Making a pronouncement that will certainly be welcomed by consumer electronics companies, and everyone else who makes products with silicon computer chips worldwide, Irvine, Calif.-based smart TV marker Vizio said its supply chain problems have already peaked.
“We do think that those challenges did peak during [2021], and we’ve seen some easing and various elements of the supply chain dynamic,” Vizio Chief Revenue Officer Michael O’Donnell told equity analysts during Vizio’s Q4 earnings conference call with investors Thursday.
Vizio finished 2021 shipping only around 5.5 million smart TV sets for the year, a marked drop-off from the nearly 7 million it shipped in the initial pandemic year of 2020, when it rushed to meet sudden, extraordinary consumer demand.
Heading into 2021, O’Donnell said, “There was a hangover that came into the year in terms of chip supplies, panel, supplies, freight, trucking, every element of the supply chain was challenged in 2021.”
The CRO believes Vizio is poised for a rebound in 2022.
“We certainly think that now with our channel inventories, now with the strength of our product lineup, the capabilities we’re bringing to the market, the features and what we’ve added to SmartCast and our ability to promote that, we think we should be able to see a return to growth in unit shipments,” O’Donnell said.
Vizio, which went public nearly a year ago, has seen its stock price drop nearly 30% in the last 24 hours after reporting a 14% year-over-year revenue slip in the fourth quarter. A net loss of $10.1 million in Q4, as well as a EBITDA decline of more than $17 million also sent investors to the door.
Like Roku, another streaming company trying grow a platform-based advertising business through proliferation of hardware, Vizio has been hit hard by the global supply chain crisis.
Vizio grew the active user base for its SmartCast operating system by 24% year over year to reach 15.1 million active user accounts at the end of 2021, while hours streamed on SmartCast ticked up 11% to 3.9 billion.
But just like with Roku, equity analysts want to see those metrics grow even faster, and the way to achieve that goal is to move more Vizio smart TVs.
Vizio seems willing to sell its sets at a loss to proliferate SmartCast. But even with that willingness, growing shipments is tough to do when you can’t get the necessary parts.
With those supply chain issues hopefully easing, O’Donnell said Vizio will be looking to establish some promotional price offers and move more smart TVs in 2022. ■
