Vizio entering PC labtop market

[Smokey]

http://blogs.r.ftdata.co.uk/fttechhub/files/2012/01/viz27in.jpg

Vizio Inc., the television maker that helped drive higher-cost rivals out of the business with rock- bottom prices, plans to bring the same mayhem to the personal- computer market.

Vizio will unveil two desktop PCs and three notebooks at the Consumer Electronics Show in Las Vegas next week, Chief Technology Officer Matt McRae said in an interview. The Windows- based machines will go on sale by June at a “a price that just doesn’t seem possible,” he said, declining to provide specifics.

The company’s push into the market could increase pressure on Hewlett-Packard Co. and other PC makers, which already have seen profit margins narrow. In the TV business, Vizio put the squeeze on Pioneer Corp. and Royal Philips Electronics NV, two consumer-electronics veterans that ultimately exited the market.

“It’s very similar to TV -- we want to get in there and disrupt it,” McRae said. “We think most PCs have been designed for the small-business users, that others have not done a very good job of making them entertainment devices.”

Vizio’s desktop PCs will sport 24- or 27-inch screens that hide their electronics within the displays, similar to Apple Inc.’s iMac. Vizio also plans to offer a notebook with a 15.6- inch screen and two ultra-thin versions with 15.6-inch and 14- inch screens. All the computers will include entertainment features that deliver audio and video to Vizio TVs and speakers.

[filecat13]

http://blogs.r.ftdata.co.uk/fttechhub/files/2012/01/viz27in.jpg

Vizio Inc., the television maker that helped drive higher-cost rivals out of the business with rock- bottom prices, plans to bring the same mayhem to the personal- computer market.

Vizio will unveil two desktop PCs and three notebooks at the Consumer Electronics Show in Las Vegas next week, Chief Technology Officer Matt McRae said in an interview. The Windows- based machines will go on sale by June at a “a price that just doesn’t seem possible,” he said, declining to provide specifics.

The company’s push into the market could increase pressure on Hewlett-Packard Co. and other PC makers, which already have seen profit margins narrow. In the TV business, Vizio put the squeeze on Pioneer Corp. and Royal Philips Electronics NV, two consumer-electronics veterans that ultimately exited the market.

“It’s very similar to TV -- we want to get in there and disrupt it,” McRae said. “We think most PCs have been designed for the small-business users, that others have not done a very good job of making them entertainment devices.”

Vizio’s desktop PCs will sport 24- or 27-inch screens that hide their electronics within the displays, similar to Apple Inc.’s iMac. Vizio also plans to offer a notebook with a 15.6- inch screen and two ultra-thin versions with 15.6-inch and 14- inch screens. All the computers will include entertainment features that deliver audio and video to Vizio TVs and speakers.

Yes, let's get into a low-margin market that's racing to the bottom and killing all the manufacturers. We'll own it baby, we'll own it!

I'd be amazed if there was any long term benefit to this move. There was a lot more wiggle room in the TV market.

Check back in 24 months, and if I'm wrong, it will be obvious.

[Smokey]

I'd be amazed if there was any long term benefit to this move.

I think it entirley depend on their PC and Labtop pricing. They might use the same strategy with TV market where after they dominated the low end market with less than competitive priced TVs, they raised their prices. And now their TVs cost as much as name brands (and sometimes more).

[Woochifer]

Hey Smoke, if you're going to make these kinds of posts, LINK TO THE SOURCE. It's hard to tell where you're the one doing the editorializing or what might been cribbed from the original article (i.e., "helped drive higher-cost rivals out of the business with rock- bottom prices" -- which rivals are you talking about?).

[Smokey]

Wooch, the article has not been editorialized. Here is the full lnk from Bloomberg...

Vizio Aims Low-Price Wrecking Ball at PCs After Shaking Up TVs - Businessweek (http://www.businessweek.com/news/2012-01-08/vizio-aims-low-price-wrecking-ball-at-pcs-after-shaking-up-tvs.html)

As it was mentioned the pricing on their new venue products has not been announced, so have to wait to see how they compare with its peers. There seems to be not as fierce competition in PC market as it is in labtop market.

[Woochifer]

Wooch, the article has not been editorialized. Here is the full lnk from Bloomberg...

Vizio Aims Low-Price Wrecking Ball at PCs After Shaking Up TVs - Businessweek (http://www.businessweek.com/news/2012-01-08/vizio-aims-low-price-wrecking-ball-at-pcs-after-shaking-up-tvs.html)

See, this is why I wanted to see the link to the original article. The two examples that the article cited were Pioneer and Philips, both of which are poor examples to support the whole "wrecking ball" premise of the article. I wanted to see if there was anything in the original article that could actually redeem itself. Unfortunately, it was all just more lamebrained writing that's too typical of what passes for analysis in the tech press.

First, Pioneer was a low volume high end plasma TV manufacturer. (and no, Vizio is not a manufacturer) It wasn't Vizio that drove Pioneer out of the TV market -- it was Panasonic, Samsung, and LG (i.e, other manufacturers) that competed in the plasma TV market with far more efficient manufacturing processes, and were catching up to Pioneer in picture quality.

