Samsung Electronics – “We got to Move Those Color TVs”
Samsung Electronics (005930.KS) never ceases to amaze, now adjusting the prices of their latest line of Mini-LED/QD TVs for the eighth time since the line’s release on May 20. Most of the price changes have been in the highest price tiers, but in this round, they got down to the bottom tier for the first time. Of the 33 models in the new line that we track, 1 (3%) model is priced higher than original pricing, while 11 (33%) are flat and 21 (63.6%) are down. 22 (66.6%) of the 33 are at their lowest price point while 1 (3%) is at its highest price point. Among the 8K Mini-LED/QD sets in the Samsung line up, the average decline from original pricing is 13.9%, while in similar 4K Mini-LED/QD sets the decline is 11.2%. When looking at sets that are only QD (no Mini-LED), the average decline is 6.3%, with high-end QD sets down 9.7% and low-end QD sets down 3.5%. Across the entire line of Mini-LED/QD and QD only sets, the average price has declined 9.0% from original pricing.
Samsung’s price changes in this new line, which is its first to contain retail level Mini-LED/QD sets, have been unusual, and we have noted previously that we believe Samsung’s initial pricing was more of a test given the lack of comparables (TCL (000100.CH)) was the only other TV brand with Mini-LED TV product and was not available in the US). Subsequent to Samsung’s release, LG Electronics (066570.KS) also released its line of Mini-LED/QD TVs at comparable or lower prices, pushing Samsung to rethink some of its original price points. Of course the true motivator in the TV space is moving units and keeping inventory lean at all levels, so the constant price adjustments seem to indicate that Samsung is still searching for pricing that will allow it to meet internal targets.
At this early point in the Samsung Mini-LED/QD TV set lifecycle we doubt that component pricing has much to do with set pricing, at least at the top end of the line, but the recent price reductions at the bottom of the line, where component price increases would have the greatest effect, are indicative of the general slowdown in TV set sales and the need to attract consumers with lower prices, despite the effect on margins. We expect that Samsung still has some margin ‘room’ on its Mini-LED/QD sets , but lowering prices on the bottom of the line when costs are rising seems a bit desperate to us.
Samsung’s price changes in this new line, which is its first to contain retail level Mini-LED/QD sets, have been unusual, and we have noted previously that we believe Samsung’s initial pricing was more of a test given the lack of comparables (TCL (000100.CH)) was the only other TV brand with Mini-LED TV product and was not available in the US). Subsequent to Samsung’s release, LG Electronics (066570.KS) also released its line of Mini-LED/QD TVs at comparable or lower prices, pushing Samsung to rethink some of its original price points. Of course the true motivator in the TV space is moving units and keeping inventory lean at all levels, so the constant price adjustments seem to indicate that Samsung is still searching for pricing that will allow it to meet internal targets.
At this early point in the Samsung Mini-LED/QD TV set lifecycle we doubt that component pricing has much to do with set pricing, at least at the top end of the line, but the recent price reductions at the bottom of the line, where component price increases would have the greatest effect, are indicative of the general slowdown in TV set sales and the need to attract consumers with lower prices, despite the effect on margins. We expect that Samsung still has some margin ‘room’ on its Mini-LED/QD sets , but lowering prices on the bottom of the line when costs are rising seems a bit desperate to us.
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