Caught by the buzz
1 min read
Hearsay and rumour are often the backbone behind the more attention grabbing news stories, for those inclined to not let facts get in the way of a good story.
The latest anecdote currently doing the rounds is the one about Mitsubishi Electric and Pioneer joining forces to corner the satellite navigation market.
Despite the fact that Mitsubishi Electric said categorically it was not in talks with Pioneer on car navigation, nor any other auto equipment operations, this hasn't stopped Pioneer's shares shooting up 13.8% since the rumour mill began spinning.
In the midst of the current recession, consolidation was always going to be on the tip of many tongues in the electronics sector. Japan, in particular, is renowned for its overcrowded industry and many consider that resources are often spread too thinly. It was not so long ago that Pioneer axed 10,000 jobs and announced its plans to pull out from flat tv screens, having made substantial losses, so the seeds were sewn for expansion.
Pioneer doesn't seem to shirk from the idea of consolidation – with plans already afoot to move its Blu-ray discs and dvd related equipment to a joint company with Sharp (its leading shareholder). It's also known that Pioneer has been in discussions with its competitors, Alpine Electronics and Clarion. So, if negotiations have taken place between Pioneer and Mitsubishi, what exactly can we expect from the electronics giants? No doubt, we can anticipate high quality automotive navigation technology, that would certainly corner the market. But would we also expect to see further restructures? And in what form would these take?
