The News That Matters...

  • Over coffee early this morning while preparing for this column, the crawl along the bottom of the CNN screen flashed the news: "...Pioneer to exit plasma panel business..."
  • This surprised me. I was surprised, not by the details of this news, but by the fact that we have evolved to a point where the average CNN viewer knows what a "plasma panel" is, and cares about the economics of this market.
  • Pioneer is not of course leaving the flat panel business. It's too much to expect that a junior CNN crawl-writer would know that Pioneer will not be exiting the industry, but will instead source their plasma panels from Matsushita (parent company of Panasonic). Pioneer is the fifth largest plasma panel producer and has been losing money on its plasma division for several years (with a loss of approximately 10 billion yen, or about $96 million for the fiscal year.) The financial markets applauded this news, as they should. They see through the headlines to the fact that the market is strong, not weak, and a key player is finding efficiencies in production and distribution and concentrating on improving the bottom line. (Pioneer stopped producing its own LCD panels last year, and began sourcing them from Sharp.)
  • The real "news" here is not news at all, but recognition that, as we have been commenting on for several years running, the consumer market is now the tail wagging the electronics market dog. This is purely a function of economies of scale on the consumer side overwhelming those of the smaller commercial AV space. So on the supply side, LCD panels, used in everything from cell phone displays to washing machine user panels to flat panels for the boardroom and classroom, are churned out in numbers so huge that their momentum will threaten to swamp competing flat panel technologies that can't be produced by the kilometer.
  • In his presentation "The One Trend That Really Matters", at the Rental & Staging Roadshow in Orlando last month, Tom Stimson delved into the dynamics that are driving the AV market, and key to his analysis is a recognition not only that the supply side has changed (as in the example above) but that, more importantly, the customer, the end user, has changed. The end user of staging services is now a different animal. Yes, they know what a plasma panel is (and what 1080P means), but that's not the crucial thing.
  • The customer now does business differently. He or she has brought new habits and expectations to meeting planning, to production, to budgeting, and to communicating with vendors. Stimson mentioned in passing during his presentation that he has a client that only communicates by text message. No meetings around boardroom tables. No phone calls. Not even email. Text messages. The production planning process, with that client, has now become a "crawl", if you will, on his cell phone screen.
  • Stimson's insight into the changing nature of the industry, and how to stay ahead of the curve and connect with a new kind of customer, is invaluable. You can catch the full presentation at the next Roadshow, to be held in Chicago in May. Stay tuned for details.

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