Pioneer stop Plasma production.......

Pioneer is the world's fifth-largest plasma TV manufacturer and has constantly struggled for relevance against the larger Panasonic brand (Matsushita). Now, Pioneer will buy its panels from the competing brand and it will begin picking up LCD panels from... you guessed it - Sharp. This makes three major manufacturers who are backing Sharp panel production in the coming year (inclusive of both Toshiba and Sony Electronics). Our guess is that Sharp is going to be the first to market with the new line of super-thin LCD panels that fans such as myself have been dreaming about for some time.

Investors have long known that Pioneer was bleeding red ink over its plasma division having several years ago decided not to compete in the low-price market. "This is an excellent development," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management. "Pioneer could have chosen another way and stepped up its plasma investment despite the fact that the business is bleeding red ink, but it's a wise step to decide against that... a quicker decision would have been even better," he said.

This is no easy decision for the Japan-based manufacturer. Pioneer has spent nearly $1 billion (yes, with a 'b') on four plasma TV manufacturing plants and two additional plants it purchased from NEC.

According to the report, a Pioneer spokesman said the company would unveil its display business strategy when it announces company-wide business plans on Friday.

The only thing surprising about this announcement is its timing. Pioneer just last year launched its premier "Project Kuro" line which promised total black levels and was designed to give consumers a no-holds-barred choice for high-end plasma displays. Pioneer had repeatedly stated that the Kuro brand was gaining speed and 2008 would show that Pioneer had captured the high-end market. The problem is that Pioneer, while predicting several hundreds of thousands of plasma TV sales, was up against rival Panasonic who had a planned sales volume of more than 5 million units.

For those concerned, this doesn't mean that Pioneer will exit the plasma business. It simply means that they are, in the interim at least, looking to leave the plasma panel manufacturing business, opting instead to purchase their panels from a company like Matsushita (Panasonic).

As to what this means for plasma as a technology, we believe that, as predicted, this is the beginning of the end. It's longevity depends on a few factors now:

Marketing and consumer perspective of the technology
How quickly the new super-thin LCD TVs hit the consumer market (Hitachi is already releasing some)
The continuation of rapidly-dropping LCD panel prices
How much Matsushita invests in plasma versus its LCD manufacturing efforts in upcoming years
So there you have it. Plasma has begun its exit from the market as consolidation forces one of the largest proponents of the technology finally exits the manufacturing business and takes on LCD. We're sad to see it go, but it appeared to us at this year's CES that ultra-thin LCDs are going to hit the market much sooner than ultra-thin plasmas. When that happens there is going to be an incredible surge in popularity for the <1-inch thin displays that will push plasma technology further away. The same effect has happened to rear projection television, with manufacturers leaving those markets and technology in droves. Just this year, Sony decided to eschew all screen technologies save LCD and OLED - and it had a large stake in its LCoS-based SXRD line.
Chadnliz, very interesting information. Thanks!
Interesting . . . thanks for the post. I do think that while Pioneer seems like a huge company compared to many in the specialty audio business . . . they're still a chump-change company in the OEM parts manufacturing business. And Matsushita isn't simply a big player, they're THE big player.

I think that this being "the beginning of the end" for television plasma displays is WAY premature. The flat-panel television market is far from mature, and I'm guessing the Pioneer has to juggle its consumer-sales profits very carefully with its OEM business, and since the consumer products have to be highly price-competitive right now, it makes sense that they'd dump the OEM parts-profit equation onto a company that has deep enough pockets to play the acronym battle with Sharp.

Also, Pioneer's manufacturing facilities aren't necessarily simply going to disappear . . . the bean-counters will most likely work their magic to make them part of some other entity, and all of those legacy R&D, development, and buildout/tooling costs will escape handily into the luminiferous ether.
When it comes to all things television and video, I consider Sony the vanguard. It's a personal bias, which I admit.

However, I find it telling that Sony never sold a plasma screen, and is now focused on OLED, which improves upon plasma in every way.
I consider Sony the vanguard.
This was quite true in the grand old days when founder Akio Morita was still running the company, esp. the Trinitron tube with its slotted shadow mask. But quite unfortunately those days are long gone, and it's wise to consider each Sony product individually on its own merits. There's still some great stuff, but there's plenty of crap mixed in.
Sony never sold a plasma screen
???? huh? I've seen a ton of Sony plasmas. And I'm pretty sure they weren't all received free of charge . . .
Sony never sold a plasma screen

???? huh? I've seen a ton of Sony plasmas. And I'm pretty sure they weren't all received free of charge . . .
Kirkus (System | Answers)

You're right. My mistake.

Yes, judge each TV on its own merit.

My money is still on Sony and OLED. I did say I was biased.

I cant believe they are walking away from that investment and turning their back on superb performance, looks like Panasonic is king of the crop now as most ranked Pioneer Elite 1 and Panasonic 2.
i have a pioneer pdp5050. it STILL has the best picture out of all that i've seen. all my freinds and family concur, even though they have newer technology high end panels. they had a good product. hopefully they won't lose their "magic". btw i also have a panasonic plasma, not even close, nor is the sharp aquos hd lcd.
When my wife and I were shopping for our fist flat-screen TV recently, she pointed up to one unit and said, "I like that one... a lot." Over the years, I've come to know that if there's a top-of-the-line anything, she could spot it with three out of five of her senses disabled.

So, we now own a Pioneer Kuro and are lovin' every minute of it. It really is an outstanding set, with PQ that is clearly superior to anything out there.

I suppose the neat part is that we now have a collector's item!
I own a Sony plasma. It was manufactured by someone else to Sony standard.
The same will happen to Pioneer. The maker will build it exactly as Pioneer wants it to be. The Kuros series will still be the same.
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Wowzers, this is a damn shame.
I still have found no Plasma that can match my Sony XBR WEGA Glass tube unit...........but they dont go over 34' and are really heavy and ofcourse deep cabinets. We use that in living room and LCD Projector in HT.
What is your impression between the Sony XBR Wega and the new Pioneer Elite Kuro?

