Wall Street Journal
Vizio Inc., a supplier of low-cost flat-panel display TVs in the U.S., expects shipments of its LCD televisions to rise more than 70% to more than six million units this year and to remain profitable even as set prices fall at least 30%, the company's chief executive said.
Such steep declines in LCD television selling prices suggest more challenges ahead for major television manufacturers. Sony Corp., Panasonic Corp. and other major Japanese television manufacturers have struggled to reverse losses at their television businesses, unable to slash costs faster than falling prices, even though demand for new sets remains strong.
Vizio, a closely held company based in Irvine, Calif., is the U.S. market leader for LCD televisions with a 21.7% share in the second quarter, edging out Samsung Electronics for the top spot, according to research firm iSuppli. Vizio's shipments would be growing at more than triple the rate of the global market for LCD televisions, based on iSuppli's forecasts for 20.5% global shipments growth in 2009.
Its televisions are available at discount retailers and can sometimes cost several hundred dollars less than competitors.
The shift to flat-panel televisions opened the door to companies like Vizio, which focuses on design and marketing while leaving the production mainly to contract manufacturers. William Wang, Vizio's CEO and founder, said in an interview Monday that Vizio is now expanding to sell Blu-ray video players and speakers, again turning to contract manufacturers in Asia.
"There are plenty of factories these days," said Mr. Wang, who says his company made money last year and will again be profitable this year. He didn't give specific details.
Japanese companies are also increasingly turning to contract manufacturers to reduce costs. Sony agreed to sell a 90% stake in an LCD television assembly factory in Mexico to Taiwan's Hon Hai Precision Industry Co. and then outsource production to Hon Hai. Hitachi also started to turn to outside manufacturers for some of its less expensive TVs for the U.S. market.
Mr. Wang was in Tokyo Monday to meet with retailers. Japan is a difficult market for discount brands, due to a loyalty to brand names and the abundance of domestic competitors. Vizio already sells televisions in Japan at stores run by Costco Wholesale Corp. but it has no immediate plans to expand in the Japanese market.
The company doesn't need capital right now, according to Mr. Wang, but it will likely raise capital in the future as it expands into other products and new markets. He also said a listing will happen eventually, saying a public offering will be good for brand building.
Such steep declines in LCD television selling prices suggest more challenges ahead for major television manufacturers. Sony Corp., Panasonic Corp. and other major Japanese television manufacturers have struggled to reverse losses at their television businesses, unable to slash costs faster than falling prices, even though demand for new sets remains strong.
Vizio, a closely held company based in Irvine, Calif., is the U.S. market leader for LCD televisions with a 21.7% share in the second quarter, edging out Samsung Electronics for the top spot, according to research firm iSuppli. Vizio's shipments would be growing at more than triple the rate of the global market for LCD televisions, based on iSuppli's forecasts for 20.5% global shipments growth in 2009.
Its televisions are available at discount retailers and can sometimes cost several hundred dollars less than competitors.
The shift to flat-panel televisions opened the door to companies like Vizio, which focuses on design and marketing while leaving the production mainly to contract manufacturers. William Wang, Vizio's CEO and founder, said in an interview Monday that Vizio is now expanding to sell Blu-ray video players and speakers, again turning to contract manufacturers in Asia."There are plenty of factories these days," said Mr. Wang, who says his company made money last year and will again be profitable this year. He didn't give specific details.
Japanese companies are also increasingly turning to contract manufacturers to reduce costs. Sony agreed to sell a 90% stake in an LCD television assembly factory in Mexico to Taiwan's Hon Hai Precision Industry Co. and then outsource production to Hon Hai. Hitachi also started to turn to outside manufacturers for some of its less expensive TVs for the U.S. market.
Mr. Wang was in Tokyo Monday to meet with retailers. Japan is a difficult market for discount brands, due to a loyalty to brand names and the abundance of domestic competitors. Vizio already sells televisions in Japan at stores run by Costco Wholesale Corp. but it has no immediate plans to expand in the Japanese market.
The company doesn't need capital right now, according to Mr. Wang, but it will likely raise capital in the future as it expands into other products and new markets. He also said a listing will happen eventually, saying a public offering will be good for brand building.
