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Pioneer Finds a Buyer for It's A/V Business: ONKYO!

3813 Views 7 Replies 8 Participants Last post by  RTS100x5
Nearly a month ago, Nikkei reported that electronics giant, Pioneer, was shopping its Audio Visual business with a targeted sell date of July 2014. The plan, as the report detailed, was to retain high-margin portions of its electronics business (such as car electronics and DJ equipment) while shedding home theater and other A/V products. Car electronics, alone, made-up roughly 70-percent ($3.4 Billion) of Pioneer’s 2013 electronic’s sales. Audio Visual products, on the other hand, sold slightly over $1.0 billion (about 20-percent) during the same time frame. The rumor mill had all fingers pointing at a potential buyer named Funai Electric, which is poised to lose a Philips-brand agreement to market Philips DVD and Blu-ray products in North America at the end of 2015.

Let’s just say the fingers were pointed in the wrong direction. After stalling negotiations with Funai to investigate a restructuring, Nikkei is now reporting that Pioneer is selling to a direct competitor: Onkyo. According to the reported terms, a private equity firm (Baring Private Equity Asia) is purchasing 51-percent of Pioneer Home Electronics. Onkyo, in turn, will acquire an unspecified interest. Obviously, this leaves some meat on the bone and Pioneer will retain a stake in the company. The deal should be finalized sometime in August.

Diehard Pioneer fans need not panic, yet; the Pioneer name is going to stay intact. According to Nikkei, Pioneer will continue to have their hands in the mix with future product designs, component procurement, distribution and sales. In fact, Nikkei says Onkyo will likely take advantage of Pioneer’s technologies to boost their electronics sales which were roughly a third of Pioneer’s sales last year.

Nearly five years ago, Pioneer sent ripples through the video world by announcing it was exiting from the plasma television business. This announcement brought videophiles to their knees and sent them reeling from the realization that Pioneer’s world-class Kuro displays were dead. The scariest news from this event, was the fact that Pioneer simply couldn’t make (enough) money from developing and selling the undisputed champion of benchmark display products. While not as highly reviewed as the Kuro displays, Pioneer’s A/V equipment is extremely popular and frequently enjoys solid, above-average, accolades. Eerily similar to Pioneer's television fate.

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From what I read it seems as though a successful A/V business model (set for worldwide distribution like Pioneer) is not to make "Benchmark Champion" or even highly regarded equipment but keep to a mediocre or average level of product compared to your competition. Don't even think of "pioneering" something as you cannot make $ with that in the long run. In short don't be a A/V "pioneer".

Really sad as they make, even today, solid and reliable equipment.
So as a society our need for "cheap junk RIGHT NOW" has surpassed our desire for something that actually works well, is built well, and will last. I think we've seen this all over, including the auto and home building industries, so it shouldn't be too much of a shock here unfortunately.

Still, at least it is good that there will be Pioneer products for the foreseeable future, and maybe Onkyo can inject something different into them.
In fact, Nikkei says Onkyo will likely take advantage of Pioneer's technologies to boost their electronics sales which were roughly a third of Pioneer's sales last year.
If the 1/3 sales compared to Pioneer info is correct that would seem to dash the oft stated contention that Onkyo sells lots more AVRs than anyone else.
At least Pioneer is not switching itself off from A/V Field as it was case with Plasma program. Some comfort for Pioneer A/V fans around the World.
Thanks for the news.

Cheers from Australia ( and it is Winter here).
Will be interesting.
Sad but hope some good comes from this!!!
DEPRESSING news :(... After the pathetic track record of Onkyo receiver failures in the last several years ... I can only imagine that they are going to take Pio down with them ... even if they didnt change Pio receivers in the least ... I will not give Onkyo another dime of my sales after all the replacement headaches they have caused me in the field ...

That said I am now changing my sales emphasis towards Marantz and Denon and will be closely monitoring any changes in Pio production...

Anyone with info please keep us informed.. thanks
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