As price differential narrows, LEDs become hotter than LCDs

Makers such as Sony, Samsung and LG see greater consumer preference for LEDs that offer better technology at lower price points

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

LED TVs offer better technology, lower energy consumption and better picture performance. The trigger for this change is the narrowing price differential between LEDs and LCDs, which is now down to less than 10 per cent from 15-20 per cent a year ago, says market analysts and officials.

For instance, a 32-inch entry-level LCD TV from Samsung costs Rs 28,500, while an LED TV of the same screen-size from the company costs between Rs 2,500 and Rs 31,000. The scenario is no different with other key manufacturers such as LG Electronics, whose price differential between the two models has come down dramatically in the last one year. Sony is the only key player whose price differential is comparatively higher, about 25-30 per cent. "But price points have been falling," says 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."

 

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 and head of audio-visual business, Samsung, says its LED business, which contributes 25 per cent to top line currently, will account for 70 per cent by year-end.

LG Electronics India also expects similar growth in LED TV sales. L K Gupta, chief marketing officer of LG Electronics India, says its LED business will contribute almost 85 per cent to revenue by the end of next year from about 30 per cent now. This year, the company expects the LED business to contribute at least 50 per cent to top line.

Sony India is also hopeful of a jump in LED TV sales. Tadato Kimura, general manager, marketing, Sony India, says the LED business’ contribution to revenue, which is about 17-18 per cent now, will grow rapidly in the coming year. He, however, did not give specific numbers.

Given this growth in the LED segment, its size, which is 15 per cent of the nearly four-million-unit flat-panel TV market, will double to 30 per cent by the end of this calendar year, according to market estimates. In contrast, LCDs’s share is likely to shrink from 80 per cent now to 65 per cent, they say.

"In the next two years, the LED segment will constitute about 80-90 per cent of the flat-panel TV market," Gupta of LG Electronics says. This means that LCD TVs’ share is likely to be down to about 10-20 per cent 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 traditional television sets.

In the last two months, key manufacturers such as Sony, Samsung and LG have all beefed up their LED portfolios, offering a range of services such as 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.