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Universal Display to bank on smartphones until OLED TVs take off

By Chandni Doulatramani

(Reuters) - Universal Display Corp, a provider of organic light-emitting diode display technologies, said it expects OLED televisions to take off in 2014 and will bank on smartphones until then.

OLED displays, which offer better color, contrast and power efficiency than LCDs, are commonly used in mobile phones and are billed the next big thing in TV display.

High prices, however, are a deterrent. OLED TVs, such as those announced by Samsung Electronics Co Ltd, LG Display Co Ltd and Sony Corp, can sell for as much as $10,000.

"2014 is where you will see the first real volume manufacturing (of) OLED TVs," Universal Display CFO Sidney Rosenblatt told Reuters in an interview.

Research firm Display Research expects OLED TV shipments to reach 4.8 million units in 2015 and 9 million in 2016, up from 50,000 units in 2013. (http://link.reuters.com/xyt46t)

Universal Display, which has a monopoly in the OLED technology industry and counts Samsung and LG as its customers, is betting on this surge in volume.

"I don't believe you are going to be able to sell any significant amount of TVs at $10,000. I've read numbers that are anywhere from 50,000 to a couple of 100,000 units in 2013 on the TV side. But in 2014, they're talking about 2-3 million units being sold," Rosenblatt said.

Analysts expect prices of OLED TVs to ease in the next couple of years.

Until then, smartphones will be the main revenue driver for the company. Samsung Display Co Ltd accounted for about 68 percent of Universal Display's total revenue in 2012.

"For 2013, it's smartphones mostly. That's really where the market is," Rosenblatt said.

"Samsung's expected to sell significantly more Galaxy phones this year than it did last year ... I do see that as the bulk of the market this year."

Analysts have also said that OLED TV sales won't ramp up until 2015.

"When we get to 2015, TVs could be an important part of the mix (for Universal Display). I don't want to bank on that yet," Wedbush analyst Craig Irwin told Reuters on Monday.

"You could see OLED TVs be price competitive with backlit LED TVs in a couple of years. So if that's the case, you could see some really glistering growth out of OLED TVs," Irwin said.

Rosenblatt said he expects the OLED display industry to grow to almost $10 billion in 2013 from about $6.6 billion in 2012.

In February, Universal Display forecast full-year revenue of $110 million-$125 million. Analysts expect revenue of $120 million, according to Thomson Reuters I/B/E/S.

Universal Display's shares, which have risen about 36 percent in the last three months, were up 2 pct at $32.51 by late afternoon on Tuesday.

(Reporting by Chandni Doulatramani in Bangalore; Editing by Saumyadeb Chakrabarty)

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