LG Electronics Inc, the world's second-biggest TV brand, expects LCD TV sales to jump nearly 50 percent next year as demand from emerging countries continues to grow robustly, a top executive said.
South Korea-based LG, which competes with home rival Samsung Electronics Co Ltd <005930.KS> and Japan's Sony Corp <6758.T>, expects to sell around 17 million liquid crystal display (LCD) TVs this year and 25 million in 2010, said Simon Kang, chief executive for LG's home entertainment unit.
LG sold 10.5 million LCD TVs in 2008.
The flat-screen TV market will continue to grow in the second half although it will probably see the growth rate slowing from the first half, Kang told a news conference. His comments, made in Seoul ahead of the IFA consumer electronics show in Berlin, were embargoed until Sunday.
I am quite confident for the Christmas season and that some kind of momentum will be maintained next year, Kang later told Reuters in an interview on the sideline of the IFA show.
The market for liquid crystal display (LCD) TVs has seen stronger-than-expected growth this year despite the global downturn and LG could have posted a sharper increase in 2009 sales if LCD panel supply was not tight, he said.
Next year, developed markets will show a limited growth, maybe 2-3 percent, but developing countries such as the BRIC countries (Brazil, Russia, India and China) will likely post double digit percent growth, Kang said when asked about the outlook for flat-screen TV in 2010.
LG accounted for 11.8 percent of worldwide LCD TV shipments in April-June, tailing Samsung with a 18.8 percent market share but ahead of No. 3 Sony with 10.7 percent.
Kang also said LG expected to sell 4 million plasma TVs in 2010, up from 3 million in expected 2009 sales and 2.2 million sold in 2008. In plasma TV, LG competes with Panasonic Corp and Samsung.
In the competitive TV market, makers' profit margins hovered at 5 percent at best, but Kang said premium products featuring new technology, such as LCD TVs using light emitting diode (LED) backlights, could boost profitability further.
There will be pressure to the margin of TV manufacturers, Kang told Reuters. He expected in the second half of 2009, panel prices would rise 5-10 percent from the first half while retail TV price would fall about 5 percent due to competition.
To overcome these difficulties product mix will become critical. We concentrate on high value and large-size models.
LG expects to sell 300,000-400,000 LED TVs this year.
Next year (LED TV) will be more than 20 percent of our entire volume, 5 to 7 million TV sets, Kang said.
At the IFA show, LG unveiled BORDERLESS TVs that eliminate the seam between the screen and the surrounding bezel, available in both traditional LCD and LED-backlit LCD models.
LG also showcased 15-inch TVs using organic light emitting diode (OLED), the largest commercial model for the emerging display technology that makes thinner and more power-efficient screens with better picture quality.
LG's home entertainment unit, which produces TVs, home audio systems and plasma panels, posted 16.4 trillion won ($13.2 billion) in sales in 2008, making up a third of the company's total revenue. The unit's operating profit margin was 5 percent in April-June, up from 0.7 percent a year earlier.
(Editing by Bill Tarrant)