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Appliances and Electronics Our insights capture shifts in consumer lifestyles and themes impacting the global consumer appliances, electronics, and toys and games markets. Themes include new business models, sustainability, innovation and the future home.

OLED TVs to Benefit from LCD Panels’ Price War

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OLED TVs were first launched commercially by Sony in 2007 and promised much – better contrast ratio, wider colour gamut, lower energy consumption and a much thinner form factor than LCD TVs. Sales of OLED TVs are projected to exceed two hundred thousand units in 2015 and by comparison, sales of plasma TVs, a product which Panasonic and LG are stopping production of, are expected to sell more than ten times more, at 2.7 million units in the same year.

TV rules

Television volume sales have declined since 2010. However, sales are projected to recover from 2016 onwards, as ultra HD starts to fall in price, although they will still command a premium over full HD panels. A global survey of consumers found that 59% of respondents’ waking time was spent in the living room. For most consumers, a TV is a key component in the living room, which also reinforces TVs longevity.

LCD’s reinvention

LCD will remain the dominant display technology over the forecast period, as Panasonic and Samsung have stopped plasma screen production and OLED take up remains lackluster. Manufacturers are working on improving LCD panels, as the technology is more mature and cheaper to manufacture than plasma and OLED panels. LCD panel manufacturers in China are investing heavily in new plants to manufacture LCD panels, as part of the Chinese Government’s initiative to move up the value chain and not become merely an assembly plant. Currently, most LCD panels are imported into China from Taiwan (AUO) and South Korea (Samsung and LG).

Accidental benefits

Display manufacturers are investing in new plants due to the strong sales of smartphones, which are projected to exceed 1.3 billion units in 2016 and experience 23% growth till 2020. The aggressive expansion by China’s BOE Technology and Tianma Microelectronics is making their rivals worried. Rather than trying to compete head on with the Chinese manufacturers on price, South Korea’s LG Display and Samsung Electronics are ramping up their research and development on the new generation display technology; OLED panels. LG Display has unveiled plans to build a new plant to manufacture OLED panels for smartphones and TVs. With smartphones driving demand, both LG and Samsung can focus on maturing the manufacturing process and improving yield on large-sized OLED panels to be used on televisions.

A pendulum swing

Sales of OLED TVs are forecast to exceed 1.7 million units in 2020, but price will remain the key hindrance to popularity. If LG and Samsung can mass produce OLED panels at a competitive cost, sales projection of OLED TVs will become a threat to sales of LCD TVs, which are currently projected to approach 250 million units in 2020. With so many manufacturers trying to compete for market share, the LCD panel market is expected to be under tremendous price pressure. The move by LG and Samsung to focus on OLED panels will also prompt Chinese manufacturers to enter OLED business in a bid for higher margins. Interestingly, the success of LCD TVs could benefit OLED TVs rather than kill the budding display technology.

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