An object of pride for Japanese consumers during the 2000s was the so-called Kameyama flat-screen television set manufactured by Sharp. Named after the factory in Mie Prefecture where it was assembled, the LCD-TV came with a sticker attesting to its provenance, and many people who bought the model never removed it. The brand was so iconic as a symbol of Japanese high-tech superiority that it was referred to it as “sekai no Kameyama,” or “the world-famous Kameyama.”
Except that it wasn’t. As Atsushi Osanai, an associate professor of management strategy at Waseda University and former Sony employee, pointed out during a recent TBS Radio discussion of Sharp’s current situation, the Kameyama TV only enjoyed popularity in Japan. And even while the plant was pumping out product, it was seriously in debt due to competition from other TV manufacturers, including overseas home electronics companies. Sekai no Kameyama was nothing more than a comforting myth.
The blinkered world view that gave rise to the myth is at the heart of Japan’s reluctance to let Sharp be sold to a foreign company, namely Hon Hai Precision Industry Co. of Taiwan. Osanai says this reluctance is fed by media and government entities that despair over the loss of industry know-how, which is considered a precious national resource. The anxiety comes from a deep feeling that denies the ascendance of Taiwan, China and South Korea in realms where Japan once reigned. Domestic media never seriously discuss the fact that companies such as Samsung and Haier now dominate the global home electronics field. By the same token, they don’t even mention it when K-pop bands continually sell out Japan’s domed stadiums.
A few pundits and journalists have made the case that not only does Sharp’s likely sale to Hon Hai not signal the end of the world, but that it could turn out to be a good thing for Japan. During the TBS Radio discussion, listeners sent in questions betraying their nervousness over the deal, and Osanai, along with finance journalist Tetsu Machida, kept talking about the “reality of the world we live in,” which is quite different from the world inhabited by the listeners — or, for that matter, from that of the program’s announcer, who admitted that she still hasn’t removed the “Made in Kameyama” label from her TV either.
One listener remarked that if Hon Hai buys the ailing company, Sharp will merely become a “maker of goods.” Osanai assured him that, in fact, Hon Hai was buying Sharp because it admires the company’s knack for new ideas. Hon Hai, also known as Foxconn, famously assembles the world’s iPhones, so it is already an experienced maker of goods, but the company possesses no capabilities for coming up with new goods and systems on its own.
Osanai and Machida emphasize that under Hon Hai, the company will be able to continue doing what it does best without having to give up facilities and personnel in Japan. Moreover, the Taiwan company will help promote Sharp’s products overseas, a proposition that may confuse many Japanese. Despite the “sekai no Kameyama” image, Sharp does not have much of a profile outside Japan due to its lack of initiative.
This laziness is endemic among Japan’s home electronics firms, according to Machida. In the previous decade, when many countries were making the changeover from analog TV to digital, Japan’s communications ministry worked hard to persuade governments in Latin America to adopt Japan’s broadcast standard rather than Europe’s or China’s, and they succeeded. Thirty countries now use the Japanese standard, but Japanese electronics makers didn’t follow up on this success, saying the region was “too risky.” In contrast, South Korea’s Samsung lobbied its own government to adopt the U.S. broadcast standard so that it would be easier for it to make equipment suitable for the American market, and now they are ascendant in that market. Sony and Panasonic, once prestige brands in the U.S., have become also-rans because they took their reputation for granted.
Japanese electronics makers “have never had an overseas strategy,” according to Osanai, unlike Japanese car makers. Hon Hai will give Sharp that chance, something the Innovation Network Corporation of Japan, which had been vying with Hon Hai for Sharp, would not have been able to do.
But that’s not the only reason Osanai and Machida are glad INCJ lost out. INCJ is the government funding arm that helped set up Japan Display by bringing together the liquid crystal display divisions of Toshiba, Hitachi and Sony in order to prevent low-price competition from wiping out the industry. Ostensibly, INCJ claimed it wanted to save jobs, but Osanai says that the only jobs the funding entity is protecting is its own. As with many bureaucratic entities, INCJ’s whole purpose is to justify its existence, and with taxpayer money.
Hon Hai’s purchase of Sharp costs Japan nothing, and except for the battery division, the Taiwan firm says it will not sell off any part of Sharp, though that could change once the financing dust has settled. Japanese media say that Hon Hai wants Sharp for its display technology, but there is nothing special about Sharp’s LCDs, which have become a commodity. Price is the only consideration. As financial writer Yasuyuki Onishi said in Nikkei Business, Hon Hai is not so stupid that it would spend ¥700 billion just for LCDs. In truth, it wants to get into the IOT (Internet of things) business, by producing home appliances that can connect to the Web, and for that it needs Sharp’s know-how. Hon Hai’s rival, Haier, bought General Electric’s appliance business for the same reason.
Softbank’s popular robot, Pepper, is manufactured by Hon Hai, another fact the media rarely mentions but one that is central to the issue of Sharp’s worth to the company. “Hon Hai is just like Pepper,” said Osanai. “You can tell it what to do, but it won’t come up with ideas on its own.”