[Digital Times, Kim Eun] LG Electronics is raising the profitability of its TV business by introducing organic light emitting diode (OLED) TV.

According to industry sources on April 18, OLED TV accounts for 26.1% of LG Electronics` total TV sales in the fourth quarter of last year, but it is expected to exceed 30% in the fourth quarter of this year.

The proportion of sales is growing at a faster pace than in 3Q09. This is because LG Electronics is rapidly shifting its TV business structure, which focuses on LCD TVs, to OLED TVs and selling high value-added products.

LG Electronics` average selling price (ASP) of LCD TVs has been 574% and 75%, respectively, compared to Sony`s USD 689 and Samsung Electronics USD 531 in the fourth quarter of last year. On the other hand, the average selling price of OLED TVs in 2004 was USD 4, which is five times higher than that of LCD TVs. Sony, which is chasing LG Electronics, also maintains a high average selling price of USD 3329. LG Electronics posted an operating margin of 8.4% in the TV business last year, thanks to increased sales portion of OLED TVs, which have high average selling prices. The company is expected to record the highest profitability since its establishment with a double-digit OP margin in the first quarter.

The securities industry is expected to record record-high earnings this year, with LG Electronics` TV business headquarters recording sales of 20.9 trillion won and operating profit of 1.9 trillion won, an operating margin of 9.5 percent.

However, OLED TV panel prices are likely to be burdensome for OLED TV panel prices to rise and profitability due to the fact that demand for OLED TV panels exceeds supply by 30% from the second quarter of this year.

LG Electronics representative said, "This year we will add OLED TVs to our artificial intelligence functions, and we expect the OLED TV market to expand from 1.6mn units last year to 2.5mn units this year." "He said.

By Kim Eun silverkim@


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