On the matter of Pioneer getting Mats/Panay to manufacture the panels, this isn't a surprise. Many manufactures outsource major components of their products when it becomes to expensive to manufacture/research and compete. Most automobile/motorcycle/electronics/etc use other companies components. They still put out products that are unique and are unlike their competitors. I would imagine the final assembly and or calibration will still be done by Pioneer along with their signature electronics, i.e. PureCinema.

Now this is only my 2 cents, and I hope Pio still puts out a quality product rather than rebranding a Panay set with their name like some other companies do with other electronics. Only time will tell...
I cant say without a comparison.
Do you think the prices of these Pioneer Elite/Kuro start dropping soon?
I predicted this in some of my past posts at the time of the Fujitsu demise. There just is no place for essentially overpriced plasmas.
Chadnliz... I looked at the Videogon ads right after Pioneer's announcement and within a week one of the dealers dropped the price for the 50" by $800. I've been watching these at Best Buy and Circuit City... and about three weeks ago I found that two Circuit City stores were discounting their 40" in-store display units (open box specials) by almost 50%. Maybe it was time to move them, but it seemed odd to me... until I read Pioneer's announcement.

This is what I got from one of the salesperson's email response:

Sorry I didn't reply to this Wade, but no Plasma is not dead it will continue to be the performance choice for HDTV's. No the prices aren't dropping. The new models will arrive this summer. Please see below the email I received today from the President of Pioneer.

Dear valued Pioneer Business Partners,

I am sure by now you have seen the announcement that was sent from Pioneer this morning. I hope it addresses the misinformation and speculation that surfaced earlier this week.

Pioneer remains passionate to delivering the ultimate home theater experience based on the brand strategy the company set nearly a year ago, to bring to market the best home theater technology, including high-definition plasma televisions like KURO.

As you know, we are coming off of a tremendous year during which Pioneer caused the first major shift in the HDTV market by breaking away from a price-driven, commoditized market. The KURO brand caused this shift - surpassing all competitors with its award-winning flat panel technology. We all worked to develop and reposition the brand over the past two years, our advertising, product mix and distribution strategy to match a premium brand/market strategy. After making these significant changes, it is only natural that we now need to align our fixed cost business strategy in an effort to right-size the business. Today’s announcement is part of that alignment process and supports our goal of being the leading display company delivering optimum performance standards in technology.

To do this, Pioneer will continue to focus on what it does best which includes engineering game-changing plasma technology and producing proprietary components that differentiate Pioneer plasma televisions from the rest of the market. The next generation KURO flat panel televisions will be coming this summer as planned with no disruption in Pioneer production.

This announcement will not affect Pioneer’s technology leadership in home entertainment but provides Pioneer the opportunity to further invest in bringing high-definition display innovations to life.

As you are aware, outsourcing is common practice among successful consumer electronics companies all over the world. Many of the most notable and respected brands of televisions, cell phones and video game consoles do not manufacture their own products. Pioneer plans to outsource production of plasma panel modules in 2009 in an effort to right-size the business.

Pioneer is developing plans with a production partner that offers the best quality and reliability in line with its own strategy and high standards, but at this point no partnership arrangements or decisions have been made.

In addition, the Mobile Business Group within Pioneer has been a consistently profitable business and has always been run as a separate division. This announcement will have no effect on this group.

We plan to leverage the engineering capabilities to compensate for any cutbacks in the plasma display business by shifting related personnel and other business resources to the Car Electronics business; the professional sound & visual (Pro SV) business, which involves DJ equipment; and the audio/video product business, including Blu-ray Disc related products.

I am confident that this announcement will enable the company to profitably bring high-definition display innovations to the customer’s living room, home cinema and all of the corners of our life where we can’t live without HD.

Best regards,

Sam Ohdate
Home Entertainment & Business Solution Division
Pioneer Electronics (USA) Inc.
Matt Brush
Custom Sales & Design

hmm, Isn't this interesting now?
I read this as there is a money making problem in their current business model and are emphasizing other more profitable areas of the company like car audio and car electronics. ( the car audio/electronics market is HUGELY profitable for sure)

In 2002 Fujitsu was the best at plasmas. Then they outsourced their panels and continued making plasmas and trying to charge very hard prices. Now Fujitsu is gone from the plasma world. Pioneers excellent plasmas hastened their exit to be sure, as did Panasonics global market share and strength. Fujitsu just didnt make sense.

If you were at CES and saw what was coming with plasmas from Panasonic the writing is on the wall.

Pioneer simply has to move to a lower cost production model in order to continue to make plasmas. They need a deal with Panasonic and Panasonic is probably weighing on the pros and cons at this point. If Pioneer has to go to Samsung for glass its basically over for Pioneer.

They made this decision before having a glass source. Lets all keep this in mind. Thats more of a panic move than a calm foresightful one.
Panny, Pioneer and Hitachi are all co-developing 10 Lumen tech for plasma, which is apparently to Kuro what Kuro is to all other plasmas.

So I wouldn't count either Pioneer or plasmas out yet.

Pioneer never had the manufacturing capability of Panny. It only makes sense to outsource.
The "double negitive reverse" is a sales technique that salespeople use, and that's exactly what I got last weekend while I was cruising thru a showroom. The salesperson came up and said... If you're thinking about a Pioneer... now's the time to buy because Pioneer is going to stop producing thier own screens soon... and once these "with the really great screens" are gone... you'll be getting something different. I took that to mean the dealers won't be offering deep discounts to move their inventory of current Pioneers.