Abstract
Although the consumer electronics market differs per product and any general description is a simplification, some common characteristics need to be described. Some products are totally dependent on factors other than the attractiveness of the product itself. The following list gives a survey of some consumer electronics products and their dependence on complementary products and functions:
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Notes Chapter VIII
In countries where the growth of the market is slow, it also means that the life cycle is longer.
James (1989), p. 189, and information by the British colour television manufacturer Spectra, itself having the brand name Akura, which does not sound particularly British.
Ishikawa, and Ueda (1984), pp.140–1.
Wall Street Journal, June 11, 1990; Financial Times, January 8, 1990.
Source: Arthur D. Little, Inc. Consultants.
Data from: Economic Consulting Services (1980), pp. 46, 47.
Commission of the European Communities, SEC(81) 428, March 13, 1981. The remaining companies are mainly Thomson (formerly Thomson Brandt, a state-owned company, which acquired Saba, Nordmende, Telefunken and Thorn-Ferguson), Nokia of Finland (combining Sabra of Finland with such acquisitions as ITT-Standard Elektrik Lorenz, Oceanic), Philips, Grundig, Bang and Olufsen, Metz, Seleco (a combination of Zanussi and some other Italian companies) and Prandoni.
These nine are only the major firms. The following is a non-comprehensive list of manufacturers in Europe: Bang and Olufsen, Elbe, Grundig, Imperial, Metz, Mivar, Philips, Prandoni, Schneider, Seleco, Spectra, and Thomson. Japanese subsidiaries are: Akai, Hitachi, Matsushita/Loewe Opta, Mitsubishi, Sanyo, Sharp, Sony/Wega, and Toshiba. Koreans are Goldstar and Samsung. A Taiwanese subsidiary is Tatung. Furthermore, there is a French-Chinese joint-venture, Kaisui. Some companies are assembly units only. However, the total is amazing. There are more minor companies. Source: the author’s memory.
Commission of the European Communities, DG XIII, Working Document, Nr. 285, Brussels, July 14, 1988, p. 2.
Prestowitz (1986), p. 201.
Electronics Industry Association of Japan: “Electronics Industries in Japan, 1979–1980”.
Source: Electronics Industry of Japan (EIAJ) Survey.
Sources: Electronics Industry of Japan (EIAJ) Survey; EIAJ: Annual Editions of “Electronic Industries in Japan”; Japanese Ministry of Finance, export statistics; various issues of TV Digest; Economic Consulting Services (1980); United States International Trade Commission, USITC Publication 1153, June 1981.
Porter (1990), p. 405.
Prestowitz (1986), p. 203.
James (1989), p. 13.
Source: Electronic Industries Association of Japan: “Electronic Industries in Japan”, Annual editions.
Wyles, John: “The Japanese Onslaught on American TV Makers’; Financial Times, August 18, 1977; Nevin, (1978), pp. 165–179. Maswood (1989), pp. 54–55.
Prestowitz (1986), p. 201.
Porter (1990), p. 162
United States International Trade Commission, USITC Publication 2291, June 1990.
Prestowitz (1986), p. 203. See also: Wolf (1983), pp. 22–61.
Yamamura (1986), p. 184.
Shannon, Thomas F., Cullen Paul D., and Howard, Lauren N. p. 6.
This Committee should not be confused with the European Committee of Mechoptronics Producers and Connected Technologies (COMPACT), dealing with Compact Disc players, a very successful and talented association.
Prestowitz (1988), pp. 203–4. A copy of the letter of May 20, 1977, from USTR Robert Strauss to Japan’s Ambassador, Fumihiko Togo, has been annexed to Shannon, Thomas F., Cullen Paul D., and Howard, Lauren N., Investigation No. AA 1921–66.
Sources: TV Digest, August 21, 1989; “Statement of S. Nehmer Before the U.S. International Trade Commission in the Matter of the Television Receivers and Subassemblies Thereof, TA-2036”; Washington D.C.: Economic Consulting Services Inc., March 5, 1980; “International Consumer Electronics Data Base”; New York: International Competitive Assessments.
United States International Trade Commission, USITC Publication 1153, (June 1981), p. A-19.
