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Merge in the Japanese electronic market is inevitable
28 September 2007In the Japanese technics and electronics manufacturers market the tendency to formation of commercial alliances between the companies, which aspire to cut expenses and minimize risks by development of technologies of following generation, is being observed.
So, this week Japanese corporations Sharp Corp. and Pioneer Corp. have decided to consolidate their business and capitals. In result of transaction Sharp receives 14,28 % of Pioneer’s share holding which, in turn, will get access to the LCD-monitors’ market.
Within last 30-40 years the majority of the Japanese manufacturers of electronics were engaged in release of almost all kinds of technics - from microcircuits and up to double boilers. And until recently this model worked efficiently. But now concerns simply do not maintain a competition from the foreign companies, which prefer to specialize on manufacture of separate products. This provoked compelled cut in prices on the goods that, in turn, may lead to huge losses.
For example, the profit of concern Sharp (their operational profit margin makes only about 6 %), which is considered as one of world leaders in LCD-monitors production, do not go to any comparison with efficiency of incomes of company Nokia (their margin is twice higher). The problem of the market of home appliances and electronics in Japan can be explained by the fact that it is almost impossible to choose only one kind of activity and to concentrate on it. And it leads to decrease in competitiveness of the Japanese companies. So, the only way out from this situation relies in further merge in this sector.
According to the analysts’ forecasts, this situation can be reflected in the Japanese manufacturers of microcircuits and mobile telephones. They cannot compete to such major concerns as Nokia and Motorola Inc.
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