Pioneer to Reduce Flat Panel Output by 25%

[Audioholics]

<P class=fp><FONT face="Arial, Helvetica, sans-serif" size=2>Pioneer is set to close about one-quarter of its global manufacturing facilities in the first major rationalization by a large flat-screen maker in response to oversupply and price falls in the sector. This would mark the first attempt by a flat-panel manufacturer to drive up demand for its products by combatting oversupply and focusing efforts on establishing a "best-in-class" view of its products in the minds of consumers and dealers alike.</FONT></P><P><FONT face="Arial, Helvetica, sans-serif" size=2>Pioneer warned yesterday it would miss its sales and profit targets for next year and would fail to achieve the 7 per cent operating margin it had pledged to deliver following savage price falls in its main markets for plasma display panels and DVD recorders.</FONT></P>Read the FT.com article (requires membership)

 

[e73bass]

Pioneer

On widescreen.com it says--Pioneer is considering a new PLASMA-LINE of TV and actually increasing production from 6 mfg. lines to 7 mfg. lines. This boosted their stock on that announcement--just the day before (3/23/05).
This was reported in the ECONOMIC TIMES/ INDIA TIMES.

 

[Rock&Roll Ninja]

I like a company that puts quality over quantity

 

[Duffinator]

Don't Be Fooled...

...By the line that supply is high and they are cutting production to control prices. Pioneeer doesn't have that high of market share to control supply. If demand is there someone else will pick up the slack.

IMO there are two issues here. The main issue is they are cutting cost as they are not profitable. This overrides all other speculation or "Press Releases" as to cutting production to control prices. The FT article talks more about profitability and cutting cost than controlling prices. Pioneer is not making money and are cutting cost. Period. And this has nothing to do with quality over quantity.

The second issue is their business decision to only produce PDP and not venture in to LCD production. Pioneer is a small company compared to Sony, Samsung, LG, etc. so they made the business decision a long time ago to focus on PDP. With their limited resources this was a sound decision. But LCD TV's are cutting into PDP market share and providing competition for the entire television market, which drives down prices on all ends. Pioneer is just doing what all good companies do when profitability is down, they cut costs.