Japan’s iconic electronics groups combined are of similar size as the economy of The Netherlands
Parts makers’ sales may overtake iconic electronics groups in the near future – they have already in terms of profits
In the 25th edition of our analysis of Japan’s huge electronics industry sector, we compare the top 8 iconic electronics groups with top 7 electronics parts makers over the period FY1998 to FY2014, which ended March 31, 2015 for most Japanese companies. Except for Toshiba, all Japanese major electronics companies have now officially reported their FY2014 results.
Japan’s iconic 8 electronics groups (Hitachi, Toshiba, Panasonic, Fujitsu, Mitsubishi Electric, NEC, SONY and SHARP) combined are as large as the economy of The Netherlands – but while the economy of The Netherlands doubled in size between 1998 and 2015, the sales/revenues of Japan’s iconic 8 electronics groups combined showed almost zero growth (annual compound growth rate = 0.4%) and almost zero income (profits).
Japan’s top 7 electronics parts makers on the other hand – similar to the Netherlands – more than doubled their combined revenues (sales) over the 17 years from FY1998 to FY2014, and earned healthy and increasing profits.
While several of Japan’s iconic electronics groups are fighting for survival, Japan’s parts makers have very ambitious growth plans – some of them may well overtake the traditional electronics conglomerates in sales – they have already in terms of profits. And they aggressively acquire around the world.
Detailed data and analysis in our Report on Japan’s electronics sector (25th edition).
Japan’s electronics parts makers combined more than doubled sales over the last 17 years
Japan’s iconic top 8 electronics groups showed almost no growth over the last 17 years
Japan’s electronics parts makers grow – the traditional electronics groups stagnate
Murata introduced their newest Cheerleader robots in a press event on September 25, 2014 in Tokyo.
Purpose of the robots is brand building and advertising of the company’s components and capabilities.
Watch the Cheerleader robots dance synchronously here:
Murata Manufacturing (村田製作所)
While Japan’s eight electronics conglomerates stagnate in both revenues and income for the last 15 years, many of Japan’s electronic component manufacturers are thriving, as explained in detail in our report on Japan’s Electronics industries.
It is maybe not a coincidence, that many of the most successful electronics manufacturers are located in Kyoto, including Murata Manufacturing (村田製作所) – away from the politics of Tokyo.
Ceramic capacitors are at the core
At the core of the business are monolithic ceramic capacitors with a 35% market share globally. A single typical smartphone includes about 700 such ceramic capacitors, a laptop computer about 800, and a tablet computer or TV set about 600, and a car about 200.
Overcoming commoditization and maintaining pricing power by achieving overwhelming global market shares
For most manufactured electronic components, Murata is able to achieve overwhelming global market shares, e.g. 35% for monolithic ceramic capacitors, 70% for ceramic filters and resonators, 60% for radio connectivity modules and 95% for shock sensors.
While company culture is strongly determined by Kyoto entrepreneurial traditions, Murata has 14 companies in USA, 13 companies in Europe, 27 companies in Greater China, 17 companies in the rest of Asia, and 30 companies in Japan. For our detailed analysis and comparison with other Japanese electronics companies, read our report on Japan’s Electronics industries.
Cheerleader robots highlight components and communication modules and “3S” competence: Stabilization, Sensing and Synchronization
Cheerleaders robots are a group of robots, bodies are balancing on rolling balls, and their bodies are equipped with motors to drive the balls, position and balance sensors and communication modules to synchronize the robots’ motion.
Murata “3S”: Stabilization, Sensing and Synchronization
The bigger picture: Murata’s robots, the big wide world, and open innovation
As presented by Murata today, the cheerleader robots, Murata Boy and Murata Girl, are closed stand-alone systems, essentially for advertising and branding the company’s products.
SoftBank, on the other hand, is working to create a developer community around its Pepper robot, and SoftBank’s SPRINT subsidiary is planning to sell Pepper in the USA from 2015. Pepper has been developed for SoftBank by the company Aldebaran, founded by Bruno Maisonnier.
Google has acquired a range of robot companies, and is developing self driving cars.
LEGO switched from a closed “waterfall” model for developing the LEGO Mindstorms system to an open innovation model with huge success.
There is a huge contrast between these robotics programs which are community based, aim to create developer communities, develop API’s (application develop interfaces) and in some cases use open source software – and on the other hand the Murata robotics program, which seems to be a closed program creating one-off closed robot systems.
I believe that Murata’s robots could create much more global impact, if they would move from a corporate branding exercise to a platform for developer communities. In my view, Murata’s Cheerleaders – if they could talk – might shout out for being opened up. Imagine the creativity which could emerge from school classes or students programming the Cheerleaders via their APIs or SDKs.
Japan electronics industries – mono zukuri. Preview this report:
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