Rookie Vizio Takes on Brand Name Superstars

For several major HD product makers, this hasn’t been a real good year.
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For several major HD product makers, this hasn’t been a real good year. Profits are down and sales are far from brisk in a question-mark global economy. Yet for one minor HD player, Vizio, it’s fun times.

This month, Philips Electronics provided disappointing profits due to its mixed HD sales numbers. Sony has replaced its top TV executive. Also, Panasonic is re-adjusting its North American operations to better respond to more competition, according The Wall Street Journal. And just this week, Samsung’s boss said he was stepping down (albeit more for alleged indiscretions than for depressed sales numbers, per se). .

Meanwhile, Vizio (a brand virtually unheard of a year or two ago) continues to knock out low-priced flat-panel sets (mostly HD LCD) without economic calamity. In fact, the tiny-company-that-could shipped nearly 12.5 percent of North America’s LCD sets in the final quarter of 2007. (That’s virtually equal to Sony’s quarterly shipment, and less than 2 percent behind frontrunner Samsung, says researcher iSuppli.)

But key to the profit kingdom for Vizio, based in Irvine, Calif., is the fact that HD and other DTV panel technology has become extremely commoditized—in effect, ubiquitous, where it doesn’t take major brand names to steer sales and profits. Without doing much of the costly research, assembly and other chores that used to be necessary to get a product from drawing board-to-market, smaller firms like Vizio can remain flexible, dealing with only designs, component parts and marketing to get their products to open market with far less time and capital than in the old days.

Today, Vizio-brand HD products wind up side-by-side in the Costcos and Wal-Marts of North America, where, all things considered, that 42-inch 1080p LCD going for maybe $400 less than the similar-looking brand name model is looking rather good to cash-strapped consumers.