No turning back

The past 12 months has arguably proven the most tumultuous period in the history of the Japanese consumer electronics industry.

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By  Aaron Greenwood Published  November 30, 2006

|~||~||~|The past 12 months has arguably proven the most tumultuous period in the history of the Japanese consumer electronics industry. With the exception of Panasonic and Sharp, who continue to forge successful paths targeting specific sectors of the market – plasma TVs for the former and LCD TVs for the latter – the once indomitable reputations of industry stalwarts including Sony and Sanyo have taken a hammering this year. Sanyo’s position has deteriorated severely during the period, with the company predicting its third straight year of financial loss. With the company planning further staff retrenchments while lacking a clear recovery strategy, shareholders remain nervous about its long-term future. Meanwhile, quality issues and production delays have taken the gloss of what was once arguably Japan’s most respected consumer electronics brand, Sony. After suffering the ignominy of exploding notebook PCs that led to mass recalls of its batteries earlier in the year, the company is once again in damage control over the recall of Cyber-shot cameras in certain markets worldwide. These issues in addition to a conservative approach to embracing new corporate thinking and technology trends has seen the company increasingly shadowed by South Korean giants Samsung and LG Electronics in the consumer electronics market. Indeed, a recent visit to Samsung’s global headquarters in Seoul further reinstated just how far the Japanese brands’ influence had slipped compared to their rivals in South Korea, in terms of shaping industry trends. Samsung is leveraging the huge profits generated by its memory chip business to reinvest in consumer electronics product development at a scale unrivalled by its Japanese counterparts. The company remains a mainstay of the South Korean economy, contributing 17% of the country’s GDP in 2005. Its influence transcends the country’s social fabric and its international success is a matter of national pride. Not since the 1980s has the global consumer electronics industry been so profoundly influenced by one nation’s international ambitions. While the Japanese truly dominated this period, the South Koreans are stealing the baton from their archrivals in the 21st century and are not looking back.||**||

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