Envision Peripherals Releases 50in. Plasmas at Mainstream Prices
May 1, 2006 8:00 AM
They were $25,000 just a few years ago, and the exclusive domain of the wealthy, but look for 50in. plasma hi-def TVs to hit U.S. shores late this year at a very mainstream, sub-$2,000 retail price. That’s the word from Envision Peripherals, the Fremont Calif.-based marketing arm of Hong Kong-based TV assembly company TPV (Top Victory Electronics). TPV, a worldwide OEM supplier of PC monitors and LCD and plasma TVs, is also making a push with its own Envision and AOC brands and plans to ship a $2,399 Envision-branded 50in. plasma stateside in time for the holiday season.
TPV hosted an American press tour last month at its LCD and CRT assembly plant in Fuqing, China, the largest of the flat-panel and CRT manufacturing facilities TPV bought from Philips last year. Including sales figures from the former Philips operations, TPV accounted for 22.5 percent of LCD monitor shipments worldwide in 2005 and 35 percent of worldwide CRT shipments. As sales of CRT PC monitors level off, the company sees flat-panel TVs as the next growth segment for the display market.
Now TPV is looking to flat-panel TVs as the future growth engine for its OEM business and its nascent branded TVs, as well. TPV customers include Dell, Sony, HP, Philips, Viewsonic, and Samsung, among others. So far EPI has elected to stick with its own brand names—AOC brand derives from the Admiral brand—rather than pay the two percent royalty fee other Chinese assemblers are paying for rights to prominent brand names including RCA, Westinghouse, and Polaroid. But EPI CE sales director Luke Ouyang told journalists the company is in discussion for rights to the GE brand, which has been licensed only for CRT TVs, not flat-panel models.
The boost from a well-known U.S. brand could help the self-labeled second-tier company achieve its goal of five percent market share (OEM and branded) of LCD TVs in the United States by 2010. TPV’s overall message will revolve around a price/value pitch.
The push by Chinese manufacturing companies draws parallels to the relatively quick ascent of Korean display companies including Samsung and LG, which have established themselves among the market leaders in the flat-panel and DLP segments. Samsung, which started as an electric fan assembler with 36 employees less than 40 years ago, is now the world’s largest consumer electronics company with more than 120,000 employees and brand value awareness that exceeds that of Sony, according to one market research firm.
American consumers, although very brand-conscious, have shown a willingness to accept market newcomers—if the price is right. A survey of flat-panel TVs sold in high-volume retail chains including Costco, Wal-Mart, and Target is evidence that there’s a strong appetite for cheap flat panels. Westinghouse recently announced a high-tech, low-price strategy with the launch of a 37in. 1080p LCD monitor for $1,899. By press time, it was selling at J & R Music World for $1,599.
With prices of 42in. plasma TVs below $2,000 today and a price freefall forecast for later this year, the pressure is on first-tier suppliers to respond to price changes, says David Wexler, VP of The Little Guys, a custom and retail dealer in the Chicago area. “A $1,999 50in. plasma HD set is going to be a real problem because you can only get so much more—maybe 30 percent to 35 percent—on the high end,” he says. “When a low-end 50in. plasma is $2,000, the mid- and high-end product can’t be $3,000-$4,000. Our suppliers have to give us product that we can sell with that kind of delta. The delta has to come down proportionately.”
While not the ideal scenario, falling flat-panel display prices don’t have to mean lower profits for custom installers, Wexler says. “Whether a customer comes in with a budget of $3,000 or $12,000, they’re still going to spend it. If a flat panel is less of the total, that’s ok. There’s still the audio side, and a big picture without big sound is nothing.”