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UPDATE 1-LG Display cuts LCD TV market outlook; shares slide

Post Time:Jul 25,2011Classify:Industry NewsView:487

Global sales of LCD televisions this year will be well below earlier market estimates of 220 million units, flat-screen maker LG Display's (034220.KS) chief executive said, due to economic uncertainty.

"Some research firms now estimate the market at around 215 million units but we see growth will be even below that level," Y.S. Kown told reporters late on Thursday but didn't provide his new estimate.

"There are so many competing TV technologies from Smart TV

(Internet TV) to different types of 3D TVs of shutter-glass (SG) and FPR (film patterned retarder). Consumers simply don't see the value for the 50-60 percent premium they have to pay for such products, and thus they are delaying purchases."

Kwon's comments were embargoed until Friday morning.

Shares of the South Korean firm slid as much as 3.8 percent on Friday as TV panel demand failed to show signs of recovery and LG cut production rates and investment plans due to losses from TV panel sales.

"Overall demand from TV and computer makers will continue to remain weak, making it difficult for LG to report a strong turnaround in earnings," said Jay Kim, an analyst at Mirae Asset.

LG, which vies for the top position in LCD flat screens globally with home rival Samsung Electronics Co (005930.KS), reported its third consecutive quarterly loss on Thursday and declined to provide an outlook, citing mounting economic uncertainty. [ID:nL3E7IK165]

"TV demand will definitely improve as we move into the August and September period because TV makers prepare for holiday sales in Chinaand elsewhere but the visibility is very low on how strongly demand will pick up," Kwon said.

Kwon also said his firm was likely to miss its earlier target for FPR-based 3D TV panel shipments because the adoption rate of the new display by TV makers was slow as they had to clear unsold inventories of the conventional SG type panel.

Samsung is the dominant producer of SG type panels.

Samsung and LG control around 25 percent of the global LCD market each.

Panel makers are bracing for a weaker-than-usual seasonal recovery in the second half as output continues to outpace demand slowing on an uncertain global economy.

Demand for large-sized displays such as TV screens and computer monitors, which together account for around 70 percent of LG's revenue, is also taking a hit as consumers opt for smaller smartphones and tablets.

"There's not much to hope for in the second half earnings and Apple will be again its sole rescuer. But Apple's move to diversify suppliers could hit LG's long-term growth prospects," said Kim Young-woo, an analyst at HMC Investment Securities.

LG is a key panel supplier for Apple's (AAPL.O) iPad and iPhone, which had record sales in the June quarter.

 

 

Source: http://www.reuters.comAuthor: shangyi

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