LG Reduces 55-inch OLED TV to $6,999 Through Price Cut, Instant Rebate

LG cut the price again on its 55EA9800 curved OLED TV, which launched selectively at $14,999 last summer through a limited number of Best Buy Magnolia Design Center stores. LG and its retailers are likely eager to push out remaining inventory of the 55EA9800, which bowed with great fanfare last summer only to be trumped a month later when Samsung unveiled its KN55S9C 55-inch Curved OLED TV at $8,999. Both products are facing competition in the new TV technology department from the far less expensive 4K Ultra HD.

LG cut its price on the 55EA9800 to $10,999 last fall, expanded distribution to retailers including Abt Electronics and Crutchfield and by last Friday the set was selling online at $8,999. After Monday’s price cut to $7,999 -- with a $1,000 instant rebate to boot -- the premium 55EA9800 TV was selling at Best Buy and Crutchfield for $6,999. Abt still had the $8,999 price posted.

"We've sold some,” Rick Souder, executive vice president-merchandising at Crutchfield, told us about Samsung and LG OLED TVs. But 4K is “a much more significant business, and I don’t think anyone expects OLED to rival that with current pricing,” he said. “People love the OLED picture, but there’s only so many people who are willing to invest that much in a TV,” he said. “We'd all like to have a Ferrari.”

Souder wouldn’t say what the sales ratio of 4K to OLED TVs has been at Crutchfield but called it “meaningful to not much.” At the same time, in this climate of rail-thin TV margins he’s happy to have a selection of TVs with some built-in profit. “We're just pleased to sell a premium TV,” he said.

LG has made a major commitment to OLED, with five models slated to ship this year, it said at CES. Prices haven’t been set for the new models but a spokesman for the company indicated the 55-inch EC9300, the replacement for the 55EA9800, would likely come in at the price of the model it’s replacing or even below, if it follows typical TV industry trends. Prices haven’t been announced, John Taylor, vice president-public affairs told us.

On competition at the premium end between Ultra HD and OLED, Taylor told us, “It’s not one versus the other. We expect dealers to carry both Ultra HD and OLED.” Certain customers will gravitate to one or the other based on tastes and needs, he said. Taylor said Ultra HD and OLED “come together in our new 77-inch model.” He cited the five OLED models and 12 Ultra HD models in LG’s 2014 lineup and said while LG is “committed to leading the industry” in Ultra HD, “OLED is where LG expects to have the most differentiation.”

Stereo East, Frisco, Tex., is an LG and Samsung dealer, but doesn’t currently sell OLED TVs because there are no promotional programs attached to the early adopter products, David Berman, vice president-sales and operations, told us. “There’s no question that OLED, from a performance and a reliability perspective, is superior to any backlight technology that’s currently available to consumers,” Berman said. On whether the store will jump into OLED later this year when LG ships its roster of models depends on how many competitors follow, and how competitive the OLED TV market becomes, he said. LG will be the first to field a range of OLED TVs, and Berman believes that will put pressure on Samsung and Sony to release their models. “I may bring one in if they give me some kind of demo program where I can put it on the floor and not lose my butt,” he said. Berman believes high prices are keeping a lot of specialty dealers away from OLED.

On OLED’s chance for success at Full HD resolution and not 4K, Berman said OLED can “buy maybe a year,” without having 4K resolution. Beyond that, “unequivocally no,” he said. That’s because ordinary consumers believe OLED is an organic version of LED TV, Berman said. “But it’s not a backlight technology at all.” OLED is where Berman sees TV technology going, “but until it hits $4,000 or $5,000 and up to 70 inches, it’s just not something that can command a lot of position in the market because consumers don’t know the benefit of an AMOLED type of product."

DisplaySearch is forecasting a total of about 5,000 OLED TVs shipped worldwide in 2013, including only about 600 units in North America. By contrast, it estimates that 4K shipments worldwide for 2013 will be just under 2 million units, with about 66,000 in North America.

The difference in shipments isn’t just about price point, Paul Gagnon, DisplaySearch analyst, told us, but the breadth of manufacturers offering 4K and the range of screen sizes. “Most major TV brands are selling 4K LCD TV, while only two are selling OLED due to supply constraints,” he said. Until LG ships 65-inch and 77-inch OLED TVs it has introduced, the only screen size available in 55 inches, while 4K TVs run from 39 inches to 85 inches, Gagnon said. Both technologies have a “great picture, but different aspects of a good picture,” he said. OLED is generally considered to have better color and contrast while 4K LED-lit LCD offers higher resolution. The resolution point won’t be a factor when LG starts shipping 4K OLED, he said.