Pioneer, a year after plasma
It's exactly a year since Pioneer announced it was pulling the plug on its Kuro plasma range, quitting the TV business completely and concentrating on in-car technology. So, since February 12, 2009, how are things going at the former maker of what were acknowledged by many to be the world's finest TVs? And how's the plan to focus on the automotive business panning out?
Well, since the announcement the company has shed something over 8000 jobs, and moved its HQ from its prime location in Meguro, Tokyo, out of town to Kawasaki (left). As a result, the company's expected loss for the current financial year is expected to be reduced: it's now suggesting it will be around
Y60bn (or just under £425m), around 30% better than it had been predicting.
Desperately seeking suitors
But the company has been having a tough time raising the
Y20bn (£142m) of capital it reckons it needs to fund further restructuring. Protracted negotiations have been ongoing with Honda to secure investment, while Mitsubishi Electric and Mitsubishi Chemical were both being courted.
It's taken until this week to reach agreements that will see the three companies buying into Pioneer, as part of a public share offering that will see up to 92m new shares being issued, raising up to
The corporate investors have been encouraged by much better results in the last quarter of 2009, giving signs that Pioneer may at last be turning a corner.
In the meantime Pioneer has set up its joint venture with Sharp to make optical disc drives, which of course are a fundamental part of car navigation systems . And its new alliance with Mitsubishi Chemical may see it taking another route, the plan being for the two to develop organic electroluminscent lighting systems.
In-car in a falling car market?
But surely a major concentration on in-car technology is a risky strategy when the motor industry is in such a turbulent state? After all, 2009 US car sales were at their lowest level for almost 30 years, and in Europe only scrappage schemes are propping up the numbers in some countries, while those without such incentives have been hit hard. In Ireland, for example, car sales last year were down 62% on 2008 figures.
Pioneer, however, is playing the long game in the in-car business – after all, it has been making both factory-fit and aftermarket in-car audio for years: in 1975 it launched the world's first component audio system for cars, in 1984 the first car CD player, and in 1990 the first-ever CD-based satellite navigation system.
MG Rover owner Shanghai Automotive: part of Pioneer's Chinese plan
It's focusing a lot of its attention on emerging markets, and lower-priced navigation systems. It has been negotiating with Shanghai Automotive Industry, a big player in China's fast-growing domestic car industry and the owner of MG Rover, to form an alliance. This, it's proposed, would allow the two to develop both hardware and software for navigation systems, and also a traffic information system for Chinese motorists.
That alliance, along with input from Mitsubishi Electric, may also allow Pioneer to develop lower-priced navigation systems – an area in which the company has traditionally been lacking. This thinking may also inform the licensing deal recently signed by company president Susumu Kotani (pictured) with Chinese retailer Suning Appliance, allowing the sale of Pioneer-branded TVs made locally.
Satnav meets the internet
But it's not all about the low end of the market. At this year's CES in Las Vegas, having relocated itself from the main hall to that dedicated to in-car electronics, Pioneer announced the impending launch of advanced navigation products based on its Platform for Aggregation of Internet Services, or PAIS.
Using Intel's Atom processor, this merges navigation and internet access, for example allowing a satnav system to search the web for local information, play internet radio, or use smartphone apps. It will also encompass social networking, music, video and TV.
The company is proposing PAIS as an open standard, and expects products to be on sale this Autumn.
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