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Friday, 07 March 2008 16:13

Pioneer terminates plasma, looks to LCD, goes Blu and turns up volume

Massive changes are afoot at Pioneer, affecting every facet of their business, including plasma TVs, audio, car audio and in-car entertainment and Blu-ray, as Pioneer continues working with Sharp Corporation on the business alliance they formed last year.

Well known for producing very high quality technologies in all their business units, Japan’s Pioneer Corporation has clearly found that having some of the very best technologies on the market doesn’t necessarily equate to absolute market dominance.

That said, it’s an ultra competitive world we live in today, with electronics companies in Japan, Korea, Taiwan, China, Europe and the US all battling it out against each other for market share, the hearts and minds of consumers, and for profit margins.

With Japan still responsible for creating world-class technologies, and Pioneer at the forefront, amongst others, in developing a range of firsts over the decades, when a company like Pioneer announces and makes major changes, its peers in the industry, interested consumers and the media take notice.

Pioneer’s first major change is the announcement of the termination of their in-house plasma panel display production after the completion of panel production for their next series of plasma TV models.

Pioneer have done this because they have decided that “maintaining the cost competitiveness of plasma display panels at projected sales volumes will be difficult going forward” – despite having arguably the very best plasma displays in the business, after years of meticulous research and development and a number of breakthroughs.

But while some might think this means Pioneer is ditching the plasma display altogether, Pioneer say otherwise, noting that they will “produce [plasma] panels externally”, and are looking at the “feasibility of procuring panel modules that may incorporate [Pioneer’s] proprietary technologies” with details yet to come.

In addition, Pioneer will work with Sharp Corporation, well known for their high-end LCD TVs, meaning Pioneer will finally join in the LCD TV race, while still continuing to sell and promote Plasma TVs based on their own proprietary technologies – more on this on page 3.

Pioneer also aim to “streamline the entire display business to a scale commensurate with sales”, which suggests a reduction in staff is coming, but say they “aim to compensate for cutbacks in the plasma display business by driving further expansion in our growth businesses” by shifting “related personnel and other business resources to the Car Electronics business; the professional sound & visual (Pro SV) business, which involves DJ equipment; and the audio/video product business, including Blu-ray Disc related products.”

So, what are Pioneer’s plans in the car electronics business (including in-car entertainment and navigation, home electronics, Pro DJ equipment, Blu-ray and speakers? Please read onto page 2.

Faced with the threat of portable navigation devices, be they standalone GPS units or GPS equipped mobile phones, eating into Pioneer’s in-car navigation systems, Pioneer wants to boost ‘telematics’ functions, using mobile phone and Internet technology to transform car satnavs into “comprehensive in-vehicle information terminals offering much more than merely car navigation”.

Pioneer says it is also developing “new in-dash car navigation systems with built-in audio/video functions that feature connectivity with peripheral electronics and innovative device operability”, while working at an OEM level to provide more in-car systems to car makers at an assembly line level.

In car audio/video products for consumer markets, Pioneer says they will “compensate for contraction in developed countries’ consumer markets by actively responding to rapid market expansion in the BRICs nations (Brazil, Russia, India and China), and will replace CD players in its car products with DVD players.

In the home electronics space, Pioneer will boost work on Blu-ray products, and work to create better links between Blu-ray players/recorders with displays, through wired and wireless means. Companies like Sony, Panasonic and others have long been working on this too, as are computing based competitors such as Microsoft, so this will be a big job for Pioneer.

Pioneer says its “goal is to create home environments where people can freely manipulate digital content piped into their homes over networks. We also aim to develop displays that are next-generation wall-mountable TVs by wirelessly connecting displays and various source devices.”

With regards to Blu-ray Disc-related products, Pioneer says it will “concentrate internal
product development on Blu-ray Disc players, which are expected to find growing
adoption worldwide”, and will also “use joint development and outsourcing to enhance our lineup of Blu-ray Disc recorders and other products.”

In the Pro SV business, Pioneer wants to drive even greater business expansion by augmenting its lineup of DJ equipment and moving into new categories of video and audio equipment.

Pioneer says its “speaker business makes effective use of technologies and expertise accumulated by Pioneer over its entire 70-year history”, and wants to grow its dominant market leading position in, but also speakers for home use, by creating ‘value added products’, such as speaker units for flat-panel TVs, mobile phones and other categories.

So, what about Pioneer’s ‘business alliance’ with Sharp Corporation, which includes the introduction of Pioneer’s first LCD TV line-up? Please read onto page 3.

Having entered into a ‘business alliance’ with Sharp Corporation last year, Pioneer says that “the two companies are conducting joint product development by making effective use of each other’s resources in their respective fields of expertise” with the “overriding goal to enhance the corporate value of both companies.”

In the field of flat-panel TVs, for example, Pioneer is taking part in Sharp’s development of acoustic systems for ultra-thin, flat-panel TVs.

By leveraging its acoustic technologies built up over many years, Pioneer “aims to develop acoustic systems employing ultra-thin speakers that still achieve outstanding sound quality for supply to Sharp.”

Furthermore, Pioneer will be supplied by Sharp with LCD TVs “based on its superior technologies” and plans to launch its own brand LCD TVs first in Europe during the European Autumn, and steadily expand its lineup of LCD TVs.

With the legacy of Pioneer’s ‘KURO’ brand of high-end plasma TVs defining Pioneer’s attention to detail, picture quality, black levels and more, Pioneer expects Sharp’s help will enable them to create LCD TVs that live up to the KURO ideals.

Sharp and Pioneer will also work together in the Blu-ray business, developing pickups and drives for Blu-ray players and recorders, special ultra-thin speakers for LCD TVs, and new devices based on the “only one device” concept.

One example given is to create “new kinds of automotive passenger cabin environments” and a linking of Sharp’s mobile phone technologies with Pioneer’s car navigation technologies, with “concrete achievements of these initiatives to be showcased at CEATEC JAPAN 2008 this fall and at various product presentations”, with CEATEC being one of Japan’s largest yearly technology exhibitions.

So, Pioneer’s relationship with Sharp draws ever closer, as the two companies work together to fight off their worldwide competitors.

Although both are global, multinational companies, clearly the likes of Sony, Samsung and up and coming Chinese/Taiwanese competitors, alongside threats from technologies such as the Laser TV and GPS everywhere is forcing consolidation in the market.

Given the additional power the linking of both these companies could generate, the developments, while signalling massive change, sound like very positive developments for both.

Just how successful it will all be is yet to be seen, but I certainly wouldn’t count either company out by any means – especially now they are working more closely than ever before.

Is an official merger on the cards in the future?

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Alex Zaharov-Reutt

One of Australia’s best-known technology journalists and consumer tech experts, Alex has appeared in his capacity as technology expert on all of Australia’s free-to-air and pay TV networks on all the major news and current affairs programs, on commercial and public radio, and technology, lifestyle and reality TV shows. Visit Alex at Twitter here.

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