No-Name TV Brand Story Misses Flat Panel Industry Dynamic

In a New York Times story, Damon Darlin (nope, I'm not trying to pick on him - just a chance occurance that I mention a couple of his stories within a couple of days) writes about how a new name in the TV unit business - Syntax-Brillian and its Olevia line of flat panel TVs - was driving down the price of televisions to the potential annoyance of the premium brands. But the story is missing some analysis and industry knowledge that puts things into a more complex perspective.

One is that some of the brand names don't just assemble televisions under brand names. LG, Sharp, Philips, and Samsung, at least, are all big names in building the actual display panels. That means they can stomach far more of a price drop than a company like Syntax-Brillian because they make one of the most expensive and necessary components. Some of the other "value brands" in competition with Syntax-Brillian are Zenith and Magnavox. But according to a New York Times blog, LG owns the former and Phillips owns the latter. Philips also owns Sylvania. So claiming that "With the exception of Zenith, which has become the value brand of the Korean company LG, these brands are used by 'virtual companies' that, like Syntax, contract with assemblers to build the TVs" doesn't seem accurate so far as I can tell.

In other words, this upstart - actually the 2005 merger of two different companies, one public and one private - is slugging it out in a brawl with a number of competitors that make money off competitors through supplying the actual displays and that have enormously deep pockets to boot. The story quotes someone from Sharp saying "The off-brands are residing in a price band where we are simply not going to reside." Of course they won't - they don't need to because they already are getting their cuts of those markets and can afford to watch the low-priced companies financially bleed themselves to death. Of course, a quick web search shows that Syntax-Brillian has another brand: Brillian high definition televisions, which by their specs appear to be a higher-end line at better margins. So maybe the entire premise of the article, that a spunky upstart is using price as its primary weapon, is slightly out of focus.