Irvine’s Vizio Inc. is back on top of the liquid crystal display TV market.
The company retook the No. 1 spot for the most popular type of flat TVs in the first quarter, according DisplaySearch, an Austin, Texas-based unit of market researcher NPD Group Inc.
Vizio, known for selling less expensive TVs, lost its grip on LCDs in late 2007 when big electronic makers started offering low-cost sets of their own.
LCD TVs account for the majority of U.S. flat-screen TV sales.
Booming first-quarter sales helped grow Vizio’s market share to 19%, up from 13% in the fourth quarter.
In North America, some 7 million LCD TVs were sold during the first quarter, up 23% from a year earlier, according to DisplaySearch.
“The first quarter was pretty good relative to our expectations as we came out of a fairly lackluster holiday season,” said Paul Gagnon, director of North America TV research for DisplaySearch. “Vizio is benefiting from some extremely good timing.”
Retailers kept the holiday spirit going by extending lower prices and promotions into January and February, which prompted consumers to take advantage of historically low TV prices.
Vizio’s TVs, made in Asia, can sell for $500 less than those of big-name rivals, including Samsung Group, Royal Philips Electronics NV, Sony Corp., LG Group and others.
After Vizio reached No. 1 back in 2007, rivals fired back with cheaper sets of their own.
The strategy fell flat as Sony and others saw profits take a nosedive.
Our competitors have “very big marketing budgets, expensive employees and a lot of overhead,it wasn’t a sustainable strategy,” said Laynie Newsome, cofounder and vice president of marketing communications for Vizio, which had more than $2 billion in sales last year.
Vizio has been able to exploit lower prices, especially during a time when consumers are taking a hard look at their budgets.
It got a boost in the first quarter largely because it picked up more sales through one of its top retailers, Wal-Mart Stores Inc.
Wal-Mart is among the few retailers that have grown during the downturn.
The retailer has nabbed former shoppers of Circuit City Stores Inc., which last year filed for bankruptcy and shuttered its stores in March.
“Aggressive closeout pricing and Circuit City’s liquidations brought consumers looking for bargains to retailers,” Gagnon said.
In December, Vizio TVs for the first time landed at another discount retailer: Target Corp.
“We certainly are still trying to provide to consumers for the absolute lowest price,” Newsome said. “We are really lucky to do business with retailers that understand efficiency.”
Vizio TVs also are for sale at the stores of Sears Holdings Corp. and at club stores such as Wal-Mart’s Sam’s Club and Costco Wholesale Corp.
The privately held company touts its extremely lean operating model, where all but the design and marketing is outsourced,mostly to Asia.
Vizio has around 100 workers here. Most do customer support, marketing and product development.
Lean Operations
The company was agile enough to quickly react to the wallops dealt by the economic crash, while its big competitors still are reeling, industry watchers say.
“A lot of the large, multinational TV brands were impacted pretty badly,” Gagnon said. “Some are undergoing massive reorganizations that led them to be less aggressive with pricing or promotional activity. That’s another area where Vizio has been able to take advantage.”
Vizio also is able to up its supply quickly.
“Vizio has a pretty lean supply chain,” Gagnon said. “If they saw a quick surge in demand, they could ramp up fairly quickly, while a lot of other companies had shuttered some of their capacity because their suppliers saw the big downturn coming.”
Vizio has poured millions of dollars into high-profile marketing campaigns geared at sports fans and is rolling out a slew of products this year.
They include an “eco” brand that features TVs that consume little energy, a mid-priced series in stylish colors and a premium brand with all the bells and whistles called XVT.
Vizio plans to release a TV with a light-emitting diode screen in July and an ultra slim TV in September.
Some of its latest products aren’t even TVs.
The company is expanding into home entertainment electronics as part of a larger push to cement its brand with consumers.
It recently launched a slim surround sound speaker, called a sound bar, that’s designed to go with any flat TV.
In July, Vizio is set to debut a sleek Blu-ray player, priced at $200.
