You are too proud. You boast too much! This is a typical Chinese trait that we Japanese find very petty.
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You are too proud. You boast too much! This is a typical Chinese trait that we Japanese find very petty.
xunzi
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The era of Japanese consumer electronics giants is dead
Once venerable names in consumer electronics such as Sony, Panasonic, and Sharp have been besieged by competition from rivals in the U.S., South Korea and, increasingly, China.
A Sony Wega rear-projection television found by the garbage in New York. The financial prospects of Sony and its fellow Japanese companies aren't far behind.John P. Falcone/CNET
Not that long ago, Japanese companies such as Sony, Panasonic, and Sharp were considered premium brands.
They made virtually everything in the consumer electronics world, from televisions to microwaves and digital music players. There seemed to be no way to stop their momentum. Their products often carried higher price tags to reflect their perceived quality, and people snapped them up.
"People used to have Sony homes," said Tony Costa, an analyst at Forrester Research. "You're just not seeing that any more."
These days, the Japanese consumer-electronics giants have largely been reduced to also-rans, many of which struggle just to turn a profit. Today, Sony's debt was downgraded for the second time in a month to one notch above junk status by Moody's. Sharp, a massive loser in the stock market this year, is already at junk status and is seeking a bailout from the Japanese government. Panasonic's leadership has already signaled a willingness to shed any unprofitable businesses, which could mean Panasonic televisions may disappear from store shelves one day.
This collapse marks a dramatic change for companies that once stood on top of the consumer electronics world. It also largely marks the end of an era in which these Japanese companies thought they could operate in a myriad of different businesses.
"Everybody recognizes those days won't come back again," said Stephen Baker, an analyst at NPD Group.
Ironically, South Korea's Samsung Electronics, which in the previous decade was a scrappy low-cost player in the business, has adopted that make-everything approach and has actually been far more successful than its Japanese rivals.
Big companies equal slow companies
So how did the likes of Sony and Sharp lose their way? As with many other downfall stories, these companies failed to pay attention to shifting trends and were outmaneuvered by overseas competitors. As consumer markets shifted to digital media and games, mobile devices, software apps and the Internet, the Japanese struggled to keep up. External factors like the rising value of the Japanese yen, which made products exported from Japan more expensive abroad and cut into margins at home, further squeezed the companies.
The decline in the Japanese television business present best illustrate their downfall. Sony, Sharp, and a myriad of other Japanese companies were dominant in the television business when bulky tube TVs ruled. The Sony Trinitron had a sterling reputation as the television to own.
Kazuo Hirai took over as CEO of Sony this year in an attempt to breathe new life into the company.Stephen Shankland/CNET
Few of them managed the transition to flat-panel display televisions all that well. While many of them reaped profits early on, increased competition and tightening margins began to squeeze many of the companies, according to Costa. Weaker players such as JVC, Hitachi, Fujitsu, Toshiba, NEC, and Pioneer exited the business.
In their place were companies such as LG and Samsung. Samsung, in particular, focused on building higher quality flat-panel TVs, packing them with a larger array of features and selling them for a competitive price -- and steadily boosted its share. It has long surpassed its Japanese rivals in features and design. Now, it's the leader in the television business with a gold-standard brand.
"As flat panel and HD got more prevalent, you started to see a (TV) business model more akin to the PC market," said Baker. "Most of those guys weren't prepared for that."
Another problem lies in the sheer breadth of products these companies offered, many of which barely exist any more. Do people buy digital music players or DVD or Blu-Ray players at a time when everything is streamed?
Missing out on mobile
The Japanese similarly missed the boat on mobile. Panasonic and Sharp were too insular and focused on their home market to be effective enough to compete around the world. Sony was tied down by its joint venture with Ericsson, which actually saw some success with basic phones.
But when Apple came knocking a few years ago with the iPhone, these companies quickly found themselves unable to compete. When Google and Android arrived a bit later, the Japanese companies were slow to adopt the burgeoning platform and found themselves far behind as Samsung and HTC took the lead.
The Xperia TL from Sony, an exclusive with AT&T this holiday season.Sarah Tew/CNET
As with the television market, the smartphone business has proven incredibly cutthroat, with only a few winners in the business. Along with Apple, Samsung is the only other major player able to generate significant profits with its smartphones.
Sony has a shot at a minor comeback with the Xperia TL, its latest flagship phone -- best known for its use by James Bond in the film "Skyfall" -- coincidentally also produced by Sony. Sharp has some phones in the U.S. market, but few, if anyone, has ever heard of them. Panasonic had ambitions to expand outside of Japan with its Eluga line of smartphones, but now lacks the clout or resources to do so. TheWall Street Journal reported earlier this month that it was scaling back its push to enter Europe.
