On Monday, May 14, the Smart House Web site (www.smarthouse.com.au) reported that Pioneer Electronics incurred a loss of more than $67M for the past fiscal year after writing down its plasma TV operations.

This announcement came not even a week after the company launched its new line of Pioneer and Elite plasma HDTVs in New York City. The new models feature a re-designed cell structure and claim super-low black levels, high contrast, and saturated colors.

According to the Smart House article, Pioneer posted a net loss of $56.3M for the fiscal year ending March 31. The company had originally forecast a profit of ¥5B (about $41M), while a poll of 15 analysts by Reuters Estimates called for a ¥4.5B ($37M) profit. (Pioneer has not yet officially released its earnings for fiscal 2007.)

While the company’s financial results are aren’t as bad as reported the previous fiscal year, it’s obvious that the rapid drop in plasma prices and the surge in product from Panasonic, Samsung, and LG (who also lost money in plasma last year) are body-slamming Pioneer repeatedly to the ground.

As the smallest of the "Big 5" plasma manufacturers in terms of capacity (and with a market share of just 8.5% in 2006), Pioneer doesn’t have all that much leverage on the market. Moreover, two consecutive years of losses will put a big crimp in the company’s plans to sell 330,000 plasma HDTVs in North America this year without resorting to further discounting.

While no one disputes the quality of Pioneer plasma displays, the company’s brand name is not being leveraged nearly enough in the HDTV market, in my opinion. LCD HDTVs are in high demand now, and Pioneer is missing an opportunity in the 32-inch to 47-inch range by not bringing out a line of Elite-brand 1080p LCD HDTVs, much as Mitsubishi has done in their 2007 product line.

Interestingly, Pioneer’s Australian subsidiary had plans to do exactly that under an OEM deal, according to Smart House, but was stopped cold by executive management in Japan, who seems to have adopted a "sink or swim" mentality with regards to plasma technology.

For the next fiscal year, the company is forecasting a profit of ¥12.5B ($103M) and plans to increase its 77% stake in Tohoku Pioneer, which makes automotive speakers and organic EL (electroluminescence) displays for mobile devices. The silver lining around the cloud is that Pioneer’s car audio and navigation systems are still strong performers, but can sales of those products overcome losses from plasma operations?