Vizio Leads LCD Sales; Syntax-Brillian Remains in Seventh Place

Syntax-Brillian's (BRLC) Olevia television brand as well as Tier 1 LCD brands: Samsung, Sharp (SCHAY.PK), Sony (SNE) and LG certainly have their hands full trying to compete with Vizio. Vizio just became the best selling LCD television brand in North America for Q2 of 2007 according to data from iSuppli.

As mentioned in my previous article, for the near term Vizio is Syntax-Brillian's biggest competitor given the fact that they both are targeting the same market by using the same strategy of selling their televisions 30 to 50% less then Tier 1 brands while providing a good quality product. While Syntax-Brillian is avoiding retailers such as Sam's Club, Costco (COST) and Wal-Mart (WMT) because of lower margins, Vizio is thriving in them and helped propel itself to the number one spot. Vizio has caught the eyes of the bargain hunting shoppers in those retailers. The addition of Sears (SHLD) for the quarter also aided Vizio in increased sales.

For Q2 of 2007, Vizio shipped 606,420 LCD televisions compared to 343,704 for Q1, an incredible 76.4% increase. Market share dramatically increased in Q2 to 14.5% from 9.4% the previous quarter, a 5.1% increase that brought them to number one from number five. Syntax-Brillian's Olevia brand stayed at number seven. They shipped 256,197 units in North America for Q2 of 2007 and market share only increased to 6.1% from the previous quarter of 5%, a 1.1% gain. Westinghouse, another popular low costing LCD brand, moved up to the number 8 spot. Their market share increased from 2.8% to 5.5%.

Vizio has done an excellent job of establishing a brand name for itself in a short period of time. At first, consumers were skeptical about the Vizio name and leaned towards the more expensive Tier 1 brands. However thanks to their marketing efforts and selling their televisions through mass-market retailers, Vizio has become the leader for quality low costing LCD televisions. By establishing a household name, Vizio will be in much better shape to compete when the difference between Tier 1 brands and Tier 2 and 3 brands compresses.

Vizio lead shipments for all 32, 37, 42 and 47 inch LCD televisions in North America for the quarter. Riddhi Patel, a principal analyst for iSuppli, believes that Vizio will maintain the leadership for at least the next two quarters which are usually the busiest quarters for LCD televisions.

Disclosure: Author has a short position in BRLC

Comments

[chiggins:]

Uh, with 50% of the stock short and earnings coming up, this Yahoo poster (for hedge funds who are not sure if they'll get smoked on this one) puts out yet another hatchet job. I'm sure if BRLC came out with blow out numbers and all receivables paid for in record time, they would still try to smear this one. If the hedge funds could put this company out of business they would. The true snakes in the grass are those that pile on the shorts just to sink the stock, of course, not using their money but OPM. using websites like this which publish anybody who can type is part of the strategy to scare you to sell or not buy. A large short fund does not want to give in and get a short squeeze. it can be quite damaging ti them. So they create the myth and rumor mill of fraud or failure to give them a lower price to cover and with the selling pressure they can hide their covering since it won't appear as a squeeze.

2007 Aug 21 01:07 PM

[soonerxii:]

50%? Really, THAT much? That's a lot. If you are long, and really believe in this company than you just might be set for a beautiful ride up. I don't agree, however, that shorts are snakes that bash unfairly punish stocks. I'm sure there are dudes on message boards and such, but who cares about them? To me the real crooks are the ones that get you into stocks that you shouldn't be in. Then it tanks and you find yourself blaming the shorts for exposing the company's flaws. When in reality, it was some pumping bull that led you to water in the first place.
I short stocks. I go long. Whatever. The market is full of snakes, but not necessarily because they are shorts.

2007 Aug 21 05:40 PM

[RC Martin:]

Where can an interested investor buy shares of Vizio? Oh, that's right , they can't. So what is his point?

That there is a company,you and I cannot own, that sells LCDs just like Brillian therefore we shouldn't be interested in owning Brillian? This story harkens me back to the fellow who whistled past the graveyard daily.

Buying a firm that isn't growing quite as fast as the one you cannot buy doesn't seem so unreasonable to me.
What is the alternative? Sit and watch how fast the firm you can't own grows?

2007 Aug 21 07:19 PM