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Summit News

Samsung mobile unit sees 2010 recovery

KIHEUNG, South Korea (Reuters) - Samsung Mobile Display, an equal joint venture of Samsung Electronics 005930.KS and Samsung SDI 006400.KS, expects the global mobile display market to recover next year to the level of 2008 after contracting this year.

Samsung Mobile Display aims to maintain its market share in mobile phone displays at about 25 percent this year and next, and is betting on growth in premium organic light-emitting diode (OLED) screens and touchscreens, said Lee Woo-jong, vice president in charge of marketing.

“The entire mobile phone market will contract this year but a rebound will start in the second half,” Lee said.

“Smartphones are driving the market’s growth, just like color phones were a decade ago,” Lee told the Reuters Global Technology Summit on Wednesday at the company’s plant south of Seoul.

Samsung Mobile Display is the world’s No. 1 maker of mobile phone screens, which make up about 80 percent of its sales.

The display maker, a sector leader in active-matrix OLED displays, competes with Japan's Sharp Corp 6753.T and TDK Corp 6762.T and Taiwan's AU Optronics 2409.TW in mobile display.

AM-OLED is suitable for high-end mobile phones with various features such as multimedia contents, not only because it has better picture quality, but also as it consumes less power and is thinner than classic thin-film transistor (TFT) LCD.

FALLING MARKET

Lee expects the market for displays used in mobile devices, including mobile phones, digital media players and navigations, to fall to 1.75 billion units this year from 1.9 billion last year.

Of these, mobile phone screens would account for just over 1 billion units in 2009, down from 1.2 billion last year.

“The mobile display market will shrink slightly this year. It will recover to last year’s level in 2010,” Lee said.

The contraction in sales volume will only have a small impact on factories’ total output as premium devices which are seeing rising demand, require larger screens.

Sales of feature-jammed smartphones, such as Apple's AAPL.O iPhone and Research In Motion's RIM.TO BlackBerry, are growing despite a worldwide economic downturn and contraction in the overall mobile phone market.

Samsung Mobile Display said last month the global smartphone market was expected to grow to 500 million units in 2012 from 170 million in 2009.

Lee said Samsung Mobile Display’s AM-OLED screen output was likely to quadruple this year from 2008 but declined to provide any numbers. The company is considering a next-generation production line for the product, although a decision has not been made, Lee said.

AM-OLED screens are currently used on only a small number of high-end models but is picking up.

Lee brushed off concerns about AM-OLED’s lifespan and price premium, two issues seen as the main hurdles for wider adoption.

“When it comes to mobile applications, we don’t have any life span issues any more,” he said. Falling material costs and rising volumes are also likely to help reduce prices.

He said features-packed touchscreens which allow users to manipulate screens will become a dominant trend as mobile screens become larger and user interfaces become more and more intuitive.

“Touchscreens will grow at an explosive pace.”

Editing by Anshuman Daga

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