Japan’s electronic market unplugged

Tough competition is driving the decline of the former tech giant
Visitors walk by Sony Corp.’s 3-D televisions at the CEATEC Japan, Japan’s biggest consumer electronics show, in Chiba near Tokyo, Wednesday, Oct. 6, 2010. (AP Photo/Shizuo Kambayashi)

Once the dominant force in electronics, Japan has been sidelined lately. The country’s most iconic firm, Sony, announced an annual loss of $6.4 billion last week. That coincided with news that Japan’s Sharp took an $800-million lifeline from Taiwan-based Hon Hai, the Chinese manufacturer of Apple’s iPhones, iPads, and other gadgets—a move that also shed light on the tough competition driving Japan’s decline.

While smartphones and tablets dominate shopping lists, Chinese and Korean firms have also been moving in on the market for video screens and TVs, traditionally dominated by Japan. In the last quarter of 2011, Korea’s Samsung had a 23 per cent worldwide market share in TVs, followed by another Korean firm, LG Electronics, with 13 per cent, while the combined sales of Sony, Panasonic and Sharp accounted for just 22 per cent, according to research firm DisplaySearch.

A Japanese-government fund recently contributed $2.5 billion to combine the display-panel operations of Sony, Toshiba and Hitachi to fight in another market Samsung leads: small screens for mobile devices. It’s a Hail Mary play from the nation that brought us the VHS recorder, the Walkman and the Game Boy—all nothing but collectors’ items now.