What happened to Japan's electronic giants?

http://bbc.co.uk/news/world-asia-21992700

by davidroberts • 13 years ago

115 110 13 years ago

bbc.co.uk

redcap• 13 years ago

Article misses the fact that managers rather than creators took over the electronics companies. Losing creativity meant losing an edge.

joelrunyon• 13 years ago

There was an article I read a while back that pointed out that the exact same thing happened with the American Auto industry before things started to go to crap.

rmckayfleming• 13 years ago

Would you happen to have a link to that? That sounds like an interesting read.

marvin• 13 years ago

Is there an article somewhere which goes into more detail about this point?

bitL• 13 years ago

I think that's common characteristics in downfall of large companies and nations. Once ambitious managerial types without a viable enthusiastic vision take over, it's a long, hopeless decline; when the innovative types are punished in order to preserve power status quo, it's over.

Egregore• 13 years ago

May be one reason is that they had a lot of cool only for Japan market devices? It is more difficult to make different devices for different markets, Apple on the other hand made one device for all the markets.

scholia3• 13 years ago

Sony Trinitron TV sets, PlayStations etc were cool everywhere. Nikon and Canon cameras still are. It's just that the Japanese specialised in high quality manufacturing, and the market went to China's low-wage manufacturing instead.

Foxconn basically uses humans as robots, and this is temporarily cheaper than using real robots -- Japan's speciality.

macspoofing3• 13 years ago

>It's just that the Japanese specialised in high quality manufacturing, and the market went to China's low-wage manufacturing instead.

Apple iPhones are largely assembled in China, and nobody would claim they are low quality. Chinese manufacturing isn't low quality, unless that's what you want to pay for.

Furthermore, I claim that in the last 10-15 years, the quality of Japanese electronics actually declined.

bluedino2• 13 years ago

A lot of JDM devices like wristwatch TV's and minidisc players just never caught on in the USA.

macspoofing3• 13 years ago

>Apple on the other hand made one device for all the markets.

That was a risky move. Samsung did the opposite (many devices for all markets) and is clearly doing very well.

lmm2• 13 years ago

This makes an amusing contrast with the frequent articles decrying the loss of manufacturing here in the US/UK.

mindcrime• 13 years ago

Interestingly enough, there is talk that manufacturing in the US is rebounding... to the point that some people are referring to it as a boom. The reasons why it's happening are varied, but it's an interesting phenomenon to observe. I'll be interested to see if it holds up over time...

For more on this idea, see:

http://www.theatlantic.com/magazine/archive/2012/12/the-inso...

http://business.time.com/2013/03/28/is-the-u-s-manufacturing...

dankoss• 13 years ago

I worked on a Hitachi based coal plant in college. The Japanese were the originators of high precision engineering, and it shows. TI's OMAP program is going the same route: pursuing long term, more stable business instead of consumer facing chips. I suspect that wages in Korea are much lower, allowing them to manufacture ripped off designs at a much lower price.

Sony's problem is that they're an engineering driven company in consumer markets. While they often win the spec game, they aren't vertically integrated enough to give the same consumer experience that Apple can. Ars has covered many of their missteps in depth.

m_mueller• 13 years ago

Actually I think Sony would have been (and in part still would be) perfectly vertically integrated. They were big in content, home electronics and hand helds. In the beginning of the last decade they could have hardly asked for a better position to completely dominate the electronics business, the way Apple/Samsung do now - but it was all for nothing. Instead of integrating everything, they just let their divisions keep doing their own thing until it was too late.

ctdonath2• 13 years ago

They tried to "vertically integrate". Really hard. Thing is, they hung the hardware on MemoryStick and the software on ATRAC. Oops.

eatmyshorts• 13 years ago

I think you'll find one person behind the Japanese focus on quality--and thus their expertise in "high precision engineering". That person was W Edwards Deming.

Deming was involved in the US Army's post-WWII rebuilding of Japan. Specifically, he was a statistician hired to help with Japan's census. His focus on quality control was revolutionary at the time, and his work became adopted throughout corporate Japan. He is seen as the father of Total Quality Management. He laid the foundations for decades of Japanese excellence in quality control in manufacturing and industry.

The problem, of course, is that the rest of the world is now well versed on TQM, and has adopted TQM principles. This is why the average car lasts 100s of thousands of miles today, when such quality was unheard of in the 1960s.

