Vizio Inc.’s line of personal computers hasn’t generated the sort of buzz that helped power the quick rise of its high-definition, flat-screen TVs and soundbars.
The Irvine-based company appears to have halted production of PCs and tablets as it weighs a product strategy forged two years ago when it first entered the market. That followed years of fast growth of sales of TVs and other products for the company and founder William Wang (see related entry on OC Wealthiest list in Special Report, starting on page 15).
PC products aren’t available on its site, as well as online or in-store at Wal-Mart or Best Buy. Only a few units are available on amazon.com, another longtime distributor Vizio has relied on to catapult its TV and audio products to the leader board in the U.S.
“Given the continued weak sales in the PC category as a whole, Vizio is revisiting its product assortment strategy,” the company told the Business Journal in an email.
The decision to reassess its strategy after two years of navigating the fiercely competitive PC market comes at a rather peculiar time: smack dab in the middle of the back-to-school shopping season, which typically provides a sales bump for companies that release new models.
Toshiba Corp.’s Digital Products Division, a unit of Irvine-based Toshiba America Information Systems Inc., announced in late June that its new lineup of ultrabooks, laptops, tablets and all-in-one PCs was available at U.S. retailers.
Vizio entered the PC market to much pomp and circumstance, debuting its line of desktops and thin and light laptops at the International Consumer Electronics Show in January 2012. It kicked off retail sales that June at an event in New York and launched a mobile road show with retailers to augment its general awareness campaign.
Timing
Vizio’s timing was off.
Consumer habits were changing rapidly. Smartphone unit sales had already blown past PC sales at a rate of more than five to one, and tablets were quickly gaining widespread adoption.
“They kind of came into the marketplace at a particularly difficult time for PCs,” said Craig Stice, senior principal analyst at Englewood, Colo.-based market tracker IHS Inc.
Industry insiders contend the PC market has bottomed out, and the top three market share leaders—Lenovo, HP and Dell—indicated in recent conference calls that a significant turnaround is unlikely.
“Everyone has been struggling on the consumer side,” said Stice, whose coverage area includes computing platforms, servers and storage.
Vizio has yet to crack his quarterly market-share report, indicating the company has less than a 2% share.
By comparison, Lenovo has 17.8%, HP has 15.2%, and Dell has 10.4%.
Vizio’s struggles to gain a serious foothold in the maturing PC market are in contrast to its early success in the flat TVs and soundbar segment that it’s maintained through the years.
The company shipped its first TV in early 2003 using a playbook similar to the one it has employed in its PC game plan: hooking up with big-box retailers and the biggest names in online retail to push its products to the masses.
By 2007, Vizio was the No. 1 seller of flat screens in the U.S., combining affordability with quality.
It has since lost that title to Samsung Electronics Co., the world’s largest consumer electronics company, but still holds the top ranking among smart-TV sellers in the U.S., with more than 6.3 million units shipped last year.
The Business Journal estimates Vizio has annual sales of about $3.1 billion.
The company’s ascension in the soundbar segment was just as impressive. Vizio released its first speaker in 2009 and within a year became the market-share leader in the U.S.
Its strategy of introducing higher-end PC models, which competed against Apple’s MacBook Pro and Air models, has been less successful.
“I don’t feel like they made a splash in the market like they could have,” said Benjamin Arnold, an industry analyst in the Herndon, Va., office of The NPD Group Inc.
Now a larger problem faces Vizio and every other PC manufacturer, though.
“We just don’t spend a lot of time on notebooks and desktops anymore,” Arnold said. “Our habits have gone in a different direction.”
Wang has been known to pull the plug on other technologies. The company’s foray into LED light bulbs never gained traction, and this year its line of TVs that debuted at CES was noticeably lacking 3-D technology.
Vizio, like its competitors, is now investing its research and development dollars in ultra high-definition technology, commonly referred to as 4K, and other picture-resolution improvements.
