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As price differential narrows, LEDs become hotter than LCDs

Makers such as Sony, Samsung and LG are seeing greater consumer preference for LEDs driven by better technology and lower price points

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The (or flat-screen) market is set for a complete makeover with laggard light-emitting diode or TVs slated to emerge as the biggest segment ahead of liquid crystal display (LCD) TVs, which have traditionally dominated the market.

The trigger for this is the narrowing price differential between LEDs and LCDs, which is now down to less than 10% from 15-20% a year ago.

For instance, a 32-inch entry-level from Samsung costs Rs 28,500, while an LED of the same screen-size from the company costs just Rs 2,500 more or Rs 31,000. The scenario is no different with other key manufacturers such as LG, whose price differential between LCD and LED TVs has come down dramatically too in the last one year. Sony is the only key player, whose price differential between LCD and LEDs, is about 25-30%. "But price points have been falling," said Tadato Kimura, general manager, marketing, Sony India. "If last year a 26-inch Sony LED cost Rs 28,900, it is now down to Rs 26,900. So yes, there has been a price erosion in LEDs this year," he says.

The result of all this is that consumers are now increasingly opting for LEDs rather than LCDs in their quest for a better viewing experience. This is pushing up sales of the former.

Raj Kumar Rishi, vice-president & head of audio-visual business, Samsung, says that its LED business, which contributes 25% to topline currently, will by the end of this calendar year contribute 70% - a nearly three-fold jump in sales. L K Gupta, chief marketing officer, LG Electronics India, said that its LED business will contribute almost 85% to topline from about 30% now by the end of the next calendar year. This year, the company is hopeful of seeing its LED business contribute at least 50% to topline. Tadato Kimura, general manager, marketing, Sony India, says contribution of its LED business, which is about 17-18% to topline, will grow rapidly in the coming year. He did not give specific numbers.

Given this growth in the LED segment, its size, which is 15% of the nearly 4-million-unit flat-panel TV market, will double to 30% by the end of this calendar year, according to market estimates. In contrast, LCDs are likely to shrink from 80% to 65%, they say. "In the next two years, the LED segment will constitute about 80-90% of the flat-panel TV market," Gupta of LG Electronics says.

Which means that LCDs are likely to be down to about 10-20% of the market in about two years from now - literally swapping its position with LEDs.

Most manufacturers have already responded to this broad trend by shifting their attention to the LED space, launching more products in an attempt to help consumers upgrade from LCD and cathode-ray-tube (CRT) TVs, which are traditional television sets, in urban and semi-urban areas.

In the last two months, key manufacturers such as Sony, Samsung and LG have all beefed up their LED portfolios offering everything from enhanced 3D features, smart applications, voice-control remotes etc. The number of models launched in the LED space by these manufacturers this summer alone is about 18-19 each. Their marketing spends on their LED portfolio have also gone up in an attempt to get consumers hooked on to the new models.

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