There was something Clintonesque about it when Samsung denied earlier this month to Lux that it is exiting the LED bulb business. Something, as we noted then, smelled off. Now, the South Korea giant has come clean: It is pulling out everywhere except at home.
‘We have decided to discontinue our LED lamp business in all markets, except Korea, so that we can focus more resources on our core business areas,’ the company said. Samsung remains in the business of making the LED chips that are the building blocks for bulbs and other products like TVs and computers screens.
It did not elaborate further on its withdrawal from bulbs.
The statement contrasts sharply with what Samsung told Lux some three weeks ago, after we enquired repeatedly about whether they were closing down their fledgling and potentially disruptive LED bulb and luminaire operations. At the time, the company said, ‘Samsung can confirm that rumours on Samsung’s intention to close down its LED lighting business are groundless.’
And former U.S. President Bill Clinton did not have liaisons with a certain young White House intern!
As we noted, Samsung wasn’t firmly denying an exit, but instead was focusing on the nature of ‘rumours.’ Lux had written two earlier stories about a possible exit, first reported by Taiwanese research house LEDinside.
Samsung’s denial was also notable because it omitted any words firmly committing to a future in LED bulbs and luminaires. Today’s statement eliminates any guess work for industry watchers. It is decamping in all countries other than South Korea.
Once again, the news of its exit should come as a relief to other LED bulb vendors, who feared Samsung’s prowess. Samsung was a relative newcomer into LED bulbs. It had yet to gear up to full force, but with its branding, marketing, manufacturing and distribution clout, it had the potential to shake up the industry in much the same way it has in smartphones, TVs and appliances.
But even mighty Samsung appears not have the stomach for an industry with huge pricing pressures on a product – the LED bulb – that lasts for decades and thus offers little in the way of follow-up, replacement sales, the model on which bulbs had been sold forever until the arrival of LEDs.
The same difficulties recently prompted venerable Dutch company Philips to seek ‘alternative ownership’ for its lighting division. Likewise, Germany’s Siemens last year spun out its Osram lighting group. On the other hand, General Electric emphatically denied rumours that it is bowing out of lighitng.
The market now favours vendors with lower costs than what is typical for traditional vendors who are saddled with an older infrastructure for conventional bulbs – or those well-equipped to sell lighting services or via other innovative business models.
The rough-and-tumble of LED bulbs appears to have become too much to handle as Samsung grapples with a slowdown in its core business of smartphones. Difficulties in plasma TVs and laptops have also not helped it feel buoyant about new product areas.
The business might also have fallen victim to an internal leadership shake up that could be in the works, with the company’s 72-year-old chairman Lee Kun-hee in poor health.
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