Pioneer Gives Haga New Post

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Pioneer used its line show here to introduce Tom Haga as the new president and chief operating officer of Pioneer Electronics USA.

The position was newly created for Haga, who had been promoted from president of Pioneer's U.S. home entertainment division. He now oversees all of Pioneer's groups including business products, car products and its service division.

Haga reports to Kaz Yamamoto, Pioneer's North American president and chief executive officer. Meanwhile, Sam Ohdate, former Pioneer Home Entertainment Division senior VP, was named to replace Haga as division president.

Haga said his chief task would be to develop synergies between the different divisions of Pioneer USA.

"The margins between the cable industry, audiophile industry and computer industry are getting very close together, and we've been looking at what is the best solution to living entertainment," Haga offered. "We have one company covering most of these industries, so we've focused on developing solutions around the lean-back user experience."

Haga said this could mean changing the traditional approach to its computer peripherals businesses to "develop products in a friendlier way," eliminating the tie to "the keyboard and the mouse."

Haga said he was tapped for the new post because of his extensive experience and background working in the computer and cable fields before focusing on consumer electronics.

Looking at the cable industry, Haga said Pioneer has already developed digital cable boxes with integrated hard drive recorders that use the company's Passport on-screen program guide system offered through cable head-ends.

These products parallel the home entertainment division's introduction of combination TiVo/DVD-RW/-R recording decks.

Haga added that Pioneer's 25-year history in making cable TV products would help it take a leadership role in the development of next-generation products based on the forthcoming OpenCable standard.

"Within two or three years we believe retail [cable] set-top boxes will be much more in speed," Haga said, adding that Pioneer plans to build cable-ready fully integrated HDTV sets in line with the FCC's digital tuner directive, beginning in July 2004.

Shifting to recordable DVD, Haga said Pioneer will support its "dash R and dash RW" disc formats with promotions and advertising as competition heats up this year.

Haga said Pioneer believes the bulk of the recordable DVD business will be in write-once discs, and there, Pioneer's dash R format has the upper hand.

"The dash R format is the front runner in market share for media sales," Haga said. "For the consumer, the most important factor is price for the media. DVD-R media is developed with a system that is exactly the same as CD-R media, which means we can use the same facilities and a similar process to produce DVD-R media as is used to produce CD-R media. This will help prices to come down very quickly."

While prices are also coming down on hardware, price erosion is not a major concern, Haga said, because supplies of high-precision components — such as 650 nanometer diodes, lenses and pickup server controls — will be limited for some time to come.

Meanwhile, he said the rewritable DVD-RW format continues to provide a compelling backward compatibility story with legacy DVD players, and is supported by the DVD Forum.

"This is a format that we view as our bridge between the CE industry and the computer industry," he said.

Ultimately, Haga said, consumers will not care which format a DVD recorder uses. An affordable price and useful, user-friendly solutions will motivate their buying decisions. That, he said, is why Pioneer opted to develop a DVD-RW/PVR unit based on the TiVo service.

He said Pioneer opted for TiVo over its own Passport EPG system, because Passport "is not a nationwide, single standard. If we used the Passport system, retailers would have to segment their sales by territories where cable operators offer Passport support. That would not be an easy solution."

Pioneer, he said, will continue to push its technological edge going forward. Over the last five years, Pioneer has spent a minimum of 5.3 percent to 5.7 percent of annual sales on research and development. This year, the company plans to spend $600 million — its largest outlay in seven years — on R&D projects.

He added, that unlike some other manufacturers, Pioneer remains profitable due largely to strong returns on its earlier investments in DVD recording and plasma display technology.

Audio, once the bread and butter of Pioneer's business, "has a great chance to be reborn," he said, through the evolution of home networking, where today's A/V receivers and set-top boxes will shift into tomorrow's media servers.

"While the [audiophile] market is down, we see a great opportunity for Pioneer to create a new sense of the audiophile business. That's why we are spending on capital investments as we are."

As for video displays, Haga said Pioneer "wants to be the No. 1 plasma-display-panel company (PDP) in terms of quality of product, quality of service and customer satisfaction."

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