 Hey guys, it's Jonathan Verch. I'm here with Matt McCray, the CTO of Vizio. We're here at CES 2014. You're still making laptops, you're still making desktops. But you've kind of pared down the model ranges there. What's going on there? We noticed 90% of our sales, for instance, just as an example, our all-in-one PC, 90% of our sales was 24-inch. So we pared down our 27 and we're just concentrating on the 24. So we took our 24-inch and we updated the touchscreen technology so it's much faster. We bumped a fourth generation Intel processor. We have Iris Pro graphics, all i7s by the way. We bumped it to 802.11ac, so the fastest wireless standard. So what we did is we pared down what people were actually passionate about buying and got rid of the stuff that people weren't buying. And you got rid of your 13-inch laptop and 8. Right, we got rid of, we had a 14. So we had a 14-inch, we got rid of that and we have a 15.6. So you stuck with the keyboard on the laptop. We did. Tell me what's going on there. You don't like it. I understand that I liked it. The first time I ever saw it two years ago, I said, this is going to be controversial and it's been two years, three years. What's the feedback? So totally open, we have about 10-15% of the people don't like the keyboard and the rest like it. So we've stuck with the keyboard. We've updated the trackpad. So we're continuously refining but we've had more people say don't change the keyboard. So we've left the keyboard the way it is and most people enjoy it. So when you launched the PCs, it was going to be the next big wave for Vizia. It was a big launch. You were everywhere and I've kind of pulled it back a little bit. Is there a reason, is it just the TV stuff is more important and there's a bigger market there? The PC market is kind of falling apart. Yeah, that helps. PC market is, I would say, at best stagnant. I think our area where we're going for is a healthy market, meaning that kind of high-end people, it's not the largest part of the market. I think a lot of the market has gone to like $500 and less and we don't have a lot of interest in playing in that. You're not going to make a Chromebook. No, we have no plans to make a Chromebook. So we're still on the premium side and we still view it as a product that complements the rest of our products. So again, it's another screen that you can watch content on. So if you're a Netflix subscriber and you're way into Netflix, you can start a stream on your laptop, close the screen, play it back on your TV and in fact, you could actually play it on our smart audio product because we have a full Android on there. So you can jump between screens and we thought that was very, very important. So that's still important to us. So why do you actually, it's weird, you have all these platforms and you were telling me that the apps are what connects platforms, but you have Android on the smart audio products, you've got proprietary, I'm assuming, Linux, National 5 on the TVs and then you've got Windows on your computers. Why not just pick one? Why not have Android run on the TV? So here's my current view, is that there isn't one platform that's perfect for all, meaning there is not an operating system that is the best PC operating system in the world and also the best mobile operating system for a smaller device. And there's definitely not an OS on a PC or a mobile device that's the best operating system for a TV. So still today on the underlying platforms, we're still in a mode of best of breed, meaning we're picking the best platform for that specific device. With the idea though that the platform doesn't really matter. What matters is, like I said before, that somebody can jump between Netflix versions and all of them and have a totally seamless experience or Spotify or Pandora or whatever. That's where people are making their connections, especially on TV when they're looking for content. And so as long as we can make that a completely consistent interface, the underlying platform to us at least becomes less important and we would still tip towards using the best platform or operating system on that given device and then concentrating on the user experience above. I don't know, in the future a single OS may become the best mobile, the best TV and the best computing and have one, but I don't think we're there yet. It seems like HTML5 is where it's going to land. What I would say is HTML5 is kind of that layer in between in that you can write an HTML5 app that runs on Android and it also runs on a web browser, Chrome or an HTML5 kit. And in fact, a lot of the apps in Windows 8 are actually written in HTML5 and CSS. So there's already a little bit of this unifying development layer. And Netflix is all over that. And Netflix is all over that and there's multiple apps and we've had HTML5 on our TVs for over a year now and I'll tell you all the new apps that are being written for smart TV platforms raise HTML5. Yeah. So that's, I mean that's, I only ask you this to ask you about the one competitor I'm going to ask you about, which is LG is going to come out with a web OS TV. And that seems like they're, it's called web OS, they're betting big on this HTML future, but it seems like they needed to race into, you know, they're not software developers, they're a version of Android, it's kind of like