Some of Japan’s biggest electronics companies are facing tough times right now, as they face stiffer competition from Korea and China than ever before. Panasonic, Sony and Sharp are all having a hard time paying their bills, and all have had their credit ratings downgraded by certain rating agencies in Japan. Foreign companies like Samsung have taken a huge bite out of the Japanese companies’ sales, and all three of the tech giants are left with an enormous amount of fixed cost assets like land and buildings that they need to get rid of.
This month, Panasonic, Sharp and Sony will all be selling off some assets, in a “garage sale” that will see a total of $3 billion worth of land and assets getting sold to the highest bidder. Panasonic has also said that they’ll be selling off a bunch of their shares in other companies, all in an attempt to raise cash flow and pay off some of their debt. Panasonic currently owns over 10 million square feet of buildings, so they’ve got some land to spare; most of the buildings that are being sold off are within Japan, and they include a 50,000 square meter apartment block in the heart of Tokyo, which they built in 2003 as a worker dormitory.
It’s a sign of a changing electronics marketplace that these companies are in such dire straits as selling their assets off would indicate they are. Just a decade ago, the Japanese were the kings of consumer electronics, and names like Panasonic and Sony were household names for almost everyone in the Western world. It seems like these days, there’s a host of other companies from other places in Asia trying to get in on Japan’s market share, and they’ve definitely had some success. Samsung is larger than ever, and Chinese companies like Huawei are starting to get a foothold as well.
The future look mighty uncertain for some of the most familiar names in gadgets, and it remains to be seen whether the new kids on the block will live up to the standards in build quality and reliability than their Japanese predecessors have established. This battle now appears to be Samsung’s to win or lose, as they see fit, and the old stand-bys like Sony will have to do some serious innovation if they want to keep afloat.