Japan’s Electronics Giants Struggle to Reboot

By Joseph B. White

 

Three of Japan’s once-mighty electronics giants today look like dinosaurs stumbling around after the asteroid hit.

Today, Sharp 6753.TO -2.37%Corp. warned that it may not survive the projected collapse in its full year profits. Sony 6758.TO +2.08%Corp., once an icon of Japanese industrial prowess, reported a net loss of ¥15.5 billion and operating profit of ¥30.3 billion. As the WSJ’s Daisuke Wakabayashi reported earlier today, analysts polled by Thomson Reuters had expected Sony to post a net profit, and higher operating profit. Sony stuck to its forecast of ¥130 billion for the year ending March 31, but it trimmed its revenue forecast.

EPA

Kazuhiro Tsuga, President of Panasonic Corp., bows deeply after announcing huge net loss.

 

Yesterday, Panasonic 6752.TO -0.72% Corp.’s shares plunged nearly 20% after the company reported a nearly $9 billion quarterly net loss.

The collapse was foreshadowed by the WSJ’s Wakabayashi and colleagues in the WSJ’s Tokyo bureau in a series of articles during the summer, summarized here.

Japan’s electronics companies are suffering from a variety of ills that boil down to a failure to read dramatic changes in their core markets — the very problem many U.S. companies struggled with when confronted by Japanese rivals 20 and 30 years ago.

The Japanese companies were big winners in the consumer electronics markets of the 1980s and 1990s with products such as the Sony Walkman music player, digital cameras, computers, televisions and DVD players. But that list of products is a clue to why they are in trouble now. The Walkman was a smash hit – until it was rendered obsolete by Apple Inc. AAPL -3.31%’s innovative combination of the iPod and its iTunes digital music service.

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