Luxury electronics maker Bang & Olufsen will begin sourcing OLED TVs from LG in an effort to achieve scale that will improve the company’s long-term profitability, B&O said.
B&O, which posted an earnings loss in its fiscal first half ending November, currently offers LCD TVs and expects to offer its first OLED TV in 2017. The company didn’t say whether it would transition all of its TVs to OLED.
In its first collaboration with LG, B&O announced earlier this year that is it bringing its audio expertise to bear on select LG smartphones.
With the OLED collaboration, B&O said the LG partnership “will help solve a key strategic challenge as Bang & Olufsen will achieve technological capabilities and scale needed to improve the long-term profitability of the company.” B&O will be able to “focus on core competencies within acoustics and design while further optimizing the company’s supply chain, development, production and service,” B&O added.
The partnership also “involves collaboration in other areas such as license and product bundle activities,” B&O said without elaboration.
The agreement could save B&O as much as $22.6 million to $30.1 million when fully implemented over the next three years, the company said.
In its first half, B&O posted an earnings loss after taxes of $14.6 million, less than the year-ago loss of $27.3 million, on a revenue gain of 18.1 percent to $186 million.
The company said is it still engaged in an ongoing dialog, announced last November, with “one potential offeror that may or may not lead to an offer for the whole or part of the issued share capital of Bang & Olufsen.”
The offeror approached B&O, the company said. B&O said it has not entered into any binding commitments, and it said “uncertainty remains as to the outcome of the dialogue with the potential offeror.”