Of course, all of the other aspects mentioned have contributed--rising wages, managers replacing engineers, etc etc. But the root cause of all of this is that their competitive advantage that results from a focus on quality is gone now.

joezydeco• 13 years ago

Is that why TI laid off the OMAP6 engineers?

http://www.theverge.com/2012/11/14/3646450/texas-instruments...

eloisant• 13 years ago

That's simple: they've always been very good at hardware but not that good at software. It was fine in a time where software was just a minor part of electronics, but today the software is the most important part, and the hardware is just here to make sure the software can run flawlessly.

scholia3• 13 years ago

If the Japanese are bad at software, it's somewhat odd that Japanese programmers wrote a huge proportion of the world's greatest video games....

They're also world leaders in software development for robotics.

Japan also developed 3G (UMTS), which is why Japanese phones no longer dominate the Japanese market.

ippisl2• 13 years ago

Maybe developing games and robots , in past didn't require good english, but today, in many industries you have to have good english in order to develop software since a lot of code will come from other places around the globe(whether it's open source, or commercial libraries).

The japanese are pretty weak in english in general.

adventureloop• 13 years ago

It is true that Japanese studio created some of the greatest games of all time. But I have also heard reports that every game was rewritten from scratch. The DIY concept was entirely alien.

Source: 84 Play Podcast interview with Gregg Tavares (I think, I cant relisten to the podcast now). Linked if interested http://8-4.jp/blog/?p=1423&lang=en

panacea• 13 years ago

Video games are games.

The best GUI's and UX considerations for video games are a completely different kettle of sushi than what you want from a consumer electronics device.

I want to play a puzzle with Super Mario.

I want to answer a red-eye phone call in the middle of the night with my iPhone without playing a game (it still has a lovely app wrapper for puzzle games, right there on the customisable app launching springboard for when I want that sort of software).

I adore Japanese hardware/software design, but I don't want my toothbrush or phone to be kawaii.

bluedino2• 13 years ago

> Japanese programmers wrote a huge proportion of the world's greatest video games....

But how much credit is because of the programmers being better than the rest, and not because of the creativity of the designers, the graphics, or even the hardware the games were created to run on?

saturdaysaint• 13 years ago

Not to mention Ruby.

Yet I was amazed by how long it took Sony and Nintendo to build something as seemingly prosaic as a usable menu system in their recent consoles. Part of me wonders if the Apple/Microsoft patent battles of the 80's deterred a lot of capable non-US companies from doing any work in operating systems.

The article seems to ignore any discussion of startup culture, which I've read elsewhere is a challenge in a country whose business culture has been defined by the "salaryman" working their entire career for one company. I mean, should we be surprised that companies around for the better part of a century are getting disrupted?

Pxtl2• 13 years ago

Which is why I'm surprised that Sony has failed so thoroughly to dominate in this new software-oriented era. Sony easily has various assets that would make them positively terrifying to Apple and Samsung if they got their crap together. Between their game ecosystem and their media (music and movies) labels, they could easily put together a Sony-branded e-shop that would give iTunes/App Store and Play Store a run for their money.

Combine that with the wide inventory of platforms they're in - imagine a Sony-branded de-Googled version of Android running on everything from PSPs to smart TVs.

They're excellently positioned, and they've demonstrated they can make good software in the various PlayStation-related devices.

acjohnson55• 13 years ago

Bad at software? What about Bitcoin!?

(just kidding, as far as I know)

venomsnake• 13 years ago

Greatness of games is in the eyes of the beholder - the only Japanese games I truly find great were shadow of the colossus and ninja gaiden black. And they never were technical gems to begin with.

Also my experience with japanese products is that they don't "get" software, not that they are bad at it. I am sure that the developers are as competent as anywhere in the world but they deliver what they are ordered to.

gnaffle2• 13 years ago

It's not that the Japanese are bad at software. But the big electronics companies never realized the importance of software/hardware integration. Sony even has a lot of in-house expertise that is probably just not put into god use. There is no reason why the on-screen menus on a top-of-the-line Sony TV should be slow when they also make the PS3 operating system.

cdavid• 13 years ago

Software is way too general. Developing games, misson critical softwares or in a body shop doing crappy consulting gigs at a bank are very different jobs.

When you make a game for a console, mistakes are very costly: it makes a lot of sense to get it right the first time. Attention to details is a trait that Japanese culture really emphasises (always think about every possible thing that can fail, triple check, etc...).

