Published On: September 1, 2011

Japan Bails Out Ailing Video Companies: Sony, Hitachi and Toshiba

Published On: September 1, 2011

Japan Bails Out Ailing Video Companies: Sony, Hitachi and Toshiba

Japanese companies Sony, Toshiba, and Hitachi have merged their display manufacturing companies into one company. But why did the companies decide to do this and will this move pay off.

Sony-Toshiba-Mitsubishi-merger.jpgPerhaps inspired by U.S. bailouts of AIG, Goldman Sachs, Bank of America, General Motors and many other companies at the start of “The Great Recession,” the Japanese government has created a fund to allow video powerhouses Sony, Toshiba and Hitachi to pool their resources for video display panels. The move comes as Korean companies like LG and Samsung as well as American owned (but still made in Asia) Vizio are eating away at the Japanese electronics companys’ valuable market share.

Additional Resources
• Read more original commentary in our Feature News Stories section.
• See more stories like this in our LCD HDTV News and Industry Trade News sections.
• Explore reviews for the companies’ products in our LED HDTV Review section.

Bloomberg.com reports that the new company will be called “Japan Display KK” and is poised for an IPO in the near future. It seems as if the companies will keep marketing under their respective, long-standing brand names.

This government-sanctioned, protectionist move is the first global sign that the video display market has hit a bump in the road in terms of overall demand. Nearly every home in America and much of the industrialized world needed a flat HDTV just a few years ago, which made the industry boom but as the housing market tanked in the United States around 2008, so did the urgent need to paper a home’s walls with 65 inch, gleaming HDTVs.

Most disturbingly is the trend of Asian governments giving a helping hand to AV companies that are failing, in that American companies can’t get the same help these days. Only banks, insurance companies and union-powered car manufacturers get those kinds of bailouts in the U.S. In China, government control of rare-earth elements like Neodymium make it tough for companies worldwide to keep prices low on products like cell phones, high performance speakers and more, as anything that needs a lightweight magnet needs to likely use some neyodynium. And China is hoarding the stuff like they are aiming for a spot on an A&E reality show.

The long term solution to the issue of video products is a turn-around in the housing market, especially in the United States as the U.S. consumes a lot of video products. If mainstream consumers could actually get a loan from a bailed out American bank at today’s low rates, they likely would buy more HDTVs and as the market would recover and heal from the massive foreclosure crisis – people would invest in computers, video, audio and home automation again. In the meantime, perhaps making fewer HDTVs and adding value to the sets will suit the Japanese video companies just fine.

Additional Resources
• Read more original commentary in our Feature News Stories section.
• See more stories like this in our LCD HDTV News and Industry Trade News sections.
• Explore reviews for the companies’ products in our LED HDTV Review section.

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