Attention, stock shoppers! There's a new blue-light special on flat-panel TVs today, but it's probably not the name you're thinking of.
TV shoppers aiming to score a flat screen without paying the top-dollar prices demanded by Sharp or Sony have benefited from an explosion in "no-name" brands -- Hannspree, Hisense, Haier, Olevia, and Vizio, to name just a few. In recent years, the king of the cheap flat screen was Syntax-Brillian's (Nasdaq: BRLC) Olevia, which until recently was clocked as one of the fastest-growing brands for any model of television in the U.S.
No longer.
Reports from technology analyst iSuppli crown a new king: All hail Vizio, a privately held company based in Irvine, Calif. At last report, Vizio was bigger than Samsung. Bigger than Sharp. Bigger than Sony, Polaroid, or Philips. Although falling prices seem to be spurring a "flight to quality" as consumers pay up for the name S-brands -- Samsung, Sharp, and Sony -- Vizio still holds the top slot in U.S. market share, at about 13%.
Meanwhile, Olevia doesn't even make the top six. According to one analyst, Vizio expects to sell $2 billion worth of LCD and plasma TVs this year, focusing primarily on the U.S. market. In contrast, Syntax-Brillian (S-B) and Olevia may manage just more than half that sum.
As fast as S-B is growing, Vizio's growing faster, as it targets cut-rate retailers in a bid to get bigger, more quickly, than anybody else. The strategy may hurt Vizio's margins on the sales-price end. But it could also pay off as Vizio reaps the benefits of larger production scale, and better name recognition from the public, by putting more TVs on more store shelves nationwide.
Right now, Vizio and Olevia run about neck-and-neck for virtual shelf space on the websites of Sears (Nasdaq: SHLD) and BJ's (NYSE: BJ). Vizio has a clear edge at Costco (Nasdaq: COST) and Circuit City (NYSE: CC), but is MIA at Best Buy (Nasdaq: BBY). Perhaps most importantly, though, Vizio sells at the world's biggest retailer, Wal-Mart (Nasdaq: WMT), where Olevia is shut out.
With its forward P/E of 7.3, 30% projected sales growth may make S-B look like a no-brainer of an investment. But keep a close eye on Vizio to see whether it might short-circuit that sales growth in the short term. And in the longer term, look for continued price drops at the other S-brands to hobble S-B's growth even more.
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