Originally Posted by irkuck
Reset, please. OLED starts only in 2015, period. What was before was experimental preproduction. Now the deal is done, OLED will carve itself market share. Challenging LCD? Only if the technology of printing OLED displays like newsprint arrives. At least such technology is not a fantasy anymore and optimists say it may come even in 2015.
Printable OLEDs may come in small quantities and small sizes in 2015. No one is going to even demonstrate a large-size printable OLED that is based on technology that will be usable for manufacturing.
The only printing tech close to mass production ready is from Kateeva of Silicon Valley. It is in the hands of one customer who is ostensibly gearing up to use it for flexible displays for some kind of mobile device.
Originally Posted by irkuck
OLED dying in 2015 is unlikely just because LG has not built the new plant to close it immediately. Pricing is of course absolutely critical and LG will do whatever it takes to sell all production. They must be prepared for long march to recuperate investment (profitability of TV business is low so there is nothing to talk about) and get a lead in this technology before Samsung potentially comes back with printed OLEDs.
Again, in TV the first pilot line for TV is no sooner than deep into 2016, quite possibly later.
Now the question is: What is the possible premium which OLED can carry over (high-end) LCD price? It is evident that if OLED and LCD prices would be equal people will select OLED. The game is how much can be added to the price for getting enough people buying the initial 800 000 sets? I am convinced LG is ready to set for such a price.
Quick math: The TV market is ~240M. Of that, the 55+ category is <40M. (Let's just go generous). Of that the premium segment is not more than 10%.
If we add in another generosity / error factor, that leaves us with a global market size for 55+ premium sets of 6M maximum.
Now, we are talking the whole premium segment here, which starts below $2000 and includes much larger sizes. For every dollar you price above the competition, you lose some sales. To sell 15% of the total in this segment -- while failing to compete in huge swaths of it (70s, 80s, sub $2000 premiums) -- you cannot possibly price even 30% above the competition. The correct number is likely at most 10%.
Realistically, if LG had price parity tomorrow, it would not capture anywhere near 50% share of the segment next year. There are critical reasons why:
1) LG cannot make more than 2 million TVs next year. And it cannot make 2 million in one year until full production is attained. So the maximum production is a constraint.
2) LG does not have the shelf space, marketing, brand, distribution to just wipe out the competition.
3) LG does not have an offering in the 70-plus category (unless it also reached sub $4000 at that size) that would be competitive.
Originally Posted by stas3098
Of course ,they won't shut down the fab in 2015 the production might even "seep" into 2017, but the thing is that OLED must be cheaper than (high-end) LCD (or equal to mid-range LCDs in price) to start gaining meaningful grounds needed to "justify" the continuation of (mass)production (the business LG is in) and if the projections don't look too good then you can expect the discontinuation of (mass)production as it happened with Plasma, CRT, GE kitchen appliances division etc.... as it will happen with Sony and Panasonic as soon as their contracts with their suppliers are up. For the moment they are trapped in the TV business, but as soon as the decision on whether or not to renew the supply contrasts comes about I'm pretty sure there's no chance in hell those contracts will ever get renewed. LG is also right now trapped in the OLED business until H1 2017 the time their last OLED supply contract is up and as far as I know most of their contracts are up for review in 2016 meaning 2015 will ultimately define whether or not any of these contracts will be renewed.
This is a bleak assessment, but I agree with one part of it: To actually push volumes, the price needs to literally equal or eclipse the equivalent LCD it is trying to displace. Even "a little more" means relatively small share. Relatively small share means no long-term OLED business.
Originally Posted by Ricoflashback
All good points. If OLED cannot bring its price down relative to an LCD/LED display - - it will truly be a "niche" market. That doesn't sound very sustainable to me.
It isn't. Look back at those numbers above. You probably need OLED TV at 10% of the overall TV market for it feel comfortable. That's 25 million, perhaps within 5-7 years. That feels like an ecosystem that's sustainable. Maybe 15 million will do it. 1-2 million will certainly not.