Wednesday, December 5, 2012

The Fall of Giants: Sony, Panasonic, and Sharp

Sony, Panasonic, and Sharp were once the premium brands when it comes to consumer electronics, from televisions to microwaves and digital music players.

Their products often carried higher price tags to reflect their perceived quality, and people snapped them up.  And there seemed no other competitors to hinder their dominance.

However, the landscape of the consumer electronics world had changed.  These Japanese giants have been struggling to turn a profit.

As of late, Sony's debt was downgraded for the second time in a month to one notch above junk status by Moody's. Sharp is already at junk status and is seeking a bailout from the Japanese government. Panasonic is eliminating any unprofitable businesses, which could mean Panasonic televisions may disappear from store shelves one day. And this collapse signals the end of an era for  these Japanese companies.

These companies failed to pay attention to shifting trends and were outmaneuvered by overseas competitors, such as South Korea’s Samsung who had gained remarkable grasp  on digital media and games, mobile devices, software apps and the Internet.  The Japanese, on the other hand, struggled to keep up.

External factors like the rising value of the Japanese yen, which made products exported from Japan more expensive abroad and cut into margins at home, further squeezed these giant Japanese companies.

Read the complete fascinating article here.

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1 comment:

  1. SAmsung played it smart. It started offering good quality and very competitively priced products, especially in the home electronics space. SONY had also shot itself in the foot with its gradually deteriorating quality. Just recently, this summer I returned the SONY VAIO laptop I bought for my daughter. The wireless card is so crappy that it barely got a good signal from my daughter's room. I replaced it with an equivalent model from HP and no issues so far. The funny thing is both laptops used Qualcomm wireless chips - so what could be the difference ? Quality of course. A few years ago I wanted an entry level DLSR and got a Sony and returned it in one day - their SAL lenses are totally garbage ! horrible quality. Two friends of mine - both their SONY HDTV's conked out before 2 years, a 46 in and a 50 in. Both my non HD Sony tvs are dead. I still have my Toshiba and JVC legacy TVs working in a couple of rooms. I own Samsung and LG HDTVs as well as Bluray DVD's from both brands. Got them from Boxing Day sales hence cheap - no regrets so far.

    SONY's reputation is damaged by their quality. They still think they are a premium brand, hence their stubbornness to drop their price, when they're not. When you go to appliance stores today here, you'd be surprised to see Samsung and LG washing machines, dryers and they're more technologically savvy than GE, Maytag nor Whirlpool.

    Watch out for Kia and Hyundai espcecially. They're creeping into the automobile space. The luxury Hyundai Genesis and Equus are so highly rated pound for pound and beats the heck out of MB and BMW in many reviews. You can get real luxury quality for 30K less but again buyers in the luxury market don't really care about performance. they're more in the image it brings.