Last year’s output of cellphones, TVs, and household appliances of Samsung Electronics and LG Electronics decreased all together. Reduction of demands due to global economy recession has become a direct hit for both businesses. Because economy recession is expected to continue this year again, it is predicted that reduction of number of produced goods will continue this year. Instead of competing quantitatively, Samsung Electronics and LG Electronics are planning to focus on increasing profitability through premium strategies.
According to business reports of Samsung Electronics and LG Electronics, output of both businesses’ major products such as cellphones, TVs and others decreased compared to 2014. As reduction of demands is predicted, they both decreased their production capabilities.
It is estimated that 423.06 million Samsung Electronics’ cellphones were produced last year. After reaching highest point in 2013 at 499.48 million and recording 439.52 million in 2014, number of produced cellphones decreased once again. Number of produced TVs from last year, which was 45.82 million, also decreased from number of produced TVs from previous year, which was 55.07 million. Number of produced TVs from last year is even smaller than number of produced TVs from 2013, which was 47.53 million.
As number of demands decreased, production capability also decreased. Production capability of Samsung Electronics’ cellphones decreased from 556.6 million to 523.75 million to 497.05 million in 2013, 2014 and 2015 respectively. Production capability of TV also decreased from 62.99 million in 2014 to 50.45 million in 2015.
Most output of LG Electronics’ major products also decreased. It is calculated that number of LG Electronics’ cellphones that were produced in 2015 was 73.34 million, which is 10% reduction from 2014 at 82.18 million. Number of produced TVs in 2015 also greatly decreased from numbers in 2013 and 2014, which were 28.78 million and 30.44 million respectively.
Numbers of produced refrigerators, air conditioners, and washing machines, which recorded highest number of produced goods in 2014, all decreased in 2015. Number of produced washing machines decreased from 13.07 million to 12.43 million while number of produced air conditioners decreased from 11.89 million to 10.32 million. Number of refrigerators also decreased from 8.89 million to 8.03 million.
As number of demands decreased, LG Electronics decreased all production capabilities of cellphones, TVs, refrigerators, and air conditioners except for washing machines.
It is predicted that global economy recession and reduction of demands will continue again this year. Samsung Electronics and LG Electronics are planning to increase their profitability by going after premium markets according to changes in outside environments.
“Although last year’s TV markets were stagnant, number of premium products in 2015 increased by 10% compared to number in 2014.” said Team Leader (Vice-President) Kim Moon-soo of Samsung Electronics’ Video Strategy Marketing Team at a recent event for announcement of new TVs. “As UHD has settled as general trend and as number of sales of curved TVs is increasing, expansion of premium markets will continue to speed up again this year.”
LG Electronics is also focusing on going after premium markets by launching its ultra-premium brand called ‘LG Signature’ and others.
Staff Reporter Kwon, Kunho | wingh1@etnews.com