Now, for most software products, that's a different story. I think that's part of the story why you don't see great software companies in Japan.

jordn2• 13 years ago

To expand, they're not bad at software per se, but they missed the boat on the idea of connected devices and the whole ecosystem that Apple and Google have done so very well.

Japanese phones were several years more capable than the first few iPhones and at the time it was thought that Japan would never use them. What changed that was how much better a phone was when it connected to a store to buy apps and games. Competition purely on electronics doesn't cut it anymore.

It's a shame Sony didn't realise this sooner, they've made phones, laptops, game consoles, music players for years. They should have been in the position to do the iTunes store or Apps way before Apple. They seem to only be trying to do such a thing now with bolted on crap like replay sharing on PS4.

Edit: Sony have a record label as well!

ippisl2• 13 years ago

It might not make sense for sony to make one device that would replace many, with most money for the software going to other people. This is a classic innovator's dillema.

Also they did build the first ebook reader, but they lost to the kindle. Since the ereader is mostly about building ecosystems, maybe the same would have happened to them with app stores ?

josephlord7• 13 years ago

Even after an edit you seem to have missed that Sony also own global movie and TV studios.

However they lacked the internal structure and strategy to really deploy them effectively. Plus someone would have had to choose a suboptimal strategy for their division's financial results if they were to avoid selling some rights or exclusivity externally but to use it for joined up strategies. (Or the low profit hardware arm would have had to paid commercial rates.)

It also surprisingly gets harder in many ways to negotiate for other rights when you have your own studio/record label and who wants to only watch/listen to Sony content. Anti-trust law may be a factor in this (as a content owner Sony couldn't legally do an Apple and tell their competitors what pricing model to accept) but also it changes the tone of the negotiation and attitude of other parties when they are your competitor.

And finally just when the network technology and the products are getting to the point where a useful internet delivered content ecosystem can be established somebody high up the organisation decides to split the platform and bend over for Google in order for the honour of making the Google TV for US only under ridiculous contract terms based on Intel hardware costs and to be supported by a dreadful marketing campaign it still sows FUD amongst content partners.

[Former Sony (Software Engineer, Product Planner, Biz Dev - all in European TV business)].

ctdonath2• 13 years ago

Agreed. As a former Sony fanboy, I've noted that the hardware is very good/innovative - insofar as it is exactly what it claims and no more. The software has driven me away. A representative anecdote: my Sony Bluray player, a flagship device, is smothered in irritations...the Netflix software is hideous compared to AppleTV, network operations end with me having to positively acknowledge every success ("Update complete, select OK" - well duh, just move on to what I obviously want to do without waiting for me!), the "Play" button just doesn't (on a movie menu, have to go find the remote and hit the Select button instead of just pressing Play on the player), the demo apps/"channels" are awful (the promotion of movie "Salt" tried to be oh-wow with...cheezy webcam resolution on a 1080p display? WTF?), and just one little grating doesn't-just-work after another. I've gone thru this "95% is great but 5% destroys the experience" with at least a dozen devices...ya know, I'm just not going to buy Sony stuff any more, mostly because of "last inch" software.

lifeisstillgood4• 13 years ago

I would suggest that a title change will say it all:

What happened to Japan's electrical giants?

Hitachi's boss says it in the article

  "Digital technology changed everything," he says.

  "In the television industry it means that just one chip is 
  now needed to produce a large and high quality TV picture. 
  So now everybody can do it."

What they did was electrical engineering - but apart from washing machines, everything consumer is on a chip. Hitachi has seen this and run, all the others should be following suit, or trading on their names as brands for Android phones.

makomk• 13 years ago

Of course, Hitachi actually had a semiconductor design and manufacturing subsidiary, and their H8 microcontrollers and SuperH CPUs were quite popular at one point. I think they've sold all that off now though.

lifeisstillgood4• 13 years ago

Well, the chips dont make the money, the software makes the money. Its kind of like why car manufacturers made more money than the car parts suppliers...

Aardwolf• 13 years ago

A vacuum cleaner on a chip? A microwave oven on a chip? A large LCD screen on a chip?

I don't really get what you mean by "everything consumer is on a chip". Making LCD screens is quite hardware-y and I thought quite difficult to do well too.

raverbashing• 13 years ago

More or less this

Let's go back to the 80's. Electronic products had to be done with lots of components. There were chips, but they did much less than what they do today.

