SEOUL LG Electronics Inc (066570.KS), maker of expensive OLED display televisions, said it will supplement its line-up of next-generation TVs with sets using cheaper quantum dot display technology under a dual-track strategy.
The world's No.2 television maker after domestic rival Samsung Electronics Co Ltd (005930.KS), South Korea-based LG has been pushing OLED TVs as the next generation technology in concert with affiliate LG Display Co Ltd (034220.KS).
"We are pursuing a dual-track strategy with quantum dot and OLED," LG Electronics Chief Financial Officer Jung Do-hyun told analysts on Wednesday.
Speculation that LG and Samsung would launch quantum dot televisions has intensified after Dow Chemical Co (DOW.N) said it will build a new quantum dot plant in South Korea. Commercial production at the plant is expected to begin in the first half of 2015.
LG earlier reported an operating profit of 461 billion won ($440.21 million) for the July-September quarter, better than a 454 billion won mean estimate from a Thomson Reuters I/B/E/S poll of 36 analysts.
LG touts various benefits of OLED TV, such as higher picture quality than existing LCD technology and the wider set of design opportunities given its malleability.
However, a 65-inch OLED television launched by LG earlier this year priced at 12 million won in South Korea - far higher than an equivalent UHD television using liquid crystal display technology, the current standard.
Quantum dot display TVs offer a cheaper alternative to OLED TVs and are easier to manufacture, analysts say, although the technology is nascent and few models are currently available, with Japan's Sony Corp (6758.T) among the few companies selling them. With more rivals likely to utilize the technology, analysts say LG cannot afford to be left behind.
"At this point LG has no choice but to release quantum dot TVs to make sure it doesn't lose ground to Samsung while OLED continues to develop," said HDC Asset Management fund manager Park Jung-hoon.
A spokeswoman at LG Display, which supplies panels to LG Electronics, said the firm had supplied quantum dot displays to a client in the first half of 2013. She declined to name the client.
LG's mobile handset division turned in a 167 billion won third-quarter operating profit, its highest since the third quarter of 2009. Smartphone shipments hit a record 16.8 million units, thanks in part to strong shipments for the flagship G3 smartphone.
The pickup contrasts with domestic rival Samsung, which is expected to report its weakest quarterly operating profit in more than three years on Thursday, following a lackluster run of new product launches.
LG's TV division reported a 131 billion won operating profit, compared with 124 billion won a year ago as sales of high-end products like ultra high-definition TVs grew. On Tuesday the company said it would wind down its plasma television business by end-November, signaling the imminent demise of a technology that has been overtaken by liquid crystal display.
LG CFO Jung said the firm's fourth-quarter profit should be higher than a year earlier and forecast an annual mid-single percentage rate revenue growth.
(Reporting by Se Young Lee; Editing by Stephen Coates and Ryan Woo)