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  • Demand for Electronics in Japan to Drag in '98
  • January 13, 1998 (TOKYO) -- Experts expect 1998 to be another hard year for the electric and electronic industries in Japan, where demand has sagged.

    Executives at the New Year's party held jointly by the Japan Electronic Industry Development Association and the Electronic Industries Association of Japan at a Tokyo hotel on Jan. 7, 1998, echoed their disappointment for the coming year.

    Some, however, said they hope the hard times will spur innovation.

    Nikkei asked executives to answer the question: "What is your perspective on the electronic industries or your company for 1998?"

    Taizo Nishimuro, chairman of the Japan Electronic Industry Development Association, president of Toshiba Corp.

    It still will be difficult for Japan's electronics industry from the beginning to mid year, but gradually there will be an upturn in the second half as the tax reduction and other measures carried out by the government turn out to be effective. Personal consumption of home electric appliances is not assured, but computing and telecommunication equipment for business use will grow more.

    Nobuyuki Idei, president of Sony Corp.

    The economic environment will remain severe in 1998. We will regard these times as a chance to revolutionize our company.

    Take personal computers for example. Sony's notebook "VAIO" was designed for family use. Matsushita Electric Industrial Co., Ltd. and Sony can develop and sell more home-oriented computing products than other computer makers, including Fujitsu Ltd. and NEC Corp. We have to achieve further improvement. Conventional desktop computers will find it hard to find their way into more families.

    Sony is already prepared. Set-top box and cable box products seem promising. The time is coming when Sony will prove its real worth as a home electronics manufacturer.

    Takashi Kitaoka, president of Mitsubishi Electric Corp.

    Falling consumer interest will make this year's business slack. An uptrend cannot be expected, as the government doesn't seem to be proceeding strongly with administrative reform.

    Looking ahead at our company this year, we will have difficulty in home electronics as before. The raise in the consumption tax is reportedly the biggest cause, but I don't think that it is the only reason.

    The home electronics industry also is being damaged by the depression in housing construction. If new construction orders drop below 1.3 million a year, it would slow down shipments of home electric appliances like refrigerators, washing machines, televisions, videos, stereos and other products. Last year, refrigerators and washing machines didn't sell well.

    Telecommunications is not bad. But the saturation level of mobile telephones has jumped, and its growth rate will be stagnant. Business of satellite communications is also expected to grow, but it will take time to grow remarkably.

    PCs are fairly good for business use, but are a difficult sale for family use. This may be caused by the lack of good sales strategy on our side.

    Semiconductors will be moving poorly. Sales of DRAMs fluctuate cyclically from generation to generation. This generation of 64Mb DRAMs will ride a bad wave, as I anticipated from the beginning.

    Kakutaro Kitashiro, president of IBM Japan Ltd.

    Home PCs should have three factors: low price, good usability and some special feature. Machines of this kind will diffuse through society in 1998.

    In late 1997, we shipped desktop computers below the 200,000 yen (US$1,530) mark for families. Voice input software emerged as a product. After the desktops, we will put advanced notebook PCs for family use on the market this year.

    Tetsuya Mizoguchi, vice president of Toshiba Corp.

    Replacement of mainstream personal computers will start in 1998. Taking the place of desktops, notebook PCs will become major factors in the market. They won't occupy 50 percent of the share this year, but they will surely keep expanding.

    Personal demand will remain dull. PCs have spread to almost every household with a person who can use them. Besides this saturated market, we have to create another one. Toshiba will send out some products to a new market. Notebook PCs will take a main role there.

    (BizTech Editorial Dept. & Hi-Tech News Center)

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    Updated: Mon Jan 12 18:12:24 1998