Also, more mechanical parts (think VCR, Camcorder, etc)

So the real work was doing more with less components and good quality.

Today, with better chip technology and 'solidization' of technologies. (magnetic tape to flash memory, crts to lcds) today you can realistically have an LCD tv with only a couple of chips (apart from the power source, lcd panel and some other components like speakers and maybe the tuning part). There's nothing much to tweak. There's software, but that's increasingly commoditized as well.

And the japanese apparently can't innovate software-wise.

lifeisstillgood4• 13 years ago

Sometimes the world is too much.

I went off to look up magnetrons (you know, microwave is just a chip with a block of iron and wire)

Hit this on wikipedia:

  or where infants have been placed inside them,[43][44]   
  resulting in microwave burns.

The reference:

http://books.google.co.uk/books?id=pHXdUbiRiA8C&pg=PA87&...

Ok, stopping arguing gleefully with all-comers and going to bed depressed about the sorry state of humankind. And willing to vote for the death penalty should it come round again soon.

InclinedPlane• 13 years ago

In the '70s and '80s Japan was hungry, they wanted to leap up to being a world-class country and a high-tech, first world economy. So they took risks and let innovation rule. Then when the high-tech sector got big they tightened up and reined in risk and creativity, causing them to miss out on several key market turnovers in tech.

Look at the biggest smartphone manufacturers: samsung, apple, huawei, htc, zte, LG. Mostly Chinese, Korean, and US companies. Only recently has Japan seriously entered the touchscreen smartphone market competitively. Maybe if Japanese company's get hungry enough to innovate they'll make a comeback.

speeder• 13 years ago

We had some Brazillian electronics company also flopping last 10 years.

Reasons I indentified: Losing creators and get swamped by middle-manager types... Too bad one of them don't even had a choice (the founder died, and this resulted into them switching from the most inventive electronic toys I ever saw, to low quality cheap DVD players, Karaoke machines and cheap Guitar Hero rippoffs using their Karaoke tech)

Second: Neglecting software... This one is obvious that when I applied to those companies as programmer, they wanted to pay me less than my rent was, absurdly ridiculous (and they all have a very high programmer turnover rate)

Third: Excessive outsourcing and subsequent problems in managing quality. This was particularly striking with one company, that fixed the first two issues and licensed from China some products (developed in China, and not rip-offs) that would have high demand here.

Indeed, that plan ALMOST worked, their products sold so much they frequently had online store freezing by excessive visits, and their products were always out of stock...

But then reports showed up of exploding chargers, screens with lots of dead pixels, and so on... This went for about 6 months, with the demand still outstripping the negative reports, but eventually it became clear they could not find a outsourcer to do it properly, and they had divested themselves of their factories many years ago, and had no know how anymore in manufacturing, and did not even had sufficient knowledge to visit the outsourcers factory and force them to fix their process.

They are bankrupt know, to much unhappiness of the costumers attracted in their short lived renaissance.

da02• 13 years ago

Pardon the tangent, but did you ever write/blog about those "inventive electronic toys"? I am not speaking as a producer, but as a consumer and over-grown child. Were they like robotic/Legos/construction kits like they had back in the 80s/early-90s? Or something completely different?

Isamu• 13 years ago

I was expecting at least a mention of Mecha-Godzilla. What happened to him was the old Godzilla.

Sony was a really big inspiration to Steve Jobs, or at least Akio Morita was. It has been very surprising to me to see Sony slip repeatedly. I think they got caught up in just packing in features without a real vision to unify what they were trying to accomplish.

Poyeyo• 13 years ago

Sony is being killed by Sony's content division, that is, the movie studio and the music label.

davidroberts• 13 years ago

I think they are failing because sometime in the mid-Nineties, in the effort to compete with lean and hungry overseas companies, they lost their legendary reputation for quality and customer service, as they tried to respond to changing circumstances.

A couple of examples of my own:

Around 1996, I bought a cassette recorder made by Aiwa, which had been a fairly upscale electronics brand. It looked nice from the outside, but when I examined it closer after buying it, I realized it was a fairly crude, generic cassette recorder of the time, made in China, probably the generic output from a factory there that Aiwa had slapped their name onto.

