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  (Source: LG Electronics)
South Korean firm beats Samsung to market, fulfills long-standing promise

With a five-figure price point, LG Electronics, Inc.'s (KSC:066570) latest television set is a bold gamble, testing whether a recovering consumer electronics market is willing to pay an extreme premium for the best technology.

I. Meet the First Big OLED TV

LG has enjoyed a relatively good track record in the LCD television market and looks to leverage its reputation for reliability with a $10,300 USD 55-inch organic light-emitting diode (OLED) set, which just went on sale this week.

The new set is a mere 4 millimeters thin and features LG's new SmartTV technology and on-board Wi-Fi.  A "Magic Remote" is included with purchase.

The release marks the realization of a long standing promise -- Samsung and LG had been showing off OLED prototypes at trade shows since at least 2008.

The move is somewhat of a surprise given the unicorn-like status of commercially available large OLED TV sets in recent years.  For example, Toshiba Corp. (TYO:6502) had vowed in 2009 to release a 30+ inch OLED model, only to abruptly bail on the launch and OLED efforts in general.

OLED TVs are more power efficient than traditional LCD TVs, but that's somewhat a moot point given that they cost nearly twice as much as their LCD brethren.  More relevantly, OLED sets feature much more vivid and accurate color reproduction than LCD models.  For consumers obsessed with picture quality, OLEDs deliver a clear edge over their less expensive predecessors.

But some are not convinced that the advantage will be enough to convince consumers to pony up $10.3K for the LG set.  Comments Seo Won Seok, an analyst at Korea Investment & Securities in Seoul, to Bloomberg, "The key issue here is how LG could possibly narrow the price gap between the new OLED TVs and the conventional LCD TVs.  The price for OLED TVs should come down to about $5,000 to $7,000 to open up the initial market, which is expected about late this year at the earliest."

II. LG Gets a Head Start

For better or worse, LG seems committed to testing the waters and Samsung will likely follow close behind.  Samsung had previously committed to selling OLED sets before the end of 2012, but on Dec. 21 backed off those claims, punting its launch to sometime in 2013.  Samsung cited weak demand and high prices as reasons for the delay.

LG shares rose on the launch of the OLED model.  Despite skepticism regarding sales in the short term, investors appear to view LG's head-start on Samsung in this growing sector as a good thing.  Market research firm IHS Inc.'s (IHS) ISuppli unit labels the OLED sector as the fasting growing part of the $100B USD TV industry.  It predicts that sales will rise from 34,000 units in 2012 to 2.1m units by 2015.  Given continued process improvements OLED panels are predicted by some analysts to be cheaper than LCD units by 2016.

OLED TV shipments
OLED TV shipments are predicted to rise to to 2.1m units in 2015. [Image Source: iSuppli]

In an email LG boasted to Bloomberg, "LG is prepared to ramp up quickly to take the lead in the OLED segment."

Samsung TV
LG's new set gives it a head start on rival Samsung Display [Image Source: Flickr]
Sony Corp. (TYO:6758) was the first to sell an OLED TV debuting the 11-inch XEL-1 in Japan for roughly $2,000 USD back in 2007.  Sold exclusively in Japan and at low volume, the tiny, expensive set was viewed as somewhat of a flop.  Sony eventually pulled the plug on XEL-1 sales in 2010.  Regardless, Sony continued to pour money into its OLED offerings.

Struggling with profitability, Sony latest move was to partner with domestic display rival Panasonic Corp. (TYO:6752).  The pair will look to produce technology for new OLED display sets to be launched sometime in 2013 or 2014.

Sources: LG Electronics, Bloomberg

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Is a little math so difficult for Daily Tech staff?
By rdhood on 1/2/2013 2:41:21 PM , Rating: -1
"OLED TVs are more power efficient than traditional LCD TVs, but that's somewhat a moot point given that they cost nearly twice as much as their LCD brethren. "

Um.... $10,000 is about TEN to TWENTY times as much as their "LCD brethren".

Every computer that I know of has a calculator program. There is no excuse for these kinds of mistakes/hyperbole.

By JasonMick on 1/2/2013 2:48:11 PM , Rating: 5
Is a little math so difficult for Daily Tech staff?
No, but apparently it is for you.

Remember this is a HIGH END model, so its LCD comparison point is @ the high end of LG's lineup. A high-end Infinia LED-lit LCD set costs around $4K...

So okay, it's ~2.5x, but "twice as much" is a reasonable approximation. By contrast your:
about TEN to TWENTY times as much as their "LCD brethren".
Is simply insane math-wise, and nowhere near the mark.

Unless perhaps you were comparing a high end model to lower end LCD/LED TV offerings, in which case the error in your premise would instead lie in your choice of comparison point.

Either way, you're not only being quite rude, you're wrong.

By Argon18 on 1/2/2013 4:36:31 PM , Rating: 2
Very true, a high end LCD television is not cheap! Attempting to compare this $10k OLED model to a Vizio Wal-Mart special is like comparing a new Porsche with a Honda Civic - completely different market segments.

By messele on 1/7/2013 4:05:46 PM , Rating: 2
Yeah, people don't laugh at you when you're driving a Civic, for a start ;)

By OCNewbie on 1/2/2013 5:43:53 PM , Rating: 3
Give this man a 6!

By menting on 1/2/2013 2:49:43 PM , Rating: 2
you'll need to compare the top of the line TVs to this one to be fair, as this is definitely top of the line.
a 10-20 times as much means you are using a $500-$1000 price as comparison.
Right now, I see LG's most expensive 55" LCD TV to cost $3600, so it's almost 3X the price for a 55" OLED compared to that one.

By menting on 1/2/2013 2:50:31 PM , Rating: 2
and I was beat by about a minute with my reply...

By mcnabney on 1/3/2013 10:34:40 AM , Rating: 2
Why are you assuming this OLED display is high end?

It could be a really crappy - bottom-end version. Only rich guys get to see the $40k+ models. They let the peasants gawk at the crappy $10k OLED.

By skroh on 1/4/2013 11:18:57 AM , Rating: 2
I watched the looping demo on a Sony 10-inch OLED unit at the local Best Buy Magnolia department. Contrast, brightness, color saturation, were stunning. No visible grain to the resolution whatsoever.

To skeptics about whether the unwashed masses will appreciate the technical image quality of OLED, they will. All the store has to do is set it next to anything else, and that anything else will look like crap.

"Hmmm, Mabel, we could get this here TEE-vee (in the South, it's important to put the accent on the tee), looks kinda fuzzy, kinda muddy, kinda flat or washed out, or we could get this one here that looks like a window into liquid light. Yep, gunna go with the liquid light."

"And boy have we patented it!" -- Steve Jobs, Macworld 2007

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