A Mixed Week for OLED

OLEDs, and, in particular, OLED TV took up a fair amount of my time this week, as I attended the LG OLED Day (which was nearly all about TV) in Munich and spent some time trying to make sense of the spat between LG and Samsung over market data for the TV market. After I’d written and published the article (Samsung Says it is Selling QLED Well, Whatever LG Says), I had another thought.

While IHS is measuring ‘sell in’ to the channel, i.e. shipments into retail, both GfK and NPD measure ‘sell out’ – the volume of sets that is sold to consumers from retailers. That means that there is a potentially significant timing difference. So one scenario for the current differences in the data being quoted is that Samsung has previously shipped a lot of QLED into the channel (so hitting high IHS numbers), but that these sets did not immediately sell out (so GfK and NPD figures were low).

It’s a long time since a TV retailer said to me “Our large inventory is a big asset at Christmas” (I remember it, as I was so shocked!), but retailers still carry quite a lot of inventory. Now imagine that the big shipments into the channel were staying in inventory. Samsung would then work with retailers to clear the sets. (and at the moment our favourite TV retailer in the UK has an offer of mainly around 20% off, but up to 30%, and a free UHD Blu-ray player and a free soundbar on almost all Samsung QLED TVs). If such promotions were successful, then at that point, retailers would not be buying, but they would be selling, so the IHS numbers would be small (as retailers would not need to replace inventory), but GfK/NPD numbers would be growing. That’s what Samsung is showing in its data.

The key, then, to understanding whether QLED is hitting the numbers, is to see if the IHS numbers go back up after the inventory bubble is cleared (and historically, Samsung is very efficient at clearing slow inventory, which is good for its business, but bad for the sale of products that have a long sales cycle or need patient long term market development). It will also be instructive to see if the promotions, which do not apply to the same degree above 65″, where OLED is not really competitive, continue and become permanent.

The point that Vincent Teoh made at the LG day (LG European OLED Day) is that when he spoke to a major retailer near his home in the UK, the store had not sold a single QLED in 55″ and 65″, just OLED, and the positive comments about OLED TV from Best Buy in its investor statement both reinforce the idea that OLED has the momentum in the market. Of course, as a market analyst, I’m fond of saying that “anecdotes are not the same as data”, but GfK was also happy to endorse the idea that OLED is growing strongly in the premium segment at the moment at the OLED day.

Furthermore, the fact that pretty well every brand except Samsung and Sharp is trying to develop OLED, while none except Samsung are talking of QD technology, which should be easier for them to integrate, is telling.

Meanwhile, we reported on Google’s problems with the OLEDs in its Pixel 2 XL smartphones. Just as we were going to press, we saw a statement that ‘ the differential aging is in line with that of other premium smartphones’. Hmmm… The display in the Pixel 2 XL is a flexible OLED from LG’s production lines, so the reported issues are not good news for the firm and there is bound to be more on this topic.

So, it looks like a mixed week for LG Display’s OLEDs, after all. Probably winning the battle for hearts and minds in TV, but not, it would seem, in mobiles.