whatever. Do you see that as like the future for all these TV products is web apps kind of being rescaled and reported to television? Yeah. Because there's no unified interface. Like it's like, you know, Netflix looks like this, Hulu looks like this, Amazon looks like that. Yeah. So what I think what's happening is on the best internet platforms for TVs, there's a unification happening at the app level. So for instance, we, you know, there's two versions of Netflix out there. There's the kind of very minimalist that ended up on Blu-ray players and some of the less capable smart TVs. And then there's the full fledged version that we have. And it's very much the same as Android or iOS and some of the others. So there's a little bit of a bifurcation, but I would say there's, there's becoming a pretty seamless user experience at the app level. I think HTML5 is helping with that, right? So a developer can develop once and with little modification moved between them. I think LG's choice of web OS is interesting. I mean, I think, you know, it may be unnecessary. I think, you know, where all the developments being done is above the OS level. You know, they bought it, so they decided to use it. That's good. Yeah. Well, they had to catch up. But for us, it's unnecessary. I think for us, it's less about, especially on a TV, it's less about the OS, it's more about the user interface. I do think that a fully unified user experience across these platforms is important. And it's something we're working on in the labs, obviously. We had to finish the reference series first and get the picture quality and audio quality where we think it, where next gen. The entire lab that we work on and our R&D center will be moving towards smart TV platforms of the future. And already have been. But I think the next step is that unification. And I can't tell you exactly what that is. But what's interesting, I think web OS is going to be tough because web OS is not on any of the other platforms. So it's interesting as they pick something that has already been taken off mobile phones and taken off everything else. So that's going to be more difficult when there's operating systems that are out there that are already kind of pushing across devices. Some of them are actually operating systems, but some of them may just be a development platform like HTML5 that ends up everywhere. So I think that's the next step is where the interface on your TV is completely the same as the interface on your tablet. And when I say the same, obviously it's scaled and it's optimized and there's some elements that are tweaked, but there's no reason to learn a completely new interface every single device you pick up. I think we're kind of past that and it just requires some extra work to get that done. And the smart audio device is our first step at actually doing that, right? Where you can pick up an Android phone or an Android tablet and then launch one of our smart devices and you're not going to see a difference. That is completely unskinned Android KitKat on a quad core processor. Again, like I said before, an Android user is going to walk up and be immediately comfortable with that, immediately, without having to go through a user training session and try to figure out how to download apps and sign up for a new account. All that is done. Come out of the box and it just works. That's the first test and we'll see some others. The big challenge is scaling that to 120 inches. You're not going to walk up there and start swiping. And I don't think people want to do this either. No, so I agree. I think the challenge for TV is not just user interface. I think the challenge with TV is it's the only device that you sit at a distance. So your interaction with it is not direct or in a keyboard and a trackpad or on a touch screen. You are 10 to 15 to 20 feet away and trying to solve for a really simple, intuitive user model is what needs to be solved. And I agree with you. I think the gesture stuff is a gimmick. I think it's great for some games. If you want to play Kinect, that's great. But as a way to navigate a full operating system, I think it just doesn't work. And the voice stuff, it feels similar. The voice stuff, if it's not stellar, it's frustrating. And so again, when you come to Visio, when I was talking before about a curated experience, I don't believe voice is good enough to put on a TV. And I think gesture is a gimmick. I don't think it works. And some of the camera-based gesture stuff is even worse. And so we don't bother putting it in because nobody uses it. And frankly, you don't want your users to be beta testers. So until it's perfect, don't put it in. So what we did is we spent the last few years going back and trying to build the best picture quality, audio quality in the game. And we're still working on some of those more deeper questions around a complete unified UI and what is the proper interaction mode with something that you're 10 feet away from. And we've got some really good ideas. That's next year. Maybe. All right, man. Well, it's always good to talk to you. Thanks. Thank you.
 Hey guys, it's Jonathan Verch. I'm here with Matt McCray, the CTO of Vizio. We're here
 at CES 2014. You're still making laptops, you're still making desktops. But you've kind
 of pared down the model ranges there. What's going on there?
