How will the future electronics industry change?

Saying goodbye to the "brilliant 20th century"

LCD panels and semiconductors are typically cutting-edge products. In the past, Japanese manufacturers have been leading the world in these areas. This can be achieved because Japanese companies have a "cheap and excellent" workforce and strong financial strength. However, this has become history. Now, these markets have been seized by companies in South Korea, Taiwan, and China, and Japanese companies are no longer in the limelight. The free cash flow of South Korea's Samsung Electronics is currently about 10 trillion yen, while the Japanese electronics manufacturers have only a fraction of their available funds.

The share of Japanese manufacturers in high-tech parts and assembled goods has declined. The reason is that with the flattening of the economy, the economies of emerging market countries have begun to grow together, and with the development of liberalization and globalization, companies can conduct business in the same environment in any region. From the results, even the most sophisticated products, as long as there are manufacturing equipment, emerging market countries can also produce most of these products. With the continuous development of modularization and horizontal division of labor in the electronics field, it can be said that it is very easy to manufacture such a product.

In such areas where products can be manufactured by hand, companies are involved one after another, and a large number of similar products are pouring into the market, leading to increasingly fierce cost competition. Although companies are racking their brains to reduce costs, there is not much difference in where manufacturing equipment is purchased. As a result, electronics manufacturers are committed to the development of new production technologies, or to promote improvement measures at the production site. However, the improved technology and methodology will eventually spread. Also, labor costs, land costs, and distance from the market are often important factors that affect the success or failure of cost competition. Unfortunately, Japanese companies do not have an advantage on this point.

In the era when Japan was a rival with Europe and the United States, the situation was completely different. The quality of Japanese workers is very high, and labor costs are lower than in Europe and the United States. In order to take advantage of this competitive advantage, the Japanese manufacturing industry has been adhering to the tenet of "conscientiously manufacturing cheap and high-quality products."

Since this actually promotes economic development, it is by no means a wrong practice. But now the environment in which the company is located is undergoing major changes. This glory has gradually become a history that is worth remembering in the 20th century. Japanese companies that compete with cost in emerging market countries will all lose out. Starting from this reality, even if it is reluctant, we can understand that we should not compete with emerging market countries on the same axis. It is necessary to find out the axis of cost competition or can replace cost competition and hone it into a competitive weapon. This competitive axis refers to the “internal” charisma that European companies often use as weapons, and the ability of the United States to expand its hegemonic “product + service” capabilities.

Industry boundaries will disappear and history will repeat itself. In the past, European and American countries had failed in cost competition with Japan, an emerging market country, and several industries were devastated. So they abandoned the past practice and found new competitive axes outside of cost.

As a result of competition, one of the gains of European companies is "premium branded products." Although commodities appear to be “products”, it is the “inner” part that allows many people to feel value from it, including the traditional culture behind them, interesting facts about celebrities who like the product, and even “here”. They are very elegant and have hidden meanings, as well as aesthetic consciousness that runs through products, stores, and corporate concepts. What enterprises need to win in this battlefield is not to "manufacture at a lower cost" but "to sell at a higher price."

U.S. companies are another situation. They have developed many different strategies from European companies. But these strategies are not omnipotent. A strategy is only suitable for certain industrial areas. Therefore, although it is possible to refer to the diversity strategies adopted by these companies, Japanese companies must consider their own history, their own industrial fields, and their current locations to formulate strategies that suit them.

In addition, there is a principle that is common to companies in any position. That is "the same practice as before does not work." A major adjustment in corporate strategy will be inevitable. At this time, there must be a strong awareness of the changes in the industrial structure and social environment and the technological advancements that cause these changes.

For example, "digital fusion." The meaning of integration is the meaning of convergence, end, convergence, and digital convergence means that although it has always belonged to different fields, it uses "broadband" and "digital" as common points to gradually eliminate the differences and realize the "integration" and "integration" of the industry. Integration phenomenon.

One of the major factors that caused this change is the Internet. With the popularity of optical communications, CATV, and ADSL, access to broadband in offices or homes is no longer uncommon. Although broadband will be widely available in the future, wireless broadband will soon become commonplace. If broadband can be easily used anywhere, then not only personal computers and televisions, but also various electronic products are networked. Broadband access sites will also expand to include outdoor and automotive locations. Broadband will become the social prerequisite for the future.

Today's "TV," "mobile phone," "personal computer," and "car navigation system" are all products that were introduced in the 20th century. Because it was born without the broadband infrastructure, hardware has so far had no broadband capabilities. But if broadband becomes the premise of social infrastructure, this structure will mutate. The main function of the product can be provided through the network, which will gradually make the terminal easier. Moreover, the differences between terminals such as personal computers, car navigation systems, and mobile phones will also become smaller and smaller. It is estimated that the difference of each terminal is only the difference between "display size" and "usable place".

Television is currently implementing networking. Mobile phones have previously been able to use a variety of services via the Internet and can watch single-segment television programs. Personal computers can both watch TV programs and talk. There will also be more car navigation devices equipped with a TV tuner, and a communication module may be used to receive data. Many equipment manufacturers now still seem to have a strong sense of industry differentiation such as "our company is a computer company" or "our specialty is car navigation systems." But from the user's point of view, these are no longer important.

This is not just something that developed countries have. Not only developed countries, emerging market countries are rapidly popularizing mobile phones, but the Internet is also spreading at an alarming rate. However, as far as broadband is concerned, the environment of emerging market countries is still not mature enough.

Although emerging market countries are constantly advancing the popularity of the Internet through mobile Internet access, the low-cost models that are widely available still have limitations in using broadband-oriented content. Consumers in emerging market countries can never pay more for terminals or services. China and India have a large population. If wireless broadband supports huge data traffic such as video and voice, it will inevitably result in congestion of communication lines. Emerging market countries are starting with a "wireless" network with less infrastructure investment, and while improving the volume of communications, the "cable" network, which is the opposite of the developed countries, has been used to make up for the insufficiency of the frequency band. Therefore, even if the Internet is rapidly becoming popular, the spread of broadband will take some time.

But even if there is a time difference, most people in most regions will still have a broadband access environment, and this general direction will not change. This will bring changes to various businesses. In other words, the old business will decline, and huge new business will emerge. This trend will overturn the world.

When we think of this, we have placed ourselves in an environment with broadband access. In the face of advanced users, we should be clear about how much business advantage we have.