From The Wall Street Journal - Friday June 28, 2013
By MIN-JEONG LEE
SEOUL—Samsung Electronics Co. 005930.SE +0.22% on Thursday began selling large, curved television sets using next-generation displays. But the steep $13,000 price tag could deter buyers.
The world's biggest TV maker already accounts for nearly a third of global volume. It aims to maintain its lead using two types of next-generation technologies: organic-light-emitting-diode screens that are lighter and more vivid than conventional liquid-crystal displays, and ultrahigh-definition sets that promise four times the resolution of existing ones.
Rivals LG Electronics Inc. 066570.SE +0.14% and Sony Corp. 6758.TO +2.11% also are betting on these new display technologies.
Samsung on Thursday unveiled its 55-inch, curved OLED television, priced at $13,000 in South Korea.
"The technology is still not mature and production cost is extremely high" for large OLED sets, said C.W. Chung, an analyst at Nomura in Seoul.
Analysts said the rollout essentially is a publicity effort for Samsung, rather an effort to actually sell the TVs. The key will be how quickly companies can mass-produce large OLED sets at a lower cost.
Samsung says viewing images from the curved screen is more comfortable for the human eye because the shape allows the distance between the viewer and the screen to be the same from most angles.
The company said it would begin selling the 55-inch curved OLED sets in 20 stores in South Korea. Samsung didn't say when its new sets would be available elsewhere.
Samsung's display business has invested heavily on OLED technology, highly touted for light, superthin structures because they don't require a backlight and are more energy efficient than existing displays. But mass production has been a challenge because of technological constraints in producing large screens in substantial volume. Samsung has long used small OLED displays in its smartphones, including the Galaxy line.
Sony introduced the world's first OLED color set, an 11-inch model, in 2007. But the company has struggled to improve manufacturing efficiency of the technology at larger sizes. Because of the challenges in mass producing OLED screens, Sony determined that producing sets with the technology would generate huge losses unless consumers were willing to pay a hefty premium above the price for LCD sets. Sony, whose television business has been unprofitable for nine years, hasn't made OLED sets for the past six years.
Sony hasn't laid out plans for an OLED consumer set, although the company continues to conduct research and development work. It exhibited a prototype ultrahigh-definition, 56-inch OLED television at this year's Consumer Electronics Show. Sony also is working with Panasonic Corp. 6752.TO +6.69% to develop a new type of production method for OLED panels.
Samsung, meanwhile, has been hyping OLED sets for years in the hope that production costs will come down as the company builds expertise in the technology.
But analysts say the company will have to continue producing conventional LCD sets as mainstream products for at least a couple of years to keep its profit margins up until production yields for large-screen OLED models improve.
Profit margins for Samsung's consumer-electronics unit has been declining because of weak demand, reaching 2% in the first quarter. The company has been attempting to strengthen its lineup of premium models.
It has been more than a year since Samsung unveiled plans to sell large OLED sets, highlighting the difficulties in bringing them to the market.
Samsung also introduced ultrahigh-definition models with 55-inch and 65-inch LCD screens.
—Daisuke Wakabayashi contributed to this article.
Write to Min-Jeong Lee at email@example.com
A version of this article appeared June 28, 2013, on page B4 in the U.S. edition of The Wall Street Journal:
Note to the Forum Moderators or Administrators - This category needs to be changed to: "LCD, OLED and Plasma HDTV'.