It failed in less than a month. I brought it to the store for a replacement and that one failed too within thirty days, exactly the same way the first one did. Obviously, Aiwa had not done extensive testing on this model, and I think probably didn't even design or supervise its manufacture.

In the early 2000s, I bought a Sony Palm OS PDA. It was very advanced and had great features that I loved. But it failed in two weeks due to bad connection to the lamp that lit the LED display. After a few minutes' search on the Internet, I saw this was a well-known problem with this device, caused by a design flaw.

I took it back to the store, and got a replacement that failed exactly the same way in two weeks. The store wouldn't give me another, so I had to rely on Sony's warranty service.

It was my worst-ever warranty experience. After a long conversation with customer service reps in India, I was able to convince them it was actually failing. They sent me a box to return it in. It took almost a month to come back, only to fail with the same problem about three months later.

I went through the whole process again, waited another month. This time the repaired (or replaced) device came back rattling around in a box with no packing material. It too failed, several days after the one-year warranty expired.

I think the decline of the Japaneses electronic giants has been caused by a combination of several things. Japanese technology companies built their reputations during the late Sixties and Seventies, at the start of the Japanese economic boom, when they had a highly skilled workforce willing to work at relatively low wages, compared to the US or Europe. They had already sharpened their quality and innovative abilities in the intense domestic Japanese market, which was extremely competitive and where the consumers were very picky about quality. That market was protected, so there was almost no competition from overseas.

When they moved into Western markets, they were the young, scrappy underdog taking on dinosaur companies like RCA and Phillips, that could not respond fast enough to compete effectively against them. They were also aided by the low value of the yen relative to the dollar, which made their products a very good value.

So all of these things have changed. Complaints of unfair trade eventually forced Japan to open their domestic market to overseas competition. As the article pointed out, now Japanese companies are the dinosaurs in their domestic market, competing against Apple and Samsung. Meanwhile, the yen is very high against foreign currencies, which hurts them badly in export markets.

The Japanese labor market has also changed. Younger Japanese are much less willing to work with the dedication their parents and grandparents had. Wages have gone up, and are equal to or higher than those in the US and Europe, and like those countries, they have tried to cut costs by shifting manufacturing overseas, which has resulted in a decline in quality.

Also, the Japanese population is declining, with fewer and fewer young workers, and those coming into the job market have been conditioned to expect comfortable, high-paying, lifetime office jobs, not manufacturing jobs.

Meanwhile, the inefficiencies of the lifetime employment system in Japanese companies have made it very difficult to adapt to changing circumstances by laying off workers, even as that system is starting to break down.

It's like a perfect storm of bad news for Japanese companies, but in many ways it is very similar to what happened to electronics giants in the US thirty years earlier as they tried to defend against Japanese competition and eventually failed.

adregan2• 13 years ago

> Younger Japanese are much less willing to work with the dedication their parents and grandparents had.

I have a few "salary man" friends in Japan, and they work really really hard. Like "hard to imagine anyone working harder".

However, if my experience working in (non-tech) companies in Tokyo has taught me anything, it's that people have to work so hard because of some startling inefficiencies (and some serious peer pressure) and a great resistance to integrating technology into the work flow (e.g. this is the first year I received internet in the office).

This sounds hard to believe as Japan has produced some amazing technological innovation, but there is a really strange mindset in the higher ups concerning digital conveniences, and they appear to be influencing protocol. For example, ATMs have working hours, and some are not available on weekends at all, and others have higher fees the later in the evening it is (and this is a cash dominate society).

gommm• 13 years ago

Ah, a japanese friend of mine used to joke that it was little dwarves working in the ATM that gave out the money. The extra fee in the evening was just overtime pay :-)

moheeb• 13 years ago

I find that type of stuff fascinating. I wonder what they think of our movie pricing (cheaper during the day)?

rdouble3• 13 years ago

Wages for engineers in Japan are nowhere near equal to those in the USA.

WildUtah• 13 years ago

Wages for doctors and bankers are even lower in Japan compared to the USA. Wages for food workers and janitors are much higher.

Nevertheless, the top majors at the U of Tokyo are all various forms of Engineering while the top majors at Harvard and its ilk are Economics, Political Science, and Psychology. That tells you a lot about what the smartest young people think is valued in their society.

technoslut• 13 years ago

>Wages have gone up, and are equal to or higher than those in the US and Europe, and like those countries, they have tried to cut costs by shifting manufacturing overseas, which has resulted in a decline in quality.

