Osaka-Japan based Panasonic might have just written its own death warrant. In a little-reported decision, the company has decided to reign in investment in its flat-panel TV operations and instead expand its reach into the entry-level television market. Management’s goal is to increase unit sales by 50% within just over a year.

No doubt Panasonic is eyeing the conversion to digital TV (DTV) in the U.S., currently scheduled for February 17 of this year (although the Obama administration is exploring delaying the switchover). This is a potential revenue boon to the company as millions of consumers seek to upgrade their sets, preferring the trusted brand over its generic rivals.

As nice (and necessary) as the goose in revenue will be to Panasonic over the next year or two, I wonder if there have been any internal discussions as to the impact this decision will have on long-term consumer perceptions of the Panasonic brand. An unprecedented wave of television buyers looking for cheap TVs may come to view Panasonic brand as representing just that–cheap TVs. That would hamper the historically venerable brand’s ability to offer high-end anything, and could one day be looked back on as a fatal decision. This is one to watch.