Pioneer Gets Smart About Surviving TV Battle

Posted by: Kenji Hall on March 4, 2008

It shouldn’t surprise anyone that Pioneer is considering outsourcing the panels that it uses to make flat-screen plasma TVs. Making flat TVs from scratch requires heavy-duty investments in plants and R&D, and Pioneer’s lower-than-expected TV sales make it hard to justify the expense. This fiscal year through March, the company expects to sell just 480,000 plasma sets, after revising down its initial projection for 720,000. According to the financial daily Nikkei, Pioneer could decide this week that it’s closing three plasma-panel-making plants in Japan, opting instead to buy plasma displays from Panasonic.

The expected announcement comes not long after Pioneer followed Panasonic’s lead, saying it would add liquid-crystal-display TVs to its product mix. Does this signal the slow demise of plasma TVs? Not necessarily. Panasonic is sprinting ahead with construction on a new multibillion-dollar plasma-display plant in western Japan on the site of two recently built gargantuan plants. Korea’s LG is forecasting a turnaround in its plasma-TV business this year. Hitachi and Samsung Electronics also continue to make plasma TVs. The best way to interpret Pioneer’s likely move is not as a step toward consolidation but rather another sign that Japan’s consumer electronics makers are getting smarter about how to stay competitive-—from both a cost and product standpoint—-and relevant in a very crowded market.

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Bloomberg Businessweek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies.

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