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Reports in the Japanese business daily Nikkei that Pioneer Electronics is planning to cease production of plasma panels shocked the consumer electronics industry on Tuesday. Along with Panasonic, Pioneer has been one of plasma’s greatest proponents. The company’s plasma technology forms the core of the Kuro, which S&V (and practically everyone else who knows anything about video) considers perhaps the finest flat-panel TV ever created.

Pioneer still intends to offer plasma TVs, but according to Nikkei, it will be sourcing the panels from Panasonic, the world’s largest makers of plasma panels. The same report said Pioneer predicts it will sell only about two-thirds as many plasma TVs in the current fiscal year as it originally expected, and that the company expects to lose $96 million on its plasma TV operations during the same period.

In the harsh light of financial reality, it’s hard to criticize Pioneer’s decision. But for the company to bail out on plasma production so soon after its triumph with Kuro is like the owners of the New England Patriots sacking head coach Bill Belichick after a perfect regular season.

There’s no doubt that LCD is usurping plasma as the flat-panel TV technology of choice. Industry research firm iSuppli predicts plasma sales will peak this year, so the smart money seems to be jumping to LCD and upcoming technologies like OLED. Panasonic is plasma’s sole remaining champion; LG and Samsung still produce the panels but don’t talk them up much anymore. Fujitsu, the first company to sell plasma TVs in the U.S., bailed out in January.

Some video experts are as puzzled as the cast of House midway through an episode; they’re wondering, “Why is this technology dying?” Although LCD has come a long way in the last two or three years, plasma still enjoys certain advantages, such as generally lower prices and generally superior reproduction of black. It’s also much less expensive to build a plasma TV plant. An LG executive told me that while LCD panel plants typically cost $1 billion to build, plasma plants cost only about a quarter as much.

At last week’s Sony line show in Las Vegas, I asked a table full of journalists why LCD market share is growing so quickly at plasma’s expense. Only one endeavored to answer. He first suggested that people are choosing LCD because consumes less power — which is technically correct but the difference isn’t really that great. He then suggested that LCD’s advantage in resolution might be the reason for its gains — but 1080p displays are readily available in both plasma and LCD. He then fell silent and the conversation drifted to another topic.—Brent Butterworth

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