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
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Comments (3)
What is the alternative? Sit and watch how fast the firm you can't own grows?
I short stocks. I go long. Whatever. The market is full of snakes, but not necessarily because they are shorts.
