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How long will Panasonic keep making plasma TVs?

Panasonic's 2013 plasmas promise to be its best range yet, but the company is contemplating shutting the division down. That would be a tragedy for people who care about picture quality.

Despite consistently producing industry-leading picture quality, Panasonic's plasma division has an uncertain future.
Ty Pendlebury/CNET

Panasonic confirmed this week that it's in discussions over whether it will jettison its plasma TV business. For me, it's deja vu as yet another Japanese manufacturer struggles to sell high-quality televisions.

In 2008, the Pioneer Elite Kuro PRO-111FD became one of the greatest TVs ever developed -- and it is still among CNET's reference TVs after five years. But producing the best TV didn't translate to profits, and Pioneer exited the TV market in 2009. The company is now best known for car and home audio.

Television is, pardon the pun, Panasonic's most visible product in the global market, and its plasmas have consistently outperformed other TVs in sheer picture quality (see the VT50) as well as bang for the buck (the ST50). The 2013 models promise to be its best lineup yet.

The Panasonic ZT60 could be the last significant plasma the company makes. Sarah Tew/CNET

At CNET, TV reviewer David Katzmaier and I have every expectation that the ZT60, the company's newest top-end plasma TV, will be the performance champion of 2013 -- give or take an OLED or two nobody will be able to afford. Meanwhile the ST60 is an odds-on favorite for best TV value of the year.

There are eerie parallels between the Kuro and the ZT60, and seemingly between the two companies that make them. After years of winning the hearts of videophiles and reviewers, Panasonic plasmas face an uncertain future. Is the ZT60, like the Kuro, a last hurrah?

Could Panasonic's "Kuro-killer" also be the last of its kind?
At a meeting at CNET this week to discuss new products, Henry Hauser, Panasonic North American vice president of merchandising display products, told us that the ZT60 likely represents the last generation of plasma TV development the company would undertake.

Traditionally, each year brings a new generation of improved plasma TVs for Panasonic, but Hauser says that after next year this practice may not continue.

"There's probably not going to be a huge generational difference next year," Hauser said. "I wouldn't expect further generations after that." He added that midterm future products were likely to focus on 4K rather than OLED.

Plasma TVs accounted for approximately one-quarter of Panasonic TV sales for the last three quarters of the 2012 calendar year (PDF).

The Pioneer Kuro still boasts the best black levels five years after its untimely demise. Pioneer

Financial woes
According to NPD, global shipments of plasma TVs were down 21 percent in 2012 (compared with a 1 percent decline for LCD). That sharp fall follows years of market share decline for plasma, corresponding to the increasing dominance of LCD.

Japanese newspaper Nikkei reported earlier this week that Panasonic was considering downsizing its plasma business over the next three years and halting production at its main plant in Amagasaki in 2014.

Panasonic's Hauser didn't say anything was certain yet, but did confirm he was travelling to Japan in the near future to take part in meetings that would determine the future of plasma TVs at the company. He said Panasonic typically has to cement its product plans for the next year by June, but added that regardless of the outcome "we still very much intend to be in the television business."

In November 2012, Panasonic announced it would cut 10,000 jobs by the end of March 2013 after laying off 36,000 employees in the previous financial year.

While the company struggled with a loss of 197.6 billion yen (approximately $2 billion) last year, it posted a profit in February 2013. It says demand for flat-panel TVs is expected to weaken in the coming year.

Meanwhile, there are no such problems at Korean competitors Samsung and LG, the other two plasma TV makers. While Samsung has the comfortable position of being the No. 1 TV manufacturer in the world -- thanks mostly to its LCD and LED televisions -- it is also performing quite tidily in mobile phones. It can sell as many or as few plasma TVs as it likes without it having a material impact on the bottom line.

Panasonic announced a healthy six-series lineup of plasma TVs again this year, but both Korean companies trotted out fewer models. Samsung announced only three series of plasma TVs for 2013, with only one, the expensive F8500, aiming to compete against Panasonic for the hearts of videophiles. LG also pared its line down to three series, and the best, the 60PN6700, comes in just one size and lacks the high-end picture quality claims of the 2012 flagship.

The band plays on
As a reviewer of Panasonic televisions for many years, I can say that its plasma TVs have consistently outshone its competition for seemingly as long as Samsung has been at the top of the sales charts. People aren't buying Panasonic plasmas in the same volumes as they are snapping up Samsung LCDs, and this is a great shame from a picture quality perspective.

Watching this situation unfold is like standing on the deck of the most advanced ship in the world and watching it inch slowly toward the iceberg on the horizon. The end is coming for plasma, but what will replace it? Some may look toward OLED, but it is currently very expensive -- the first 55-inch model on the market will cost $12,000, and industrywide problems with yield mean the technology won't be competitive for years.

In the meantime, the loss of Panasonic plasmas as soon as next year would mean buyers who prioritize picture quality -- whether on a tight budget or otherwise -- will have fewer alternatives. While Samsung may offer some hope, without Panasonic to compete against, who is to say it will continue producing plasmas in the coming years?

If picture quality is important to you, my suggestion is this: Buy a quality plasma TV while you still can. A good model will offer the best bang for buck you may see for many years.