Rumors have begun to circulate throughout various online spaces that LG has been looking to partner with Hisense for running its TV business—rumors that have been resoundingly rebuffed by LG as being “speculative and misleading.” It seems that all the recent activity in the TV space has caused many to begin to wonder and anticipate a major paradigm shift coming in favor of Chinese brands.
LG calls Hisense TV rumors ‘groundless’
The source of the rumors stems from the Korean business news outlet EBN, which claimed that LG was exploring spinning-off and/or selling its TV business to Hisense. The move, if true, would have followed trends established earlier in the year through the high-profile handoffs of Sony and Panasonic’s TV businesses to TCL and Skyworth, respectively. (It’s worth noting that Philips had undergone a similar transfer years ago, with Skyworth now making Philips TVs under license).
The original report, which has since been removed pending administrative review, claimed that LG executives travelled to Beijing to meet executives from Hisense to discuss the future of LG TVs, including a possible sale of the business to Hisense.
LG has since responded to multiple news outlets that the original report was “groundless,” “baseless,” and “misleading.”
Why integrators should take note
Despite being rumors at this point, the prospect of LG selling its TV business to Hisense has caught the attention of many due to the recent transactions between other major TV manufacturers. Sony’s stands out the most for the custom integration (CI) channel, as in the recent CE Pro 100 Brand Analysis, Sony ranked as being the most used TV brand on projects at 79% use rate among CE Pro 100 companies. LG isn’t too far behind at 54%.
Is the market expecting a paradigm shift?
Last year, it was reported that Hisense eclipsed LG sales in the premium TV segment—which there’s a strong possibility that little data point is where the rumors might be stemming from.
It’s no secret that TV production is largely viewed as being a race to the bottom, with the margins on TVs usually being so low for manufacturers that it requires a tremendous number of products to be moved to be able to make any money. That means that any amount of pressure has the potential to drastically impact profit, with erosion of market share being even more damaging here than in other categories.
In a way, the rumors might point to there being some level of anticipation from markets at this point that other major TV manufacturers, facing pressure from China-based rivals, are looking to exit an increasingly choppy category. Indeed, even CE Pro’s own reporting has looked to answer the question as to what the state of the television market is in attempt to anticipate any other seismic shifts.
Still, at the moment, rumors of LG selling its TV business to Hisense remain just that: rumors.
