Panasonic is planning to bow out of the Plasma TV market by March of 2014, sources reporting to Reuters and Nikkei claim. Despite being rumoured for some time, the exit comes sooner than expected as the Japanese electronics giant focuses its attentions on the more profitable manufacturing of LDC and OLED TVs instead.
Not so long ago Panasonic’s TV division was the company's biggest success story, raking in more than £6.9 billion in 2010. Recently, however, it has devolved into a drain on the company’s financials. The electronic company reported a combined £9 billion net loss over the last two years, with the TV division operating on a loss of £571.5 million in the last financial year alone.
The early move is part of a process set in motion by company President Kazuhiro Tsuga that will see Panasonic turn away from low-margin consumer electronic goods in favour of products catering to automakers and other business clients. Since taking charge in June 2012, Tsuga has warned that any division failing to meet a 5 per cent operating margin goal would be weeded out within three years.
Panasonic's decision to exit plasma production signals the demise of the technology in favour of advances in Liquid Crystal Display (LCD) business, which made up 87 per cent of global shipments in 2012 compared to only 6 per cent of Plasma screens. In contrast to South Korean rival firms LG and Samsung, Panasonic has been specifically targeting TV quality purists on the back of the belief that high-end plasma screen devices give superior image quality and a richer monochrome contrast. Despite this, the market has been clamouring for the cheaper and more durable LCD and OLED technologies and Panasonic's margins have suffered.
The decision would see the closure of its only plasma panel factory in Amagaskai, with the several hundred employees at the plant being redistributed to other parts of the company. Panasonic hasn’t yet publicly confirmed the move, but losses for the company’s last plasma factory are expected to stack up to £259.6 million.
Image Credit: Flickr (Pondspider)