Pioneer puts new PDP factory on hold after poor sales

Poor sales of plasma display panel televisions in the United States over the year-end holiday period have forced Pioneer to postpone planned investment in a new PDP factory in Japan, the company said Wednesday.

The company had been planning to build a new plant west of Tokyo. It did not say when the plant will be built.

Pioneer's sales of home electronics sales dropped 2%, to ¥113 billion (US$928 million), for the last three months of the year, it said. PDP sales fell about 10%, because of a substantial drop in sales of PDP TVs made by Pioneer for other companies. Sales of sets sold under its own name also fell in Japan, but increased in Europe.

The flat-panel TV market is one of the most fiercely competitive in the consumer electronics business, and prices have been dropping fast. Not only are companies competing against each other, but so are technologies: PDP is battling with LCD.

In the big-screen TV market PDP lost ground to LCD in the fourth quarter, market analyst DisplaySearch said Tuesday. PDP shipments in the quarter were 15% lower than the makers' aggregate forecast, and the lower-than-expected unit growth meant the first year-on-year decline in PDP revenue to date, DisplaySearch said.

For the first quarter of 2007, Pioneer said it expects to make fewer plasma displays and also spend more money promoting them to consumers. Because of that and the poor results in the previous quarter, the company lowered its financial forecast for the full year.

It reduced its operating revenue forecast by ¥20 billion to ¥800 billion and cut its net profit forecast in half to ¥5 billion. Both forecasts are still well above last year's results.

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