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Samsung Buys Sony's Stake In LCD Joint Venture
First time accepted submitter rtoz writes "Samsung Electronics has decided to buy out Sony's entire stake in their Liquid Crystal Display (LCD) joint venture. S-LCD Samsung will pay Sony 1.08 trillion won ($939m; £600m) in cash for Sony's entire stake (50% – 1 shares) in S-LCD Corp., a venture formed in 2004 to make TV panels. After acquisition, Samsung Electronics' stake in S-LCD will be 100%. The move comes as Sony has been restructuring its TV business, which has been making a loss for the past seven years."
Surely, this business would have made business sense for Apple. How did they miss out?
On the other hand, I blame SONY for the woes they are facing in today's electronics market.
Nickel and dimming customers together with hardware that would not work properly with non Sony peripherals robbed them of all potential customers, myself included. Sony thought they were everywhere all the time. Watch out Samsung because I also see Sony traits in you.
Forgive my ignorance, but I've never followed the LCD and/or HDTV market closely, so these may be silly questions with obvious answers. I will assume (correct me if I am wrong) that there's some consolidation in the LCD TV industry and that most "manufacturers" get their panels from only a handful of sources. If that is in fact the case, what variables actually go into determining the quality of a unit? For example, I've read several "rumors" that Samsung once upon a time had a ton of bad caps on some model(s) that gave consumers a lot of grief. Just curious, so thanks for the insight!
Samsung has an Intel-like proprietary stake with many of the boards used in LCD and plasma production, and everyone is using Foxconn factories to assemble and produce. Sony is a major brand value but trying to keep ownership of actual LCD display production was an expensive gamble. Hopefully they put some of the trillion into R&D. Their mhttp://slashdot.org/story/11/12/26/1238225/samsung-buys-sonys-stake-in-lcd-joint-venture#ove to make content (Sony Pictures and Playstation games) was a better investment than hardware.
Gently reply
This news, coupled with the fact that Samsung controls 95% of the rapidly accelerating AMOLED panel market, puts them in a dominant position for display panels in general.
For years Samsung played the "ant" by investing heavily into new production plants for AMOLED when the technology was uncertain. While LG, AUO and Sony acted as the "grasshopper", flip-flopping in their commitment to future investment (documented on oled-info.com back to 2006).
Now AMOLED is in a huge number of phones and actual production TVs will be appearing at the upcoming CES (with OLED lighting in a couple years). So Samsung can retrofit the dying, low-margin LCD business by integrating hybrid OLED backlit modules. That will provide competition to LG's upcoming "fake" OLED TV (OLED backlit only), while Samsung's "true" OLED TV (actual OLED pixels) business will have little competition when they release it.
Lastly, not only did Samsung have the foresight to invest billions in capex for the replacement technology, they also locked up a multi year (non-exclusive) contract with the fundamental IP and materials provider for PHOLED (Universal Display Corp). LG and AUO are still twiddling their thumbs with 3-6 month contracts with UDC. This extends to the general lighting market too, as PHOLED will be required because of efficiency.
Is it a good thing for one company too become so powerful in a single segment? Never. But when the competition is weak and near-sighted, this is inevitable outcome. Jmho.