Digital TV Opens New Electronics Frontier
By Nho Joon-hun
Staff Reporter
Opportunities do not come everyday in the combative world of electronics, but they do come. Once it came in the form of semiconductors, and again in liquid crystal displays.
Now there is another huge opportunity on the horizon, and there is a clear indication that a number of Korean players have to capitalize on them with long-term planning and technology development.
``Every once in a while, there comes a product that revolutionizes a sector of society, and digital television is one of them. It is not like having a super-flat television. It is a completely different technology,'' said one senior executive of LG Electronics.
Woo Nam-kyun, executive vice president in charge of the digital display and media business unit at LG Electronics, was quick to point out that while the market has not formed yet, the technology is already here.
``We have been able to take the initiative in developing the latest technologies for digital TV, and we dare to say that we are at least among the global leaders,'' he said.
For one thing, LG, in collaboration with other leading electronics companies like Samsung Electronics, has developed the chipset for digital television reception, a vital set of components for digital broadcasting.
``The localization of critical components for digital television is at the heart of our determined efforts to secure a strong market share when the demand begins to take shape,'' Woo elaborated.
Why is this such a golden opportunity? Along with the development of digital television units, the world is beginning to make the transition to digital broadcasting, which means that soon, conventional analog television sets will not be able to tune in.
``You can use an old washing machine if it does not break down, but with digital broadcasting, the only way to gain access is with a digital television set, or by purchasing an expensive set-top box,'' the LG executive said.
Digital television units come in different forms. They could look very much like the television sets of yesterday _ more likely with improved sassy designs _ or wall-mounted versions, like the plasma display panels (PDPs) for which Korea also has a global leadership.
And in all aspects of the business, LG Electronics has been there first, including the development of the advanced chipset as well as the 64-inch units which meet U.S. specifications.
``One of the reasons why we have been able to achieve the fastest results in our technological development is our acquisition of Zenith Electronics Corp. which has the most advanced know-how in digital television,'' said Woo.
Indeed, having entered the global race as recently as in 1996, LG Electronics has made determined efforts to be the No. 1 in the world in both digital TV and PDPs, and these efforts are already paying off.
For instance, the 28-inch digital television unit that LG Electronics is marketing in Europe was surveyed in March 2000 to command a market share of a whopping 41.4 percent, making it the market leader ahead of Japanese and European brands.
In fact, Woo cited statistics from the GFK report that LGE alone had a greater market share than seven models from Sony, Panasonic and other Japanese brands combined.
``The situation is similar in the United States, if not better, since LGE owns the Zenith brand, which has a customer brand recognition of 90 percent,'' the LGE senior vice president said with confidence.
In addition to the market volume, LGE's digital television models have been tested repeatedly in the United States as having the highest quality and performance, the most recent test reports coming from the authoritative ZDNet.
Such brand recognition and tested quality positions LG Electronics perfectly for emerging as the global leader in digital television and take the lion's share of a market that is projected to grow at a rate of 91.1 percent every year through the year 2005.
A projection from Cahners IN-STAT shows that the global market will have a demand for 2.26 million units, estimated to be worth $4.2 billion.
The market will grow quickly, the data compiler says in its report. The demand is estimated to reach 4.4 million units in 2002, 8.86 million in 2003, 15.4 million in 2004 and as much as 25.9 million units in 2005 when $27.8 billion worth of digital televisions will be sold.
``The main problems, if you can call them that, for the moment, are that digital broadcasting is not fully commercially available, and the price of digital televisions, especially PDPs, are very expensive,'' Woo noted.
At present, a 43-inch digital television costs in the 3 million won range, and the top-of-the-line projection unit, having a 60-inch screen, carries a relatively high price tag of 12 million won.
However, there is help on the way. For PDPs, the Korean government has implemented a temporary exemption of the 15-percent excise _ this practice is common in numerous other countries, including Japan _ making it possible for manufacturers to reduce their prices.
On the high prices that LGE's digital television units carry, Woo explained that there are a number of specifications that consumers have to consider when purchasing a digital television.
``For one thing, you have to see if the digital television comes with the set-top box, which receives digital broadcast signals, installed within the unit,'' he said.
Another important factor is whether or not the model offers high definition resolution, which virtually all of the LGE units provide, thus making them considerably better than the competition.
In fact, Woo says, this is the very reason why LGE products have been so popular in foreign markets, and when all these factors are included in the equation, they are actually less expensive.
``With the constant advancement in technology, made possible by strategic alliances with leading foreign companies, like Spyglass of the United States for software development, LGE will be tough to beat as the market heats up,'' he elaborated.
jakenho@koreatimes.co.kr
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