Samsung and LG Cut 65-Inch OLED TV Prices Up to 50% Before Black Friday

Samsung Electronics and LG Electronics have started year-end discount campaigns on TVs and home appliances ahead of Black Friday in the United States, according to Money Today. Two 65-inch OLED TVs (a screen type where each pixel makes its own light) are being sold at roughly half off through major retailers.

The campaigns are also running in South Korea. The report says the companies face pressure from Chinese brands, and that bigger sales do not guarantee bigger profits.

The discounts in numbers

• $1,398: the sale price of Samsung’s 65-inch S90H OLED TV, a 48% discount, according to Money Today.
• $1,350: the sale price of LG’s 65-inch C6 OLED TV, a 50% discount.
• 11: the number of home appliance categories Samsung is discounting in South Korea, including TVs, refrigerators and washing machines. Five categories of mobile and IT products are also included.
• 7 million won: the maximum benefit LG is offering in South Korea to customers who buy multiple items or subscribe to services. Both companies’ offers tie into the government-led “Korea Grand Festival” and run through the end of this month.

The report did not name the U.S. retailers or the dates of the American sales.

Chinese rivals are closing in

Market research firm TrendForce counted global TV shipments in the first half of this year. Samsung shipped 17.6 million units, up 6.3% from a year earlier. TCL shipped 15.08 million, up 7.1%, the fastest growth among the top four brands. Hisense shipped 14.23 million (up 3.0%) and LG 11.3 million (up 3.9%).

TCL’s preliminary revenue for the first three quarters is expected to rise by up to 18% from the same period last year. In the first half, its TV business gross profit margin rose by 3.4 percentage points to 19.3%. Money Today says this is putting pressure on Samsung and LG as Chinese brands push into the premium market.

Why it matters: sales and profit do not move together

For shoppers, the headline prices are real, but the report says retailers’ discount rates do not always match the cost the manufacturer bears. Component costs and promotional spending also affect what the companies earn.

Money Today reports that Samsung’s Visual Display and Digital Appliance divisions posted an operating loss of 200 billion won. LG’s MS and HS Business Divisions, which handle TVs and home appliances, made an operating profit of 405.9 billion won. The report describes narrowing Samsung’s loss and holding LG’s profit as the main year-end tasks.

An unnamed industry official told Money Today that substantial profit improvement may be limited by China’s aggressive premium pricing and promotion costs. The official said success depends on defending premium margins rather than just sales growth.

Possible extra promotions

The Samsung Lions baseball team won the Korea Series for the first time in 12 years. Samsung Electronics ran large discount events such as the “1111 Grand Festival” after the 2014 championship, and Money Today says more promotions this year are highly likely. The company has not announced any.

Source: Money Today