Pioneer to stop making 42-inch plasmas, buy instead

In an attempt to make money again in its flat TV venture, Pioneer is reportedly stopping production of 42-inch and smaller plasma displays and buying them instead from Hitachi or Matsushita, which supplies panels to Panasonic. The consumer and auto electronics maker will focus instead on manufacturing panels at least 50 inches in size, while ending production of its smaller panels as early as March 2009 in its native Japan.

The Kagoshima plant which produces Pioneer’s 42-inch panels was bought from NEC about three years ago, and Pioneer wishes to sell it back, according to Japan’s Asahi newspaper. Critics and consumers alike believe the NEC acquisition hurt the quality of the picture Pioneer’s displays have become famous for.

This move marks the company’s latest in an attempt to become more efficient and gain market share. Last year, the company outsourced by buying LCD panels from Sharp and thereby introduced LCD TVs to its line-up. Prices of Pioneer’s TV sets need to come down if Pioneer is to sell more than its target of 480,000 plasmas in the 2007 business year next year. For perspective, that number represents less than a tenth of Matsushita’s (now Panasonic's) projection of five million displays in 2007.

Pioneer released its Kuro line of plasma HDTVs last year, and while their performance is judged to be well above average, especially in the sets’ ability to reproduce realistic blacks, the line is criticized for its high cost versus more basic plasmas or same-sized LCDs.

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