By now it is likely that many of you have heard that Pioneer recently announced that it will be exiting the TV business. Last year at this time the company announced that it would no longer be manufacturing the glass for its plasma panels, and that it would instead be OEMing glass from Panasonic in an effort to streamline their plasma business. There was a lot of speculation then that Pioneer would ultimately be leaving the TV business, and as it turns out that speculation has come to pass. I have been talking to industry pundits this week to get an idea of how this came to be. It appears that a series of large mistakes led to the ultimate demise of the Pioneer plasma business.

One of the first business mistakes that I believe the company made was to rush into opening Magnolia, a division of Best Buy, as a reseller. This turned out to be a real slap in the face to Pioneer's tried and true high-end dealers that have been supporting the company for decades. For one thing, these dealers had always enjoyed a relatively protected specialty distribution, and that was now gone. Of course, Magnolia (Best Buy) immediately undercut the little guys on price. To add insult to injury Pioneer's limited manufacturing capability led to a perpetual state of back order for the small high-end specialty retailers, because Magnolia (Best Buy) would have their orders filled first. The main reason for Pioneer's inability to keep up with sales demand is the fact that every piece of glass for each panel was manufactured individually rather than utilizing a method known as "Mother Glass", which produces large sheets of glass that are then cut into multiple panels at one time, a method employed by virtually every other plasma manufacturer in the business. This would also account for the very high price at retail and wholesale compared to all of the other plasma manufacturers.

The next big mistake made by the company was to shut down their own manufacturing facilities before Panasonic's new plant was opened to supply Pioneer with glass. This was probably the death knell for the company as Panasonic has postponed the opening of that plant for at least 6 to 12 months leaving Pioneer with no glass with which to build their panels. It is my contention that the current line of Pioneer Elite panels are so good that had they left their own plants open they could have gotten away with manufacturing the same models for another calendar year, and then pickup with the Panasonic glass once that plant opened. I wonder whether Pioneer will survive as a company without their TV business. Can the company survive on audio, and car stereo alone? In today's economy I seriously doubt they can. Let us know what you think.