Electronics maker Pioneer, the world's fifth-biggest plasma TV maker, said it would fall into the red for the fourth straight year on costs to scrap production of plasma displays as it shifts its strategy in the cut-throat flat TV market. Pioneer is expected to now turn to Panasonic to supply it with panels for its plasma TVs, thereby allowing it to focus on design and marketing and save on production costs. "This move will allow us to transform our business model for displays from vertically integrated, capital-intensive operations to a leaner business model geared to making value-added product proposals," Pioneer said in a news release.
Pulling out of plasma production marks a major shift in Pioneer's strategy. The company has spent a little over 100 billion yen to build four plasma panel production lines and to buy two more lines from NEC Corp. Pioneer said it would now refocus its resources on more promising businesses such as car electronics and audio equipment.
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