seem a blunder at the time, as Samsung considered the OLED technology too immature.
When asked about whether it plans to restart OLED TV production and sales, Samsung said that it will lead the premium market by focusing on QLED and micro-LED technology, which uses miniature light emitting diodes to improve picture quality. “There’s no change (in our strategy),” Jonghee Han, President of Samsung’s TV business told reporters last month.
Some display analysts say all might not be lost as Samsung can fight back on price. Initially the U.S. price for Samsung’s mid-range Q7F 55-inch QLED TV in 2018 was $1,900, down from $2,500 last year, according to online channels. Meanwhile the initial price for LG’s 55-inch C7 OLED TV was $3,500 in 2017 but the corresponding C8 started at $2,500 this year.
“Our goal is not to be No. 1 for x-number of consecutive years, but No. 1 forever,” Samsung’s Han said.
