Has Vizio Done It Again? Vizio Sheds Light on Inventory Situation and Q3 Results at DisplaySearch Conference

October 23rd, 2007

By Ross Young, Founder and President, DisplaySearch

At DisplaySearch’s TV Supply Chain Conference in San Diego in June, Vizio VP of TV Marketing and Business Operations Jeff Schindler revealed that their Q2’07 sell-in results would benefit from Costco and Sam’s Club making a concerted effort to keep more Vizio stock on hand. As I indicated in my August 21st blog, Schindler said at the conference that these retailers boosted store inventory on hand from one week to three weeks in June due to

  • Concerns from often running out of Vizio stock due to strong demand
  • Panel and TV shortage concerns
  • The fact that club layouts allow them to stock more product

In addition, I also attributed the growth in channel inventory as one of the many reasons for them assuming the #1 position in the US flat panel TV market. The other reasons can also be seen here.

At DisplaySearch’s HDTV Conference held in Los Angeles on October 10-11, Schindler again touched on their inventory situation. He did show Vizio’s internal plus channel inventory growing from <2 weeks of inventory in April to over 4 weeks in late May/early June when they re-started the Wal-Mart relationship. From that point, inventory remained stable at around 4 weeks. Actual inventory rose around 4X from 50K units in April to over 200K units in August and September. At the same time, the number of store shelves stocking Vizio TVs rose around 4X from around 8,000 in May to 34,000 in September.

What does this all mean? There are several factors to consider:

  • Inventory levels stable at four weeks for the quarter, below the industry average of seven weeks of LCD TV inventory in retail
  • Demand seasonally stronger
  • 4X more store shelves available to them
  • Share gains throughout the quarter according to NPD’s sell-through data

As a result, we would expect to see Vizio enjoy Q/Q growth and maintain the #1 spot in flat panel TVs in Q3. Their panel suppliers enjoyed rapid growth, the club channel remains healthy, they are taking share outside of clubs and they maintain disruptive prices over premium brands due to their lack of channel conflicts. Furthermore, with premium brands and national retailers emphasizing 1080p, their 720p products at clubs are priced significantly lower than what national electronic chains like Best Buy are emphasizing.

Do you think they were #1? Do you think they can hold onto this position in Q4? How about throughout 2008?

DisplaySearch should have the Q3’07 results shortly.

Click here for more information on Vizio’s presentation from our HDTV Conference.

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