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New 2023 QD OLED TV strategy from Samsung to raise industry expectations


5 Jan, 2023 | Ken Park


TV set 03_AdobeStock_232785918

Samsung began shipping its first OLED TV in March 2022, though not in large quantities initially. Samsung Display’s yield rate hindered the initial supply, and after rumors of failing to adopt WOLED panels surfaced, changing the OLED TV lineup was inevitable. Samsung suddenly adjusted its stock-keeping units (SKUs) of OLED TV models with its distribution channels after experiencing difficulties in its WOLED panel supply negotiations with LG Display. As a result, Samsung did not unveil its first QD OLED TV even at CES 2022, and instead of a global launch, it quietly launched the 55- and 65-inch models mainly in the US and some European countries. 

Samsung VD applied Samsung Display’s latest panel technology, which is its first QD OLED panel. Even so, and despite it being Samsung’s newest product after nine years, this model was purposely not put in the top grade of the TV lineup. Instead, to preserve the consistency of its “Neo QLED TV” brand name, which has existed since 2021, Samsung selected its QN95 model to top its 4K lineup as it had a similar screen size. 

Samsung moved the S95 model one level down. As it was not a top-tier product, it did not bring out the maximum specs that a QD OLED panel could produce. The S95’s price was determined according to QN95’s top-of-the-line pricing strategy. Samsung did not even put the term “QD” in front of “OLED TV.”

Samsung’s sales of the S95 series, which had started quietly, changed dramatically in the second half of 2022

First, Sony, which had entered the market late, placed its A95K series, equipped with the same Samsung Display QD OLED panel, at the top of its lineup. Despite the higher price, the A95K series received massive media and industry attention and its sales volume increased every month.

In addition, Samsung Display’s panel yield rate soared by more than 80% from July onward, and panel supply outstripped consumption. So, if Samsung VD had not consumed all of the previously promised quantity, Samsung Display would have had a problem with panel stocks piling up.

Most importantly, Samsung’s strategy had entered a completely different phase, unlike in the first half of the year, after it received an internal directive to achieve its volume target. This directive was interpreted as Samsung VD should consider further investing in Samsung Display’s QD OLED panel capacity. As a result, Samsung could apply price discounts—mainly used when the market is in decline and are simple and effective to drive sales—on the latest model within months of its introduction. 

Samsung’s October shipments exceeded 70,000 units for the first time, and Sony’s shipments, which had a relatively wide price gap, fell (Figure 1). Sony’s shipment drop and Samsung’s drastic price reduction shocked the entire OLED TV market, affecting LG Electronics’ WOLED sales price strategy as well.

Samsung’s and Sony’s QD OLED TV shipments are expected to reach 440,000 units in 2022. LG Electronics, which does not have QD OLED, is highly likely to show negative growth compared to last year.

Figure 1 QD OLED TV monthly shipments 000s

Samsung’s action of hastily increasing its shipment volume through its pricing strategy in 2H22 instead of using global launching, branding reinforcement, or marketing promotion strategies is burdensome to its cost structure, Samsung Display’s new investment plans, and Samsung’s future roadmap.  

The steep price drop affected the increase in QD OLED TV shipments and expanded the possibility of a price drop throughout the OLED TV market. Further, in terms of Samsung’s premium lineup, the price drop caused relatively low sales in its Mini LED product category.

Samsung highly likely to learn from its OLED TV debut in 2022 and use a completely different OLED TV strategy in 2023

First, instead of a quiet product launch, Samsung will conduct a hard launch in 2023. This is one of the reasons why CES 2023 has been eagerly awaited—through the event, we expect Samsung to formally launch a new QD OLED product and to publicize it extensively.

Second, in expanding the lineup from one series to two, the 77-inch will be introduced in 2023 to reinforce the premium segment. This lineup is possible because the 77- and 49-inch can be produced together using Samsung Display’s multi-model glass (MMG) technology. With the size composition prepared to promote the premium segment lineup, we can expect TV sets to have the maximum picture quality performance that QD OLED panels can inherently produce.

Third, we have also detected changes in Samsung’s product strategy. Previously, the priority for the target quantity was Mini LED TVs, not QD OLED TVs. Samsung’s initial target for QD OLED TVs in 2022 was 600,000 units, but in reality, it did not exceed 400,000 units. This is because the Mini LED TV shipment target was still high, and Samsung prioritized the product strategy and target volume for this lineup. While Samsung’s 2023 QD OLED TV target is set at over 1 million units, the sales target for Mini LED TVs has not been raised.

Lastly, we expect new players TCL, Sharp, and Philips to introduce QD OLED TVs next year, alongside current players Samsung and Sony. As competition increases, Samsung’s product strength and promotional strategies will be most effective in attracting market attention and will provide an advantage. 

Samsung’s product performance, number of lineups, and promotional strategy will be important criteria to determine the QD OLED TV market size in 2023. Therefore, CES 2023 will undoubtedly be a major stage to analyze Samsung’s strategy and identify QD OLED TV product capabilities and market potential in the coming year.

According to Omdia’s latest forecast, the QD OLED TV market is expected to grow 141% year-over-year (YoY) in 2023, as seen in Figure 2.

Author:

Ken Park, Senior Research Manager

As part of Omdia's Components and Devices team, Ken Park heads the Professional AV Devices research team, specializing in global TV set market research with display technology expertise and various industry experiences. Read bio

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