Pioneer Exits TV Business As Losses Mount
By TWICE Staff -- TWICE, 2/12/2009
Tokyo — Pioneer Electronics will exit the TV business by March 2010, cut 10,000 jobs worldwide and center on car electronics and other home electronics businesses.
Pioneer made the announcement as it posted operating and net losses, as well as lower sales, for its fiscal third quarter, ended Dec. 31, and is projecting a record net loss of 130 billion yen, or $1.44 billion, for its fiscal year ending March 31.
The company plans to cut 6,000 full-time employees worldwide and 4,000 temporary workers.
Pioneer said in a statement it is exiting the TV business because “recent market conditions have changed far more than initially anticipated, and Pioneer has decided to withdraw from the display business after concluding there are no prospects for improving profitability under current conditions.”
In DisplaySearch’s 2008 fourth-quarter market share report, Pioneer ranked fifth in U.S. plasma TV market, with a 2.6 percent share, down 4 percent from the prior quarter and down 9 percent year over year.
The company said it will continue to provide after-sales services even after the withdrawal from the market.
While Pioneer acknowledges that car electronics is “severely affected by lower demand” for cars, it expects a recovering in fiscal year 2011, ended March 31, 2011, and will shift its TV resources to emphasize telemantics.
In its home electronics business Pioneer will center on audio products, DJ equipment and cable TV set-top boxes and will emphasize “‘sound’ as we take advantage of our extensive audio technologies and expertise developed over the years.”
In its optical disc business Pioneer is “considering measures for improving profitability, including forming a joint venture.”
Pioneer reported a 37.8 percent drop in sales during its fiscal third quarter, to $1.44 billion, an operating loss of $117.8 million and net loss of $287.3 million. In the prior year’s third quarter Pioneer reported net income of $18.7 million
As with other Japanese CE makers, the combination of the worldwide recession and the exchange rate between the yen and the U.S. dollar and euro drove losses deeper than expected.
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Mr. Flummox: The official word from Pioneer USA Feb. 18 to TWICE was the same comment from corporate last week about 6K full time, 4K part time employee layoffs worldwide. There hasn't been any information from Pioneer or known industry sources about possible layoffs as yet.
Steve Smith - 2009-19-2 09:21:00 EST -
Pioneer let about 200 people go in the US last week. No article?
Mr. Flummox - 2009-17-2 22:19:00 EST -
I think the CE business has to face the facts here. Customers simply are not willing to pay for quality products or service anymore. They may gripe and moan when their TV breaks and is down for 2-3 months because the one reputable shop in their area is overwhelmed with work, but they have obviously spoken load and clear that they are more than happy with shlock product and service they receive at Walmart, Costco or Walgreens.
Going forward ALL vendors and retailers would be wise to understand what the customers have said. The recent sinkings of Tweeter, Magnolia, CC, and countless others is more than fair warning for those that are still fortunate enough to be afloat. To survive you are simply going to have to give the people what they are asking for.
It's a new day gang....the past is over.
Sarah Connor - 2009-13-2 08:46:00 EST -
I have had the pleasure, over the last 11 years in the specialist Audio Video realm, to turn to one product time and time again, when a customer was driven to request and own the best...Pioneer Elite. I also happen to be the proud owner of an Elite PRO530HDi, as well as a PRO110FD, each ISF calibrated. One word to describe the visual experience provided by these no compromise displays - YUMMY! It was incredibly comforting as a salesperson/designer to know that the best product in the world, in its respective category, was always at my disposal. It almost feels like I''m in mourning, having lost a stable, dear, well mannered friend. Here''s to you Pioneer, you''[ll be the subject of many a toast tonight!
Shawn Downs - 2009-12-2 18:44:00 EST -
Very bad for our industry.Pioneer had great customer service, exceptional picture and sound,and great build quality. Unfortunately our industry tells consumers only to look at price and what cheap freeby can I get if I buy a Viseo.
jeff traviss - 2009-12-2 14:40:00 EST
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