Marty Mcfly once said, “All the best stuff is made in Japan.” That was in 1990, long before products like the iPhone and Galaxy S II were defining today’s smartphone zeitgeist. Skip ahead to 2012, and three of Japan’s most highly regarded electronics companies – Sony, Sharp and Panasonic – are losing money in the billions. All combined, the three are projected to take a $17 billion hit during Q1 of this year. Why? Fundamentals, the Wall Street Journal said.
Japanese manufacturers are no longer creating the most desired electronics on the market, and a lot of it has to do with differentiation. What happens when everyone on the block starts offering the same stuff? Fierce price wars ensue, eventually leading to a negative affect on consumers. More of the same creates severe consumer confusion, thus giving other outside manufacturers the opportunity to swoop in. Guys like Apple and Samsung.
“The result is that they can’t match the innovations of Apple Inc.—with its iPads and iPhones—or the manufacturing might of Samsung Electronics Co., a powerhouse for semiconductors and cellphones, as well as TVs,” said the WSJ.
It’s not just the fundamentals, either. It’s business strategy as well. Samsung downsized its supply chain, Sharp built a massive plant to manufacture LCDs and Panasonic acquired competitors hoping to expand into new markets. But all three companies have failed to compete in a crucial part of today’s landscape: mobiles devices.
The technology landscape has seen a similar shift before. As Japanese electronics companies began to emerge twenty, thirty years ago, U.S. technology greats were suddenly threatened by a smarter, more innovative product. Today, a lot of the momentum has swung back to America’s favor, but now competition from Korea and China is cropping up.
The WSJ delves deeper into the foibles of Japan’s most recognized electronics brands, from Sony’s slow roll out of its 2009 streamline plan, to Sharp’s failed LCD investment, and Panasonic’s struggling television business. If anything, it’s an interesting look at how competitive the market has become, and how quickly technology brands can fall behind.
[via Wall Street Journal]