Will Pioneer stop selling plasmas?
There is speculation in the media about Pioneer Electronics withdrawing from the flat panel TV business. There are several factors involved in this speculation.
Even though Pioneer is universally lauded as the leader in plasma technology, their prices have kept them out of reach for most consumers. Pioneer holds a 6% market share for plasma TV sales. The plasma sales leader is Panasonic with 37%, followed by Samsung at 23% and LG Electronics with 16%.
Plasma sales are also a fraction of the overall flat panel market with LCD leading by a wide margin. Part of this is the fact that LCD comes in sizes from 19″ on up (in sizes most people buy). But a portion of this is also the misconception that LCD is a better technology.
We’re all familiar with the colloquialism “don’t throw good money after bad,” and this is generally true of corporate business. Considering investment takes risk they will go years hoping losses will turn around, sooner or later executives will cut their losses and move on.
Pioneer has lost money on their flat panel business five years running. The electronics firm is projecting a net loss of $850 million for the 2008 fiscal year. Sooner or later they will have to profit or cut and run.
As it stands
Currently Pioneer has cut most flat panel production and is sourcing panels from Panasonic. Only their Elite Signature Series panels are built in-house. They have plans to sell LCD panels sourced from Sharp Electronics, but they are only in the European market at this time.
With the current economy, luxury items are not selling as well as they have in years past. I hope Pioneer lives on because of the high quality they allow electronics consumers, but time will tell. For now it’s all speculation.