Back in February, television manufacturers were talking about industry losses and efforts to rebuild a once great TV industry. Now, it's time for some good news, don't you think?
Last week, Samsung and LG announced first quarter earnings for 2012 -- and they were very promising. According to a new report by DisplaySearch, LG reported a 4.1 percent operating profit margin in its home entertainment division, with Samsung seeing a 5 percent increase in consumer electronics. While each company seems to call it something different, make no mistake; this is all about TV.
Even though those profits sound kind of small, this is excellent news for both manufacturers. DisplaySearch says that LG and Samsung barely broke even in 2010, with profits around 2 percent in 2011.
Despite the losses reported by Sony, Sharp, Toshiba, and Panasonic earlier this year, Samsung and LG didn't want to budge on TV prices. The end result was that they didn't lose money on the current TV lineup.
Instead, the companies opted for tight inventory management, which saved on marketing expenses. Also, lower cost models were introduced, with premium models -- the ones with 3D, LED backlighting, and web-based Smart TV features -- driving profits with strong unit market shares.
The research firm also says that this increase may fuel a little fire in both companies, with Samsung and LG looking to snatch a larger market share. Japanese manufacturers seem to be feeling the heat, with some looking to collaborate with Taiwanese panel makers to create future, less expensive products.
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