Insignia TVs are some of the most affordable televisions available, especially if you get deals and discounts from Best Buy. But why are Insignia TVs so cheap? Here are a few reasons why.
1. Made in third-world countries (China and Vietnam)
One of the biggest reasons why Insignia TVs are so cheap is because their televisions are made in third-world countries, like China and Vietnam where labor costs are cheaper.
While it’s true that Insignia is Best Buy’s in-house brand that makes all kinds of tech from appliances to consumer electronics, most of their TVs are outsourced to China and Vietnam.
Best Buy never disclosed who makes their Insignia TVs, but I believe they work with original design manufacturers (ODM) in third-world countries.
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 working with an ODM, a company like Insignia is able to bring products into the marketplace without actually making the products and investing in expensive factories.
Since Insignia outsources its production, the company doesn’t need to put much effort into production. All Insignia needs to do is market and distribute 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. Televisions are almost entirely screen, after all.
“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. Yes, you can watch videos on the go, but the cheapest Insignia smart TV costs just about $190, which is a 24-inch TV you can watch from the couch.
According to Kyle Wiens, the CEO of iFixit, the most expensive component in a modern TV is the LED panel, which TV makers can buy from third parties at lower prices than ever before.
Additionally, manufacturers have gotten more efficient at cutting large pieces of glass into screens, producing less waste compared to several years ago.
Put simply, companies that make TVs, like Insignia, have become more so good and efficient in their production process, which in turn drives down the costs of manufacturing TVs.
3. Plenty of competition
In the last point, we talked about the improvements in the manufacturing process of televisions. This has resulted in another event to happen: competition.
The decreased prices of LED panels, along with better production efficiency, allowed more TV brands to enter the market, which resulted in more competition.
Unlike in the smartphone market, which is more complex and is dominated by a handful of big companies, TV makers only need to buy the display, build a case, and offer a streaming service.
James Willcox, a senior editor of Consumer Reports, said that newer companies, like Insignia, “have taken a lot of market share in the past couple of years from more established brands.”
A brand like Insignia can enter the television marketplace by being cheaper than established brands like Samsung, LG, and Sony. This forces other TV brands to also lower their prices.
4. Insignia keeps things basic
Insignia is one of the rare brands that stick to the basic necessities when it comes to televisions. Their TVs don’t come with fancy tech that is very costly.
For example, the N10 Series, which is their most basic range, doesn’t have smart TV functionality, so if you want to stream Netflix, you’ll need to connect to a dedicated streamer.
The TVs are sold at logic-defying prices, between $90 to $220.
If you go up a notch, you’ll get the Insignia F20 Series, which comes at similar prices to the N10, but comes equipped with smart TV functionality. Still, most of the TVs are pretty basic.
Other aspects of the TV, like the remote controls, for example, are pretty basic too. The materials used are not as good as the ones you’ll find on more expensive brands.
In short, Insignia is not trying to compete with the biggest brands employing the latest tech. They keep things simple, selling basic TVs at affordable prices for everyone to enjoy.
5. Insignia makes a profit when you watch TV, not when you buy
With the exception of the N10 Series, all Insignia TVs are smart TVs that run on Amazon’s Fire TV smart platform, where the choice of apps available is plentiful.
Insignia smart TVs are convenient because they can be connected to the internet and supported video streaming services can be played directly from them.
When you watch TV, Insignia is watching you and profiting off the data it collects. This is perhaps the biggest reason why Insignia TVs are so cheap and affordable.
To enable smart features, Insignia smart TVs require you to agree to personal data collection and receive targeted ads to all devices that are connected to your IP address.
Insignia can then sell your data to advertisers.
This means Insignia can sell their TVs almost at cost and still make money long-term by selling data. In addition to selling your data to advertisers, Insignia TVs also show ads in the interface.
Insignia TVs run on the Amazon ecosystem. I actually like the streaming experience provided by Amazon, but you can’t get past the annoying sponsored ads at every turn.
In short, Insignia makes money when you watch the TV, not when you buy it.
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