This post is part of my series featuring established companies and the smaller, more aggressive or innovative rivals that may eventually succeed them.
Who would have thought that privately held, 2002 upstart Vizio could upset the LCD TV market and knock giant Sony (NYSE: SNE) off of its perch?
The world of televisions is transforming itself to flat-panel, high-definition and big screens. Vizio was founded in 2002 and is taking major market share from Sony and former second fiddle Samsung. Vizio's promise to its customers is simple -- small is big. The company has only 85 employees, mostly in sales and marketing, and outsources the manufacturing to other suppliers. The key to the Vizio story is getting the product through as many retail doors as possible.
The company has signed up a couple of big wigs in the retail sales channel: Wal-Mart (NYSE: WMT) and Costco (NASDAQ: COST), to go along with Sears (NASDAQ: SHLD) and Circuit City (NYSE: CC). Vizio is also available from Dell Computers e-commerce web site (NASDAQ: DELL). Vizio understands it's all about distribution, distribution, distribution.
Vizio has taken the marketing position that television decisions typically are the domain of the male of a household and, as such, has partnered up with the NFL. Football and big screen TVs are synonymous. Vizio has signed All-Pro running back LaDainian Tomlinson of the San Diego Chargers to be its spokesperson. Tomlinson is regarded as both a fine gentleman and perhaps the greatest running back since Barry Sanders. His wholesome image is magical to Vizio's marketing program.
Vizio offers the lowest prices for the new LCD TVs. The company operates with low overhead and very effective, but low-cost marketing plans. Recent market share numbers show Vizio at 14.5%, easily topping Sony. Vizio's actual numbers are hard to find but the 2nd quarter of 2007 saw the company sell 606,000 units, up 76% from the previous year, while Sony fell from 412,000 units to 253,000 units in the same period.
Vizio has managed to capture the lion's share of new unit sales, but has not disclosed its profitability numbers. The margins in the industry are thin to begin with, which explains Vizio's low expense structure.
Still, it's hard to imagine this young company knocking Sony around the block. Now Sony knows what it's like to tackle LaDanian Tomlinson!
Georges Yared is the editor of GameOnInvesting, a free service devoted to helping investors spot game-changing stocks before they breakout.











Reader Comments (Page 1 of 2)
6-27-2008 @ 10:18AM
tom said...
JUST PURCHASED A VIZIO 37" HDTV WAS SO EASY TO CONNECT AND THEY HAVE A TEC.SUPPORT TO CALL IF HELP NEED. THE PICTURE IS CLEAR AND THE PRICE WAS GREAT.2 YR.WARRINTY IN THE SERVICE.LOOKING TO BUY SOME THING MADE IN THE USA .THEN THIS IS THE ONE.
6-27-2008 @ 11:07AM
Dennis said...
I just took my vizio 50" plasma tv to the dump because there weren't any parts available to fix it,so i bought a different brand. (the vizio only lasted a year and a half)
7-02-2008 @ 11:10PM
Al Stimmler said...
Purchased a new Vizio 46" several months ago. The picture was not clear and was distorted.The sound system sounded tinty and fuzzy. I returned the T.V. which took several months to receive a refund.
I purchased a new 46" Samsung high definition LCD TV which ,in my opinion, is far superior to both Vizio and Sony.
6-27-2008 @ 11:59AM
Christine said...
We didn't buy a Visio because of the many comments on the internet of problems getting it repaired. Some said you had to return the set to their Southern Cal office to get it repaired. Some comments also said it's life might not be as long as Samsung, etc.
Check it out on the internet for product remarks before you buy.
6-27-2008 @ 12:40PM
MICHAEL BLOOMFIELD said...
I've had a Vizio for about 6 months. No problems at all. The 40 inch screen is the perfect size (for me). The only downside is wishing I had waited for the 1080P .... It's out now and will be the 37 incher for the bedroom........soon.
6-28-2008 @ 1:52PM
rj said...
We have one of the new Visio 50' Plasma TVs and other than the heat it puts out, it's a fantastic TV, almost better than going to the theater! It was really easy to set up. It was good that we got a better deal on it so that we could opt for a larger size, the more expensive companies would have forced us to get something like a 42 inch set and the 8 inches really makes a big difference!
Also I would agree with the other writer to definitely get 1080p vs the 720 for the extra expense.
I also have hooked up an old laptop that is on my wireless network, and my wife and I watch streaming videos on them from internet sites on things like NBC, ABC, CBS in the RGB mode, and it totally rocks! We watch almost as much "internet TV" as regular TV now!
I was amazed to read that Vizio itself has under 100 employees total...Pretty impressive performance for that size of a company!
