For value brands, a sour economic climate can be a blessing as folks that used to splurge on high-end tech gadgets are now looking for deals. This rule of thumb applies even more when the product costs a thousand dollars or more—a 10% savings is dinner out with the family, or groceries for a week, or a couple rounds of golf. And it is even more true when consumers feel like they are not really giving anything up but getting a great value.
Last week, HDTV manufacturer VIZIO
announced that that it had become the top shipper of LCD HDTVs in North America with 21.6% market share according to iSuppli. Thanks to shipping 1,351,860 units in Q1, a 21% increase from last quarter, Vizio is no longer second-fiddle
to rival Samsung
and keeps ahead of other leading brands Sony and LG Electronics. This represents a huge jump in market traction for Vizio, which for the past four quarters has languished in second to fourth place with market share in the 8%-14% range. Together with plasma TVs, Vizio shipped more than 1.4 million units, also making it the #1 overall flat-panel HDTV vendor in America.
How was Vizio able to achieve this?
Well, for one thing, the company continues its marketing and distribution partnerships with leading value retailers, including Target, Costco, Walmart, and Sam’s Club (where I got mine). In this economy, more consumers are walking around in those stores, whether they are loading up on breakfast cereal or golf balls.
“We have been fortunate to have been doing business with VIZIO from its inception,” stated Tim Farmer, Costco merchandising VP/GM. “They have absolutely been one of the leaders in the design and manufacture of flat panel television. It is to their credit that they have gone from startup to ‘Top Dog’ in less than five years.”
The other thing is that, in a rapidly commoditizing market for HDTVs, consumers don’t feel like they are being “cheap” when they choose Vizio— they get all the features they would expect. Indeed, Vizio has a full line-up of HDTVs that starts from smaller sets to the most sophisticated XVT Series 55” HD 1080P 240Hz LED LCD HDTV featuring 1,000,000:1 Mega Dynamic Contrast— a monster that rivals the best technology from competitors.
“VIZIO is number one because consumers appreciate saving money while enjoying the latest technology like 1080p and 120Hz,” stated Laynie Newsome, VIZIO Co-Founder and VP Sales & Marketing Communications. “The entire VIZIO team continues to bring the best to consumers - be it performance, stylish design, superb out-of-box experience, world class customer support and we deliver products through the strength of great retail partners.”
In addition to keeping up on expected features, Vizio has been quietly expanding its product line up with peripherals to provide a full home theater experience. They have a new Blu-ray player ($199) and a sleek and powerful HD Sound Bar and Wireless Subwoofer to turbo-charge your HDTV's sound (note: I will try to obtain one or both of these products for an official review).
What we are still waiting to see come to fruition are Vizio’s announced plans to bake Internet content into a new line-up of connected TVs. The advent of Internet-connected TVs, a strategy adopted but most of the leading HDTV vendors in some form, has the potential to upset the current market share apple cart. Vizio plans to leverage new 802.11n WiFi powered HDTVs to provide a range of Internet content including videos from Amazon and Netflix and music from Pandora and Rhapsody. While lacking a full Internet browser, this line of HDTVs will have snippets of Internet content including news, sports, stock quotes, and weather courtesy of imbedded Yahoo Widget Engine technology. Along with Adobe’s Flash Lite software, the new TV Widgets platform will allow developers to build a whole new set of Internet connected applications for Vizio’s future product line.
The challenge when any new major technology is added to an existing line-up is that it becomes a wild card for consumer adoption. Can Vizio continue to execute on its “Where Vision Meets Value” strategy in a market where the stakes and complexity are raised? Will Vizio be forced into a more simplified product strategy to fit the needs of the WalMart public, or can it continue its market leadership with great value and technology that stands up to the best of them? Time will tell.