Why Are Insignia TVs So Cheap? (Explained)

Why are Insignia TVs so cheap? How can the brand make profits by selling electronics at such low prices? Here are a few reasons why Insignia TVs are cheap.

Insignia TVs are made in third-world countries

Insignia TVs are cheap because they’re made in countries with low labor costs, like China and Vietnam. Insignia is Best Buy’s in-house brand that produces various tech items.

However, most of their TVs are made in China and Vietnam. Best Buy hasn’t shared which company produces Insignia TVs. I think they partner with ODMs in countries with cheaper labor.

An Insignia TV made in Vietnam.
An Insignia TV made in China.

How does it work?

In a nutshell, an ODM (original design manufacturer) is a company that builds products based on the design specifications provided by another company.

By partnering with an ODM, Insignia can sell products without owning costly factories. Since Insignia outsources, it doesn’t invest much in production. Insignia just markets and distributes its products. However, Insignia retains ownership of the designs.

This is why consumer electronics companies, like Insignia, are able to make the most out of third-world countries’ cheap labor costs to keep their products affordable.

2. Manufacturing process improvements

Another reason why Insignia TVs are so cheap is because of manufacturing process improvements. TVs mostly consist of their screens.

“A TV is a control board, a power board, a panel, and a case. There isn’t much secret sauce in there.”

– Kyle Wiens, CEO of iFixit

The cheapest iPhone right now is $800. You can watch videos on phones, but the cheapest Insignia smart TV is only $190. This is a 24-inch TV for home use.

According to Kyle Wiens, the CEO of iFixit, the most expensive component in a modern TV is the LED panel. TV makers can now buy these panels from third parties at much lower prices.

Additionally, manufacturers have become better at cutting large glass pieces into screens. They produce less waste than they did a few years ago.

Simply put, TV-making companies, like Insignia, have improved their production. This lowers the cost of making TVs.

Insignia has plenty of competition

In the last point, we talked about the improvements in the manufacturing process of televisions. This has led to increased competition.

The decreased prices of LED panels and better production efficiency have allowed more TV brands to join the market, increasing competition.

The smartphone market is complex and dominated by a few big companies. In contrast, TV makers simply buy displays, build cases, and offer streaming.

James Willcox, a senior editor at Consumer Reports, said newer brands like Insignia have gained market share from established ones in recent years.

Brands like Insignia enter the TV market by pricing lower than established ones like Samsung, LG, and Sony. This prompts other TV brands to lower their prices too.

Insignia keeps their TVs simple

Insignia focuses on basic features for their televisions. Their TVs don’t come with high-cost, fancy tech.

For example, the N10 Series, their most basic range, lacks smart TV functionality. To stream Netflix, you need a dedicated streamer.

The TVs are sold at very low prices, between $90 and $220.

The next level is the Insignia F20 Series. It’s priced like the N10 but has smart TV features. However, these TVs remain basic in features.

Other parts of the TV, such as the remote controls, are also basic. The materials used aren’t as high-quality as those in pricier brands.

In short, Insignia doesn’t aim to rival top brands with the latest tech. They offer simple, affordable TVs for everyone to enjoy.

Insignia’s main profit comes from usage data, not the TV sale itself

Except for the N10 Series, all Insignia TVs use Amazon’s Fire TV platform with many app choices. Insignia smart TVs connect to the internet and play streaming services directly.

When you watch TV, Insignia collects data and profits from it. This might be why Insignia TVs are priced so low.

To use smart features, you must allow Insignia TVs to collect data and send ads to devices on your IP address. Insignia can sell this data to advertisers. This allows Insignia to price their TVs low and still profit by selling data. Additionally, their TVs display ads in the interface.

Insignia TVs use the Amazon ecosystem. I enjoy Amazon’s streaming, but the sponsored ads are annoying.

In conclusion, Insignia earns more when you use the TV than when you purchase it.

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