Earlier this month we came with a story about plasma TVs losing their marketshare to the LCD market that's currently growing. Just a few minutes ago we catched the news that Pioneer drops its production of 42-inch plasma panels. Why, and do the two have something to do with each other?

No, it doesn't have anything to do with LCD's growth. Pioneer will continue to offer 42-inch plasma panels, but steps away from creating a vertically integrated business model. Pioneer will buy the 42-inch panels from Panasonic's maker Matsushita Electronics. Main reason for this change is the loss-making flat TV business.

Pioneer's target was set at 480,000 plasma TVs in this business year. This 'small' number is only one-tenth of Matsushita's target of 5 million plasma TVs. Pioneer had trouble with competing against efficient producers like Matsushita and LG. This announcement shows that Pioneer didn't have the power inside, to create everything by itself.

What does this say of an electronics giant?