Could this really be the end for ‘retro’ electronics brands?

Sony made our first walkmans. Sharp made our first hi-fis. Along with Panasonic they were brands that were revered throughout the seventies and through to the late nineties. But now, with fierce competition from more fashionable brands such as Apple, and huge losses faced by the Japanese companies, could this be the end of an era for the businesses of the 1970s consumer electronics boom?

Sharp made the headlines last week when it announced that it expects to lose 450 billion yen (£3.4 billion) this year. Its shares, which have lost three-quarters of their value since the start of the year, fell 4.1 percent to 162 yen (£1.26). Fitch Ratings also dealt another blow to the company on Friday, saying it had cut the embattled Japanese electronics giant’s credit rating to junk. “The downgrade reflects growing risks to Sharp’s liquidity position, reinforcing Fitch’s view that the technology company will struggle to turn its business around,” a Fitch statement said. Sharp chief executive Takashi Okuda told reporters: “We have lots of great technology and we want to tap that asset to revive and make money” but admitted that the company was worried that it might not be able to survive on its own.

It is not easy to see however who might be able to take over the company. Panasonic Corp also recently announced that it will lose almost £6 billion this business year as it writes down goodwill and assets and prepares for more restructuring. Its shares slummed by nearly a fifth on Thursday, knocking nearly £2 billion off its market value, and its cumulative loss over five years is over £15 billion. Similarly, although Sony managed to make a small profit last week (after it sold a chemicals business), its overall prospects do not look good. Last year the maker of Playstation lost £3.5 billion, and its TV assembly lines have lost money for eight years.

These firms need to rescue themselves before they can step in to save Sharp. All have suffered from the strong currency, which makes their products more expensive overseas, as well as new competition from South Korean and Taiwanese rivals. While brands such as Apple and Samsung have taken over the high end market, Chinese companies are making extremely cheap gadgets which appeal to the mass market, squeezing companies like Sony, Sharp and Panasonic out. What were once the premium hi-tech brands of their generation may now reduced to relics of another, increasingly distant, technological era.

Sources include: News on Japan, Japan Today, The Telegraph, The Guardian


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