Back in the 1960s, a TV set, a refrigerator and a washing machine symbolized affluence for Japanese households. They were dubbed the “three sacred treasures” — an analogy to the sword, mirror and sacred bead treasured by the Imperial Household.
So what are the three sacred treasures the electronics industry has to offer in the information technology era?
Toshiba Corp., a leading electronic appliance and computer manufacturer, hopes they’ll be digital TV sets, mobile terminals and personal computers, according to Tadashi Okamura, Toshiba’s new president and chief executive officer.
In the IT revolution, consumers are gaining access to a wide array of gadgets to enjoy life in an information-based society and are not limited to PCs alone.
“Until now, information technology was a synonym for personal computers. But the world of IT is diversifying,” said the 62-year-old Okamura, who assumed Toshiba’s top position in June. “In offices, information technology is based on PCs. When people are on the street, they use mobile (terminals), mainly cellular phones. At home, (digital) TV sets will be the center of IT.”
Okamura became president and CEO just as the firm embarked on a three-year management plan to transform itself into a network-oriented company by concentrating corporate resources on mobile and network businesses.
During this plan, Toshiba aims to reach consolidated sales of 7.8 trillion yen in fiscal 2002, from 5.7 trillion yen in fiscal 1999. Accordingly, the company has set a goal of earning 370 billion yen in pretax profits and 200 billion yen in net profits.
In a move to strengthen its mobile electronics business, Toshiba will introduce cellphones next year that are compatible with the International Mobile Communications-2000 system (IMT-2000) as well as personal digital assistants.
Under a partnership with NTT DoCoMo Inc., Toshiba is developing a next-generation cellular phone that will be designed to offer high-speed and high-volume communications. DoCoMo is expected to launch the world’s first next-generation cellphone service in Japan as early as next spring.
In the PDA field, Toshiba is trying to figure out what kinds of terminals will fit into the Japanese market, where demand is steadily developing.
Such mobile products will help overcome what is seen as one of Toshiba’s weak points — that it is not a designated supplier to DoCoMo, the country’s No. 1 mobile telecom carrier, and thus lags behind its competitors in the cellular phone market.
On top of selling digital TV sets and a tuner for the upcoming launch of interactive digital TV broadcasting, Toshiba is creating a new business model for new services under digital TV broadcasting in cooperation with Matsushita Electric Industrial Co. and Sony Corp.
While market research companies describe Toshiba as the world’s top PC manufacturer and the country’s second-largest television set maker, people have come to acquire various IT-related appliances and tools, and this change will help strengthen Toshiba’s electronic component business because it can make parts for various products, instead of depending solely on PCs, Okamura said.
In the electronic components segment, he said, “we focus on mobile. The contents of IT are expanding, and we will respond accordingly.” He attributed previous losses in the segment to excessive dependence on memory chips for personal computers.
Under the three-year management plan, Toshiba plans to raise consolidated sales in the electronic component business to 2.55 trillion yen, or 28 percent of total sales, in fiscal 2002. In fiscal 1999, the figure stood at roughly 1.55 trillion yen, or 23 percent of total sales.
On the other hand, Toshiba’s operations include production of traditional home appliances and power plants, both areas where future growth in the domestic market is limited.
Okamura said his firm will have to find demand overseas, especially in less developed countries such as China, for these products, and will proceed to seek out partnerships with and acquisitions of foreign companies.
He stressed that in order to seize the momentum of the IT revolution, Toshiba needs to create synergy among its individual segments, which range from computer system solutions to home electronic appliances.
“Our strength is that we have many . . . layers for the IT business, including the component business, technological accumulation and the production of finished products using the two. We must create a “value chain” by causing interaction among them.”
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