Is Walmart About to Buy Vizio?

We predicted at the end of 2023 that the home theater category was going to experience a series of earthquakes in 2024 and it would appear that we were correct if the reporting in the Wall Street Journal proves to be accurate. Is Walmart about to purchase Vizio for $2 billion?

If a deal is concluded, Walmart would move into a prime position to compete with Amazon-branded Smart TVs — in addition to budget-priced models from Hisense and TCL.

It’s All About Data

However, what makes Vizio most interesting to Walmart is not their TVs, it’s their operating system. Vizio’s smart TV interface controls what apps, ads and shows appear on the home screen. Beneath that are mechanisms to collect data to personalize viewing experiences and serve relevant ads. Such ads are not only an ongoing revenue source from third parties, but could also become a portal into a Walmart shopping experience.

Tip: What is a Smart TV?

If Vizio gets absorbed into Walmart two things happen. A layer of product markup is eliminated and Walmart can leverage recurring ad revenue to further drive down new model pricing. The good news for consumers is that TV prices could go even lower.

Brand Recognition

Although Walmart currently sells its in-house ONN-branded TVs (that include the Roku OS) and soundbars, the Vizio brand has much wider brand recognition. Replacing a less recognized brand could alleviate consumer confusion, while also boosting Walmart’s soundbar market share. 

The Wildcard

Roku is the wildcard in this TV drama. They not only make a Smart TV operating system, they license it to Walmart, TCL, Hisense and others. In addition, Roku has started making their own TVs. Walmart could buy Roku, but it would be a much more expensive purchase. Roku’s current market cap is $13 billion.

According to Parks Associates, Roku has a 25% share of the operating systems in smart TVs (both in-house and licensed TV brands that incorporate the Roku OS). Amazon has 17% with its Fire TV operating system. Vizio has 8% of the smart TV market with its new Home Screen interface, previously known as SmartCast.

TVs & Soundbars

Vizio is currently the biggest-selling TV brand in Walmart’s online and retail locations. Vizio’s TV line includes LED/LED and QLED TV offerings that are higher-end than Walmart’s in-house ONN series, although still occupying the budget-priced TV landscape. Vizio also includes an OLED TV model in its line-up. Whether that would continue remains to be seen.

Absorbing Vizio into its consumer electronics infrastructure would definitely increase Walmart’s presence in the AV market.

• TV Ownership: According to Statistica, Vizio currently holds the number three position with 11% market share.

• Soundbar Ownership: According to several reports on soundbar market share, Samsung holds the number one spot and Vizio is number 2.  

So far, Walmart and Vizio have not commented. However, as a result of reports revolving around the possibility of Walmart buying Vizio, shares of Vizio increased 24.6% on Tuesday, February 13, 2024, while Walmart shares fell 1%. On the other hand, Roku stock fell 8.8%.

Stay tuned as this story continues to develop (or not).  

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