Vizio PC Sales Could Outstrip Those of TVs

While it took Vizio about seven years to climb the ranks of TV suppliers to the 20 percent market share it had in Q1, the ramp up in the PC business could be faster, CEO William Wang said. Unlike TVs, where it took Vizio years to build a brand that started with Costco, the company is launching a new line with established distribution, industry officials said. “It’s huge industry and we are in it for the long haul, so we have a three- to five-year investment,” McRae said. “It could be big, if not bigger than TVs over time. We are not testing the waters."

Vizio is air-shipping in the first of the PCs into the U.S. and will rely on retailer forecasts for the second round of deliveries, McRae said. Walmart will initially carry an Ultrabook with a 14-inch LCD with 1,600 x 900 resolution and a 1.6 GHz Intel i5 Core processor ($898), and a notebook with a 15.6-inch LCD with 1,900x1,200 resolution and a 1.8 GHz Intel i3-3217U processor, Kevin O'Connor, vice president of CE at Walmart, told us. Walmart also will initially have an all-in-one PC with a 27-inch LCD with 1,900 x 1,200 resolution that starts at $1,099 for a model with an i3 1.9 GHz processor, one terabyte hard drive and 32 GB solid-state drive (SSD), he said. Vizio will be key as Walmart moves to expand its assortment of PCs in the ultra-thin notebook segment, he said. Walmart will have the Ultrabooks and notebook PCs in 3,700 stores within two weeks, while the 27-inch all-in-one will be in 2,000 locations, a spokeswoman said.

The type and number of Vizio models each Walmart store carries will vary based on customer demographics and PC sales at individual locations, O'Connor said. Walmart will have a “strong number” of its stores selling the Vizio PCs in the next few weeks, but the chain isn’t likely to start promoting the line heavily until the back-to-school selling that begins in late July, he said. In addition to Walmart, Sam’s Club, Target, Costco and Amazon are expected to be among the initial retailers carrying the PCs. Vizio has pitched a wide range of its retails on the new PCs, retailers said.

"The product looks sellable and I think consumers will accept it, but what their distribution and profit model is unknown to us,” said Mark Shaw, CE division merchandise director at Nebraska Furniture Mart, which carries Vizio TVs. “We have an interest it, but we still have some questions. It just goes to show that you don’t have to be one of the traditional computer companies to develop and come out with a product."

Walmart isn’t replacing any PCs SKUs with new Vizio models, and O'Connor conceded that adding a new brand is a “delicate balancing act” with incumbent suppliers. Walmart is “working on several different things” with Vizio in terms of in-store promotion of the PCs, he said. Vizio developed displays ranging from end caps to store-within-a-store concepts for selling its PCs, McRae said. Vizio also will have several 40-foot trailers that will travel the U.S. starting at Microsoft stores. The trailers will carry and demonstrate the Vizio PCs, McRae said.

"It’s a very delicate balancing act, but we really just want to get back to what the customer wants and what they are voting before,” O'Connor said. “We will make sure we have the types of brands our customers are asking for and they really enjoyed the Vizio brand of TVs. We also carry Asus, Lenovo, HP, Samsung and Sony, so we are all about assortment and brands."

In Ultrabooks, Vizio is featuring a model with a 14-inch display, 1.7-1.9 GHz Intel i3-3217U, i5-3317U and i7-3517U processors, 4 GB of RAM, a 128 GB solid-state drive, Intel HD 4000 graphics processor, 1.3-megapixel camera with 720p resolution, Bluetooth and 802.11 dual-band WiFi. The second Ultrabook has the same specs save for a 15.6 display with 1,920 x 1,080 resolution. The notebook steps up to Intel Core 2.3.-2.5 GHz i3-3110M, i5-3210M and i7-3610QM processors, with the top-end model moving 8 GB RAM, one terabyte hard drive and 32 GB SSD. The entry-level and mid-priced models have 4 GB DRAM and SRS Labs’ 2.1 Premium Sound HD and 500 GB and one terabyte hard drives, respectively.

The all-in-one models have 27- and 24-inch LCDs with 1,920 x 1,080 resolution and Intel dual and quad Core i3, i5 and i7 2.3-2.5 GHz processors. The entry-level models have 4 GB DRAM, Windows Home Premium, Intel HD 4000 graphics processor and 500 GB hard drive. The high-end models have 8 GB RAM, one terabyte hard drives, 32 GB SSDs and Nvidia’s GeForce GT 640M graphics processor. The all-in-one models also have dual HDMI connectors, two, 2-watt speakers paired with a 6-watt subwoofer that doubles as a power connector.

The Vizio PCs also come with a stylized “V” hot key that provides access to online services including Vudu, Netflix, and the BackBlaze cloud storage service, which charges a $5 monthly fee. The Ultrabooks also have Microsoft’s Signature software that provides quick access to Windows 7, Windows Live Essential, Zune, Internet Explorer, Bing and Microsoft Security Essentials anti-virus software. The Microsoft OS consumes 15-20 GB and is stored on the SSD, along with other applications, McRae said. The new Vizio models can be upgraded to Windows 8 OS when it becomes available in October for a $14.99 fee, a spokesman said.

Vizio News Conference Notebook

Vizio will ship a 58-inch 21:9 LCD TV this month, capping more than a year of delays, company officials said. The XVT Pro 58-inch was first shown in 2010 and scheduled to ship in early 2011. After several delays, the 58-inch set was expected to arrive in February along with a 50-inch model (CED Jan 13 p2). The LED edge-lit 3D TV features a 120 Hz panel, 2,560 x 1,080 resolution and contains the company’s Vizio Internet Apps (V.I.A) platform and handles 2D/3D conversion. Vizio also had plans for a 71-inch backlit model containing a 240 Hz panel. “We will see how the 58-inch does and then go by what the demand is,” McRae said. “We see the larger screen sizes being more popular.” Vizio also is weighing introducing the 85-inch 4K LCD TV it demonstrated at CES in January, but plans haven’t been finalized, McRae said. Vizio will deliver the first of its Google TV-equipped products in the coming months, he said. McRae declined to disclose details. Vizio showed Google TV-equipped 47-, 55- and 65-inch LCD TVs and a VBR430 Blu-ray player at CES in January. Vizio continues to weigh plans for LED bulbs. It had been expected to ship 60- and 75-watt-equivalent LEB bulbs last fall. But it licensed a technology that allows for more efficient light output from fewer LEDs, which would translate to lower prices. The new 60, 75- and 100-watt-equivalent bulbs were to be available by mid-year. “We have been watching the industry and there have been a lot of price fluctuations in the LEDs,” McRae said. “We still think it’s interesting market, but there are no firm plans for it."

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While Walmart’s launch of its Vudu disc-to-digital service “has gone well,” there are plans for “marketing it more effectively” to raise awareness, O'Connor said. Walmart will promote the service in its weekly ad circulars and recently highlighted it in a banner on the Vudu website in offering five free movies to those signing up for the disc-to-digital program. Walmart has positioned the digital-to-digital program in the photo services section of its stores. “It is bringing traffic back to our consumer electronics section,” O'Connor said.