David Kuo's Blog

The trio of Panasonic, Sony, and Sharp are quickly falling behind in the electronics industry. All three companies are reporting huge losses, and solutions only minimize the damage. Each company is losing ground in the electronics industry, failing to compete with Apple, LG, and Samsung on TVs, phones, and tablets. Panasonic has cut 39,000 jobs within the last year and even skipped a dividend because of the huge losses ($9.6billion). Investors don’t believe the job cuts were enough, and the value of Panasonic’s stock reflects that with a 100 yen drop in a day, reaching the daily limit.

These companies have become too reliant on the sales of TVs, focusing on differentiating themselves with superior technologies (Which is also a case for most of the Japanese tech sector). Competitors caught up on technology and quality, and instead, focus on differentiating through content and applications, which brings a comparably stronger competitive advantage. This is evident with the struggles of the Japanese companies in designing competitive products.

The question is, can they dig themselves out of their current hole? I don’t think so, and if they do, they would have to face the task of positioning their brands better than the likes of Apple.

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