It didn't hurt their auto manufacturing industry. Japan has moved some manufacturing to America and their cars still remain at the top of any car site list just as they have always been.

>Complaints of unfair trade eventually forced Japan to open their domestic market to overseas competition.

The complaints were true just as the ones leveraged against China now.

While you may have given a very detailed response, the truth was that Japanese never cared about as much about software as they should have.

The situation has become so dire in Japan that Sony is making phones, at least on par with Samsung, but cannot sell them in their own country due to perception. It's a consequence of a reputation that has been degrading for a decade.

I'd argue that Japanese culture has changed dramatically in the "Nintendo" era. It's one that left behind the tradition of their own culture to adopt Western values while many Western tech companies today base their values upon that same tradition.

SkyMarshal• 13 years ago

This makes me wonder if it's a hardware vs software problem. Hardware is universal, the same design can appeal to any culture. Cars are still generally hardware products, and even though they're run by software under the hood, the interfaces are still very hardware oriented (though high-end cars are moving toward software interfaces).

Consumer electronics, like smart phones, tablets, media players? The hardware is being commoditized, the interface is heavily touch/software oriented, fewer physical buttons, etc. I wonder if the Japanese aren't at some cultural/linguistic innovation disadvantage there, at least relative to the very software-oriented US.

ropz• 13 years ago

On a related but tangential theme, I once started an argument by claiming that Japanese culture does not support the emergence of strong individuals. Perhaps, in electronics as in software, it really does take someone with a huge ego to send a product back to the development labs because 'the black is not black enough'.

josephlord7• 13 years ago

There is some truth in this article but it misses some of the really key factors.

1) Value of the Yen. The Yen is seen as a safe haven and has been at almost ridiculous levels (considering trade balances and government debt) at least since late 2008. This is crippling exports (and/or profitability) in these price sensitive markets (TV's, computers, phones) as even though much production is abroad they still have massive cost bases in Japan.

2) Development of Korea. LG and especially Samsung took the place of the aggressive upstarts driving down prices and then building up the quality as Japan once did to the West in markets such as cars. It will be interesting to see what China's development does to Korea in 15-20 years. So far the aggressive pricing from Korea has kept Chinese TV brands from prominence but that may not last.

3) As Japan prospered and incomes rose it became uneconomic to manufacture commodity items there. Outsourcing and offshoring production damages the feedback and development loop between production and design that enables efficient optimum design of products. Also they narrowed the parts of the supply chain that they supplied to focus on the high value ones that could still be profitable but that costs control and foresight into important developing areas. e.g. Samsung could develop LCD panels in exact form factors to fit their devices and to use them as structural elements in TVs getting a jump start on Sony. (Sharp had[has?] their own panels but the quality wasn't uniformly high and they were overly dependent on their home TV market anyway).

4) There is very little profit in many electronics items. TVs especially are not a source of profits (maybe Samsung makes some but it is hard to tell from their annual reports). Aggressive and falling prices, unstable panel supplies and the fact egos and ecosystems are on the line means that the once stable profit source of CRT TVs has been replaced by an LCD bloodbath. Even in mobile phones only Apple and Samsung are really making money (along with a number of component suppliers getting their slices).

[Former Sony employee.]

wsc981• 13 years ago

I think it's also an issue that many Asian companies haven't figured out how to add value with software the way a company like Apple does. Apple can ask a big premium on their tablet and phone devices based on the exclusivity and capabilities of iOS. Certainly lots of innovations could still be achieved in (e.g.) the television markets by creating great software for these products. We still don't have really "smart" television sets.

This is the reason why I think the rumoured Apple television set will be a big hit with very nice profits when it finally arrives.

The key is to differentiate with the competition and if you can't differentiate on a hardware level, then you have to do it on a software level.

lmm2• 13 years ago

Apple is an outlier even among US companies; I don't think there's much to be gained by asking "why aren't Asian companies like Apple".

I think in the case of a lot of electronics (e.g. TVs) the market has been commoditized, which is usually permanent. The big profit margins are gone, and they won't be coming back.

josephlord7• 13 years ago

> I think it's also an issue that many Asian companies haven't figured out how to add value with software the way a company like Apple does.

I think you can completely remove 'Asian' from that sentence. Few companies ANYWHERE have figured out how to add value with software like Apple does.