Identity change
These companies are in for some drastic changes in the coming years -- if they survive.
Among the three fallen giants, Sharp has deflated the most. The company earlier this month reported a loss of 387.6 billion yen ($4.87 billion) in the six months ended September 30, a near tenfold increase over the year-earlier period. The company was already in the middle of a restructuring, having cut more than 10,000 jobs and looking to sell manufacturing plants to Foxconn, and insisted that those efforts would help generate cash flow.
Rather than consumer products, Sony and Sharp have found some headroom supplying to other more popular companies. Sony, for instance, provides the camera for the iPhone, while Sharp is one of several display suppliers to Apple's smartphone.
But even the display business isn't entirely safe, with lower cost competitors threatening to eat Sharp's lunch.
"They don't have a lot of options and they're in a very poor place," Costa said.
The Panasonic brand and business is under assault.Panasonic
Panasonic President Kazuhiro Tsuga, meanwhile, has been forthright about his desire to move away from consumer electronics. He recently told managers that any business failing to earn margins of at least 5 percent would have no place in the company, the New York Times reported.
Panasonic could very well disappear from the consumer landscape as it leans on its more successful non-consumer operations, analysts said. In fiscal 2012, the company's PC, television, and digital camera unit posted an operating loss of 67.8 billion yen ($853 million).
Sony, the maker of the PlayStation and owner of Hollywood movie and recording studios, may have the best shot at survival given its diversified presence in gaming and entertainment. The company is looking to focus more on areas such as imaging and gaming, even as it looks establish its footing in the mobile area. But TVs could end up being a "hobby" and the company moves its focus away from that area, according to Costa. Still, it has a wide variety of consumer lines to fall back upon.
"Sony's probably the best positioned of any Japanese company," Baker said.
New pressures
While all have laid out a path back to profitability, the truth is the pressure will only get worse. The competition isn't just coming from the U.S. and Korea, but increasingly from China. Lenovo has shown its dominance in the PC business, yesterday reporting record sales of $8.7 billion and record market share , according to IDC.
This comes as Sony and Toshiba laptops sink further into the also-ran category.
On the smartphone side, Huawei and ZTE are making strides around the world with both low and high-end phones. In the U.S., the companies have yet to break into the major carriers in a significant way, but both companies can be counted on to provide affordable smartphones and tablets.
Huawei is an up-and-comer that the Japanese companies need to watch out for.Josh Miller/CNET
In the television market, the Chinese companies represent a potential threat. The top Chinese domestic TV manufacturer is TCL, followed by Hisense. While neither have a significant presence in the U.S., they are starting to make moves. Both companies have been chipping away with extremely low-cost televisions, and Hisense has even introduced a high-end 4K model to the US market. CNET's TV reviews editor David Katzmaier said he believes the two stand to gain share over the next couple of years.
"With the three Japanese companies losing share, it makes sense that some of it will go to the Chinese companies," he said.
The companies aren't standing idly by. Sony is pushing hard to extend its presence in gaming, and analysts believe it could still benefit from more tightly integrating its products together, similar to the way Samsung has bridged together its televisions, tablets, smartphones, and even appliances. Panasonic is set to deliver the opening keynote address at the Consumer Electronics Show in January, likely to be a reaffirmation of its presence in the industry.
No one knows if any of them will succeed. What is clear is that they all have a rough road ahead.
Once venerable names in consumer electronics such as Sony, Panasonic, and Sharp have been besieged by competition from rivals in the U.S., South Korea and, increasingly, China.
A Sony Wega rear-projection television found by the garbage in New York. The financial prospects of Sony and its fellow Japanese companies aren't far behind.John P. Falcone/CNET
Not that long ago, Japanese companies such as Sony, Panasonic, and Sharp were considered premium brands.
They made virtually everything in the consumer electronics world, from televisions to microwaves and digital music players. There seemed to be no way to stop their momentum. Their products often carried higher price tags to reflect their perceived quality, and people snapped them up.
"People used to have Sony homes," said Tony Costa, an analyst at Forrester Research. "You're just not seeing that any more."
These days, the Japanese consumer-electronics giants have largely been reduced to also-rans, many of which struggle just to turn a profit. Today, Sony's debt was downgraded for the second time in a month to one notch above junk status by Moody's. Sharp, a massive loser in the stock market this year, is already at junk status and is seeking a bailout from the Japanese government. Panasonic's leadership has already signaled a willingness to shed any unprofitable businesses, which could mean Panasonic televisions may disappear from store shelves one day.
