Vizio Inc. in the fourth quarter of 2008 surpassed Sony Corp. to become the United States’ second-largest flat-panel television brand, as increasingly value-conscious consumers embraced the company’s combination of competitive price/performance, increased marketing efforts, popular retail channels and rising brand recognition, according to iSuppli Corp.
U.S.-based value brand Vizio accounted for 14.3 percent of flat panel TV - i.e. LCD and plasma–unit shipments in the United States in the fourth quarter, up an impressive 3.11 percentage points from 11.2 percent in the third quarter. In contrast, premium brands Sony and Samsung Electronics Co. Ltd. suffered declines of 0.42 percent and 0.62 percent respectively during the same period.
Sony’s share declined to 13.5 percent in the fourth quarter, down from 13.9 percent in the third, allowing Vizio to take the No. 2 rank, behind only Samsung with its 20.2 percent share.
Vizio in the fourth quarter posted the second-best performance among the Top-5 flat-panel television suppliers in the United States on a percentage basis. Only No. 4 brand Panasonic exceeded Vizio’s results, with its shipments rising by 3.12 percent.
The attached table presents iSuppli’s ranking of flat-panel television brands by unit shipments in the fourth quarter of 2008.
“Vizio’s success in the fourth quarter was partly due to increasing brand recognition, courtesy of the company’s strong marketing efforts and retail strategy,” said Riddhi Patel, principal analyst, television systems, for iSuppli.
“A cornerstone of Vizio’s selling strategy is Wal-Mart, the world’s largest retailer, which features the company’s LCD-TV products. U.S. consumers in November and December 2008 bought more televisions at Wal-Mart than at Best Buy, the first time this has occurred in the two years iSuppli has been conducting research in this area.”
In September and October 2008, flat panel-television unit sales at Best Buy exceeded those of Wal-Mart by 2.9 and 3.3 percentage points respectively,” according to a survey of U.S. consumers conducted by iSuppli’s U.S. Television Consumer Preference Analysis service. However, in November, flat panel-television sales at Wal-Mart exceeded those at Best Buy by 2.3 percentage points, making Wal-Mart the biggest flat panel seller in the United States. In December, the sales gap grew to 2.9 points.
“This is an indication that in the present tough economic climate, consumers are becoming less brand conscious and prefer televisions that they perceive to have good picture quality and that are less expensive compared to the competition, rather than seeking models with a lot of extra features,” Patel added.
The attached figure presents the results of iSuppli’s survey of U.S. consumer television retailer preferences.
Bumpy times for flat-panel televisions
The U.S. television market has been impacted by the recession and the past two quarters have been a struggle for brands and retailers. Consumer spending has decelerated and sales of big-ticket items like LCD-TVs have not grown as quickly as in the past.
This decelerating growth and stiffening competition has led to a shakeout among television brands.
“Brands are finding it hard to survive in the current economic climate amid tough price competition,” Patel said. “Olevia LCD-TVs are no longer available since the company filed for bankruptcy in 2008. Pioneer has announced its exit from the television market. During 2009, a few value brands will disappear from the market. The brands that survive will be the ones that either own or have very close ties with the LCD and plasma panel makers, allowing them to keep their costs down.”