 We noticed 90% of our sales, for instance, just as an example, our all-in-one PC, 90%
 of our sales was 24-inch. So we pared down our 27 and we're just concentrating on the
 24. So we took our 24-inch and we updated the touchscreen technology so it's much faster.
 We bumped a fourth generation Intel processor. We have Iris Pro graphics, all i7s by the
 way. We bumped it to 802.11ac, so the fastest wireless standard. So what we did is we pared
 down what people were actually passionate about buying and got rid of the stuff that
 people weren't buying.
 And you got rid of your 13-inch laptop and 8.
 Right, we got rid of, we had a 14. So we had a 14-inch, we got rid of that and we have
 a 15.6.
 So you stuck with the keyboard on the laptop.
 We did.
 Tell me what's going on there.
 You don't like it.
 I understand that I liked it. The first time I ever saw it two years ago, I said, this
 is going to be controversial and it's been two years, three years. What's the feedback?
 So totally open, we have about 10-15% of the people don't like the keyboard and the rest
 like it. So we've stuck with the keyboard. We've updated the trackpad. So we're continuously
 refining but we've had more people say don't change the keyboard. So we've left the keyboard
 the way it is and most people enjoy it.
 So when you launched the PCs, it was going to be the next big wave for Vizia. It was
 a big launch. You were everywhere and I've kind of pulled it back a little bit. Is there
 a reason, is it just the TV stuff is more important and there's a bigger market there?
 The PC market is kind of falling apart.
 Yeah, that helps. PC market is, I would say, at best stagnant. I think our area where we're
 going for is a healthy market, meaning that kind of high-end people, it's not the largest
 part of the market. I think a lot of the market has gone to like $500 and less and we don't
 have a lot of interest in playing in that.
 You're not going to make a Chromebook.
 No, we have no plans to make a Chromebook. So we're still on the premium side and we
 still view it as a product that complements the rest of our products. So again, it's another
 screen that you can watch content on. So if you're a Netflix subscriber and you're way
 into Netflix, you can start a stream on your laptop, close the screen, play it back on
 your TV and in fact, you could actually play it on our smart audio product because we have
 a full Android on there.
 So you can jump between screens and we thought that was very, very important. So that's still
 important to us.
 So why do you actually, it's weird, you have all these platforms and you were telling me
 that the apps are what connects platforms, but you have Android on the smart audio products,
 you've got proprietary, I'm assuming, Linux, National 5 on the TVs and then you've got
 Windows on your computers. Why not just pick one? Why not have Android run on the TV?
 So here's my current view, is that there isn't one platform that's perfect for all, meaning
 there is not an operating system that is the best PC operating system in the world and
 also the best mobile operating system for a smaller device. And there's definitely not
 an OS on a PC or a mobile device that's the best operating system for a TV.
 So still today on the underlying platforms, we're still in a mode of best of breed, meaning
 we're picking the best platform for that specific device. With the idea though that the platform
 doesn't really matter. What matters is, like I said before, that somebody can jump between
 Netflix versions and all of them and have a totally seamless experience or Spotify or
 Pandora or whatever. That's where people are making their connections, especially on TV
 when they're looking for content. And so as long as we can make that a completely consistent
 interface, the underlying platform to us at least becomes less important and we would
 still tip towards using the best platform or operating system on that given device and
 then concentrating on the user experience above. I don't know, in the future a single
 OS may become the best mobile, the best TV and the best computing and have one, but I
 don't think we're there yet.
 It seems like HTML5 is where it's going to land.
 What I would say is HTML5 is kind of that layer in between in that you can write an
 HTML5 app that runs on Android and it also runs on a web browser, Chrome or an HTML5
 kit. And in fact, a lot of the apps in Windows 8 are actually written in HTML5 and CSS. So
 there's already a little bit of this unifying development layer.
 And Netflix is all over that.
 And Netflix is all over that and there's multiple apps and we've had HTML5 on our TVs for over
 a year now and I'll tell you all the new apps that are being written for smart TV platforms
 raise HTML5.
 Yeah. So that's, I mean that's, I only ask you this to ask you about the one competitor
 I'm going to ask you about, which is LG is going to come out with a web OS TV. And that
 seems like they're, it's called web OS, they're betting big on this HTML future, but it seems
 like they needed to race into, you know, they're not software developers, they're a version
 of Android, it's kind of like whatever. Do you see that as like the future for all these
 TV products is web apps kind of being rescaled and reported to television?