This collapse marks a dramatic change for companies that once stood on top of the consumer electronics world. It also largely marks the end of an era in which these Japanese companies thought they could operate in a myriad of different businesses.
"Everybody recognizes those days won't come back again," said Stephen Baker, an analyst at NPD Group.
Ironically, South Korea's Samsung Electronics, which in the previous decade was a scrappy low-cost player in the business, has adopted that make-everything approach and has actually been far more successful than its Japanese rivals.
Big companies equal slow companies
So how did the likes of Sony and Sharp lose their way? As with many other downfall stories, these companies failed to pay attention to shifting trends and were outmaneuvered by overseas competitors. As consumer markets shifted to digital media and games, mobile devices, software apps and the Internet, the Japanese struggled to keep up. External factors like the rising value of the Japanese yen, which made products exported from Japan more expensive abroad and cut into margins at home, further squeezed the companies.
The decline in the Japanese television business present best illustrate their downfall. Sony, Sharp, and a myriad of other Japanese companies were dominant in the television business when bulky tube TVs ruled. The Sony Trinitron had a sterling reputation as the television to own.
Kazuo Hirai took over as CEO of Sony this year in an attempt to breathe new life into the company.Stephen Shankland/CNET
Few of them managed the transition to flat-panel display televisions all that well. While many of them reaped profits early on, increased competition and tightening margins began to squeeze many of the companies, according to Costa. Weaker players such as JVC, Hitachi, Fujitsu, Toshiba, NEC, and Pioneer exited the business.
In their place were companies such as LG and Samsung. Samsung, in particular, focused on building higher quality flat-panel TVs, packing them with a larger array of features and selling them for a competitive price -- and steadily boosted its share. It has long surpassed its Japanese rivals in features and design. Now, it's the leader in the television business with a gold-standard brand.
"As flat panel and HD got more prevalent, you started to see a (TV) business model more akin to the PC market," said Baker. "Most of those guys weren't prepared for that."
Another problem lies in the sheer breadth of products these companies offered, many of which barely exist any more. Do people buy digital music players or DVD or Blu-Ray players at a time when everything is streamed?
Missing out on mobile
The Japanese similarly missed the boat on mobile. Panasonic and Sharp were too insular and focused on their home market to be effective enough to compete around the world. Sony was tied down by its joint venture with Ericsson, which actually saw some success with basic phones.
But when Apple came knocking a few years ago with the iPhone, these companies quickly found themselves unable to compete. When Google and Android arrived a bit later, the Japanese companies were slow to adopt the burgeoning platform and found themselves far behind as Samsung and HTC took the lead.
The Xperia TL from Sony, an exclusive with AT&T this holiday season.Sarah Tew/CNET
As with the television market, the smartphone business has proven incredibly cutthroat, with only a few winners in the business. Along with Apple, Samsung is the only other major player able to generate significant profits with its smartphones.
Sony has a shot at a minor comeback with the Xperia TL, its latest flagship phone -- best known for its use by James Bond in the film "Skyfall" -- coincidentally also produced by Sony. Sharp has some phones in the U.S. market, but few, if anyone, has ever heard of them. Panasonic had ambitions to expand outside of Japan with its Eluga line of smartphones, but now lacks the clout or resources to do so. TheWall Street Journal reported earlier this month that it was scaling back its push to enter Europe.
Identity change
These companies are in for some drastic changes in the coming years -- if they survive.
Among the three fallen giants, Sharp has deflated the most. The company earlier this month reported a loss of 387.6 billion yen ($4.87 billion) in the six months ended September 30, a near tenfold increase over the year-earlier period. The company was already in the middle of a restructuring, having cut more than 10,000 jobs and looking to sell manufacturing plants to Foxconn, and insisted that those efforts would help generate cash flow.
Rather than consumer products, Sony and Sharp have found some headroom supplying to other more popular companies. Sony, for instance, provides the camera for the iPhone, while Sharp is one of several display suppliers to Apple's smartphone.
But even the display business isn't entirely safe, with lower cost competitors threatening to eat Sharp's lunch.
"They don't have a lot of options and they're in a very poor place," Costa said.
The Panasonic brand and business is under assault.Panasonic
Panasonic President Kazuhiro Tsuga, meanwhile, has been forthright about his desire to move away from consumer electronics. He recently told managers that any business failing to earn margins of at least 5 percent would have no place in the company, the New York Times reported.
Panasonic could very well disappear from the consumer landscape as it leans on its more successful non-consumer operations, analysts said. In fiscal 2012, the company's PC, television, and digital camera unit posted an operating loss of 67.8 billion yen ($853 million).