6-28-2008 @ 5:53PM
bill520 said...
I'll stick with Sony until they get rid of that big mouth cry baby spokesperson LaDainian Tomlinson, who along with the rest of the San Diego Chargers can dish it out but when they receive it they cry like babies. Any company that would have him represent them I would not trust to stand behind there product.
6-28-2008 @ 6:18PM
VIC said...
IF VIZIO IS BASICALLY A MARKETING FACILITY, AND THEY OUTSOURCE THE MANUFACTURING END, IT SEEMS LIKE IT MIGHT BE A PROBLEM WITH WARRANTIES WHEN REPAIRS ARE REQUIRED. YOU COULD BE DEALING WITH THIRD PARTIES.
6-29-2008 @ 7:59PM
Aeva said...
I purchased a Vizio TV for my husband for his birthday last December 18th. Set up wasnt too bad...but, the picture was really fuzzy and distorted(never could get it to adjust properly and it sure didnt look like it did in the store,...EVER!!!), the sound was tinny (even with the Bose entertainment system I purchased to go with it). Then,....three weeks later, it just died...no warning...just went black. When I called Sears to have it serviced...they told me sure...in April. And, there was talk about the replacement parts taking forever to get here. I returned it immediately, and got a Sony Bravia. It is excellent..no problems...great picture...sound is immense hooked up to out Bose system. I would highly recommend the SONY BRAVIA....as for Vizio...yuk!!!!!
6-29-2008 @ 9:10PM
Kirk Kelley said...
I have 3 Vizio TV's...Have had the 37" LCD for about 2 years in the bedroom...Have a 42" LCD in the gameroom and just got a 50" Plasma for the Family room....all 3 with surround sound and couldn't be happier.....just like with any man made product there are gonna be some that have a problem......keep kickin A## Vizio...
6-29-2008 @ 9:26PM
moonie said...
Sony for all i care you can take your overpriced sony's of anything and go dump it in the ocean even before it gets to the US. I'm gona buy 7 vizeos tomorrow i hope you will buy vizeo they're just as good as SONY OR BETTER ,..I SAY BETTER. go to any Walmart and look at Vizeos how good the quality is and a much better price, Sony welcome to competition lmao.
6-30-2008 @ 1:16AM
Galls said...
Vizio just buys up excess capacity at assembly lines, so to claim they will become Sony is premature. They have shown great marketing ability by the reselling of industry excess, but they have not shown ability with being prime order/manufacturing.
6-30-2008 @ 1:57AM
Seth said...
VIZIO is ONE BIG PIECE OF CRAP. CRAP CRAP CRAP
6-30-2008 @ 9:57AM
Margaret said...
We bought a Vizio last Sept. 5 months later, all the black portions of the screen turned green (ever seen a green baby gorilla?). Vizio's customer support was very good, and they had us send it back to be fixed. Unfortunately, 1 month after we got it back, the black portions turned green again. We shipped it back for a new replacement. Despite the good customer support, we probably wouldn't chance a Vizio again. This TV replaced an Amana that lasted for 25 YEARS....
6-30-2008 @ 10:02AM
Shane said...
Yea! Just go ahead and buy that Visio. If that $1500.00 wonder breaks out of warranty, just throw it away & buy a new one. Afterall, what's the problem? It's just money. Who cares that few if any inexpensive parts are available and repairs under $150 could be practicle if only Visio was commited / obligated to providing parts & servicibility after the warranty expires. Oh yea, let's discuss electronics made in China.......
6-30-2008 @ 10:56AM
john said...
I have had no first hand experiance with a vizio, but it seems to me its a lower end TV. However, I have a samsung DLP TV, cost me 3200 at C.C and it has been nothing to write home about, makes me wonder if its even wise to spend the big money for the big names or not. as one said, I think there are lemons in every group/manufacturer.
6-30-2008 @ 11:43AM
roudy11z said...
I have asked two large sellers of lcd tv's which one they have returned the most and they say the Visco.
RoudMan
6-30-2008 @ 3:15PM
K. Murphy said...
this is one of the worse companies ever. no customer service at all. wouldn't buy anything else from them
6-30-2008 @ 4:39PM
Billy said...
I have a 50" Sony plasma one and a half years old sitting on my deck that blew out. What a piece of CRAP! I replaced with Visio 47" lcd 1080p that that piece of junk Sony never had a picture nowhere near this picture. They can keep Sony in China. Visio is awesome!
7-02-2008 @ 7:41PM
RT said...
Dell shoots up after CEO buys $100 million in stock
Is there any truth to the rumor around the Dell campus is Michael Dell is planning on taking the company private soon? Also, heard he is working with foreign venture capitalist to try and pull it off.