The heat is on!


It seems to me this summer the heat is on in many ways. On the weather front: Japan is experiencing higher than usual summer temperatures, which puts a strain on the limited available electric resources. While the area in Kanto with all the “setsuden” activities (individual and company wide energy-saving, company wide change of work time pattern), the previously devastated areas have to face an even tighter energy supply, because their demand seems to hover daily around 95% of the available electricity.
At the same time the heat is on the local smartphone makers as well. They have realized that they need urgently expand their activities to abroad, because within Japan foreign producers are taking a rather high share (according to Nikkei Shimbun Apple Inc. and Samsung Electronics Co. sharing 46.8% of domestic smartphone shipments in fiscal 2010). Although Japan is usually rather efficient in creating barriers for foreign firms to succeed locally by promoting functions that are unique to the local market (e-money systems and television broadcasts for mobile phones), this time it did not seem to work well. In order to become more competitive cost structures are very important, when presently compared to foreign manufacturers Japanese models are too expensive. Japanese firms have no choice but need gain sales volume by expanding overseas, but they have been slow to do so. For example Sharp Corp. moved into China in 2008 and India last year, but annually it sells only 1.19 million units abroad. It seems overall the challenge is to differentiate their smartphones compared to the global competition. Options with high-resolution LCDs, thin phones as well as water- and dust-resistant models might help, but honestly I doubt whether these features can really boost sales.
On the other hand, some local companies like Horiba are under heavy pressure to keep up with the demand. Before the disaster hand-held radioactivity meters were sold about 100 per year, but recently the orders have jumped up to 1000 units per week according to the Asahi Shimbun. Seeing Japanese companies thriving usually warms my heart, but in this case I have mixed feelings. Having this unusual demand for individual radioactivity meter in mind, it is not surprising that the purchasing behavior of every day users has changed. I am sure many families had to reorganize their household spending, when after the disaster new basic needs were created.

Brought to you by Sibylle Ito (シビル伊藤)

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