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Vizio Takes Big-Picture Approach To U.S. TV Market

Big Korean and Japanese consumer-electronics makers spend huge sums developing and marketing their own technology, creating a high barrier to entry for newcomers. Although Vizio is a fraction the size of Sony and Samsung--the leading brands in the U.S. flat-panel market--it shipped 12.4% of North America's liquid-crystal display, or LCD, TVs in the last quarter of 2007. That's just behind Sony's 12.5% share and Samsung's 14.2%.

The success of Irvine, Calif.-based Vizio illustrates the rise of a new business model in the fast-changing TV industry. As flat panel technology becomes ever more commoditized, nimble players like Vizio--which handles design and marketing--are hooking up with contract manufacturers to produce their own cheap TVs. At the same time, discount retailers such as Wal-Mart are increasing their sales in the category, slashing prices in the process.

Struck by a 2002 ad for a $10,000 Philips flat-panel TV, Vizio CEO William Wang, a former marketer of computer monitors, sensed an opportunity. Rather than sell the sleek sets as luxury items, he figured he could make flat-panel TVs that were affordable. "Our goal is to be the next Sony in 20 or 30 years," he says.

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