Tsurumi (1976), pp. 93–94
T.V. Digest, December 5, 1988.
TV Digest Vol. 30, No. 32, August 6, 1990.
Japan Electronics Industry, June 1987.
TV Digest, December 12, 1988.
Japan, an International Comparison“, Keizai Koho Center, 1989.
American colour television set makers were apparently not very careful in the choice of their partners. Aiwa would probably not be very enthusiastic to sell CTV sets competing with those of Sony. Itoh exports CTV sets from Hitachi, but is not likely to import them.
Not only by Brian Hindley of the Financial Times. The English, Dutch and German administrations have submitted papers for discussion in the Community, according to which the European Commission has implicitly been accused of such a policy. In these discussion papers, the difference between European and Japanese distribution has been neglected and all the arguments of the “Japanese dumping” lobby have been adopted. Unfortunately, these papers cannot be quoted. The Brussels lawyer Pierre Didier (1990), p. 103, defending major Japanese companies in anti-dumping cases: “Indeed, exporters with all or a majority of domestic sales to unrelated Japanese distributors (thus at a stage close to ex-factory) have shown much lower average normal value than that of exporters who sell predominantly to dealers or end users on the domestic market, hence a much lower dumping. These blatant unfairnesses…” Hereby Maître
Didier confirms the analysis in Chapter V that part of the selling costs is made at the distributors’ level. These costs are investments in a “Bertrand market”.
As seen in Chapter V, Matsushita’s selling, general and accounting expenses are about 15%. This is comparable with the selling costs of European companies borne by the sales organizations of the manufacturer.
Sources are TRM (December 1986) and GfK (December-January) - both market research institutions - 1987 studies of the Japanese and UK markets respectively. Prices are averages, including rebates. The 17“ sets sold in the UK and Japan have been compared, because at that time no 17” screen was produced by Japanese manufacturers in Europe. The English set included remote control and probably the Japanese set of Matsushita was also supplied with remote control. The difference between the PAL and NTSC system, of which the first is the current system in the main part of Europe and the latter in the US, Japan and some other countries is about 2%. The more expensive PAL system offers a better picture. The list price of the product was Yen 168,000, but the average price was Yen 85, 000.
UN Statistics reveal a very low income of the retailer in comparison with other participants in the economy and compared with other industrialised countries, such as the United States, the United Kingdom, Germany, Italy and France. The equalisation of income does not work.
Toshiba had sold machinery to the Soviet Union which were on the list of the Coordination Committee (Cocom) as strategically sensitive products. Mr Shoichi Saba had to resign, to resume his activities as an adviser, and television sets were smashed by angry U.S. senators.
All models of Sharp in Japan are more expensive than the models made in the EEC or imported. Source: GfK April/May 1991. All Sharp models, either made in, or imported into, the EEC are cheaper than on the Japanese market. If products assembled in the Community are sold at dumping prices, the Community industry is practically powerless to do anything against it. The problem lies in the Japanese market, where Japanese manufacturers have huge profits. If Sharp wishes to do so - which it apparently does - it can undercut the prices of European producers, or of exporters who themselves have an open home market, and depress their profits to zero.
Regulation No. 2423/88 of July 14, 1988, article 13:10.
GATT: “European Economic Community, Regulation on Imports of Parts and Components; Report by the Panel adopted on May 16, 1990 (L/6657).
Walter Bruch is the intellectual father of PAL (Phase Alternation Line). The patent belongs to Telefunken and negotiations on the conditions for licenses have been conducted by the I.G.R. (the Interessengemeinschaft der Deutschen Rundfunk-and Fernsehindustrie). I.G.R. had negotiated ably on behalf of the industry’s interests. Restrictions were imposed on some non-European manufacturers, among which the Japanese, so that they could not export a greater number of PAL sets with screen sizes of 20 inches, or more, than they sold domestically. Since Japan is an NTSC country (NTSC is National Television Standardization Committee), the number of sets to be exported to Europe exceeding the 20“ size was limited. France adopted the Séquentiel Couleur à Mémoire (SECAM), a system mainly embraced in Eastern Europe so as to make Western broadcasting difficult to receive. Source: interviews with some business leaders in Germany.
