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EPI Looks To Join Top LCD TV Ranks

3/28/2006 09:54:00 AM Eastern

Fuqing, China — A shakeout is coming soon to the United States among the ranks of second-tier flat-panel TV brands, and only those with strong core competencies will be able to survive, said Luke Ouyang, Envision Peripherals (EPI) consumer electronics sales director.

Ouyang predicted that by 2010 the industry will be selling 100 million LCD TV units worldwide, and that the top five brands may control up to 70 percent of the market.

In the end, Fremont, Calif.-based EPI, which markets Envision- and AOC-branded PC monitors and AOC-branded LCD and plasma TVs in the United States, should rank among that top five, due in large part to its connection to China-based Top Victory Electronics (TPV), which owns a portion of EPI, according to Ouyang.

TPV is one of the world’s largest assembly companies for CRT, LCD and plasma products, producing some TV displays and/or PC monitors for such leading brands as Sony, Sharp, Philips, Magnavox, Dell and HP, among others, in addition to its own.

Ouyang said the company has collected substantial knowledge of design and manufacturing from its OEM relationships and is now able to sell high-quality AOC-branded LCD and plasma TVs at value price points.

Its heavy manufacturing volume also gives TPV status as the largest customer of LCD panels, which brings the company access to “A grade” LCD panels at full supply levels, despite market shortage conditions last year.

Meanwhile, Ouyang said that to ensure AOC’s longevity in the U.S. CE business, EPI has instituted a policy that no single customer will take more than 20 percent of its volume, and is studying using multiple model lines to serve a variety of distribution channels to protect dealers against unequal pricing practices.

“If you sell the same products into national and discount chains, you will have a lot trouble with complaints about selling the same model with different MSRPs,” Ouyang said. “Pricing is something we are thinking a lot about, and we are looking to offer different models to different categories of retailers.”

Similarly, the company is putting together a plan to offer private-label goods for some accounts, but will make sure that what it produces under a private badge doesn’t conflict with products it sells under its own AOC lines.

“We are not just going to go into the market and disappear tomorrow,” Ouyang vowed. “Our IT monitor business has survived for 10 years” in the United States.

Meanwhile, the company is building AOC gradually using standard co-op advertising programs and product placement through multiple e-commerce Web sites, including Amazon.com and Costco.com. But EPI doesn’t have the deep pockets of a Sony or Samsung to promote its brand on major television and print campaigns.

Ouyang acknowledged that the AOC brand (which stands for Admiral Offshore Company) may be difficult for customers to embrace, so he is looking to connect the Envision trademark used for IT monitors with AOC on television products. The company has launched an Envision Series of LCD TVs under the AOC brand, in a fashion that Ouyang compared to Sharp’s Aquos sub-brand or Sony’s BRAVIA line.

The company does not have licensing rights to the once popular Admiral TV brand in the United States and must stick with the AOC trademark, he said. In other international markets, such as Latin America, the AOC brand has sold very well, according to Ouyang.

Ouyang said EPI also has been exploring licensing another established brand for flat-panel TVs, including GE, to join its AOC line.

EPI, which claims 2 percent U.S. market share today, currently sells AOC televisions to such accounts as CompUSA and Fry’s and has had its plasma models tested by Tweeter. Ouyang said he also expects to soon deliver small screen LCDs to Costco, after working the warehouse club on its Costco.com Web site.

The company is adding large-screen high-definition TV displays, including 42W-inch, and in September 50W-inch, sizes, and it offers LCD TVs in the 27W-inch, 32W-inch and 37W-inch screen sizes. AOC is offering leading retailers an alternative to lesser-quality flat-panel lines being featured at discounted prices.

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