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Plasma Takes a Hit as Manufacturers Back Out

It's hard to fathom that in 12 short years, the 50in. plasma TV went from the technology status symbol to a discount-store closeout.

Plasma Takes a Hit as Manufacturers Back Out

Mar 2, 2009 12:00 AM,
By Rebecca Day

Pioneer is the first plasma manufacturer to announce that it is pulling the plug on its line of plasma displays, including the PDP-425CMX pictured above.

It’s hard to fathom that in 12 short years, the 50in. plasma TV went from the technology status symbol to a discount-store closeout. Pioneer‘s recent bombshell decision exit the TV market ends a valiant effort to push the envelope of flatpanel TV quality amid a climate of fierce price competition. The company’s impressive Kuro line of TVs gave specialty dealers and integrators a margin edge over other flatpanel TVs, and its departure from the market leaves a hole at the best level of the good-better-best retail pyramid.

Plasma took a hit at the low end, too, when leading mass-market brand Viziodecided to drop its plasma TV line and focus entirely on LCD. Vizio’s growing success (iSuppli reports that the company was second only to Samsung in fourth quarter U.S. flatpanel TV shipments last year) reinforces the market conditions leading to Pioneer’s exit. Consumers are looking for deals in flatpanel TVs, and they’re heading to discounters to find them.

The availability of sub-$1,000 TVs on the Internet and at warehouse clubs has contributed to the demise of plasma by devaluing the once-lofty image of the product. That has led some integrators to be burned by clients who buy their own flatpanels at a bargain price and then want the installers to set them up and fit them into a distributed AV system.

Bill Anderson, owner of Genesis Audio & Video in Irvine, Calif., saw the writing on the wall last month when a customer called for installation of a Pioneer Elite TV he bought at a Pioneer factory-direct outlet in southern California. Anderson was stunned by the call and the custom client’s discount-store mentality. What was once the centerpiece of a high-margin custom installation sale has been commoditized, Anderson says, threatening video’s role in the custom-installation business model.

“I told the client that it’s a balance of things—the boxes, the labor, the programming, and the parts—that gives us a small profit,” Anderson says. He cited the company’s costly overhead including a trained staff, vehicles outfitted with “every part you’d possibly need,” four types of insurance—medical, auto, workman’s comp, and liability—and the expenses that go along with having a complete service department. “He’s asking me to do part of an installation without a major profit component,” Anderson says.

Dealers and consumers who prefer the deeper blacks and richer hues of plasma technology can take solace that, for now, Panasonic and Samsung remain committed to the technology. Panasonic showed plasma prototypes at CES claiming power consumption one-third that of 2007 models, addressing one of oft-cited cons of plasma versus its LCD counterpart. New Panasonic plasma models also boast a thinner profile thanks to advancements made to the panel structure and circuit layout. The company’s new 50in. HD panel measures 1/3in. deep at the thinnest section, which will allow for more flexible mounting solutions.

Samsung beefed up its Series 6 and Series 8 lineup for 2009 with wireless-DLNA capability and the company’s [email protected] content-service platform. On the green side, both series offer eco-friendly no-lead designs that are Energy Star 3.0-compliant.

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