How Japan Lost Its Electronics Crown

By DAISUKE WAKABAYASHI

TOKYO—During a business trip to Japan in 2004, technology analyst Michael Gartenberg caught a glimpse of Sony Corp.'s 6758.TO +3.93% Librie, the first e-book reader with an electronic ink display.

As they have fallen behind consumer electronics giants like Apple and Samsung, Japanese tech firms Sony, Sharp and Panasonic are trying to figure out how to get back on top. The WSJ's Daisuke Wakabayashi explains.

Mr. Gartenberg was impressed. He saw it as a harbinger of a new wave of products that would hit the U.S. But there were problems. The software was in Japanese. It required a computer to download a book and selection was limited.

Today, Amazon.com Inc.'s AMZN +1.78% Kindle dominates the e-reader business and the Librie is little remembered. Sony is playing catch-up with a successor device, which ranks a distant third in the global market.

It is a story that has played out repeatedly over the past 20 years for Japan's once-world-dominant electronics firms. Japanese companies have beaten rivals to the market with hardware breakthroughs—from flat-panel televisions to advanced mobile phones.

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