13 Mar
7 implications of Pioneer’s decision to stop plasma TV manufacturing
Pioneer might not be stopping to sell its plasma TVs, however its decision to actually stop making the panels is a major 180 degree turn from the fifth plasma manufacturer in the world. So here is the first implications of this decision that immediately come to mind:
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Flat panel TVs are not the rosy high margin market that most people imagine. Margins are tiny and the technology is mature as we have now reached ninth or tenth generation panels and plants. Size matters a lot apparently, and Pioneer is a notable victim of that trend.
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Japanese manufacturing is not the fortress that it used to be, despite the fact that Panasonic and Sharp will supply Pioneer with plasma and LCD panels respectively.
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The fact that Pioneer actually trusts Panasonic and Sharp for its panels means that there is still a lot of cutting edge technology involvement and Pioneer wants to keep the game in Japan with minimum risk.
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That does not mean that production could not be outsourced to Taiwan or China in the future, possibly when OLED becomes more mainstream, with plasma and LCD becoming low end technologies.
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I am sure Pioneer is heavily influenced by success stories like the iPod and the Xbox 360, where Apple and Microsoft center on design, while manufacturing is outsourced. If they can do it, why cannot Pioneer at least try?
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It is impossible to know the exact deal between Pioneer and Panasonic, but it must be nice to be to a degree decoupled from sales and not to have to worry about new plants.
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On the other hand cutting edge technologies -like the Kuro panels for example- might have to be shared with Panasonic…
It remains to be seen how successful Pioneer’s move will be, I have the suspicion that it is a large test. If successful, Pioneer might apply the same tactic to AV and car electronics.
I remember that some years back it was an insult to find that a TV was not completely manufactured by the same brand. Things have changed a lot and the good news is that consumers are now less bothered by such a detail, but instead center on performance and quality…
[...] Pioneer might not be stopping to sell its plasma TVs, however its decision to actually stop making the panels is a major 180 degree turn from the fifth plasma manufacturer in the world. So here is the first implications of this decision … Read More [...]
March 14th, 2008 at 12:02 am