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LG Display losing Apple’s favour

Publication Date : 23-01-2014


LG Display has been losing its vigor since its key customer Apple began expanding and diversifying its supply chain of display panels in 2012.

Besides the fact that Apple has been increasing its number of display suppliers in Japan and Taiwan for its smartphones and tablets, the globally sluggish market conditions for televisions and personal computers have weighed down the prospects for Korea’s second-largest display panel maker.

LG Display reached its peak in the second quarter of 2012 when its supply share for Apple’s iPhones was almost 57 per cent.

As Japanese companies such as Sharp and Japan Display began ramping up their technology and supplies, especially of in-cell panels for Apple’s smartphones, the Korean tech company began losing Apple’s favour.

Japanese companies’ supply share increased from 33 per cent in the second quarter of 2012 to 77 per cent in the third quarter of last year. A weak yen also had a positive effect on their global shipment of panels to the US tech innovator.

LG Display, meanwhile, saw its share slide from 57 per cent to 22.5 per cent during the same period, according to data by research firm HIS and Etrade Securities.

“Apple’s increased sales of its new products boosted expectations for LG Display’s earnings as Apple had significant influence over LG Display,” said Jeon Byung-ki, an analyst at Etrade Securities.

“But those expectations are turning into concerns (due to LG Display’s falling market share).”

It remains to be seen whether Apple’s plan to enter the wearable electronics market with the iWatch could revive LG Display and offset slow panel supplies to its largest shareholder LG Electronics, which faces increased competition from China’s LCD TV makers.

The media has been speculating that LG Display secured a deal to supply OLED panels to Apple for its smart watch, which could be introduced in the second quarter of this year.

Analysts have expressed a positive outlook for LG Display following reports of its deal with Apple, although the Korean display giant denied such speculations.

Expectations of stable panel and TV prices on the back of major sporting events such as the Olympics and the World Cup this year are also likely to boost LG Display and LG Electronics, said Jeff Kim, an analyst at Hyundai Securities.

LG Display recently introduced an LCD panel for big TVs, which is 30 per cent more energy efficient and 60 per cent brighter than the current models available on the market, in a bid to widen the technology gap with China and Taiwan, and gain attention from its global customers.

The company said the energy efficient “G Plus” display will be the one that will differentiate the company from other competitors in the global market as its partners and consumers want products that perform better and more efficiently. The letter “G” refers to green technology, the company said.

“The newly released LCD panel will be first utilised for big-screen TVs, but it will be further applied such as for smartphones and wearable gadgets down the road,” an LG Display official said.

LG Display, which will release its fourth-quarter earnings on Thursday, is expected to post operating profit below the market’s initial projection of around 200 billion won.


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