Bloomberg News

Vizio Aims Low-Price Wrecking Ball at PCs After Shaking Up TVs

January 11, 2012

Jan. 7 (Bloomberg) -- 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.

Tough Market

Vizio, a closely held company based in Irvine, California, is vying with Samsung Electronics Co. for dominance of the U.S. television market. Most television makers lost money in the industry last year due to low prices and sluggish consumer demand. In December, Sony Corp. agreed to sell its stake in a venture with Samsung that makes liquid-crystal displays after predicting an eighth consecutive year of losses from TVs.

Vizio has succeeded by getting cheap screens from Taiwanese contract manufacturers Foxconn Technology Group and AmTRAN Technology Co., which also hold equity stakes in the company. Vizio also sells an 8-inch tablet computer for $250 to $300. Apple’s iPad starts at $499.

Vizio is targeting the two of the fastest-growing categories for PC makers: ultra-thin laptops and so-called all- in-ones -- desktop machines with built-in monitors. Still, those areas is getting more crowded. Hewlett-Packard will introduce a new all-in-one PC for $1,200 at the Consumer Electronics Show, and other computer makers are unveiling slimmer laptops, a category known as ultrabooks.

Hewlett-Packard is betting that the ultrabook category will resemble other parts of the PC market, with consumers and businesses asking for different designs that meet their needs, said Page Murray, a marketing vice president.

“I don’t believe there’s a one-size-fits-all laptop out there, like some of our competitors might,” Murray said. Driving down prices isn’t a viable long-term strategy, he said.

“There’s always going to be somebody who wants to win a race to the bottom,” Murray said. “But you get what you pay for in many of those situations.”

--Editors: Nick Turner, Anthony Palazzo

To contact the reporters on this story: Aaron Ricadela in San Francisco at aricadela@bloomberg.net Cliff Edwards in San Francisco at cedwards28@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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