Panasonic says sayonara to plasma HDTVs

The market for plasma TVs has slipped dramatically in recent years

Panasonic is discontinuing production of plasma televisions and shuttering the three factories that made them in the wake of stiff competition from LCD TVs.

Panasonic has announced it will end the production of plasma display panels (PDP) next month and shutter three factories that were building the HDTVs.

The company will stop selling plasma TVs for consumer use and PDP-related products for commercial use, such as Interactive Plasma Displays, with the current line of TVs. It expects to stop business operations at three of its display plants -- the Amagasaki P3 Factory, the Amagasaki P5 Factory and the Amagasaki P4 Factory -- by the end of March 2014.

Samsung and LG continue to produce plasma display televisions, but theirs are lower-end or entry-level models; they have generally put development dollars into LCD TVs, according to Paul Gray, a research analyst with NPD DisplaySearch.

"Samsung and [LG] were at best uncommitted to PDP," Gray said in a blog post. And as for Panasonic, Gray said its "PDP research team had to counter every move in LCD and translate it to their technology.... Inevitably, they slowly lost ground."

A 65-in. Panasonic VIERA Plasma HDTV.

Since 2000, Panasonic has been the leading PDP maker. It led the global flat-panel display market by using PDP for large displays and LCD screens for small- and medium-sized displays. Only three years ago, Panasonic claimed 40% of the plasma display market.

In 2010, plasma accounted for 40% of flat panel TVs; this year, PDPs are expected to represent only 5% of the flat-panel market, according to according to market research firm NPD DisplaySearch.

Over the past two years, Panasonic has lost $15 billion through investments in flat-panel TV production, according to financial reports.

Plasma displays have increasingly lost market share to LCD TVs as they moved to LED backlights that narrowed the performance gap between the two technologies.

"With the rapid development of large-screen LCDs, and facing the severe price competition in the global market brought on by the Lehman Shock in September 2008, the company consolidated production in the Amagasaki P4 Factory, made a shift towards commercial applications and worked to improve the earnings of the business," Panasonic said in a statement this week.

Panasonic will now focus its attention on "non-TV applications" and is moving to reduce its fixed costs for production of both plasma and LCD panels.

The move away from plasma HDTVs is reminiscent of the video tape wars of the 1970s and 1980s.

In the 1970s, the Betamax standard came up against VHS in the video tape industry. While experts agreed at the time that Betamax was the superior technology, the market chose VHS as the dominant player, and Betamax died off. Similarly, many experts agree plasma PDPs have superior pictures to LCD displays, but sales of the former have been steadily decreasing.

"The biggest problem plasma had is the industry simply decided to go with LCD," Gray said. "In the end, more people decided to support LCD, and as a result, the pace of innovation in LCD ended up being faster. One of the conclusions I draw out of this whole thing is that the best technology doesn't always win. In fact, the best technology usually doesn't win."

Even in the face of shuttering its once market-leading technology, Panasonic touted the superiority of the picture in its statement. "Panasonic's PDPs have received high appraisal and there has been firm demand from customers worldwide," it said. "However, due to rapid, drastic changes in the business environment and a declining demand for PDP in the flat0panel display market, it was judged that continuing the business would be difficult and a decision was made to stop production."

Along with LCD, newer flat-screen screen technologies such as organic light emitting diode (OLED) and ultra-high-definition 4K screens, are challenging plasma display sales.

Lucas Mearian covers consumer data storage, consumerization of IT, mobile device management, renewable energy, telematics/car tech and entertainment tech for Computerworld. Follow Lucas on Twitter at @lucasmearian or subscribe to Lucas's RSS feed. His e-mail address is lmearian@computerworld.com.

See more by Lucas Mearian on Computerworld.com.

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This story, "Panasonic says sayonara to plasma HDTVs" was originally published by Computerworld.

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