This year, in the first half, the average selling prices of TVs from Samsung Electronics and LG Electronics have both fallen. This decline is interpreted as a result of domestic companies expanding their mid-range lineup to defend their market shares amid stagnation in the global TV market and the aggressive pricing strategies of Chinese manufacturers.
According to the semi-annual report disclosed by both companies on the 17th, the average selling price of Samsung Electronics' TVs in the first half decreased by about 4% compared to the annual average of last year. LG Electronics also saw a 2.5% decline during the same period, continuing a downward trend following a 3.8% decrease from last year. The second-quarter results previously released indicated that the TV business burdened the overall performance of the company. Samsung Electronics' Visual Display (VD) division reported sales of 7 trillion won, a 7% decrease from the same period last year and a 10% decline compared to the previous quarter. LG Electronics' Media and Entertainment (MS) division recorded a loss of 191.7 billion won, becoming the only major division to transition into a deficit.
This underperformance is interpreted as a consequence of the global economic slowdown, which has led to reduced TV demand, while Chinese firms have rapidly increased their market shares based on government support. According to the market research firm Omdia, Samsung Electronics has maintained the number one position in global market share by shipment volume for the 19th consecutive year, but its share has fallen from 21.9% in 2020 to 17.6% last year. LG Electronics, which ranked second in 2020, has now dropped to fourth place.
The marketing competition among domestic companies and the expansion of mid-range products to defend market share are resulting in decreased profitability. In fact, the mid-range TV market is rapidly growing. According to Omdia, the proportion of OLED TVs priced below $1,500 increased from 39% in the first quarter of last year to 56% in the first quarter of this year, a 17 percentage point increase over one year. Consequently, Samsung and LG are strengthening their mid-range lineup while maintaining their premium product strategies.
Samsung Electronics launched Neo QLED 8K and 4K models using mini LED technology in 2021 and has since expanded its Crystal UHD and QLED series. LG Electronics is simultaneously targeting the premium and mid-range markets with its mini LED-based QNED TV alongside its OLED TVs, employing a 'two-track strategy.' LG Display, a panel supplier, is increasing the price competitiveness of OLED TV panels through cost innovation and production efficiency improvements and is accelerating the transition to AI-based production while expanding its lineup from 40-inch to 90-inch models.