Sony, the maker of the PlayStation and owner of Hollywood movie and recording studios, may have the best shot at survival given its diversified presence in gaming and entertainment. The company is looking to focus more on areas such as imaging and gaming, even as it looks establish its footing in the mobile area. But TVs could end up being a "hobby" and the company moves its focus away from that area, according to Costa. Still, it has a wide variety of consumer lines to fall back upon.
"Sony's probably the best positioned of any Japanese company," Baker said.
New pressures
While all have laid out a path back to profitability, the truth is the pressure will only get worse. The competition isn't just coming from the U.S. and Korea, but increasingly from China. Lenovo has shown its dominance in the PC business, yesterday reporting record sales of $8.7 billion and record market share , according to IDC.
This comes as Sony and Toshiba laptops sink further into the also-ran category.
On the smartphone side, Huawei and ZTE are making strides around the world with both low and high-end phones. In the U.S., the companies have yet to break into the major carriers in a significant way, but both companies can be counted on to provide affordable smartphones and tablets.
Huawei is an up-and-comer that the Japanese companies need to watch out for.Josh Miller/CNET
In the television market, the Chinese companies represent a potential threat. The top Chinese domestic TV manufacturer is TCL, followed by Hisense. While neither have a significant presence in the U.S., they are starting to make moves. Both companies have been chipping away with extremely low-cost televisions, and Hisense has even introduced a high-end 4K model to the US market. CNET's TV reviews editor David Katzmaier said he believes the two stand to gain share over the next couple of years.
"With the three Japanese companies losing share, it makes sense that some of it will go to the Chinese companies," he said.
The companies aren't standing idly by. Sony is pushing hard to extend its presence in gaming, and analysts believe it could still benefit from more tightly integrating its products together, similar to the way Samsung has bridged together its televisions, tablets, smartphones, and even appliances. Panasonic is set to deliver the opening keynote address at the Consumer Electronics Show in January, likely to be a reaffirmation of its presence in the industry.
No one knows if any of them will succeed. What is clear is that they all have a rough road ahead.
mickytrain
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lol, all this bickering between Asians... you guys crack me up.
Snowden a CIA agent directly working inside the US and has his first hand news of how CIA works and operate. If his word is not credible then who? You mean you?
ChineseTiger1986
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The reality is that Japan is a weak country with a weak fragile mind.
And we shouldn't hurt their feeling too much, since I think we are being a little bit sadistic by bullying them so much in this thread.
KAL-EL
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xunzi
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The difference between you and us is that we don't' talk the talk, but we will TALK THE TALK AND WALK THE WALK. Do you understand, my Japanese friend? Your country is very reliant on the US's technological ecosystem which is why you fear of the US abandonment. If they do, your whole industry collapse because you are supplier and can't product high-tech product. You have no replacement for chip. You have no alternative for GPS. You rely on the US's goodwill for all your technological industry.
Nan Yang
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ChineseTiger1986
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Yep, the US is a tree, while Japan is only a twig on it.
@xunzi ,
Total and complete rubbish. The United States is a major trading partner, and a defense ally, but we have relations with a host of nations , and do not really need the United States for our own development. Japan is fully capable of addressing any security concerns by itself, as it has done. It is China that is uneasy about American presence in the region; in Japan and South Korea. We do not loose sleep over this.
You say dependency? Look at the economy of China, which is built on manufacturing and dependent on American consumerism; as well as Japanese consumerism.
Take this as a constructive criticism, dude, learn to be humble. Don't boast, and don't gloat. It is very unattractive. This is not a Japanese trait. Perhaps it is common for Chinese to do so.
Total and complete rubbish. The United States is a major trading partner, and a defense ally, but we have relations with a host of nations , and do not really need the United States for our own development. Japan is fully capable of addressing any security concerns by itself, as it has done. It is China that is uneasy about American presence in the region; in Japan and South Korea. We do not loose sleep over this.
You say dependency? Look at the economy of China, which is built on manufacturing and dependent on American consumerism; as well as Japanese consumerism.
Take this as a constructive criticism, dude, learn to be humble. Don't boast, and don't gloat. It is very unattractive. This is not a Japanese trait. Perhaps it is common for Chinese to do so.
sweetgrape
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Oh, you think we care what you japanese think about us?
Hehe, China copy many things, did I deny it? I also agree that you japanese produce is better than Chinese now, but I ask you some questions, seems you can't answer it, or don't want face it, seems Japanese have common characters that deny and distort the history. hehe.
I don't evade the reality, it is you evade the history and reality.
ChineseTiger1986
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Don't make me laugh, can you settle the TPP deal with your US master?
xunzi
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They deserve it for challenging us in the global order. There is no one worthy to challenge us but the USA.
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