Samsung Rumored to get out of LCD Panel business

This is about the Panel business - not the final TV product. Either way, still rather surprising given Samsung's #1 position in TVs, but look at the losses listed below and not to hard to figure out why. Most of Samsung's future Capital Spending has been shifted to renewable energy.

JZ

Samsung says considering spinning off LCD business

 

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• An electronics shop salesperson sells flat screen TVs of Samsung Electronics displayed at a shop in Seoul October 6, 2009. REUTERS/Choi Bu-Seok

By Miyoung Kim

SEOUL (Reuters) - Samsung Electronics Co said on Wednesday it was considering spinning off its loss-making LCD flat-screen business in a surprise move as it seeks to orient its components business towards OLED displays, touted as the next-generation technology that will replace LCD TVs.
The LCD industry has been mired in a slump since the second half of 2010 and looks set to become a low-growth commodity type technology with greater competition from low-cost Chinese manufacturers, according to industry studies.
Many analysts had expected Samsung would take full direct control of its OLED flat-screen business and merge it with the LCD operation to utilize part of LCD production capacity in making the more profitable new displays.
The surprise move also underscores the severe market conditions that the LCD industry is facing.
Samsung's South Korean rival LG Display has been loss making for the fifth consecutive quarter, while Japan's Sharp Corp forecast a record 290 billion yen ($3.70 billion) net loss for the year to March as a slump in TV sales forced it to halve output at a western Japan LCD plant.
Samsung ended its liquid crystal display (LCD) joint venture with Sony Corp recently.
"A spin-off will allow Samsung to focus more on OLED and also broaden its LCD customer base to companies that have shunned Samsung due to the fact that they are in direct competition with it in finished products such as televisions and computers," Seo Won-seok, an analyst at Korea Investment & Securities.
Apple, for example, is in direct competition with the South Korean firm in smartphones and resorts to Samsung's key rival LG Display for supply of panels for its popular iPhone and iPad.
BNP Paribas expects a spin-off will also have negative impact on Taiwanese LCD makers as Samsung may also reduce panel purchases from them to help its own spun-off operation.
It estimates Samsung, the world's biggest TV maker, currently sources 40 percent of its panel requirement internally and buys the rest from the likes of AU Optronics Corp, Chimei Innolux and Sharp Corp.
NON CASH DEAL?
Samsung and other companies such as LG Display Co are shifting to a newer type of flat-screen display called organic light-emitting diode (OLED), which is currently used mainly in high-end smartphones, as they believe the technology will replace LCD in larger-sized panels such as TV screens.
Samsung Electronics said earlier this month it was considering fully taking over Samsung Mobile Display (SMD), its OLED joint venture with its Samsung SDI subsidiary.
SMD is a near monopolistic supplier of OLED displays, which are thinner, more power-efficient and boast better clarity and color contrast than LCD screens, and BNP Paribas estimates Samsung's OLED revenues will jump nearly six fold to 26.3 trillion won by 2014 as it is set to be used in large-sized TVs.
But Wednesday's announcement raised speculation that Samsung Electronics may drop a full acquisition of SMD, which may cost 1.6-2 trillion Korean won ($1.4-1.8 billion) and instead transfer its LCD business to the OLED maker and receive a significant number of new SMD shares.
Prospects for a non-cash deal sent in Samsung SDI stock down as much as 6.5 percent, but shares in Samsung Electronics, Asia's most valuable technology firm with around $160 billion market value, jumped more than 5 percent to a record, buoyed by LCD restructuring plan and a broader rally in Asian chip makers on firmer chip prices and rival Elpida's financial trouble.
Samsung, which vies with local rival LG Display for the title of the world's top maker of LCD flat-screens, is estimated to have lost more than 1 trillion won ($890 million) from LCD last year on sales of 23 trillion won ($20.5 billion).
($1 = 1123.8250 Korean won)

Apple TV - New Talk for 2012

Let's be honest, the issue is not if Apple can get the components and build a TV. It is the experience and ability to have the content available in the way Apple would like you to experience it. That is the challenge! See the latest talk about how it may happen below.

JZ

Analyst talks three possible routes for future Apple TV

By Darrell EtheringtonFeb. 1, 2012, 6:35am PT7 Comments

• inShare35

A dedicated Apple TV set was a hot topic at the end of 2011, spurred mainly by comments Steve Jobs made in his official biography by Walter Isaacson. So far in 2012, news on that front has been relatively quiet, but a new note by longtime Apple TV set booster and Piper Jaffray analyst Gene Munster (via Fortune) is reigniting discussion Wednesday morning.
Munster claims discussions with a “major TV component supplier” which had been contacted by Apple about its TV display parts lead him to believe Apple is still on track to introduce a dedicated television device in late 2012. However, there’s a caveat: Munster thinks if Apple can’t get a revolutionary new content model in place, then it won’t move on the market this year.
The analyst then goes on to suggest three possible scenarios that might constitute a unique Apple approach to the television market. Those potential solutions break down roughly as follows:

1. Changing the experience, not the service

In Munster’s first scenario, Apple would basically leave TV programming to existing operators and simply layer its own interface software on top, including menus, guides, DVRs and content discovery. Munster notes that Apple was expected by some to manage its own wireless network in the U.S. ahead of the iPhone launch, but instead partnered with AT&T and focused on UI and UX instead of content. Remember that apps came after the iPhone’s original introduction.

2. A hybrid content model

Apple could also partner with existing networks to offer live TV, and at the same time, deliver on-demand content from providers like Netflix, Hulu Plus or any other content partner willing to play via an App Store-style distribution channel, Munster suggests. It’s a “best of both worlds” type solution, and would probably still come complete with an overhauled UX, but might be trickier to negotiate than option number one, since it involves negotiating with two different types of content providers.

3. A la carte

Munster’s last option is a completely customizable, a la carte option that would see users subscribe to live TV packages from content providers. This would be the most revolutionary of the options in terms of the existing TV experience, but it would also involve a dazzling shift in the way providers make their content available, and the negotiations involved in doing so would be challenging, at best. In the end, there’s also no real guarantee that selective programming is what viewers are after, especially if existing, less flexible bundles from other sources cost less.
GigaOM’s Ryan Lawler wrote last year that Apple’s television effort was more about experience than about content, and described a likely outcome of Apple’s TV endeavors that pretty much mirrors Munster’s second scenario listed above.
Given the challenges involved in negotiating the third solution, I have to agree that a system that works with existing content sources, but also opens up the possibility of apps for different kinds of content makes the most sense as a solution that could still make big waves in the TV industry while also remaining realistically possible in the near-term. Which of Munster’s Apple TV predictions, if any, make the most sense to you?