Damn, that’s one click-bait-y title. Shame on the person who wrote it, but here we are, and I guess it is as good a time as any to pursue the sentiment of the title.
What do we know so far? Walmart is acquiring Vizio. Whatever Walmart does Amazon will probably do. And whatever Amazon does, Walmart will do. So, is Walmart raising the ante on store brand TVs with the Vizio purchase, upping the stakes against Amazon’s Fire TVs or is Amazon behind the curve on this one, and should be looking to buy its own display company?
Who cares? Nothing more boring than analyzing retail strategy by two behemoths who will, basically, flood the market with crappy products that are just good enough to pass the feature test, but never good enough to drive anything but prices, and by drive I mean push down.
Ooh, there’s a thought. Two gargantuan retail companies start to hack away at the TV market driving prices lower and lower, and squeezing out the middle of the market. I mean, let’s be honest, you’re never going to have a state of the art home theater built by Amazon or Walmart, but you might just end up with very big TVs at rock bottom prices.
What’s that got to do with the price of fish, or OLEDs? Retail shoppers are kind of predictable, they like deals. Give them a deal and they will overlook almost every other natural sense of curiosity. It’s like when people decided to go into debt to buy something they can’t afford because it’s 50% off on sale. Yes, big discount, but you still have to pay more than you can afford.
So, what do we have as a potential scenario here that connects the dots with OLED? Ignoring the fact that you have a lot of questions and are very nosy, lets’s try and answer that question. First off, you come up with big screen TVs that are good enough, but a lot cheaper, backed by the no questions asked delivery and return policies of a Walmart and Amazon, and you end up with a very compelling market force. It’s like a TCL and Hisense dream sequence. It’s actually the best thing that could happen to TCL and Hisense because they don’t have to sell against Samsung or LG or Sony, and they don’t have to invest in catching up on OLED production because, it doesn’t matter.
Secondly, retail consumers are lead by the wallets and not their heads so, you can make all the arguments for LED TVs and premium TVs, but if I can get a 100 inch screen at a bargain price, and I have two companies – maybe four if TCL and Hisense decide to jump into the fray, normalizing Walmart and Amazon pricing strategies – I am not going to pay a premium for your brightness and color gamuts and eco friendly packaging or sustainable manufacturing. No one is saving the planet if gas is a buck a gallon, if you catch my drift.
Putting aside the facetious nature of this article, and turning all analyst-like, it’s probably safe to assume that Amazon will follow Walmart, in some way, and that the display market now has two very powerful brands that will ignore all traditions and just pillage their way through SKUs and pricing. We can also safely assume that both companies will want to stack lots of boxes of TVs in warehouses and ship them out as quickly as possible. It does not auger well for OLED TV market share and that’s that.
The problem will sorta kinda monopolies, which you can assume Amazon and Walmart are, particularly online, they squeeze the middle, drive everyone down, and scare others up. The premium market will not disappear but it will be out of reach but for a very select few and the rest of the market is price-driven. That’s a squeeze on the OLED TV strategies of Samsung and LG, for certain, and damning for many premium feature and next gen tech.
And it’s not a business issue, it’s an engineering issue. What is the focus of your tech team when you have to change tack and reevaluate your roadmap completely? If that sounds drastic then consider that the price differential between OLED and other display tech is about 3x conservatively. Can you really say that you get 3x the performance and experience with OLED versus other TV tech?
So, I don’t need to see your color palette or pretty pictures of chameleons walking on lily pads or whatever they are doing. What I would like to see is how you get OLED premiums to be about 10-15% of competitors. You know what is not happening in 2024.
Can Samsung and LG strategize on pricing and deal making in the consumer market? We’ll see but they will have to move a lot quicker than they have done in the past or else will be having the same conversations about third quarter losses this year that we had in 2023.
Maybe the industry should pay more attention to Walmart’s TV strategy than Apple’s roadmaps for OLED. That would be the smarter move right now.
