While the just completed Beijing Olympics will have meant different things to different people, one thing is certain: A lot of TVs were tuned into the games. And now that the intense viewing of judo, swimming and softball is over, it is quite possible a number of Japanese TV owners are wishing they could have seen more of their favorite athletes in even better detail.
It is hence good timing for the organizers of the Combined Exhibition of Advanced Technologies (Ceatec), which is getting ready to launch the eighth edition of Asia’s largest consumer electronics show at the end of the month. Ceatec is one place where Japanese electronics manufacturers make a special effort to bring the latest and greatest to the market — especially TV sets.
The show grew to 205,000 visitors last year, and a similar turnout is expected this time as well. But in terms of international exhibitors, Ceatec does not overwhelm: Of the nearly 900 companies who opened booths there in 2007, only about a third were from abroad. Ceatec is still a mainly domestic affair.
This is being viewed with increasing criticism by Japanese firms, which are feeling a strong need to internationalize further. After testing the limits of the Japanese market, many have realized that growth and future profits lie abroad. Now the Japanese are on a shopping tour of their own.
This spring Sumitomo Heavy made an offer to purchase semiconductor equipment maker Axcelis of the United States. In July, NEC bought communications engineering firm Linecom of Hungary. In August, rumors grew that Fujitsu would buy out the remaining 50 percent stake in Fujitsu Siemens Computers in the Netherlands.
But that’s not all. Just weeks ago, Ricoh announced it would purchase U.S. office equipment manufacturer Ikon, and by the end of this month, TDK is expected to have finalized its acquisition of Germany-based EPCOS, a deal worth up to ¥200 billion.
TDK is a giant in electronics, but the threat of increased competition had the company asking itself tough questions, such as how would it survive in the long run. EPCOS, one of the world’s leading makers of electronic components, was facing concerns of its own amid a tightening global market and rising materials costs.
The two companies will eventually merge their electronics operations as soon as early next year. The deal is being viewed as a sign that the industry is headed for reorganization, with closer ties between European and Japanese electronics companies looking likely.
For Japanese firms with such inclinations, consumer-oriented trade shows like Ceatec will no longer be sufficient as major contact platforms. Instead, more professional- and internationally oriented events, like Germany’s CeBIT, the world’s largest electronics and digital trade show, fit the bill.
CeBIT takes place each spring in Hannover, Germany. Compared with Japan-focused Ceatec, international exhibitors account for more than half of the nearly 6,000 companies present. At the same time, the overwhelming majority of visitors are professionals directly engaged in making business contacts and transactions.
Another aspect that sets CeBIT apart from other electronics shows is that it often sets fundamental new agendas in the IT world. Laptop computers, for example, debuted there as far back as 1986. Bluetooth, the wireless communication technology, also took a bow at the show.
The new buzzword this year is Green IT, and it is again CeBIT that is taking the lead here.
Clearly supported by Germany’s strong legacy in environmental issues, this year’s show made Green IT a focus area by setting up a complete Green IT village.
Technology firms from all over the world have jumped on the bandwagon, looking to Germany and CeBIT for the most recent developments in the field and its prospects for the future. Even Ceatec is offering a Green IT pavilion at the next show, no doubt inspired by the proceedings at CeBIT.
These days, it is clear that the Japanese electronic giants have embarked on a shopping spree abroad to ensure and propel their internationalization efforts. In the electronics industry, Europe has become a major point of focus, not only for its pool of potential takeover targets, but also for its capacity to set new trends, such as Green IT. It is now time for Japanese firms to sit up and notice these two factors.
It is the reality of doing business across multiple boundaries — as businesses do every day in the EU — that leads to the creation of new opportunities, something that Japan, with its isolated geography and inward-looking trade show culture, is perhaps not as quick to catch on to.
Direct exposure to other players in the same industry via major overseas trade shows has never been more important in the global race to found next-generation technologies.
Jochen Legewie is president of German communications consultancy CNC Japan K.K.