Pioneer to ally with Matsushita on PDP technology? June 28, 2006Posted by fukumimi in Economy & Business, electronics, Japan, technology.
This news is a little bit old, having made the newspapers in early June. Article from the Asahi Shimbun here (Japanese).
Pioneer, the struggling consumer electronics firm is rumoured to be considering an alliance with Matsushita.
Pioneer was a pioneer in the PDP business (pardon the pun). However as a relatively small player, it has been struggling, although its technology is well regarded. Its strengths are in the high end market, which is beyond the reach of most consumers. The rumoured deal might see Pioneer supply high end panels (full HD, large size panels) to Matsushita, whilst Matsushita would supply lower end PDP modules to Pioneer, which would allow Pioneer to beef up its product range, especially in the volume sector. (There might also be Pioneer branded LCD panels from the Matsushita/Hitachi factory, although one has to wonder whether the Pioneer brand would be competitive in the LCD market as a late entrant with an OEM supplied, badge engineered product)
Is this really the best way forward for Pioneer? It has been struggling and has announced that it will no longer be developing its own DVD recorder related microprocessors and software, rather it will be sourcing from Matsushita going forward. Pioneer was a pioneer in the DVD-R market as well…..
The PDP and DVD-R stories illustrate the fact that Pioneer have the technological capacity and market reading foresight. However it would appear they cannot sustain their initial lead, and get overtaken by a bunch of fast followers, Matsushita being a great example of a leading player of this strategy. (Which is why techie types tend to turn their noses up at Matsushita. A bit like they do at Toyota (which, to be fair, is trying to lead things (sucessfully so far, it would seem) in the hybrid sector)
It’s not like Matsushita isn’t working on high end PDP either. They have been exhibiting the world’s largest 103″ PDP every opportunity they get. Will the internal political machine be willing to overcome the dreaded NIH syndrome, and work with Pioneer at the higher end of the market?
Pioneer is doing brisk business elsewhere, notably in the car audio and navigation markets, where it is a market leader.
My personal opinion is that Pioneer would be better off remaining independent, and not get too draw into any relationship with a much bigger partner. I actually think this company would be an interesting proposition for a private equity play.