Vizio Seeks to Expand Distribution, Readies Price Move

Vizio isn’t alone in its pursuit of Syntax-Brillian accounts. ViewSonic is said to be lobbying many retailers for shelf space, including TigerDirect. Syntax-Brillian’s annual sales through TigerDirect were about $40 million, much of which has gone up for grabs when the manufacturer went Chapter 11, sources said. Vizio is expanding into Canada, having delivered product to 74 Costco stores and six Sam’s Club outlets there, with 274 Wal-Mart Canada stores to follow, Vizio said. TVs sold in Canada are largely culled from Vizio’s “VO” series of 52W ($2,499), 47W ($1,799), 37W ($899) and 32W ($699) LCD sets, Vizio said. Vizio also has landed its TVs on Target.com. Target is a major Syntax- Brillian customer.

Syntax-Brillian isn’t alone among troubled suppliers “that are waving the white flag a little bit,” John Schindler, Vizio vice president of product development, told us. “That will bring opportunities that allow established companies like Vizio to expand their distribution. There’s not much room for more brands in the market.”

Among the levers Vizio expects to pull is continued aggressive pricing and adding audio and other products that complement its TVs, Schindler said. Vizio expects to lower its prices next month, he said. It plans to cut pricing on its 42W 1080p VW42LF LCD TV that has been priced at $996, he said, without giving specifics. The move will close the gap with Vizio’s 42W 1080p plasma TV, sold through Wal-Mart at $797, Schindler said. Vizio returned to the 42W plasma TV category this year after dropping the product in 2007, owing to price competition with similarly sized LCD TVs. Wal-Mart also has been selling Vizio’s 32W plasma TV since June at $528 and distribution will expand to other chains by fall, Schindler said.

As for audio, Vizio worked with ASI Audio Technologies to develop a new Sound Bar speaker system that will ship in August at $299 as a complement to its flat-panel TVs. The Sound Bar bears a Cirrus Logic Class D amplifier and is packaged with a 6.5-inch, 75-watt wireless subwoofer that operates at 2.4 GHz. ASI is designing the speakers and sourcing production for Vizio. It has SRS Labs’ TruSurround HD and Volume IQ technologies. Vizio is weighing adding wireless headphones in Q1 2009 and may build other features into its flat-panel sets, including a Blu-ray player, Schindler said. “We want to be leaders in audio and we're going to focus on that for the next couple of years to complement our TV strategy,” Schindler said. “So it’s not just one product but a series them that we will eventually come out with. We'll have different versions of this and maybe integrate a Blu-ray player.”

As Vizio embarks on a new strategy, its major flat-panel TV supplier Amtran cut forecasts for 2008 shipments to 3.2- 3.3 million units from four million, Amtran officials said. Amtran, which assembles most of Vizio’s product for North America, said shipments dipped to 720,000 units in Q2 from 760,000 in the previous quarter. It had predicted in 2007 it would ship four to five million units this year (CED July 27 p6). Vizio shipped about 2.8 to 2.9 million units last year, generating $1.9 billion in revenue, company officials said. Vizio also sources about 500,000 units from a combination of Foxconn and TPV Technology, mainly smaller sizes. The sluggish economy is causing the slowdown as is the fact that the market “is not growing as fast as we thought it would,” Schindler said. Vizio is projecting 25 to 30 percent unit growth, he said.

In effort to break out of its low-end niche, Vizio unveiled its Extreme Vizio Technology (XVT) series of 42W ($1,499) and 47W ($1,899) LCD TVs with 120 Hz frame rates and motion estimation, motion compensation (MEMC) technology based in a Mediatek processor, said Ken Lowe, vice president of product development. The sets, which are first entries in the 120 Hz category and ship in late September, use LG Displays panels with 1080p resolution, 500 nits, five millisecond response time and 6,500:1 contrast ratio. The series also will include a 50W plasma TV ($1,599) that combines Mediatek’s MPEG decoder with Silicon Optix’s Reon processor that handles deinterlacing and noise reduction in SD video. It features 1,200 nits, 30,000:1 contrast ratio and 100,000-hour life time, up from 60,000 hours, Vizio said.

Vizio also is readying 32W ($649) and 37W ($849) LCD TVs housed in a “Java” dark wood-like bezel and highlight with gold trim. The 1080p sets have 1,500:1 contrast ratio and 500 nits and will be part of Vizio’s effort to gain regional dealers, Vizio said. Vizio also will plunge into the PC LCD monitor business with a 26W model ($449) that ships in August with a Chi Mei Optoelectronics panel that has 1920x1200 resolution, 2,000:1 contrast ratio, 300 nits and three millisecond response time. Vizio is considering adding 24W and 22W monitors in 2009, Schindler said. Vizio also will add 19W, 22W and 26W LCD TVs in November, the latter two with 1080p resolution, Schindler said. Each set will have 300 nits and 1,000:1 contrast ratio. Pricing hasn’t been set, he said.