I'm still highly sceptical of "smart" TV although I am a big believer in easy UI and attractive content. My own long term view (since about 2002) has been the TV control will move to a handheld touchscreen display (a tablet) removing most or all of the UI from the main display.

I also think there are good reasons why Apple hasn't entered the market. It will be hard, even for them to make money there. Also to deliver what is accepted as a TV requires significant localisation to broadcast and cable standards. Apple may be able to go with HDMI and internet connections only but that isn't something that many other companies would get away with. I don't think that they will make real money if they do come although they could still hurt Samsung which might make it interesting to them.

w1ntermute2• 13 years ago

What's interesting is that the value of the yen has plunged in the last month or two, due to hardcore quantitative easing by the BoJ. The first signs of change are maybe, just maybe, in the air.

What's also interesting is that Sony's recently released Xperia Z Android phone has sold quite well.

cube13• 13 years ago

>Sharp had[has?] their own panels but the quality wasn't uniformly high and they were overly dependent on their home TV market anyway.

Sharp's supplying Samsung with LCD panels: http://www.bloomberg.com/news/2013-03-19/sharp-affirms-opera...

josephlord7• 13 years ago

Samsung has long bought in additional panels on the spot market in addition to using their own production. The higher end TVs tended to get their own panels and I think they found it wiser to mop up any bargains in the spot market rather than let competitors undercut them drastically.

I think that shows:

1) How many TV's Samsung is selling. 2) How desperate Sharp is for cash.

What isn't clear from that article is whether these are high or low end product and how profitable it is.

BenoitEssiambre• 13 years ago

I think you are right, economic factors have made a big difference. The Yen, the liquidity trap, the disproportionately old population and resulting humongous government debt are the main culprit.

It is impressive that Toyota has manage to survive.

People say that Japan is good at hardware but not at software. I own multiple Samsung products and their software is downright embarrassing yet the company is thriving.

They all have excellent hardware but if I for example use the 'smart' part of my 'smart TV' it is unresponsive, crashy and generally a terrible experience. My Samsung blu-ray player takes seconds to respond to button presses and integration between my Samsung devices which is promoted heavily by them is not reliable and the user interface is terrible.

Yet Samsung manages to dominate and actually make decent devices when the mostly rely on other's software (Google).

IMO the difference between Korea and Japan can be explained by economic factors not technical ability.

continuations• 13 years ago

Japan's electronic giants fell because there's no longer an electronic industry. The computer industry has "annexed" the electronics industry and the Japanese companies were never good at computers.

mikecane2• 13 years ago

Minimal Mac just ran a picture yesterday that does indeed say it all: http://minimalmac.com/post/48088436702/yep-pretty-much-sums-...

BTW, I kept looking at the first picture and wondering how many people were employed making all those devices versus those now making the components for the iPhone.

programminggeek• 13 years ago

Um, maybe they are failing because modern electronics are more about software than hardware. If devices are becoming very small PC's with ARM processors, then of course software companies like Apple, Google, and Microsoft will do well.

Companies like Sony have hardware DNA, not software DNA.

pornel• 13 years ago

Interesting tidbit in the article is that majority of Sony's profit comes from their life insurance business:

http://www.splatf.com/2011/11/sony-profits/

cmsimike• 13 years ago

Sony.. just ugh.

I couldn't tell you how big of a Sony fan I was - TVs, cd players, PS 1-3.

Then they removed my ability to run Linux on my PS3. They stopped caring about giving the PS3 any new functionality that wasn't for plus members.

Blu-rays that I bought stopped working in that system, or took forever to load because the blu-rays started downloading massive new commercials to play for me before the movie started.

That was the breaking point for me.

What happened to Japan's electronic giants? I can't speak for all of them but Sony started blatantly chasing money. I get that companies exist to make money but, for crying out loud, don't make it so obvious that you're only out for money.

josephlord7• 13 years ago

> What happened to Japan's electronic giants? I can't speak for all of them but Sony started blatantly chasing money. I get that companies exist to make money but, for crying out loud, don't make it so obvious that you're only out for money.

Have you seen the losses that Sony has made over the past decade? They are pretty desperate and need to chase money. It isn't like they have massive margins.

They main problem is that they are amateurs at chasing money compared to companies like MS.

