The Evolution of LED TV Market – Survival of the Fittest (1)
In a consumer electronics market where LCD TV is the central focus, Samsung, the leading global TV manufacturer, managed to jump into the limelight with a new design concept – the ‘LED TV’. Even though this LED-backlit LCD TV cannot be considered a product with a total innovative concept, with the combination of features such as Samsung’s edge-type LED backlight, new ID design, and the ultra slim 2.99cm profile, a star product was born and its became an instant hit this year. Samsung intentionally coined the term ‘LED TV’ to differentiate this new model from all the existing LCD TV product lines available on the market, in an effort to establish a brand new market segment.
As of 3Q09, various other highly-recognized TV brands have also jumped on the bandwagon with their own LED TV models. Although this ‘Blue Ocean’ market will inevitably be a ‘Red Ocean’ one, end consumers will be the ones enjoying the benefit. In this article, we will analyze the product features and product positioning of different LED TV models, and explore the potential opportunities and future development of this market.
Samsung
At its initial launch, Samsung introduced the 6, 7, 8 series LED TV, with a wide selection of sizes ranging from the mainstream 32W to 55W. Take 46W for example, the price range of different LED models falls between $2,599 ~ $3,199, about 1.5 to 2 times that of CCFL models. In addition to its new, dazzling ID "Touch of Color", the breakthrough design of adopting edge-type white LEDs has slimmed down the TV profile to only 2.99cm, making other brands of LCD TVs seem obsolete in comparison.
On the performance of models with basic specification, Samsung offers the 120Hz refresh rate with 3,000,000:1 contrast ratio in its standard package across all its series; and in the 8 series, it upgraded the specifications to 240Hz and 5,000,000:1, creating a close-knit association of LED TVs with vivid and crisp image quality. In addition, the integration of Internet connectivity and multimedia playback also added to the diversity of the product. All these features are part of the successful packaging of the Samsung’s LED TV.
Yet, if we were to assess Samsung’s LED TV by a stricter measure, the product has not incorporated any new elements in its design apart from the adoption of edge-type LEDs. Nonetheless, Samsung has a mastered the key to its success – the market will only remember the first. In addition to enjoying a lucrative ‘honeymoon’ period, Samsung’s launch of LED TV has successfully gained foothold in the market and solidified its position as the flagship brand in the consumer electronics market.
LG
LG made a huge leap to take second place in the LCD TV sales leaderboard. Having witnessed Samsung’s success with its LED TVs, LG also began its counter strategies. Yet, LG seems unwilling to follow Samsung’s footsteps in emphasizing the ultra slim design; instead, it aims at differentiating its product line through product positioning and characteristics.
LG launched a total of three series of LED TVs; among them, only the entry-level SL series adopts the edge-type design, the 3cm in thickness is similar to that of Samsung, while mainstream 47W is strategically priced at $2,399, a significant $200 lower than Samsung’s entry-level 6 series 46W. This price strategy makes it evident that LG intends to capture market share through price competition.
In contrast, LG’s other two series LH and LHX adopt the more costly direct-type light source. Its 10cm profile will certainly not be the focus of LG’s marketing campaign; instead, it highlights the 240Hz refresh rate, as well as the Local Dimming function which cannot be achieved through edge-type lighting. Also, for the first time, LG is adding 1080p Wireless Transmission to its flagship model LHX. Although the practicality of this function is quite limited, through this new product, LG demonstrates the originality of its products and its excellent integration technology in televisions.
LG is unwilling settle for second place in the market, and tries to create a new segment of its own. Although the cost of direct-type backlight cannot be reduced in the short-run, LG’s attempt in gaining market share at the expense of its profits is quite evident, case in point – LG’s LH series 47W is priced at $2,099, $500 cheaper than Samsung’s entry-level 6 series 46W at $2,599.
Sony
Sony, the Japanese TV giant, has been facing serious issues with its TV sales this year – apart from reluctantly losing its number two position to LG, the production of the new generation of LED products has also been delayed due to its organizational restructuring.
Sony was the first TV manufacturer that launched LED TVs. Yet, because of the high cost of using RGB direct-type backlight, the price tag was too high for the general public, and the product eventually faded out of the market. Thereafter, Sony bounced back and chose Japan as the initial launch site for its new Bravia ZX5 series; two new models 46W and 55W, are expected to launch in November this year. Having learned a lesson through the tragic failure of its direct-type products, the ZX5 product design shifted to the mainstream edge-type backlight, and one of the most prominent feature in its design is the integrated wireless 1080p connectivity and the 1.6cm ultra slim profile. The former lost its novelty as it had already been introduced in the market. However, the latter is worth mentioning – Sony has always been recognized for its cutting-edge design, by introducing an LED TV that is almost as thin as a cell phone handset, with only half the thickness of Samsung’s LED TV, Sony has done it again in setting a milestone in the television market.
On the downside though, the price of the ZX5 is out of line with the mainstream market, both its 46W and 55W cost twice the price of their same-range counterparts, at $5,660 and $6,669. Ultimately, there is no harm in testing the waters with the price of the ZX5, since Sony’s full 2010 series of LED TV has yet to be unveiled; but if the full range its 2010 series adopts the same price strategy, Sony may have trouble taking back the crown through its LED TV sales.
