The announcement, reported in trade magazine ERT, that Pioneer TVs will soon be back in Dixons stores, could just show the way forward for the big Japanese names

Pioneer was a – umm – pioneer for the Japanese TV business when it launched its Kuro range back in the Spring of 2007, it embarked on a two-year adventure in which it flew in the face of the cut-throat price competition in the TV market, and headed for the high quality, high price high ground.

It also led the way for the major Japanese consumer electronics companies when, in February 2009, it announced it was getting out of the TV business within a year, and would be concentrating its efforts in areas where it thought it could makes better profits, such as automotive electronics

The 2007 launch event was certainly dramatic, being held in Rome and themed to within an inch of its life, complete with a gloomy tunnel full of strange sound effects through which we entered the event, a ‘made for the event’ movie starring a character called Michael Tiger, and the introduction of the company’s new Vision range. Yes, it was called Vision, not Kuro – the Japanese word for black was the name of the development project behind the new TVs, only later being adopted as a name for the range itself.

The Project Kuro team, lead by Pioneer’s ‘Godfather of Plasma’, Yoichi Sato, put a lot of work into getting deeper, richer blacks, using technology including a redesigned electron source, enhanced signal processing and a non-reflective pure colour filter on the front of the screen.

Too much, too late?
When I first published news of the TVs, the response was immediate, with the keyboard warriors coming out of the woodwork to assert that Pioneer was on a hiding to nothing with TVs priced at around the £2000 mark, when screens of a similar size could be bought on the high street for about a third of that amount, and were more than good enough.

Good enough wasn’t good enough for Pioneer: its eighth-generation plasma TVs were designed to offer class-leading performance, be sold only through a selected list of retailers able to demonstrate and install them to give of their best, and sell at class-leading prices in order to return some profitability to both manufacturer and retailer.

Perhaps the writing was on the wall at the time of the launch: in my blog from the event, published in May 2007, I reported the following encounter:

“That night, on the last flight of the evening back to Heathrow, the bloke sitting next to me asks me how long I’ve been in Rome. He’s sharply dressed, and his partner flicks idly through the fashion pages of a magazine before she falls asleep over her tray table, in a decidedly non-upright position.
‘Just overnight’ I reply.
‘Sightseeing?’
‘Business’
‘What do you do?’
I tell him.
‘Oh, we were thinking of buying a Pioneer plasma – we’re just renovating a 1930s flat, and we want to put it over the fireplace. Will it be too heavy?’
I suggest he’ll probably be OK, but he should get an installer or builder to check it out first. Dull but sensible advice – I’m tired.
‘So how much are the new Pioneers, anyway?’
‘Well, they’re positioned at the upper end of the market’ I say, not wanting to tell him about Michael Tiger if I can possibly avoid it.
He pauses, then
‘OK, so what’s a good LCD for about a grand?’”

In my previous life, I have spent the better part of three decades on the heels of the consumer electronics industry, watching and commenting on the way first the camera industry, then the specialist hi-fi world, and most recently the TV business struggled to adapt to new markets and changing technologies.

I remember when sales of camera magazines started to fall off a cliff as autofocus compacts, then AF SLRs, and then digital photography put out of business or under the cosh the kind of companies we used to think of as industrial giants – Kodak, anyone? –, and have followed closely the struggles of the Japanese TV manufacturers over the past few years.

Evaporating profits
Hit by recession, falling domestic sales and then the great earthquake and tsunami of 2011 – coincidentally, a week after I’d flown back from a Panasonic event in Japan clearly designed to reinforce the superiority of plasma over the upstart LED-lit LCD TVs on all kinds of levels – the big Japanese TV players have seen both sales and profits evaporating. That’s not just the obvious contenders – Panasonic and Sony – but also Sharp (which also sold off its 9.2% stake in Pioneer), Hitachi, and Toshiba, all of whom have taken, or are taking, a long hard look at their future in TV manufacturing and sales.

Philips has already taken that big step, all but offloading its TV division into joint ventures with Chinese manufacturers, and attempting with limited success to do the same with the rest of its consumer electronics operations, even if its final big deal with Japanese company Funai didn’t quite come off.

In the meantime, companies such as Hon Hai (the parent of Apple’s favourite manufacturer Foxconn) and a whole raft of very large, often state-sponsored, Chinese companies are poised to take up any slack the Japanese may leave, not to mention make their own inroads into the new TV sectors. If any of the big Japanese names are thinking of turning their fortunes around with premium-priced 4K or Ultra High Definition TVs, they need to think again: the Chinese competition has already got bargain-priced examples of the technology either ready to roll, or already in the shops.

Pioneer’s no stranger to the kind of operation it’s now entering into with Dixons Stores Group, which will see Pioneer-branded LED-lit LCD TVs in your local Currys PC World shed in fairly short order. After all, its Elite brand it used on Sharp-made LED TVs sold in the States, and aimed firmly at the upper end of the market. And by all reports, the sets aren’t at all bad.

However, there’s not a lot of Pioneer input into the TVs, and while reports here in the UK quote Pioneer’s business planning director for home electronics as saying ‘We’re delighted to collaborate with Dixons Retail. With our unparalleled reputation for cutting-edge technology and sophisticated designs, we know these technologically advanced high-end TVs have a unique place within the market’, the remarks from DSG make it very clear that the retailer is going to be sourcing, distributing and selling the new models itself, using its Hong Kong-based Exclusive Brand sourcing business.

So when the Pioneer source says ‘With their highly respectful approach to the premium positioning of the Pioneer brand, alongside our loyal customer base, we believe this is a winning combination and we’re excited to watch these new products transport customers in to a world of fun, entertainment and interactivity’, there’s quite a lot in that statement.

DSG is clearly hoping to build on what’s left of the Kuro reputation – though how much that reputation means outside a tightly-huddled knot of AV enthusiasts is open to question –, while Pioneer is going to be doing a lot of watching as the TVs hit the market. In other words, a purely passive role – or so it would seem.

Watching this latest twist in the TV market as an outsider these days – I have to admit I no longer start my day with a lengthy scan of the news wires and business dailies from Japan, Korea, China and Taiwan, as once I did, and my range of Google Alerts is more that somewhat pared back from where it was six months ago – I can’t help but wonder whether this is again Pioneer showing its Japanese rivals some leadership.

Just as Sharp was long negotiating with Hon Hai to take over a serious slice of its business – not quite serious enough a slice for Hon Hai boss Terry Gou, it seemed last time the story surfaced –, Panasonic has recently announced it’s canning plasma TV operations, Sony’s still struggling to find a way to make TVs make money and even Toshiba has recently announced it’s to cut its TV division in half with the loss of 3000 jobs and two of its three overseas factories.

The Toshiba story is a familiar one: pulling out of unprofitable markets, concentrating on emerging ones, and moving resources towards 4K TVs in the hunt for the elusive profit.

I just wonder how long it will be before other well-known Japanese brands are buying in complete TVs from overseas, just as almost all of them already do with the display panels at the heart of their sets, or looking to capitalise on their brand reputations while eliminating fixed costs by letting someone else take the risk in manufacturing, distribution and sales.

The TV business shows no signs of slowing its long-running headlong rush into ‘the biggest screen for the least money’, and previous attempts to shore up prices – 3D, ‘smart’ features – have very obviously failed to do the job, so such a strategy would seem to make a lot of sense.

In a market where you can now buy a 50in Panasonic plasma TV for under £400, and the Chinese are squaring up with bargain 4K TVs before the established names have hardly got their roll-out of the pricey stuff going, what other choice is there?

Written by Andrew Everard