Pioneer to Exit Plasma Panel Production

March 5th, 2008

By Paul Gagnon, Director of North America TV Research

As we reported in an article in DisplaySearch’s Weekly TV Flash Report a few weeks back, Pioneer had announced their exit from the 42″ plasma panel production business in Japan. It seems, however, that Pioneer now plans to completely abandon ALL plasma panel production by the end of the year, according to an article from Reuters, which cites an industry source, corroborating a Nikkei business daily report in Japan.

Indications are that Pioneer will remain a plasma TV manufacturer, but will source panels through Matsushita (Panasonic) in the future and should announce future plans shortly. This is a major development in the flat panel TV market, and the implications and questions are many. What’s to become of the high-end plasma business that Pioneer occupied and the recent launches of the Project KURO models with dramatically better contrast and black levels? Will Matsushita be able to manufacture the KURO panels to sustain Pioneer’s up-market position? How quickly, and to what extent, will LCD infiltrate the Pioneer lineup? We already know of 40″ class LCD models, produced through their new partnership with Sharp, but what about larger?

Of course, Pioneer’s share has been slumping and revenues have not met expectations. The plasma TV business has few major competitors within the technology, but intense competition from LCD brands. We’ve also seen another plasma-centric brand, Hitachi, bring 40″+ LCD models into the mix in the past year and other brands such as Philips, which have supported both camps, have been moving rapidly to favor LCD in their business plans.

Pioneer also had very strong relationships with the regional and A/V specialty dealers in the US, so the impact of a weaker brand story could certainly hurt that relationship. The major advantage Pioneer had in securing the specialty retailers was a less aggressive distribution strategy, particularly in warehouse clubs and mass merchants. Now, it seems as though these specialty dealers will have to look for another heavily sheltered brand to prevent rapid price erosion, unless Pioneer can continue to maintain a strong brand story and performance position without increased channel conflicts.

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