LG hits OLED everywhere


The latest issue of the British Journal of the Economist wrote that LG was once a Korean electronic manufacturer with a fascinating appearance. However, due to strategic mistakes in recent years, it failed to grasp the wave of smartphone development and caused it to always lag behind. Now, the company is putting its bets on the OLED market. Although it has achieved a temporary dominance, it is by no means easy to secure this achievement.

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Giant decline

When asked about his views on his old rival, LG, a Samsung executive said with a wry smile: Consumer electronics users always want to have a second, third or fourth choice, but this lack of local hostile enemies With enough engineers, technology, budgets, and leadership, it is difficult to become the industry leader in most consumer electronics.

However, at a time when LG was dominant in Korea. In 1959, LG, which was named Lucky Goldstar, produced the first radio in Korea. Shortly afterwards, it developed the first fan and first telephone in South Korea. By 1970, the company was the first to sell refrigerators, televisions and air conditioners in South Korea. But nowadays, it is only ahead of Samsung in the field of household appliances in washing machines, and the market share that was snatched before is hard to recover.

Samsung has become the dominant player in the global chip and smartphone market in recent years. Including the display, its electronic business revenue last year reached 4 times that of LG and its operating profit was as much as 15 times. LG also had a large-scale semiconductor business. After the Asian financial crisis from 1997 to 1998, when the country’s electronics industry experienced restructuring, LG forced the government to withdraw from the business.

Kim Dae-won once wrote a research report and analyzed the strategic differences between Samsung and LG. He explained that Samsung decided to launch a new high-end mobile phone in 2009 and compete directly with the iPhone, which also helped it consolidate its leading position. LG's initial response was to upgrade the previous product and launch a new generation of chocolate phones. As a result, LG's mobile phone business suffered only two years of heavy losses when its competitors took advantage of the smart phone wave to extract lucrative profits. In 2010, the company’s boss resigned and replaced him as a member of LG’s founding family.

Miss the trend

Due to the late entry into the smartphone market, LG’s current global share is less than 5%, and Samsung is as high as 25%. This area has become more and more crowded now. Chinese companies such as Lenovo, Huawei and Xiaomi are competing fiercely with Indian companies such as Micromax. However, LG is still aggressively developing high-end models, including the G4 launched earlier this year. The phone is equipped with a high-definition camera and optional leather back cover.

ShinMoo-young, who had previously held management positions with Samsung and LG, doubts that such a gimmick could not be effective. He compared the future of LG's mobile phone business to the "version of HTC." This smart phone manufacturer from Taiwan also used to occupy it. Market-led. Although it was just released soon, analysts have recently lowered the G4’s sales expectations, and Samsung’s latest flagship Galaxy S6 seems to perform well.



Due to the difficulty in catching up with the smart phone market and the challenges faced by low-priced competitors in the domestic appliance industry, LG began to bet on emerging technologies and hopes to change this status lagging behind. Specifically, the company has been developing OLED TVs since 2013. This display is more sharp than the top LCD display. However, the large-size OLED display is expensive, the process is complicated, and the yield rate is extremely low.

Emerging Technologies

Last year, LG said that the company has made breakthroughs in large-scale mass production technology, and the current yield rate is as high as 80%. The first 55-inch curved screen OLED TV launched by LG in 2013 was priced at US$15,000, but now the price of the latest version has dropped to US$2,500, which is about the same price as high-end LCD TVs. The company is actively expanding the production capacity of the second OLED plant and is considering building a third factory.

Thin and light OLED displays do not require backlighting, which allows LG to attempt transparent, scroll, fold, and curved screens to break through the traditional screen form. LG ranks first in the world in all types of large-size display screens: In just 10 years, the company’s display revenue has doubled, reaching 26.4 trillion won (26.3 billion US dollars) last year.

With regard to small-size screens, the company expects that as many as 40% of smart phones will be equipped with flexible OLED displays within five years. LG already supplies LCD screens for companies such as Apple. According to DisplaySearch, a market research company, LG has a 90% share of the global smartwatch market, mainly from Apple Watch.

Today, the number of electronic devices on the car is also increasing, and LG also hopes to make full use of this trend. The company has become the world's top four automotive display suppliers. They also supply electric vehicle batteries for 13 of the world's 20 largest automotive brands, including Renault-Nissan, which has the most extensive electric vehicle product line. Last December, LG and Mercedes-Benz signed an agreement to jointly develop a camera system for driverless cars. LG is also using OLED technology to develop flexible energy-saving light boards.

Independent development

However, large-size OLED TVs are the areas most valued by the company. Samsung is still investing heavily in the display business, but it is more cautious than LG in launching large-size OLED TVs. Japan’s Sony and Panasonic have already given up plans to cooperate in mass production of such products. Therefore, Shaun Cochran, an analyst at Lyon Securities in France, said that for a long time, LG has become a leader in a certain component field for the first time.

However, the lack of competition has made LG's progress even harder. The company can only open up the market for such products, attracting the interest of retailers and consumers. Outsiders believe that LG's OLED TV business is experiencing huge losses. The company said that they have spent 3 billion U.S. dollars to invest in production facilities since 2010, but it will probably take a long period of time to recover these returns.

Even if consumers around the world fall in love with this slim, sharp OLED display, the advantages of LG may not be sustainable. Samsung will certainly use its huge resources to catch up. LG rarely tops the list in some area, but it is obviously not easy to keep this result.



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