Digital revolution? Take it as red

Pioneer's new logo marks its rebirth, writes Roger Trapp

THE DECISION by Pioneer, the Japanese electronics company, to abandon its 60-year heritage and familiar image in favour of a new strategy and a fresh identity must be ranked as brave.

Since being founded as an audio products manufacturer in 1938, the company has acquired a worldwide reputation in such areas as hi-fi, car stereos and, latterly, navigation systems. But its executives say that the arrival of the digital age necessitates a change in focus.

Pioneer had already made strides in this direction - taking a lead in the introduction of the digital versatile disc (DVD) and the plasma displays that are central to the development of flat, high-definition television screens. But, according to Masao Kawabata, managing director of the UK operation, "half-measures and incremental improvement are not enough to win in the competitive market of digital convergence".

Accordingly, as part of the company's "Vision 2005" programme, Pioneer has just launched a new logo: it is red instead of blue, and consists of its name rather than the Omega tuning fork that was introduced in 1969.

In future, the company will focus on the two core technologies of DVD and plasma display, and it will move away from selling stand-alone products to supplying networked systems that combine its set-top boxes, optical disc/DVD and plasma products.

With a simultaneous effort to push for features that make the systems easier to use - such as voice recognition to operate products in homes and cars - the company is also looking to build on its traditional strength in home entertainment to benefit from such developments as home banking and home shopping.

Shungo Minato, chairman and managing director of the Belgium-based European arm, said the change was a symbol of the company's commitment to digital technology over the analogue products that have served it well in the past.

Claiming that this was a "make-or-break situation" for an electronics company, Mr Kawabata added that the new logo was a demonstration to the 20,000 employees - as well as suppliers, customers and retailers - of Pioneer's seriousness about its change in direction.

As "brand ambassador", he has plenty of explanations for the choice of logo - red symbolising commitment to technological brilliance and enjoyment, and the slant of the lettering indicating speed.

He also claims that the timing is ideal; DVD and plasma are reaching critical points in their development, and the Japanese calendar suggests that the 60th anniversary is a propitious time for rebirth.

More rationally, no company can expect to be a leading player in all of the technologies emerging in this area. Pioneer is seeking to double turnover by 2005 from the current $4.2bn (pounds 2.6bn) to nearly $9bn, largely by gaining 15 per cent of the plasma market and 20 per cent of the DVD market.

One of the first products to carry the new logo in Europe is a 50-inch screen that Pioneer claims is both the world's largest and highest-definition plasma display. It sells for pounds 10,000 in Japan, but Mr Minato insists it will become affordable in the next couple of years.

Meanwhile, the company - which makes the world's only combined DVD/laser disc/CD player - claims that DVD is "already a big hit with both business and consumers".

With more products available in this area than its competitors, Pioneer is confident of establishing a strong position in the US with a product that has outsold the CD player tenfold.

"We've spent 20 years developing optical discs rather than videotape technology, and now we are in a prime position to capitalise on the doors it is opening in the DVD market," said Mr Kawabata.

A lot is clearly riding on how enthusiastic consumers turn out to be about turning their living rooms into home cinemas.