Plasma TVs were once the pinnacle of development in high-def television. But as competitors respond, consumer demand changes, allowing the visual entertainment industry to evolve itself. Panasonic is the latest testament to this shift, as the company now plans to sunset its plasma television operations in recognition of a TV business that isn’t what it used to be.
The group is set to make adjustments to its healthcare program at around the same time.
Panasonic saw over $10.5 billion at its peak in the TV market from 2009 to 2010, but is foreseen at less than half that in the next three years. The consumer electronics great is therefore considering a significant shrinkage to its entire TV department over the same time period, to cushion the impact of this stint of decline.
"We are considering a number of options regarding our TV business. But nothing has been decided yet," Reuters reported of a Panasonic spokesperson.
Headquartered in Osaka, Japan, the developer looks to close its operations at its main plasma TV plant in Amagasaki by FY 2014, according to the Nikkei newspaper, having already halted the production of new product for the sake of redesigning its investment in LCD machines for an already limited national flat-TV market.
Panasonic’s decision accompanies a second possible move to amend or cut its healthcare services – a unit which saw an operating loss of about $92.6 million as of March 2012, according to Bloomberg. It has gleaned interest by other entities in buying the program, which helps users examine blood sugar levels and hearing aids, which would boost the firm’s revenue by up to $1 billion.
“The direction is right for Panasonic to try to generate cash by selling and restructuring its business and I feel positive about this direction,” said Koki Shiraishi, an analyst at SMBC Nikko Securities, Inc. “I still worry about speed because cash generated in this way needs time to find buyers.”
Savings the company expects to see as a result of changes to these two sectors will likely help it move past overwhelming competition from Apple and Samsung, and focus on beauty appliances, welding systems and other more lucrative departments.
Edited by Brooke Neuman