Vizio keeps pressure on Sony, Samsung

Low-cost LCD TV maker again shows it can compete with bigger, more established TV brands.

After a dramatic rise to the top of the LCD TV market last summer, Vizio seemed to have gotten a taste of reality as it settled back down to the No. 3 spot through the end of the 2007.

But it appears Vizio is ratcheting up the price pressure again on its closest competitors, according to new figures from iSuppli, a market research firm that monitors the LCD industry.

Vizio logo

For the first quarter of 2008, the top vendors' share of unit shipments, led by Samsung with 13.9 percent of units shipped, and followed by Sony (13.7 percent) and Vizio (13.5 percent), remain separated by 0.3 of a percentage point. The three were separated by 1.8 points in the fourth quarter of last year.

As the economy worsens, and consumers have less discretionary income for luxury purchases like a flat-panel TV, lower-priced sets are going to sell better . Vizio is in a better position than most in its industry to do that because of its distribution channels, which are mainly bargain-friendly outlets like club stores, and Wal-Mart Stores, and because it saves money by not building and maintaining multi-billion-dollar fabs, or panel manufacturing plants. Instead, it buys its panels from those that do.

Both Sony and Samsung have already responded to Vizio's price pressure with lower-cost LCD TVs of their own. But those TV manufacturers that haven't responded similarly to the Vizio threat are finding the North American flat-panel market an increasingly difficult place to do business.

Philips was the first to buckle under the pressure , announcing last month that it would no longer make or distribute its own TVs in North America. Instead, it arranged for low-cost TV vendor Funai to do so on its behalf.

Shipments of LCD TVs were down across the board in the first quarter, reaching 5.6 million units, versus the same quarter a year ago when 7.96 million LCD TVs shipped, iSuppli said. Although the first quarter is always the weakest for the industry, it appears the second quarter may not fare much better.

iSuppli says unit shipments in North America are expected to grow just 26.6 percent overall this year, to 27.4 million units. That's a far cry from the 88.8 percent growth in 2007 and the 92.6 percent seen in 2006.

About the author

Erica Ogg is a CNET News reporter who covers Apple, HP, Dell, and other PC makers, as well as the consumer electronics industry. She's also one of the hosts of CNET News' Daily Podcast. In her non-work life, she's a history geek, a loyal Dodgers fan, and a mac-and-cheese connoisseur. E-mail Erica.

 

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