The conclusions were based on a report of the Boston Consulting Group.
National Economic Development Council: “Industrial Strategy: Electronics Consumer Goods Sector Working Party; Summary Note by the Chairman”; NEDC, March 1, 1979.
NEDC: “The Role of Inward Investments in the Electronics Consumer Goods Sector”, SWP, 1979.
NEDC Electronics, Consumer Sector Working Party: “The Electronic consumer goods industry, a report of the second stage of the SWP’s strategy”; NEDC, July 1982. A representative of Matsushita, Mr Imura, was a member of this SWP, chaired by Pye director Griffith. The presence of a Japanese person in this semi-governmental institution is not a phenomenon not very commonly encountered, neither in the West nor in Japan.
As mentioned in the summary note of the Chairman, document NEDC (70).
The Japanese estimate of their production in the EEC is about 3.19 million colour television sets in 1989, or about 15% of the European market (together with imports the total approaches 30% of the market). Sony U.K. is supposed to produce 0.63 million (1989 figures; sources: data made available by Henri Anus, Directeur-Général Délegué of the French consumer electronics association Simavelec, partly from Press cuttings); Matsushita (U.K.) 0.48 million, Hitachi (U.K.) 0.18 million, Mitsubishi (U.K.) 0.23 million, Toshiba (U.K.) 0.39 million, Sanyo (UK) 0.18 million. All far below the critical level of the British Sector Working Party.
The observer status of the Republic of China (Taiwan) was ended in November 1971.
HSYY document C/M/124.
Source: BREMA. The discussions with Japan about Voluntary Export Restraint had actually started before, in 1973. The Radio Industry Council, a cooperation of UK component and set makers had asked the British Secretary of State for Trade and Industry, Mr Chapple, for action. He advised industry-to-industry talks, which started in 1973, but after the Japanese threatened to abandon the talks. Source: Geddes (1991), pp. 385–6. Unilateral measures against Korea and Taiwan appeared to be helpful for the resumption of discussions. And they greatly helped the Japanese.
Nihon Keizai Shimbun, April 21, 1979.
In view of the conditions of the PAL licensing agreements with the Japanese, this was hardly a restraint as far as exports from Japan were concerned, let alone a voluntary one, severely fought against by British industry.
James (1989), pp. 10–11.
Geddes (1991), pp. 401–3.
Mitsubishi (U.K.) had, according to the Nihon Keizai Shimbun of April 21, 1979, a capital of £ 355,000.
But, as shown in Chapter V, the Japanese have their own quality problems.
Financial Times, April 5, 1988.
Financial Times, June 25, 1991.
Cawson (1989), Ch. III.
According to GfK studies, Japanese brands and some supplies to OEM customers that can be detected. A combined Japanese market share of about 30% can be derived from these figures.
United States International Trade Commission, USITC Publication 1153 (June 1981), p. A-27.
Nikkei Sangyo, November 17, 1988. Sony has relocated its TV Division Europe from Tokyo to Fellbach, West Germany.
The French commercial agreement dates from 14.5.1963 and a protocol was added in 1966, in which a letter from the Japanese Government confirms agreement on these quantitative restrictions. (Décision du Conseil, du 25 février 1991 autorisant la prorogation ou la tacite reconduction de certains accords commerciaux conclus par des États membres avec des pays tiers, No. 91/104/CEE, Official Journal of the European Communities, No. L 54/36, 28.2.91.)
Official Journal 1968, L. 148/1.
Regulation No 2632/70, Official Journal 1970 L279/35. The same rule is applicable to tape recorders according to Regulation 861/71, Official Journal 1971, L95 /11.
Financial Times, July 16, 1991.
European Electronic Component Manufacturers Association (EECA), London. Printed in Germany, 1978.
The European Association of Consumer Electronics Manufacturers was founded, inter alia by the author, in the meantime in 1978.
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© 1993 Physica-Verlag Heidelberg
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van Marion, M.F. (1993). The Bleak Image of Colour Television. In: van Marion, M.F. (eds) Liberal Trade and Japan. Contributions to Economics. Physica-Verlag HD. https://doi.org/10.1007/978-3-642-46942-8_9
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