There is no question that television manufacturers in Japan are disappearing as fast as melting ice.
Their competition is headquartered in Korea, China and the United States. Japanese electronics manufacturers continue to lose market share in this very competitive global arena.
Let’s take a look at the retail market in the United States. The big box stores allocate a lot of space to the flat panel TV segment and almost every television manufactured is on display. If you want to buy a television, you will most likely end up in one of these big box stores.
The first store I visited was Wal-Mart located in New Hampshire. There were at least 50 televisions on display; their sizes ranged from 19" to 84" and many were the new 4k HD models. Almost two-thirds of the televisions on display were manufactured by Samsung Electronics, the electronics giant in Korea. LG Electronics, another electronics giant in Korea, had the second most, and the third most-representated group was Chinese and American manufacturers. There was only one television on display that was manufactured in Japan - Sanyo. I don’t know where this item came from. Sanyo was acquired by Panasonic a couple of years ago and the brand name is no longer used on any of its products.
The second big box store I visited was Best Buy - a major discount chain store for electronics and appliances. The retail footprint for televisions was the same as Wal-Mart. Samsung had the lion’s share of the space and most of its product line was high-end products including the new curved LCDs. The leftover space was filled with a variety of manufactures including Sony. I did not find a single television on display that was manufactured in Japan.
Ten years ago most of the display space was occupied with televisions made in Japan. This list of names included Panasonic, Sony, Sharp, Toshiba, Sanyo, Hitachi and more. Sony was probably considered the leader of the pack. Back then, televisions made in Japan were considered very reliable and consumers would never consider buying a TV manufactured in Korea or Taiwan. For this reason, product like Sony commanded a higher retail price simply because of its name.
Fast forward 10 years and the marketplace changed considerably. Consumers have no problem purchasing electronics that are made in Korea. Products made in Korea are considered reliable and competitively priced. Korean manufacturers provide new products such as curved panels and OLED panels.
The outlook is not so good for Japanese TV manufacturers. Toshiba has plans to close all overseas TV manufacturing and sell all its plants. It will use EMS firms for manufacturing. Panasonic will also close several foreign operations due to shrinking demand and Sharp is also scaling down.
Japanese companies are all in the same boat. When business was booming, their forecasts were extremely optimistic, so they invested huge amounts of money into capital investment to expand manufacturing capacity. They did not see any competitor from outside their own country. Now there is not enough business to support these new manufacturing plants. There will never be a return on investment, and they are loosing money month over month. The TV segment is not profitable for them.
I am advising Korean and Taiwanese companies not make the same mistake. Unfortunately, history always repeats itself.
Dominique K. Numakura, This email address is being protected from spambots. You need JavaScript enabled to view it.
DKN Research, www.dknresearchllc.com
DKN Research Newsletter #1506, Feb. 22, 2015 (English Edition) (Micro Electronics & Packaging, www.dknresearchllc.com)
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Headlines of the Week
1. Toshiba agreed to codevelop a next-generation photolithography process, “Nano-In- Print Lithography,” with SK Hynix in Korea.
2. Mitsubishi Plastic founded a new subsidiary, Daia Plas Film, to expand its plastic film business in EMC and medical market.
3. TMJ agreed to work on a new R&D project for voice analyzing systems with Smart Medical. The new system will be capable to analyze feeling of the speakers.
4. Mitsubishi Electric commercialized a new power module, “J Series T-PM,” in a small package CSTBT for automobile applications. The package became 36% smaller.
5. Alps Electric unveiled a low-height, compact connecting device “micro clip” for wearable products. Size: 1.4 x 1.4 x 0.7mm.
6. Panasonic developed the largest non-spherical lens, up to 75mm diameter, for high brightness projectors.
7. LG Electronics unveiled a wearable device called “LG Watch Urbane” with a 1.3” p-OLED panel (320 x 320 pixel) for typical citizens.
8. Sony unveiled a wearable device kit, “SmartEyeglass Developer Edition”. It has tight integration with smartphones.
9. Epson unveiled a 16-bit MCU “S1C17W03/04” with flash memory (16/32kB) packaged in 5 mm SQFN or 7mm TQFN.
10. JEITA said total domestic electronics shipments in January were worth 89 billion yen, a 21.9% decline from the same month of the previous year.
11. TSMC will invest NT$3.49 billion in its Fab15, a 300mm wafer plant in the Central Taiwan Science Park, to expand manufacturing capacity. The new equipment has been ordered from manufacturers in Europe, North America and Japan.
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