Japanese electronics firms are beginning to see a turnaround, although they remain a shadow of their former selves. Once global leaders, these companies were hit hard by competition from South Korea and China, as well as the rise of digital giants like Apple and Google. However, they are now showing signs of recovery, with Sony’s share price doubling in the past year and Panasonic posting its first annual net profit since 2011.
This revival is largely due to a shift in strategy, with firms focusing more on profitable areas such as car electronics, batteries and energy-saving home appliances, rather than trying to compete in the saturated smartphone market. For example, Panasonic is now the world’s largest supplier of car batteries, while Sony’s image sensors are used in Apple and Samsung smartphones.
Nevertheless, these companies still face significant challenges. They are burdened by a legacy of huge debts, a lack of innovative products, and a corporate culture that is resistant to change. Additionally, they are still struggling to compete with their Asian rivals who have the advantage of scale and lower costs.
Overall, while the future for Japanese electronics firms is still uncertain, their recent performance suggests they are on the right track. It remains to be seen whether they can regain their former glory, but for now, they are showing signs of life in a highly competitive industry.
Go to source article: http://www.economist.com/news/business/21606845-electronics-companies-japan-are-starting-turn-themselves-around-they-are-shadow