Will Japan, Inc. say Sayonara to TV manufacture?

Will Japan, Inc. say Sayonara to TV manufacture?

TOKYO – The TV set – once regarded by Japan Inc. as the focal point of every living room, essential to fuel growing demand for a host of other consumer devices in the home – has turned on its parents, draining their resources and threatening their future.

Japan’s big three of consumer electronics, Sony, Panasonic and Sharp are suffering from television fatigue. While no company seems to have a silver bullet to fix this gloomy situation, the strategy most touted by the media and among analysts here is both blunt and startling:

Get the hell out of the TV business — fast.

Nikkei Business, the Japanese business publication, put a daring headline on its cover in the latest issue that just came out here Monday: Sayonara, TV.

The summary of the cover story is: “Wake up, Japan, Inc. By clinging to the TV business, while accumulating losses, you’re treading water on the way to drowning. It’s time to abandon TV.”

The story is based on a pessimistic assumption – although shared by an apparent plurality of industry experts – that flat TV manufacturers may never be able to squeeze out a profit again. The hard reality is that Japan’s flat TV suppliers, in recent years, have had no choice but to sell their panels at a loss, or forsake selling them at all.

The Nikkei Business story, however, overlooks a possibly significant historical lesson: Ending TV manufacturing in the 1980’s marked the beginning of the end of production, development and engineering activities for U.S.-branded CE companies in the United States. Zenith became LG of Korea, RCA became TCL in China, and the rest fits into the bleak pre-millenial history of American industrial decline.

But all that might not matter so much. Clearly, it’s upsetting to many in Japan that Panasonic, Sony and Sharp – the three biggest flat TV manufacturers here – are no longer making money on TV manufacture.

But also upsetting is the fact that the TV business isn’t just a drag. It’s sucking the life out of the big three.

Ailing Japanese CE manufacturers (fiscal year ending March, 2012)
TAG:Japan Flat TV Manufacture