With yesterday’s news that plasma TV sales have fallen an additional 19 percent to $3.8 billion in the last quarter comes news that struggling plasma manufacturer Pioneer is set to restructure their distribution operations in Australia yet again in an effort to be competitive against the likes of Samsung, LG and Panasonic.
Last quarter plasma sales fell 22%, Pioneer revenues fell 80% with the company forced to take an injection of capital from Sharp.
Despite having what has been described as the best plasma TV in the world, Pioneer are being forced to compete for the plasma scraps at the bottom end of the market.
Among plasma TV suppliers, Panasonic maker Matsushita Electric Industrial kept its No. 1 spot, controlling 32.9 percent of the market, while Samsung came in second with 21.3 percent and LG Electronics Inc took a 16.3 percent share.
Pioneer is in 6th spot with several unknown plasma brands.
Plasma TVs have seen their share erode in the overall TV market as LCD TV suppliers in recent years encroached on the market for large-sized TVs with 40-inch and larger panels, formerly plasma TVs’ stronghold.
In Australia Pioneer have struggled, in mid 2006 several specialist resellers dumped them from their stores as Pioneer cuddled up to mass retailers in an effort to compete in the volume market. Then they realised that the plasma market was moving to the top end with the over 50″ and 60″ market being one of the fastest growing. They also realised that the consumers buying a large plasma screen were more than likely to engage the services of a custom installer so they struck a compromise by giving CEDIA members access to their top end model.
Then in November 2006 they launched a high end plasma TV at $14,999 only to slash it to $9,995 3 months later because it was not selling. This left specialist resellers to explain to customers the sudden price drop.
Now the company has done another about face and are again seeking the support of mass retailers for their new LX product range. Describing their previous distribution model as tired they now claim that almost anyone can sell their plasma screens as long as they have the floor space and the capability to merchandise the plasma screens.
A big boost to Pioneer’s fortunes this year was the roll out by arch competitor Panasonic of a multi-million dollar advertising campaign that promoted plasma as being a better TV technology than LCD TV. This led to Pioneer selling out of their small amount of plasma stock in stores. It also led to Panasonic air freighting stock to meet the demand.
Pioneer Electronics Australia spokesperson, Michael Broadhurst has admitted that 130 retailers will be stocking the LX range of Pioneers high end products.
These include several who have better buying power than the small specialist retailers who over the years have been long time supporters of Pioneer. Pioneer are also set to extend to mass retailers like Harvey Norman, JB Hi-Fi, Clive Peeters, David Jones and Myer co-op dollar advertising that they are not being provided to the smaller specialist resellers who are more likely to sell the award winning Pioneer 60″ plasma.
While Panasonic sponsor the rugby and Samsung the Soccer, LG is sponsoring the cricket while also rolling out a massive TV advertising campaign for their plasma TV offerings.
Pioneer have taken to rolling out an obscure “Kuro” advertising campaign which is based on redefining black as opposed to driving sales of plasma over LCD TV technology.
While things don’t look good for Pioneer the company is having one last fling this Xmas in an effort to turnaround their fortunes. While it was forced into a capital alliance with Sharp a few months ago it does have healthy profit margins in its auto electronics unit, which offers car audio and car navigation systems.
Last month Pioneer has also suspended plans for a new plasma television factory owing to disappointing sales for their products with some Japanese analysts tipping that the company will be forced to source plasma screens from OEM manufacturers in the future such as Panasonic.
Pioneer has a targeted production of 720,000 plasma televisions this fiscal year.
For the year to March, Pioneer cut its operating profit forecast by one-third to $87.16 million, down from a 12.49 billion yen profit a year earlier and compared with a consensus for a 12.5 billion yen profit in a survey of 14 analysts by Reuters Estimates.
Sharp said last month it would buy about $362 million worth of new shares from Pioneer and work with the loss-making rival in developing DVD players, car electronics and displays, the latest move by Japan’s electronics makers to form alliances to better compete with global rivals.