Samsung Scores with Newest TV Tech

The Korean electronics maker is determined to widen its LCD-TV leadership, pummeling rivals with an all-out effort to promote new screens with LED technology

By Moon Ihlwan

Stop in a Best Buy (BBY) to buy a new TV and, separate from all the flat screens from the likes of Sony, Sharp, and Philips, you'll find a section devoted to just one brand, Samsung, and only one type of TV technology, LEDs, or light-emitting diodes. Since July, Best Buy has been devoting 16-foot-wide wall space in each of its 900 stores nationwide to the Korean company's top-of-the-line flat-panel sets, which feature a new type of lighting that produces a picture that is crisper than ordinary LCD or plasma models. It's the first time Samsung Electronics has gotten this kind of red-carpet treatment at Best Buy, which has a similar arrangement for Apple's (AAPL) iPhone.

The alliance with Best Buy is another sign of the success Samsung Electronics has achieved in marketing its high-end TVs, which are burnishing its brand image and helping Samsung to rake in profits. The increased presence in the U.S. retail electronics chain underlines the Korean company's growing leadership in TVs. Its global shipments of LCD TVs totaled 5.7 million in the second quarter of this year, up by some 606,000, or 12%, from the first quarter, the largest growth of all TV makers, according to market researcher iSuppli. In contrast, sales for Sony (SNE), erstwhile king of the TV world, fell to 2.8 million units from 3 million.

Samsung's strategy this year was to bring out a new series of TVs, particularly those using LEDs as a light source. It was a high-risk bet as the new lineup could boost the price by up to a third at a time when consumers faced the pain of a global recession and the threat of layoffs. But Samsung officials said they were determined to widen the gap with rivals after becoming the leader in LCD TVs in 2007 both in terms of unit sales and revenues. "We needed a new driver to maintain a growth momentum," says Sue Shim, senior vice-president for TV marketing at Samsung.

Making LED TVs Stand Apart

The Korean electronics company saw the answer in LED-lit LCD TVs. That's because by replacing traditional fluorescent lamps with LEDs to illuminate the screens of LCD TVs, manufacturers could deliver brighter and sharper picture quality, save power by more than 40%, and reduce the thickness of the screen by a third to make it easier for consumers to hang them on the wall. Yoon Boo Keun, Samsung's TV chief, said he believed his company could accelerate the opening of a market for the products as they satisfy "unmet needs of consumers."

Once the decision was made last fall, Samsung pushed for LED-lit LCD TVs at full force. To make its new products stand out from other LCD TVs, Shim's marketing team drew up a plan to position them as a completely new category. "We want to get across a message that it is a whole new species of TV," Shim said. To stress the difference, Samsung dropped a reference to LCD, simply calling them "LED TVs."

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