Pioneer exits Plasma TV market

As we predicted several years ago, plasma technology is on its way out. Putting one of the nails in the lengthy coffin is Pioneer Corp, who is stopping ALL production of plasma display panels. Last week we reported that they had decided to stop all 42-inch panel production, however that has now been expanded to its entire plasma line. This comes via an industry source briefed on the plan and quoted by Reuters in an article released today. Rather than panic, Pioneer shares immediately jumped to a four-month high following the report - up 11.2 percent.

You heard it here first: Plasma TV is dead.

Pioneer is the world's fifth-largest plasma TV manufacturer and has constantly struggled for relevance against the larger Panasonic brand (Matsushita). Now, Pioneer will buy its panels from the competing brand and it will begin picking up LCD panels from... you guessed it - Sharp. This makes three major manufacturers who are backing Sharp panel production in the coming year (inclusive of both Toshiba and Sony Electronics). Our guess is that Sharp is going to be the first to market with the new line of super-thin LCD panels that fans such as myself have been dreaming about for some time.

Investors have long known that Pioneer was bleeding red ink over its plasma division having several years ago decided not to compete in the low-price market. "This is an excellent development," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management. "Pioneer could have chosen another way and stepped up its plasma investment despite the fact that the business is bleeding red ink, but it's a wise step to decide against that... a quicker decision would have been even better," he said.

This is no easy decision for the Japan-based manufacturer. Pioneer has spent nearly $1 billion (yes, with a 'b') on four plasma TV manufacturing plants and two additional plants it purchased from NEC.

According to the report, a Pioneer spokesman said the company would unveil its display business strategy when it announces company-wide business plans on Friday.