Samsung 2006 Annual Report Download - page 34

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The world’s premiere digital media brand
Our Digital Media business is well established in both the audio/video and IT sectors
and consists of four major divisions: Visual Displays, Digital Audio-Video, Printing and
Computer Systems. We are the world’s top seller of TVs, and our distinctive product
selection ranges from LCD monitors, printers, DVD and Blu-ray disc players, digital
camcorders, home theater systems and MP3 players to personal computers.
Competitiveness in products, solutions and services
Samsung Electronics enjoys a competitive edge in products, solutions and
services—the three key factors to success in the IT sector and a prerequisite for
breaking into the corporate market. We continue to elevate our brand name
in the IT segment as we contribute to the advancement of TVs and mobile phones.
At the same time, we are introducing a steady stream of creative and innovative
printers, PCs and LCD monitors. Now we are also entering into the B2B market,
boosting sales volume and profitability at the same time.
The top market share in TVs amid intense competition
TVs are one of the most important segments of the electronics industry, with global
demand reaching 194 million sets in 2006. The Korean TV market penetration rate
reached 100% (i.e. at least one TV in every household) in 2000, and the penetration
rate in other developed markets exceeds 90%. However, rapid growth momentum
has returned with the introduction of digital broadcasting as well as demand for
large-screen TVs with higher image quality.
The arrival of the flat panel TV has taken away market share from the
conventional TV models, and customers now have a wide range of choices. Price
competition is severe as rival TV brands vie for market share, while smaller players
from China and non-brand TVs are also making their presence in the market.
As all TV makers struggle for survival by securing market share, we apply
our distinctive technologies, designs and marketing approaches to strengthen our
preeminent position in flat screen TVs. We will continue to widen the lead over our
competitors in 2007 to become the world’s undisputed top TV brand.
US$10B in TV sales for the first time ever
The flat panel TV market, where both LCD and plasma TVs are major segments,
is experiencing explosive growth, and TV makers are engaged in an unprecedented
price war. Yet, we have managed to lead the global TV market by responding to
diverse customer needs with a portfolio that includes LCD, plasma, projection and
cathode ray tube (CRT) TVs.
In 2006, our TV operation reached new heights as we secured the top
share of the world TV market in both sales revenue and units sold. This was our
best performance since we began making TVs thirty-four years ago. Also in 2006,
Samsung became the world’s first to break the US$10 billion mark in annual TV
sales, a record that is more than 60% higher than the US$6.5 billion figure we posted
in 2005. This averages out to US$27 million worth of Samsung TVs being sold each
day throughout the year.
In March 2006, we introduced our new-style LCD TVs, which became a mega-
hit with 3 million units sold over 12 months. We also launched full-HD LCD TVs and
new plasma TVs during the second half, and their enthusiastic reception
in the marketplace has elevated our global leadership still further.
Our premium LCD TVs,
full-HD LCD TVs and
plasma TVs have been
enthusiastically received,
cementing our market
position.
Net Sales (in trillions of KRW)
Operating Profit
(in hundreds of billions of KRW)
06
20.7
17.7
05
2.5
5.8
0605