"Legacy companies." That's what William Wang, the man who has led VIZIO Inc. to become one of the top TV manufacturers in the United States, calls the companies who are still in the business from the age of CRT. Companies like Sony Corp., for example.
The numbers back up his confidence. According to iSuppli Corp., the number of LCD TV sets shipped by VIZIO in the third quarter of 2009 jumped 87% over the same term of the prior year, which is pretty astounding when you consider that the LCD TV market overall only grew 11% in the same period. VIZIO has been caught up in a number of patent fights since 2007, but is still going strong.
Rivals are pushing to differentiate themselves from VIZIO through functions and other means, but VIZIO was only a few quarters behind them in adopting a faster refresh rate, LED backlights, and other improvements. And of course VIZIO sets are less expensive, and the styling is not half bad.
We spoke with VIZIO's Wang about the source of their strength.
Q: How have you been able to keep on shipping inexpensive but good sets to the market so long?
A: Most people think the way to make inexpensive TVs is to use inexpensive parts, but these days that's not the best approach. It is far more important to establish a strong relationship with outstanding firms.
We outsource TV design, manufacture and other matters to AmTRAN Technology Co., Ltd. and Hon Hai Precision Industry Co., Ltd., both of Taiwan, and to TPV Technology Ltd., a Taiwan-capital company in Hong Kong. They all grew to the size they are in the PC industry. I'm from Taiwan myself, and that was a big help in building good relations with them.
For sales, our tie-ups with companies like Costco Wholesale Corp. are essential. It would be impossible to drop the street price on our sets if our price structure was the high-cost system used by existing mass merchandisers, or if we used distribution channels that demanded high gross profits. Even if we tried to grow by providing good and inexpensive TVs, it just wouldn't happen.
Before I got involved in TVs, I was delivering CRT monitors to Gateway, Inc., and it seems as if Gateway has been replaced by Costco Wholesale. Both firms are channels concentrating on providing quality products at low prices. Ted Waitt, the founder of Gateway, is a personal friend of mine, and a VIZIO shareholder.
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