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Plasma Remains On Pioneer Menu

Pioneer Electronics will continue its plasma TV strategy, which still includes its upscale Kuro line, despite its decision to discontinue production of plasma panels.

Russ Johnston, U.S. marketing and product development senior VP, disputed conjecture that immediately erupted when word hit Pioneer would stop making its own plasma panels and said it has not changed its commitment to plasma technology.

“Pioneer is not changing its direction with regard to display strategy,” Johnston told TWICE. “We believe that PDP is the critical component for display in the home theater environment that we are focused on. We are not de-emphasizing the importance of PDP. We are trying to bring our Kuro strategy to the marketplace and be profitable at it.”

Johnston said Pioneer feels it will be able to continue to produce plasma sets with Kuro’s high black level and contrast performance using outsourced panels, because much of the industry has now migrated in the direction of Pioneer’s encased cell structure technology. Panasonic is expected to be its primary plasma panel supplier.

A combination of three critical parts make up Kuro technology including the panel, panel driving and video processing circuitry, and filter technology, Johnston said.

“We are sourcing one of the three components as a starting point for our technology now,” Johnston said, adding that Pioneer believes that it can work with its OEM sourcing partners to produce a panel appropriate for the Kuro line.

“This is something that Pioneer has been studying for about two years and it finally aligns with the Project Kuro strategy,” Johnston explained. “Last year we unveiled a marketing program and a repositioning of the brand with a new logo. In parallel with that this study has been going on.”

Johnston said the decision to get out of panel manufacturing resulted from “changes in price points in the marketplace, changes in production of our competitors bringing on oversupply which affected price points, and increases in fixed costs in panel production.

“After our two-year study we decided to start going into the marketplace and researching partners for us to source panels from,” he said. “We are now discussing with potential partners how to bring a module into our assembly process and bring Kuro products to market.”

Pioneer, he said, never made adjustments in its production strategy to fit the new upscale Kuro business strategy. The end of panel production reflects that adjustment.

Johnston said Pioneer plans to work with Sharp on introducing LCD TVs to the line, but nothing has been decided for the U.S. market at this time. The first Pioneer LCD TVs will launch in Europe in the fall. Johnston said he sees LCD coming in using “Kuro DNA” (meaning high black level and contrast performance) in screen sizes 42 inches and smaller. He added these will likely be targeted at secondary-room applications.

The entire PDP category will represent “the best-in-cost technology for 50- and 60-inch size ranges,” he said, adding that it is likely to continue to be so in the future. PDP has effectively replaced rear-projection in those size sweet spots.

Reaction to Pioneer’s decision was applauded by two top industry executives, Jim Ristow, executive director of the Home Entertainment Source buying group, a unit of Brand Source (see p. 1) and Panasonic Display Company’s senior VP, Bob Perry (see story, above).