The Failure and Redemption of Japan's Consumer Electronics Industry

Losses continue, Japanese consumer electronics giants usher in difficult times

The Japanese electronics giants, which were once brilliant, have had a very difficult time in recent years. Panasonic and Sony all suffered losses in fiscal year 2011, and Sharp The 2011 fiscal year was the largest loss in its century-old history. These companies that believe in the tenure system of employees also have to start the painful layoff process. Panasonic has previously announced that it will lay off 8,000 employees as of March 31, 2013, and Sony plans to lay off 10,000 employees and sell the headquarters building. The latest news also Olympus will cut 2,500 jobs due to the downturn in its digital camera business.

This can be said to be a microcosm of the Japanese economy in recent years. Since the global financial crisis in 2008, Japan's GDP growth rate has remained at a low level, the monthly growth rate has never exceeded 2.5%, and nearly half of the time has been in the negative growth range. The Japanese economy is still not out of the shadow of the "lost twenty years". No wonder Shinzo Abe couldn't wait to launch "Abenomics" of monetary easing and fiscal stimulus as soon as he took office, trying to boost the economy and encourage business investment.

"Nihon Keizai Shimbun" said in a report that the former Japanese symbol is causing a lot of blood loss in the Japanese economy. Electronic giants such as Panasonic, Toshiba, Sharp and other electronics giants once led the Japanese economy into the most brilliant high-speed growth. period is the pride of Japan. The "Wall Street Journal" article said that these three electronics companies are now crashing like dinosaurs after the planet hit the earth.

For nearly half a century, Japan's electronics industry has undoubtedly been a benchmark for global attention. Japanese consortium companies such as Panasonic and Sony have built an absolute leading edge. Walkmans, VCRs, TVs, mobile phones, cameras, and printers are all made in Japan. But entering the 21st century, with the advent of the era of mobile Internet, the most important product - the smartphone, Japanese companies have fallen behind. Apple, Samsung, and Google are going high, Chinese and Taiwanese manufacturers are rising rapidly, and the territory of Japanese-funded enterprises is constantly being eroded.

Technical advantages are gone, and cost disadvantages become soft underbelly

The reason is that the "low-profit era" of consumer electronics products is rapidly coming, and the cost-effective advantage of Japanese products is no longer an important reason. Due to the survival mode of Japanese enterprise groups, materials, production equipment, R&D, and manufacturing are all completed by Japanese enterprises. This closed model can guarantee high quality and high technology content, but in the era of smart devices, the marginal utility of these advantages of Japanese companies is rapidly diminishing. When a thousand companies in China can develop mobile phones, the technical threshold of mobile phones has disappeared, and cost has become the key to competition.

Manufacturers such as Apple have succeeded in reducing manufacturing costs through outsourcing. However, the closed nature of Japanese electronic enterprise groups determines that Japanese enterprises are completely powerless in reducing costs. In the manufacture of Japanese products, priority is given to purchasing upstream Japanese products. This has become an inherent system, a system that no one can change. The problem is that the cost remains high.

Big Mac conglomerates stifle Internet innovation genes

In addition to cost, the innovation genes that Japanese companies are proud of are also rapidly fading. In the era of mobile Internet, Moore's Law has accelerated innovation, and revolutionary products have emerged one after another, leading to a rapid demand blowout. Xiang Ligang, secretary general of the 3G Industry Alliance, believes that Japanese high-tech companies are good technology trackers, but not good technology innovators. For example, the PSP game console, it should be able to integrate communication and other modules into it, but he has never done it.

On the other hand, the Japanese conglomerate system makes it inflexible and slow to respond to the market. The most active innovation field in the past decade is the pan-Internet field. Countless start-up companies start from a few people and small garages to create new product forms and promote the development of the industry. Apple, Google, etc. have also achieved leadership in this atmosphere. status. This "bottom-up" innovation path model is not tolerated by Japanese enterprise groups. In today's Japanese electronics industry, the companies that are fighting in the market are still those companies of 30 years ago.

JPY appreciation eats into profit margins

The decline of Japan's consumer electronics industry began with the appreciation of the yen following the financial crisis. Affected by the global financial crisis, the yen has appreciated against the US dollar since 2009, from the highest value of 120 yen before the crisis to 80 yen, which caused the nine major Japanese consumer electronics giants to lose money. Stringer, then the global CEO of Sony, once said, "We can't decide the external environment such as the exchange rate, but this situation will not continue like this." But the actual depreciation time exceeded his expectations, and the share of Japanese consumer electronics giants also being constantly eroded.

Take Sharp as an example. From 2005 to 2007, it once ranked the top two in global flat-panel TV shipments with a share of nearly 20%, but by 2013 its TV shipments had shrunk to less than 8 million units , has slipped to around the tenth place in the world. Also because Panasonic, which chose plasma in the display technology competition, was forced to make a choice to de-television last year, its plasma TV factory in Shanghai may also be closed this year.

The thin dead camel is bigger than the horse, and it needs to regain its advantageous industries to make a comeback.

But the Japanese consumer electronics giant is not at the end of the road. Bai Weimin, vice president of China Electronic Video Industry Association, believes that Japanese companies and Japanese companies have deep accumulation in many technical fields. The most important thing at this stage is to do a good job in business selection and integration, throw away the useless industries that affect its own development, and focus on developing its own advantageous industries.

Hong Shibin, an industry watcher, also holds a similar view. He believes that Japanese companies can only hope to return to the upward channel only if they boldly abandon some fields and take greater steps in the adjustment of the industrial structure.