In the case of Philips, the article is factually inaccurate because Philips still sells TVs under its name. They ceded the North American market years ago, and outsourced its TV manufacturing in this market to Funai. Philips exited the OEM LCD panel market in 2008, but again, that has nothing to do with Vizio because they are not an OEM vendor.


As it was mentioned the pricing on their new venue products has not been announced, so have to wait to see how they compare with its peers. There seems to be not as fierce competition in PC market as it is in labtop market.

The competition in the PC market drained the margins to commodity status well before the same thing occurred with laptops.

For whatever reason, the tech press has this fascination with Vizio, even though they are untested in other markets and the set of conditions that fueled their growth in the TV market don't exist with PCs.

First off, the HDTV market still had high margins when Vizio entered. They had a lot of space that they could use to undercut the competition. There's no such margin in the PC market, which has been languishing at commodity levels for years.

Right now, Apple is the only PC maker that maintains high margins with PCs, and that's because of how they manage their supply chain. Apple pays its OEM vendors cash up front, and will front the capital expenses for plant expansions with their contract manufacturers. In exchange, they get guaranteed supply and a low unit price. The volumes that they generate with their iOS devices share common components with their Macs, which gives Apple a cost structure that no one else in the industry can match. Everybody else is a box builder using parts procured on the commodity markets. Margins are already thin, and Vizio does not have the volume to undercut competitors in the PC market.

And this is not their first foray into the PC market. To much fanfare at CES, Vizio announced last year that they would enter the tablet PC market and the tech press lapped it all up. Well, Vizio's tablet didn't come out until August and it has already been clearance priced down to around $200, as competitors engaged in a price war. The Vizio tablet is "out of stock" on their website, and I have not heard anything about a new model coming out.

The only PC market segments where there are some margins remaining are with all-in-one PCs and ultrabooks. That might be where Vizio is focused, but again, they are trying to compete as a virtual company, where competitors in the PC market are already heavily outsourced.

[Smokey]

Wooch, may be you should be a contribute writer for one of those tech magazines :)

You probably right about Pioneer. Shifting of consumer from Plasma to LCD and others catching up to Pioneer in picture quality (at lower price) probably did Pioneer in.

But Philips did exit the market due to losing money on their TV from lower end manufactures which Vizio was spear heading. First they exited north America market, and then they exited TV manufacture all toghether by last year when they sold their majority share (70%) to Hong Kong manufacturer TPV Technology.


The only PC market segments where there are some margins remaining are with all-in-one PCs and ultrabooks.

Looks like that is where they are focused since their two PC models are all-in-one PCs. There are couple of manufcatures beside Apple that makes all-in-one Pcs, but they are rather pricey. Maybe that is where Vizio is trying to undercut the competition. But first we have to see the pricing :)

[Woochifer]

Wooch, may be you should be a contribute writer for one of those tech magazines :)

No thanks. So much of what passes for journalism at tech publications is nothing more than link baiting. A style guide for AOL (which publishes Engadget, Fanhouse, Huffington Post, and other popular online media sites) that got leaked online last year laid it all out -- it's all about goading readers into clicking headlines. Think about this next time you end up looking at some top 10 list that's nothing more than link bait to get you to make 10 clicks on a slide show.


You probably right about Pioneer. Shifting of consumer from Plasma to LCD and others catching up to Pioneer in picture quality (at lower price) probably did Pioneer in.

But, it was primarily their production inefficiencies. All the way to the end, Pioneer could only cut one plasma panel from a single sheet of glass, whereas Panasonic and Samsung (and presumably LG) were able to cut 8 panels from one sheet. Pioneer could afford to maintain inefficient processes if they could sell their HDTVs at premium prices, but once the price points went into a nosedive, they had no choice but to exit the market.


Looks like that is where they are focused since their two PC models are all-in-one PCs. There are couple of manufcatures beside Apple that makes all-in-one Pcs, but they are rather pricey. Maybe that is where Vizio is trying to undercut the competition. But first we have to see the pricing :)

Yeah, surprise surprise, Vizio is trying to copy the look of Apple's iMac, everything down to the chiclet keyboard and trackpad.

Right now, Apple controls about 1/3 of the all-in-one PC market. They are pricey primarily because Apple does not sell any entry level spec'd models, and all of their iMacs use the more expensive LED-backlit IPS LCD displays. Dell, Lenovo, and HP all sell less expensive all-in-one PCs, but those are entry level models with lower performance. Apple aims at the most profitable segments of the market, and ignores the entry level lines because that's where profits get sucked into the black hole.

HP already sells their Omni all-in-one PC starting at under $500, so I don't see how much further down Vizio can go. If Vizio undercuts those brands by a wide margin, I'd be very curious as to the components they use since budget PCs will often sacrifice build and component quality to hit that lower price target. Vizio won't gain a significant advantage by outsourcing, since these PC makers contract with the same manufacturers.