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A correction - the article says Visio makes almost as much profits on ads and data ($38M) as hardware ($48M). In my view, the surprising thing here is how littl
by fshbbdssbbgdd 5y ago
A correction - the article says Visio makes almost as much profits on ads and data ($38M) as hardware ($48M). In my view, the surprising thing here is how little money the hardware business makes. TVs are a low-margin product, so the revenues there are certainly higher. Visio sold 7 million TVs last year, and TVs last some years, so I’d estimate they have an install base of tens of millions and are making about $1 per TV per year in ads and data, which is obviously less than a TV costs. My takeaway is that this is a terrible business to be in, given that a leading brand is making so little per TV.
- dingaling 5y agoYou can't really compare headline profits without seeing the full breakdown of revenue and expenses that led to those results. For example Visio's hardware side could be reinvesting vast sums of revenue back into TV R&D. Or they could have invested in upstream component manufacturers. Maybe they spent a large amount on recruiting new staff. All those expenses are deducted before profit. Meanwhile the ad division might have made no investments for the future and took the tax-inefficient choice to show a large profit instead.