LG Electronics, one of the biggest TV manufacturers in the world, has missed its financial targets by a wide margin, after it managed during 2012’s Christmas period, to make just ten percent of what it did during the same time last year on TV sales.
It’s not all LG’s fault however, as TV purchases have been flat across the board, mainly because everyone already has a flat screen of some description and many, many people have HD displays, so beyond minor improvements to thickness, weight, picture quality, there isn’t a stark difference when upgrading – making it a much less attractive option than the initial switch from CRT to LCD/plasma.
There’s also the fact that with increased advertising budgets with many TV manufacturers, margins of profit with individual televisions have gone down, as competition increases.
Despite the missed target however, LG still did manage to turn a profit, a good one as well. Between October and December, Reuters has it that LG made 107 billion won (£62.5 million) in profit, which is a quarter more than it did during the same period last year. This was still a third less than predicted however, causing LG executives to refine their expectations for the rest of 2013.
It also didn’t help that back in December the company was part of the biggest anti-trust fine in history, when the EU Commission slapped a nearly 1.5 billion euro penalty on LG, Phillips, Panasonic and a few other firms for price fixing on CRT televisions for nearly twenty years.
KitGuru Says: LG is obviously doing ok, it’s hardly falling apart, but it seems like the flat screen TV industry has certainly peaked and is in decline. When was the last time you guys upgraded your TVs and do you plan to in the future?