 Yeah.
 Because there's no unified interface. Like it's like, you know, Netflix looks like this,
 Hulu looks like this, Amazon looks like that.
 Yeah. So what I think what's happening is on the best internet platforms for TVs, there's
 a unification happening at the app level. So for instance, we, you know, there's two
 versions of Netflix out there. There's the kind of very minimalist that ended up on Blu-ray
 players and some of the less capable smart TVs. And then there's the full fledged version
 that we have. And it's very much the same as Android or iOS and some of the others.
 So there's a little bit of a bifurcation, but I would say there's, there's becoming
 a pretty seamless user experience at the app level. I think HTML5 is helping with that,
 right? So a developer can develop once and with little modification moved between them.
 I think LG's choice of web OS is interesting. I mean, I think, you know, it may be unnecessary.
 I think, you know, where all the developments being done is above the OS level. You know,
 they bought it, so they decided to use it. That's good.
 Yeah. Well, they had to catch up.
 But for us, it's unnecessary. I think for us, it's less about, especially on a TV, it's
 less about the OS, it's more about the user interface. I do think that a fully unified
 user experience across these platforms is important. And it's something we're working
 on in the labs, obviously. We had to finish the reference series first and get the picture
 quality and audio quality where we think it, where next gen. The entire lab that we work
 on and our R&D center will be moving towards smart TV platforms of the future. And already
 have been. But I think the next step is that unification. And I can't tell you exactly
 what that is. But what's interesting, I think web OS is going to be tough because web OS
 is not on any of the other platforms. So it's interesting as they pick something that has
 already been taken off mobile phones and taken off everything else. So that's going to be
 more difficult when there's operating systems that are out there that are already kind of
 pushing across devices. Some of them are actually operating systems, but some of them may just
 be a development platform like HTML5 that ends up everywhere. So I think that's the
 next step is where the interface on your TV is completely the same as the interface on
 your tablet. And when I say the same, obviously it's scaled and it's optimized and there's
 some elements that are tweaked, but there's no reason to learn a completely new interface
 every single device you pick up. I think we're kind of past that and it just requires some
 extra work to get that done. And the smart audio device is our first step at actually
 doing that, right? Where you can pick up an Android phone or an Android tablet and then
 launch one of our smart devices and you're not going to see a difference. That is completely
 unskinned Android KitKat on a quad core processor. Again, like I said before, an Android user
 is going to walk up and be immediately comfortable with that, immediately, without having to
 go through a user training session and try to figure out how to download apps and sign
 up for a new account. All that is done. Come out of the box and it just works. That's the
 first test and we'll see some others. The big challenge is scaling that to 120 inches.
 You're not going to walk up there and start swiping. And I don't think people want to
 do this either. No, so I agree. I think the challenge for TV is not just user interface.
 I think the challenge with TV is it's the only device that you sit at a distance. So
 your interaction with it is not direct or in a keyboard and a trackpad or on a touch
 screen. You are 10 to 15 to 20 feet away and trying to solve for a really simple, intuitive
 user model is what needs to be solved. And I agree with you. I think the gesture stuff
 is a gimmick. I think it's great for some games. If you want to play Kinect, that's
 great. But as a way to navigate a full operating system, I think it just doesn't work. And
 the voice stuff, it feels similar. The voice stuff, if it's not stellar, it's frustrating.
 And so again, when you come to Visio, when I was talking before about a curated experience,
 I don't believe voice is good enough to put on a TV. And I think gesture is a gimmick.
 I don't think it works. And some of the camera-based gesture stuff is even worse. And so we don't
 bother putting it in because nobody uses it. And frankly, you don't want your users to
 be beta testers. So until it's perfect, don't put it in. So what we did is we spent the
 last few years going back and trying to build the best picture quality, audio quality in
 the game. And we're still working on some of those more deeper questions around a complete
 unified UI and what is the proper interaction mode with something that you're 10 feet away
 from. And we've got some really good ideas. That's next year. Maybe. All right, man. Well,
 it's always good to talk to you. Thanks. Thank you.