Japan’s consumer electronic market is under huge pressure, with worsening financial results adding to increasing competition from more agile rivals like South Korea’s Samsung and U.S.-based Apple.
The combined losses for the current fiscal year from Japan’s tech leaders Sony, Panasonic and Sharp will reach about $17 billion. On the other hand, Samsung will invest $22 billion in development.
“Japan’s consumer-electronics makers are in a total breakdown,” said Masamitsu Ohki, a fund manager at Tokyo-based hedge fund Stats Investment Management Co., quoted by Bloomberg. “They need to compete with ideas, not technology.”
Japanese manufacturers were severely hit in the last year by the domestic natural disaster and the flooding in Thailand, as well as by the record-strong yen cutting into export-based revenues. For example, Sony gets 70 percent of its revenue outside Japan and Panasonic 48 percent.
Samsung and Apple are cruising ahead thanks to revolutionary thinking in the smartphones sector, forcing Japanese competitors to look for alternate paths like medical devices and green technologies.
“Apple changed the paradigm of thinking,” Ohki said. “It would be very hard for the Japanese companies to recover unless they can get back the de facto standard for products like mobile phones from Apple.”