Pioneer Corp. (PNCOF.PK) said that it is considering possible options to exit its flat-panel television unit, as a part of its ongoing review of businesses. According to media sources, the company also plans to shift its DVD player operations to a new joint venture with Sharp Corp.
The ongoing economic recession in the U.S., which has been dubbed as the worst since the Great Depression, has severely affected the global economic conditions. Consumers are cutting back their spending on buying TVs and other discretionary items to focus on necessities, as rising unemployment and tight credit dents their purchasing power.
Japan-based Pioneer is in deep trouble for quite sometime from now. Apart from the economic crisis, the company is suffering from the lower prices offered by its rivals. The company is responding to the global economic crisis by taking cost cutting measures including facility closures.
Last year, Pioneer closed its plasma panel factory and also revealed plans to outsource its panels to Panasonic, while stating its intention to continue to sell Pioneer branded HDTVs with design and assembly at its own facilities.
However, the current economic climate forced Panasonic to announce a six-month delay in the opening of its plasma panel factory to early 2010. This delay may have been a factor in Pioneer's decision to abandon TV production.
In January, Pioneer said it would cease manufacturing its laserdisc players upon completing the production of a total of about 3,000 more players. Under the market environment in which new media such as DVD and Blu-ray discs now dominate, it has become difficult for Pioneer to procure the parts required to produce LD players. Consequently Pioneer has been forced to terminate production of its LD products.
Pioneer, which introduced the first DVD player in 1996, is expected to announce its fiscal third-quarter results on February 12.
PNCOF.PK closed Friday's regular trading session at $1.75, down 10 cents or 5.41%.
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