2. home-theater
  3. 1204842925

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
wader1971
77 posts
 
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
President
Home Entertainment & Business Solution Division
Pioneer Electronics (USA) Inc.
Matt Brush
Custom Sales & Design

hmm, Isn't this interesting now?
rysa4
266 posts
 
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.
rackon
301 posts
 
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.
raks
468 posts
 
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.
More to discover