Panasonic leaving plasma TVs in 2014
Panasonic’s recent efforts at cutting away unprofitable parts of the company has led them to drop their plasma TV division.
Panasonic will be leaving the plasma television business in March of next year. The exit is no surprise, but comes sooner than expected. Panasonic’s TV division has been a major contributor to the $15 billion loss that the company has experienced over the past two financial years. The operating costs alone for the division have been around $913 million.
Panasonic’s decision is likely part of President Kazuhiro Tsuga’s plan to cut away the weaker components of the company and focus on higher margin products. It is also an indicator of the downfall of the plasma TV technology, which is being overtaken by advances in LCD technology. Over the past year, plasma televisions only accounted for 6% of global TV shipments.
Goodnight sweet prince.
As President Tsuga put his plans for Panasonic into action, he warned that any division unable to meet a 5% operating margin goal within three years would be cut. The plasma TV is a victim of this plan, as are other non-core assets like medical systems, which are being sold off. Pansonic’s blood sugar monitoring and electronic record keeping systems were sold just last month for $1.67 billion to a US company, KKR & Co.
Panasonic’s stock dropped by 0.2 percent this morning, however that is quite in line with the drop of 0.3% on the Nikkei average.