Japan and South Korea Home Appliances

From the results, we can see that the advantages of Korean enterprises in the consumer electronics field are still quite obvious. Domestic home appliance companies must seize the opportunity of the global home appliance industry transfer brought about by the decline of Japanese companies, although they still face enormous challenges.

Recently, everyone has submitted their transcripts. In the previous fiscal year, in the first quarter of this year, some people were happy that someone was paralyzed. In addition to domestic appliance companies, we are also concerned about the situation of “neighbors”.

Once a glorious moment and a huge loss in recent years, the status of Japanese electronics companies has attracted attention. This week Sony adjusted its performance data for the 2013 fiscal year ending in March this year. The net loss amounted to 130 billion yen, which is a further increase of 18% from the previous expected loss. At the same time, Sony significantly reduced operating profit to 26 billion yen, which was expected to be 80 billion yen.

This is already the third consecutive reduction of Sony's 2013 performance expectations. In fact, Sony’s performance in the 4K TV and smart phone markets has been remarkable in the past year, but Blu-ray Disc and PC business have seriously weighed on corporate performance, especially PC business, and the PC market has been shrinking for many years under the impact of mobile terminals. The decline in market demand, the ever-decreasing gross margin of PC products, and the fact that some manufacturers such as IBM, who had once been in the PC era, have already withdrawn from the PC product line. Sony will not complete the sale of a 95% stake in the PC business until July of this year, hoping to bring more positive impact. Sony needs some good changes too, just as Reuters quoted Jefferies data, removing the company’s sale of assets. In the past 12 years, Sony's performance in 10 fiscal years has not met expectations and it has performed the worst among the 30 Japanese consumer electronics manufacturers.

In comparison, Panasonic and Sharp could take a brief breath. The two companies achieved their first profit since the three fiscal years in the previous fiscal year. Panasonic released data that it achieved revenue of approximately 7.74 trillion yen in 2013, operating profit of 305.114 billion yen, an increase of 5.9% and 89.6%, respectively, to achieve a deficit, net profit of 120.442 billion yen. Although Sharp has not formally announced its performance, the previously announced performance expects that its 2013 fiscal year revenue will reach 2.9 trillion yen, of which operating profit will reach 100 billion yen, and net profit is expected to reach 5 billion yen, turning losses from the same period last year.

Sharp's ability to turn losses was mainly attributed to IGZO small and medium-sized LCD panel products and healthy environment business divisions. The business departments such as TVs and mobile phones did not significantly improve. Panasonic is also benefiting from the company's restructuring and increased sales in the housing and automotive-related sectors. The contribution of the home appliance business is even smaller.

The TV business that is more like a drag on the Japanese companies is a bonus for the Korean companies. Both Samsung and LG recently announced their performance in the first quarter. Although the shrinking demand for high-end smart phones led to a 3.3% decline in Samsung’s operating profit in the first quarter, the increase in demand for low-end and mid-end mobile devices and the increase in TV sales still led to better-than-expected sales. The sales for the quarter reached 53.68 trillion won. Net profit still has an increase of 5.86%. LG Electronics' first-quarter results were also better than market expectations, and set a profit for the most profitable quarter in two years. Operating profit rose 44% year-on-year to 504 billion won. The reason is that the sales of large-screen TVs and the reduction in material costs have contributed to the growth of profits in the first quarter. LG expects that the revenue of the TV business will continue to grow in the second quarter.

From the performance, it can be seen that the advantages of Korean companies in the consumer electronics field are still quite obvious. At present, there are indeed many opportunities for domestic home appliance companies to seize the opportunity of global home appliance industry transfer brought about by the decline of Japanese companies, but they still face enormous challenges.