In Japan, the Asahi News Service said Pioneer Corp (Tokyo, Japan, www.pioneer.com) will stop producing plasma panels in the 42-inch and smaller sizes to help shore up losses at the company’s less efficient Kagoshima production plant. Pioneer will continue to include the smaller size displays in its product line-up, but source the smaller PDP panels from Japan plasma makers Panasonic and Hitachi according to the news report, but we’re here to say - maybe not.

Steve Sechrist
Senior Analyst and Editor

The move is totally expected after the previous tectonic shift at Pioneer last October when the company agreed to a strategic partnership ala stock swap with flat panel manufacturing rival Sharp Electronics (see Large Display Report Oct-07, p.54.) The deal gave Pioneer a cash boost of a little more than $200M to get the company back on track with hints from Pioneer President Tamihiko Sudo that there’s an LCD future in the Pioneer brand. OK, here’s what he really said:

"In flat-panel-TV operations, it will be difficult for Pioneer to bring the segment back into the black with just plasmas, so it is better if we have 42-inch LCD-TVs in our line-up." He went on to say, " We hope to build up our brand perception with 50- and 60-inch plasmas, while also selling LCDs that are regarded as highly as Pioneer’s [plasma] TVs. We would like Sharp to supply us with LCD panels with special specifications since our strategy is to sell high-value-added products."

Bingo. If you think Pioneer (now 14.7% owned by Sharp) is planning to give much small PDP panel business to Matsushita or Hitachi, just remember back to October. Japan’s Nikkei.net reported then that Pioneer first approached Matsushita for a deal on plasma-panel manufacturing, but was rejected. Later reports came out in the December issue of Large Display Report (p.51.) from analyst Aldo Cugnini, that it was Pioneer who said no "because the quality of their panels did not meet our standards," according to a company executive. Pioneer is viewed by other major electronics makers as so "proud" that any efforts to collaborate with it are doomed to failure.

Just about this time (also when the Sharp stock swap deal was concluding), Pioneer announced it was putting on hold plans to build a new production facility in the city of Minami Alps, Yamanashi Prefecture. Pioneer spokesman Kesanobu Yamagishi said the company won’t be building the new PDP facility as previously planned because PDP-TV sales have been lower than expected. "At this moment, we are just taking a wait-and-see approach. We need to review the whole production capacity," said Yamagishi. "Our new plasma displays launched globally from this summer have been highly praised in the market for their picture and sound quality as well as for their design," Sudo told a news conference.

What Sudo seems to be describing is a formula for a niche market, low quantity production of larger (plus 50-inch) high-end PDP panels made by Pioneer to go with the plethora of plus 20- 30- and 40-inch LCDs all courtesy of the giant Sharp manufacturing juggernaut.

The Sharp / Pioneer deal makes a lot of sense from a branding perspective. Once considered the king of flat displays - in the pre-LCD TV days, (you remember, when a 42-inch plasma cost more than a used BMW.) Pioneer still holds on to a perception of best display image and has recently re-earned that title with its KURO brand products. The company also recently won an Insight Media Best Buzz award at CES for best technology demo, showing its Super Black and Super Thin PDP. Pete Putman said: "the company showed there is plenty of life in the old dog with an amazing demo of low black levels on a next-gen KURO plasma monitor. The blacks on this new KURO were so good that objects on the screen appeared to be floating in mid-air, while the colors had plenty of pop."

So the company with the stellar display image is trying to find a way to maintain its performance high-ground position with a must-have image any "true display aficionado" cannot resist. For its part, Sharp gains a top tier brand to associate (and sell) its LCD-TVs.

Pioneer getting out of 42-inch plasma - that’s old news (if you take time to read the tea leaves.)

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