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Pioneer Plasma is “on the Roof”

February 9, 2009 | Author: Ibex Marketing

First, Pioneer announced their exit from the plasma panel manufacturing business nearly a year ago. Last November, the company announced expectations of a major loss and the elimination of about 2,000 jobs. Now it is widely reported that a story in the Japanese newspaper Nikkei indicates that Pioneer will exit the plasma TV business altogether. The company did issue a statement that did not confirm or deny the article, but said that additional details about Pioneer’s restructuring plans will be announced on Thursday, when it releases its corporate financial information.

I would not be the least bit surprised with the news that Pioneer is exiting the plasma TV business. The last quarter was brutal for everyone in the business, and Pioneer was already badly battered well before the holiday season. They didn’t have the production or the market share to be a major player in the business, and as we enter an era of commodity pricing and distribution, it becomes more and more difficult to maintain success from the premium brand high ground as the floodwaters of lower-priced products sweep the market away. Now that even the powerhouses Sony, Sharp, Panasonic, LG, and Samsung are having difficulties and posting large losses, it becomes harder than ever for the smaller brands to survive. And if Pioneer does exit the market, this will put even more pressure on Panasonic as it will be the only major brand committed to plasma technology for its primary products.

So expect Pioneer to confirm that it’s throwing in the towel later this week. And don’t be surprised to hear about even more brands leaving the flat panel TV market before long.

UPDATE 2/12/09: It’s official. Pioneer will exit the TV business by March 2010, and will focus on its automotive electronics business instead.