How TCL leverages its vertical integration to stay ahead of the competition

When you buy a product from any brand, it may seem logical that that company is behind all of the creation of the product. But for complex items, like phones and televisions, this can be far from the case.

A car you buy will have parts from everywhere. It might have wheels made by a company, windows maybe a second, and a transmission a third. A TV may look a lot simpler compared to a car, but it can also have its display panel built by one vendor, its processor built by another, and it may be that only the assembly and housing is made by the brand you see on the TV label.

While this can be the natural order of things for many businesses, it is not always beneficial. TCL does things a little differently.

TCL has been manufacturing televisions and telephones for years and has all the production capacity it needs to manufacture many of its products on its own. For example, Chris Larson, former vice president of sales and marketing and now TCL senior vice president for North America, told Forbes, “We make our own plastic. We make our own cabinets. We make our boards. We even have a factory that makes loudspeakers. The only thing we really need to buy is the main processor and the memory that goes with it. “

This vertical integration allows TCL to operate faster, delivering new products that exploit new technologies at a rate that can outpace the competition and reduce costs. Other companies that don’t have this vertical integration have to wait for their suppliers to send them samples before they can finalize their product designs, delaying when a new technology is introduced and its appearance in a finished product.

Since TCL is fully involved in the development of new technologies that will go into its products, it may be ready to incorporate them as soon as they are completed. Lason says, “We know exactly what’s going to come off the line in four, five, or six months, and can design a TV around it today.”

TCL has already used its vertical integration to manufacture many attractive televisions. It drives the market forward with QLED, 4K, 8K and even mini-LED displays, and many of its products cost much less than its competitors’ offerings. TCL’s expertise is not limited to televisions, however.

The company works on many other product categories. TCL recently started releasing their own smartphones with the latest 5G connectivity, at a fraction of the price of other smartphones. He was also able to use his TV expertise and apply it to his phones, as is the case with TCL’s NXTVISION image processor, which works for both the phone’s screens and its cameras.

Kevin Wang, CEO of TCL Industrial Holdings, said: “With our unique combination of manufacturing expertise and vertical integration, TCL can now offer a complete ecosystem of products, while envisioning a future that will create a fully integrated experience. and connected for our customers. . “

So we can expect to see a lot more to come from TCL with technologies and prices leading the pack.

Learn more about TCL here.

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