More Lowball Ultra HD Pricing Looms as TCL Seeks to Build Brand Here

Chinese TV manufacturer TCL said it will blast into the low end of the U.S. Ultra HD market in September with a 50-inch LED-edge-lit Ultra HD LCD TV priced at $999. TCL’s strategy is to establish the TCL brand in the U.S. with “advanced technologies” and “premium design” at an “aggressive price point,” the company said Thursday. TCL is “not looking to create high margins like their competitors,” said Jim Redner, a U.S.-based spokesman for TCL, in comments accompanying a news release he emailed us.

Redner said LG recently launched a $,000 55-inch Ultra HD TV that’s priced $5,000 higher than the TCL set for only “five inches more” of screen space. In response, LG Electronics spokesman John Taylor told us: “We don’t normally comment on other brands, but since they're mentioning us, we're flattered to be the benchmark.” On whether LG would adjust prices in response to the launch of the low-priced TV, Taylor said LG just began shipping its 55- and 65-inch Ultra HD TVs and has “no plans” to shave prices, “especially in response to a lower-tier brand.”

While other brands see 4K as an opportunity “to introduce large margins back into the category,” Redner told us, TCL sees 4K as an opportunity “to introduce ourselves to U.S. consumers.” He said TCL is new to the U.S. market, but it’s the third-largest TV brand in the world. Its “commitment to 4K worldwide” gives TCL advantages in scale through its “vertically integrated supply chain,” Redner said. “Our U.S. pricing strategy and our scale and vertical supply chain allow us to offer an aggressive price point,” he said. In an effort to promote the brand, TCL recently bought the naming rights to Grauman’s Chinese Theater, now called TCL Chinese Theater, in Los Angeles.

TCL’s 50-inch edge-lit 4K Ultra HD TV packs SRS TruSurround and will upscale TV shows and Blu-ray and DVD content to 4K, the company said. It didn’t disclose the video upscaling technology used or the panel supplier, though published reports say TV makers have been looking to Ultra HD panel suppler Chimei Innolux for larger-size Ultra HD panels, including 50-inch. Redner said the company will provide more details about video processing used in the TV in coming weeks. Specifications of the TCL Ultra HD TV include a 120 Hz refresh rate, 5,000,000:1 dynamic contrast ratio, four HDMI inputs and a Mobile High-Definition Link input, TCL said.

TCL will offer the Ultra HD model through its current retail accounts, which include Best Buy, Walmart, TigerDirect and Newegg. Redner said interest in the TVs has “opened new channels for us,” saying TCL can’t comment on which retailer will carry which new TCL products yet and that announcements will be made in coming weeks. TCL also announced a new line of HDTVs. Best Buy didn’t immediately comment on whether it would sell TCL’s Ultra HD model.

Abt Electronics would “more than likely not” carry the TCL 4K TV, Vice President Phil Hannon told us. Abt’s brand partners over the years have remained “pretty consistent” and partnering with major brand players is “the best thing for us,” he said. On the impact the $999 Chinese-branded TV would have on the fledgling 4K market, “if it was from Samsung, it would have significant impact,” but a TCL product would have “limited impact,” Hannon said. Most big TV brands “will move prices when other major players are moving prices -- or as technology and capacity will allow them,” he said. “If they begin to get capacity and they're making more of them, prices will naturally migrate down.”

On the overall potential market confusion that might emerge as consumers face purchasing choices based on new unfamiliar TV technologies with wildly differing price points, Hannon said new technology allows Abt to differentiate itself from other retailers through customer education. When new technology launches, “that’s when we see the biggest benefit to our business, so we're looking forward to it,” Hannon said. Differentiating “LED TVs” from “LCD TVs,” or educating consumers on the first go-round of OLED TV with Sony’s 11-inch model a number of years back, were examples of new TV introductions that allowed “companies like ours to do very well,” he said.

TCL follows another TV maker, Seiki Digital, into the U.S. market with lowball Ultra HD TVs (CED April 18 p1). Seiki Executive Vice President Frank Kendzora has predicted a “pretty aggressive” Q4 in Ultra HD. The $1,499 Seiki SE50UY04 50-inch 4K was selling at a $200 discount at TigerDirect.com Thursday and also for $1,299 through July 28 at QVC.com, we found. Amazon showed the Seiki 4K TV for $1,108.42, nearly $400 off list.

Richard Glikes, president of Azione Unlimited, met with Seiki at CES, and based on what he saw, he has “no desire” to bring the TVs to his buying group dealer base, he said. At first blush, he feels the same about TCL, he said. “At Seiki, we go to great lengths to make sure our TVs are the highest quality and available at a fair price,” Seiki’s website says of its products’ quality. But lowball TVs are “manufactured differently,” Glikes said. “The back is stamped on, and you can’t repair them,” he said. “The last thing I want is a $999 Ultra HD TV; that’s not our client,” he said of Azione members’ target customers. Moreover, Azione’s custom electronics customers typically don’t get involved with the choice of TV but rely on dealers to select the best product for them, he said. “At $999 they can’t be built like a $20,000 TV,” he said. “They're going to be disposable.” In addition to quality of the build, the evidence is in picture quality, where poor contrast, black levels and color are hallmarks of poor performance in low-end TVs, he said. “Some of these TVs look like the Cartoon Network,” he said. “The colors look phosphorescent versus natural color.” Seiki or TCL representatives didn’t comment by our deadline on the Glikes remarks about lowball TVs.