VLM• 13 years ago

A conflicting opinion: The market used to be narrow where being Japanese made actually mattered. Now flood that market with absolute cheap garbage from China and it bifurcates into mostly purchasing cheap garbage and "everything else is better but costs twice as much and it doesn't matter who makes it as long as its not China".

What I'm getting at is the fight shifted from Japan vs the world to China vs the world.

r00fus• 13 years ago

All my nail clippers are japanese make. They're truly amazing compared to the crap that floods the aisles of your average US retail store.

DanBC• 13 years ago

Japan suffered economic slump. Where people used to dump old electronics to buy new versions (there's a Japanese word to describe the perfectly good trash that people used to collect to furnish their homes) they had to stop because they just couldn't afford to do that any longer.

ekianjo• 13 years ago

"Mr Nakanishi's strategy is working. Hitachi is back in profit. Hitachi trains are the front-runner in the competition to replace all of the UK's fleet of inter-city high-speed trains. "

Mouhahha. Strategy is a long term thing. You can't the effects just in a couple of years. What a joke of an article.

gcb02• 13 years ago

It's the same economic shift we see since industrial revolution.

Nobody here remembers, but one Italy was the cheapest labor. Everyone produced cheep stuff there. Then some companies started to produce quality product (and win races with what was cheap cars) and to be proud of made in Italy (which was a bad thing before). And when Italian design became expensive, markets moved on.

I think there was another country in this step, but let's say cheap labor is now in Japan. When it started, only college students would buy Japanese cars (death traps) and Japanese stuff was deemed cheap. Come the same cycle. Companies start to show pride and produce quality stuff. Now made in Japan is expensive.

Market moves on to China... Kia is now the car of the new rich with bad taste. But this will change soon (they are even trying to win prestigious rally in Africa) and soon Chinese products are going to be expensive. And probably some Latin or African country will be the next cheap labor.

rdouble3• 13 years ago

Kia is from Korea.

vetinari• 13 years ago

Yup, Kia/Hyundai are from Korea, and the cars sold in EU are also made in EU.

gcb02• 13 years ago

You are correct. I think Korea is the country i couldn't remember before :)

And it's following the pattern alright. Kia, Hyundai, lg.

All companies that started with race-to-the-bottom products that are now trying to be market leaders

geon5• 13 years ago

> Kia is now the car of the new rich with bad taste.

Perhaps it is. I wouldn't know.

Here in sweden, Kia is kind of popular (the Sorento SUV has a large market share), and has a reputation as being good quality to a reasonable price.

yekko• 13 years ago

It's simple, they didn't let their developers run free and are paid too little. You have to pay the creators of wealth in order to get wealth in return.

anizan• 13 years ago

Sony has been plagued with inability to deal with technology which disrupts their business model in any way.

Network walkman which didn't support mp3 on purpose(would cannibalize media division) was so technologically stupid and ever since then they have lost the plot

adregan2• 13 years ago

Though, Abe, the current Prime Minister of Japan a very conservative fellow, he surprised (at least) me the other day by announcing that he's interested in creating a culture of entrepreneurs and startups.

The most shocking quote in a recent piece in the WSJ[1] might be Abe, referring to Rakuten.com's Mikitani, saying "I ask Mr. Mikitani to not be afraid of being labeled a trouble maker and to speak his mind to his heart's content." You really can stir up some trouble in Japan by suggesting changes to the status quo (something foreigners do with regularity), so it's very interesting to see a guy like Abe say this. Maybe I misjudged the guy.

I think Japan needs to move away from the big electronics companies and focus on creating an environment more conducive to creating young interesting companies.

1: http://online.wsj.com/article/SB1000142412788732434580457842...

dharma1• 13 years ago

Often wondered this too. Japanese hardware is still good, but difficult to compete on price compared to Korean/Chinese.

They have great developers, and have had for a long time, but it feels like the corporate structures themselves are too rigid to allow innovation to surface.

You know these companies are doing something wrong when hobbyists have to reverse-engineer their firmware to get the functionality they want and need (I'm looking at you Canon and Panasonic). Sony is not much better, the user interfaces of their hardware feel 10 years old and the recently opened "app store" for their cameras is a joke, with no SDK or 3rd party apps available. As they focus away from TV's to cameras and sensors, that's something they should definitely fix if they want to succeed.

The best thing these consumer electronics companies could do is open source parts of the firmware/software and engage more with consumers who are taking a more active role in developing products these days.

What happened to Japan's electronic giants?

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