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OLED Becomes The Main Force Of High-end TV Market

May 24, 2018

Recently, LGDisplay said that this year the company will provide large-size OLED panels to two brand companies. This is a new partner. This means that the OLED TV camp has further expanded. The data shows that OLED TVs are becoming the “Sweet Potatoes” in the high-end market, and the situation of oversupply is forming.

Overall color TV performance remains low

Recently, many color TV companies have announced their detailed annual reports for 2017. From the perspective of the annual report, the overall LCD TV business was in poor condition last year, and brand owners encountered many difficulties in this sector.

Last year, Hisense’s multimedia segment’s operating revenue was approximately 30.6 billion yuan, operating costs were approximately 26.2 billion, operating income increased by 6.95% from the previous year, operating costs increased by 11.68% over the previous year, and gross profit margin decreased by 3.62 percentage points from the previous year; Its operating income from television products increased by 6.83% over the previous year, operating costs increased by 11.89% over the previous year, and gross profit margin decreased by 3.88 percentage points from the previous year. Konka Group’s revenue from electronic sector was approximately 16.1 billion, operating costs were approximately RMB 13.1 billion, operating revenue decreased 5.93% year-on-year, gross profit margin increased 3.8%; Konka Color TV business revenue was approximately RMB 12 billion, operating costs were approximately RMB 10.1 billion, operating revenue The year-on-year decrease of 3.87%, gross profit margin increased slightly by 2.1%. Changhong achieved operating revenue of 77.632 billion yuan, an increase of 15.57%; the parent company's net profit of 356 million yuan, a year-on-year decline of 35.76%. In 2017, Skyworth achieved an operating income of 725,480,560 yuan, an increase of 22.40% year-on-year, and achieved a net profit of 95,244,200 yuan, a year-on-year decrease of 81.93%.

Data show that in 2017 China's color TV retail sales reached 47.52 million units, down 6.6% year-on-year, the largest decline since 2003, at the same time, the reasons for the rising price of memory chips and panels have appeared in the annual reports of many companies. It is the rise in the manufacturing cost of the whole machine. On the one hand, it is the decline in sales volume. The end result is that the decline in profit of famous brands is the lowest level in recent years.

High-end market "view" is very different

Compared to many domestic well-known TV companies in the multimedia business "struggling", Sony last year in the color TV business can be described as wind and water.

Sony's performance in the high-end TV market last year was repeatedly mentioned by executives at a Sony brand event of the year. Sony said that in 2017, although the overall scale of the Chinese TV market has shrunk, Sony seized the opportunity of increasing demand in the 4K and large-size segments to lead the upgrading of the consumption structure by increasing the supply of high-value-added products. In the high-end, large-screen segment successfully achieved market share has risen steadily.

In fact, last year Sony integrated its own advantages in color TV chips and launched OLED TV's flagship product with impressive sales. According to HIS, a well-known market research organization, Sony’s overall TV revenue in 2017 increased by 21% compared to 2016, of which OLED TV contribution rate reached 8%.

The results of the strenuous efforts have also become one of the few highlights of some domestic TV companies last year. The Skyworth annual report pointed out that high-margin, large-size products can greatly reduce the industry's average price fluctuations on the impact of corporate profits, and the OLED TV sales, Skyworth is a major player in the growth of high-end product line sales.

OLED becomes the absolute main force in the high-end market

Last year, laser TV and ULED super quality TV were the main layouts of Hisense in the high-end TV market. These two products did bring bright colors to Hisense's color TV business. This year, the company's layout in the high-end market may occur. In the second half of this year, Hisense is expected to join the OLED TV camp. However, at present, Hisense has not formally confirmed this news.

"The television industry is currently in saturation, but OLED TVs have brought new value to the market and will become a breakthrough in the display industry." Liu Weizhi, CEO of Skyworth Group, said publicly.

At present, under the situation that overall demand has reached “saturation”, if TV manufacturers do not want to fall into the trap of price wars, they will only seek new value and develop high-end markets, thus achieving new breakthroughs.

The performance of OLED has to be mentioned. According to IHS data, last year, in the high-end TV market of over $2,500, OLED TVs accounted for 51.3% of the world's total, occupying half of the country's total, and surpassing LCD TVs for the first time. This figure was only 15.5% in 2015 and 35% in 2016.

IHS expects that in the high-end market, OLED TVs will continue to maintain high-speed growth. In 2018, OLED TVs will increase to 70.7% in the high-end TV market of 2500 US dollars, becoming an absolute mainstream.

It is worth noting that LG Electronics’ overall TV revenue in 2017 increased by 9% compared to 2016, of which OLED TV contribution rate was as high as 52%. LG's LG Display is the only company in the world to mass produce large-size OLED panels.

Li Shangxun, vice president of marketing and marketing of the LG Display Television Division, said in an interview with the Nanfang Daily reporter that companies that had been hesitant have now started to invest in the OLED market. Since the end of 2017, OLED has expanded to include Philips, including Japanese manufacturers such as Sony and Panasonic, Korean manufacturers such as LG Electronics, and major Chinese manufacturers such as Skyworth, Changhong and Konka, totaling 13 companies.

"We can be sure that there will be two new companies entering the OLED TV camp this year," said Li Shangxun. For business norms, Li Shangxun did not disclose the specific company name.

For these two companies, the industry is generally considered to be Hisense and Toshiba. Regardless of who it is, this means that the OLED TV camp has further expanded.