Samsung Electronics whose TV sales in Australia are struggling has started to cut global TV production because of weak demand. Also struggling to get traction in the Australian market is Samsung’s all new $10,000 9 series TV according to sources at the OZ subsidiary.
In a statement issued overnight Samsung said that their LCD factories were currently operating at around 90 percent utilisation due to a “softening of the market”.
Both JB Hi Fi and Harvey Norman have confirmed to ChannelNews that sales of all TV sales have fallen “flat”.
Samsung’s comment comes at a time when many LCD producers are reeling from falling profitability due to weak demand for TVs in markets like Australia, Europe and the USA.
Earlier this year Samsung Australia was offered a TV deal by Microsoft to link their Xbox 360 Foxtel offering with a Samsung TV. The deal was rejected only to be picked up immediately by LG.
Analysts said Samsung’s effort to reduce output, if joined by its rivals, could help contain further price falls and advance a much-awaited industry rebound.
Nam Ki-yung, a Samsung Electronics spokesman, said the reduction of its LCD factory utilisation rate is partly due to year-end maintenance and adjustment of some output lines to gear up for new products.
At the CES Show in Las Vegas in January 2011, Samsung is set to reveal what has been described by Samsung Australia as an “exciting new range” of TVs with a big emphasis on IPTV services and that deliver a variety of applications to the screen. The TVs will also deliver DLNA connectivity to various devices including tablets, Smartphones and new Google Chrome powered notebooks and netbooks.
Samsung’s LCD division, which makes LCD screens for phones, computers and TVs, saw a sharp drop in operating-profit margin to 6.5 percent in the third quarter from 11.3 percent in the second quarter as weaker sales of TVs weighed on demand for LCD screens.