Dominique Numakura's Newsletter from Japan
May 19, 2006
Business and World Cup Soccer
The Japanese people may not want to admit it; however, we come from a unique and very uniform culture, and can be perceived as strange individuals, such as myself. Business and social settings can be uncomfortable, and sometimes, we feel not as welcomed as our U.S. or European peers. On the other hand, it is relatively easy to predict what most are thinking, and a business plan can be developed using this information.
Japan sent a large contingent of athletes to The Winter Olympics in Italy this past February. A media spectacle was planned since the beginning of the year, and everybody in Japan was talking about The Winter Olympics. Most large electronic companies had ad campaigns for large size LCD TVs and PDP TVs hoping for a spike in sales at retail stores in Japan. Unfortunately, the Japanese athletes did not win any gold, silver, or bronze medals for a while, and the media spectacle cooled down, as well as the sales of TVs. Fortunately for Japan and the Japanese electronics companies, a female athlete won a gold medal, and the Japanese media production showed some sign of life. Accordingly, TV sales showed signs of strength.
Although the Winter Olympic are in the history books, Japanese electronics companies are still manufacturing flat panel TVs, gearing up for the next big event. The World Cup Soccer 2006 will be held in Germany next month. Again, the Japanese media will create an extravaganza. If I were to let on that I am not interested in supporting the Japanese soccer team, I will be called an unpatriotic person.
This could be the last sales spurt for the TV market, however, there is a bigger issue facing the companies; it is whether the Japanese soccer team can survive the preliminary games and go on to the final tournament. If they fail, Japanese retailers will not see a spike in sales during the second half of the big event.
One of my friends in South Korea told me that it is the same situation in Korea for Korean electronics manufacturers. The Korean soccer team has more of a possibility to make the final tournament than the Japanese team. The Korean electronics industry will be able to enjoy the increased sales; however, you donít want to bet on it. The winning of the game is never guaranteed.
Soccer is not very popular in the U.S. Since American people are more interested in major league baseball, The World Cup Soccer matches will have a small contribution toward TV sales in the U.S. during the event in Germany.
Headlines of the week
Toppan Printing (Major printing company in Japan)
Has developed a new label type non-contact IC card, "Felica" for portable devices. It is capable for multiple purposes.
Chi Mei (Major TFT LCD device manufacturer in Taiwan)
Had the same revenue as forecasted for 1st Quarter of 2006, but the income declined 13% from the same period of 2005. The profitable monitor business declined instead of increase of the flat panel TV.
NTT DOCOMO (Major cellular phone company in Japan)
Has unveiled the ring type wearable cellular phone "Yubi-wa".
Alps Electric (Major component manufacturer in Japan)
Has commercialized a new pointing device "KGDD" for the notebook computers. It has enough brightness for out door use.
Nikkan Kogyo Shinbun (Major industrial media in Japan)
Four major component manufacturers in Japan, Kyocera, Murata, TDK and Nihon Densan reported more than 20% increases for the incomes for the fiscal year of March 2006. The booming disc drive business made a major contribution.
Fuji Sankei Business (Economics media in Japan)
Retailing shops of electronics equipment have been making aggressive sales campaign for the large size flat panel TVs before the World Cup Soccer in June.
Hitachi Chemical (Major electronics material supplier in Japan)
Will invest about 3 billion yen to build a new plant of photo-sensitive dry films in Suzhou for the PWB manufacturers in China.
Sony (Major electronics company in Japan)
Will develop the large size OLED panels. Sony plans to build a pilot plant of the OLED devices for large size TV.
UMC (Major EMS company in Japan)
Had a 65 billion yen revenue for 2005. UMC plans to expand the business aggressively to 1 billion dollars in the next 2 years.
Micro Tech (Equipment manufacturer in Japan)
Has developed a high-resolution screen-printing technology with fine screen mask. The new technology can generate clear 10 micron line/space.
Tohoku Device (Device manufacturer in Japan)
Has build the industry first plant of the white organic EL devices in Aomori Prefecture for mobile equipment.
JSR (Major electronics material supplier in Japan)
Will increase the manufacturing capacity of the polarization films for LCD devices to 15 million square meters per year.