With the advent of the age of the UHD (3840×2160) TV, it is forecast to grow steeply in advanced markets this year. For Korean companies to continuously hold the global leadership, it seems that they need to make inroads into advanced markets with lots of purchasing power rather than emerging markets where UHD is mixed with full HD (1920×1080) or digital conversion has just begun.
According to a market research firm Display Search on February 11, UHD TV’s share of sales in advanced markets and emerging markets was 29.3% and 70.7% respectively last year, and the figures will be 34.1% and 65.9% respectively, reducing the gap. Their share of sales volume was 22.5% and 77.5% last year, and the numbers are expected to change to 31.5% and 68.5% respectively this year.
In this investigation, Display Search included North America, Western Europe and Japan in advanced markets, and put remaining regions in emerging markets. Considering that it separated only Japan in Asia and classified some G20 countries like Korea, China and Australia as emerging markets, UHD TVs will increase more steeply in advanced markets.
In 2018, the gap between advanced markets and emerging markets will be further reduced, and their share of sales is expected to be 38.5% and 61.5% respectively, and their share of sales volume is predicted to be 36.9% and 63.1% respectively. While big sports events, such as 2016 Rio de Janeiro Olympics, 2018 Pyeongchang Winter Olympics and Russian World Cup, are scheduled to be broadcast in 4K UHD, those households which replaced their TVs in the early 2000’s in line with digital conversion will have to repalce their TVs yet again.
As a result, TV manufacturers are targeting advanced markets. Samsung Electronics has been concentrating on advanced markets since a while ago, and its share of the UHD TV market in advanced markets like North America and Western Europe exceeded 60% last year, and even 70% in some countries. Considering that UHD and full HD TVs account for 10% and 90% of SEC’ total TV sales, it means that its marketing strategy, focused on lucrative UHD TV-centered advanced markets, worked.
“Premium products account for 10% of quantities and 30% of sales,” said Kim Hyeon-seok, CEO of the Visual Display (VD) Division of SEC at a press conference for releasing the SUHD TV. “We will work hard to reinforce the premium market this year too.”
LG Electronics is not different. Having introduced the UHD OLED TV in advanced markets like North America and Western Europe as well as in Korea, the company is strengthening its premium strategy. Even though its profitability worsened in the 4th quarter of last year due to the unstable exchange rates in Eastern Europe including Russia, LGE could overcome it with increased shipments and sales of the OLED and UHD TV.
“This year TV set makers will have difficulties due to exchange rates,” said Ha Jin-ho, managing director in charge of HE (Home Entertainment) planning and management at LG Electronics, explaining its premium-oriented strategy. “We will increase the proportion of high-end (premium) models including UHD for higher profits.”