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Samsung's TV reign faces challenges

Competition from rivals, rise of smartphones threaten TV business

By 김영원

Published : March 1, 2016 - 17:55

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South Korean tech giant Samsung Electronics has added a new chapter to the history of the global TV market as it topped the segment last year for the 10th consecutive year.

According to global market research firm IHS, Samsung was the world’s largest TV seller in 2015 on the back of the strong performance of its high-end models, taking 27.5 percent of the global TV market in terms of sales and 21 percent in shipments.

The Korean TV maker has held the top spot for the past decade since 2006, when the company’s global TV sales and shipments stood at 14.2 percent and 10.6 percent, respectively. Behind Samsung’s decade-long reign in the TV sector is solid demand for the tech firm’s high-end models, market watchers said.

The global electronics giant, however, is expected to face hurdles in keeping up the growth momentum in TV sales over the next decade as it has to deal with breakneck competition and unfavorable market conditions due to the rise of mobile devices.

Visitors at the Samsung Electronics’ showcase event in Lisbon, Portugal, in February, look at the tech firm’s latest SUHD TV. (Samsung Electronics) Visitors at the Samsung Electronics’ showcase event in Lisbon, Portugal, in February, look at the tech firm’s latest SUHD TV. (Samsung Electronics)

Armed with price competitiveness, Chinese and Taiwanese TV makers, such as Hon Hai, Hisense and TCL, are closing the technological gap with Samsung. They have received the spotlight at global electronics trade shows as news media often highlight the technical advances of the Chinese players.

Samsung’s recent decision to close a TV manufacturing factory in Malaysia is also seen as part of its efforts to counter the saturated TV market and fierce competition from cheaper TV makers.

Built in 1995 in Seremban, Malaysia, the factory had annual production capacity of 2 million TVs.

The Korean firm plans to build new facilities in Vietnam to produce SUHD, ultra-high definition, TVs and smart TVs, along with refrigerators and washing machines.

The rise of new forms of entertainment, smartphones in particular, is posing another threat to the growth of Samsung TVs in the global market.

Smartphones have been replacing TVs at a fast pace since they emerged in the mid-2000s. The number of smartphone users stood at 3.4 billion last year and is expected to nearly double to 6.4 billion in 2021.

In response to challenges in the market, Samsung is also trying to make their TV products fit in with its other home appliances. The company is putting the Internet of Things -- Internet-connected everyday items -- at the core of all it does.

At the International CES trade show in Las Vegas last year, Yoon Boo-keun, the chief of Samsung’s consumer electronics business, said “Samsung will connect all home appliances by 2020” to make daily lives more convenient and fun.

Some market analysts projected a positive outlook for Samsung’s TV business, saying that due to the quickly growing Internet of Things sector, Samsung could expand its reign in the TV sector in the coming years.

By Kim Young-won (wone0102@heraldcorp.com)