THE FRONT LINE: MAY 10, 2007
Pioneer Electronics 2007 Line Show
Pioneer’s new line of plasma HDTVs for 2007 are different. (Or are they?) The company also says it is re-inventing itself and re-defining its markets. (Or is it?)
One thing is for certain. Pioneer’s line show event, held yesterday at the trendy Branch Hotel on Manhattan’s upper east side, was full of contradictions and puzzles. First off, Pioneer has embarked on a company-wide campaign to re-invent its brand, aided by agency TBWA/Chiat/Day’s “Disruption Consultancy.” The agency has also developed ad and branding campaigns for Apple, Adidas, and Pedigree.
Next, Pioneer has also re-engineered several aspects of their core plasma technology, including (once again) a new pixel cell structure and electrode design, improved video processing, enhanced color filters, and a lowered “priming” charge (required to fire each pixel quickly) which is supposed to result in richer black levels.
Figure 1. Pioneer’s general manager for display products, Ken Shioda, kicks off the festivities.
It all sounded good, but one question came to mind immediately during senior VP Russ Johnston’s presentation where he stated the company’s goal was to sell 330,000 plasma HDTVs in the USA this year. Given how intensely price-driven the plasma business has become, how will Pioneer be able to swim against the tide and concentrate on selling to higher-end markets with higher ASPs than anyone else, yet still make their numbers?
Pioneer’s market share in plasma is not particularly large (between 8% and 9% for 2006, depending on whose numbers you believe) and they are perhaps the smallest of the “Big 5” plasma manufacturers in terms of monthly capacity. Bear in mind also that the parent company had an operating loss of $700M a year ago, in part because of downward pricing pressure on all flat panel HDTVs.
You can find Pioneer Elite plasmas in Best Buy, and you can find conventional Pioneer HDTVs at Costco and BJ’s. Johnston’s response to my question about the status of these distribution channels in the future seemed to indicate that the wholesale clubs won’t be part of this new “disruptive” brand strategy — at least, for now.
But the big box stores will remain very much in the mix as they can move a ton of product and have aggressive national advertising campaigns. It also appears that smaller dealers and specialty home entertainment chains like Tweeter will still be a vital part of the mix as before.
Figure 2. The event was staged so that each image appeared to float in the darkness.
While all of Pioneer’s plasma lines will employ the new engineering enhancements, the company doesn’t seem to have ramped up production over 2006. And while the lower priming voltages did result in some really rich, velvety black tones in the displayed content, there is no improvement in power consumption over last year’s models.
What is new for 2007 is an “Optimum” picture mode processor, which Pioneer claims can tell the difference between a cartoon, football game, news, movies, and music videos (perhaps using cadence detection). This “optimum” mode can then make picture adjustments and video processing tweaks accordingly, although we didn’t get an explanation of how those tweaks would work. (The processor can also adjust brightness, based on ambient light levels.)
There are eight new models of plasma HDTVs for 2007, with four labeled as “Pioneer” products and four carrying “Elite” badges. Within each family, you’ll find a 42-inch 1024x768 offering, a 50-inch 768p set, a 50-inch 1080p version, and a 60-inch 1080p HDTV.
It’s my belief that plasma TVs will only survive at 42 inches going forward if they are either discounted heavily (less than $1,500) or come with 1080p resolution and are priced within a couple hundred dollars of 1st and 2nd-tier 1080p LCD HDTV brands. We’re already seeing competitive 42-inch 768p plasma SRPs of $1,800 for the coming year, and you can bet those prices will drop quickly as the months wind on.
Figure 3. You want rich black levels? Pioneer’s got em, not to mention great colors.
Red was a continual theme during the demonstration.
Pioneer’s new 768p PDP-4280HD ($2,700) will immediately find itself at a serious price/performance disadvantage against Panasonic’s $2,495 1080p TH-42PZ700, as both will be sold through the same channels. (The LCD folks have been aggressively dropping the prices on 1080p 42-inch product to well under $2,000.) The Elite version (PRO-950HD) will retail at $3,200, but won’t offer any more resolution than the PDP-4280HD.
A more logical strategy for Pioneer would be to concentrate on 50-inch and 60-inch product for 2007. The PDP-5080HD ($3,500) is a new 768p model for the big box stores and has an SRP about $1,000 higher than competitors. With some discounting, it could hang in there on picture quality alone, but will eventually have to get down under $2,500 for any volume sales.
The Elite version (PRO-1150HD) of this HDTV is tagged at $4,500 and seems almost superfluous, considering that you’ll be able to buy the Pioneer-branded PDP-5010FD with 1080p resolution for just $500 more. (The 50-inch 1080p Elite mode, PRO-110FD, will set you back $6,000.)
A similar situation applies at 60 inches, where the 1080p PDP-6010FD carries a $6,500 sticker, but the Elite PRO-150FD is priced at $7,500. I’m not sure the average customer will be able to tell the difference between the Pioneer model on a Best Buy shelf and the more expensive Elite version over in the Magnolia section. I sure couldn’t, unless I stood close to the screens.
Figure 4. The BDP-94HD adds some media center features,
but is still too expensive like most Blu-ray players.
Figure 5. Want to watch Blu-ray movies on your PC? You’ll need a BDC-2202 to do it.
Pioneer’s got a new Blu-ray player in the mix this year. The BDP-94HD ($1,000) has networking capabilities, supports the Consumer Electronics Control (CEC) standard, has photo gallery playback, can download digital media files from a networked PC for playback, and offers 24p output.
Even more intriguing was the announcement of a $299 Blu-ray writer/reader for PCs. The BDC-2202 can read BD-ROM, BD-R, and BD-RE discs (25 GB) at up to 5x speed, and handles dual-layer BD-R and BD-RE discs (50 GB) at 2x speed. It will also read and write conventional red-laser DVDs and CDs.
Pioneer obviously spent quite a few dollars to stage their press event in a near-black environment, providing maximum display impact for all in attendance. I think that most veteran journalists in attendance would have agreed that there’s no argument — Pioneer’s plasma image quality and engineering know-how is top notch.
What we’re not so clear on, going forward, is Pioneer’s campaign to “disruptively” re-invent itself, nor do its 2007 channel and pricing strategies and sales targets ring of clarity. Since the dog-eat-dog LCD and plasma price wars show no signs of letting up, the company could be in for a bumpy ride this year. Only time will tell…
