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Wed, Oct 08, 2003 - Page 12 News List

Sony urges Japanese rivals to cooperate

COMPETITIVE EDGE Sony boss Nobuyuki Idei said electronics makers must learn to coexist to defend their markets against Chinese and S Korean firms

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Sony unveils the ``PSX'' hard-disk DVD recorder which can play Playstation2 video-game software at the CEATEC electronics trade show outside Tokyo yesterday. Sony will put it on the market at the end of this year with a price US$720 for the 160GB model and US$900 for 250GB model.

PHOTO: AFP

Sony Corp chief executive Nobu-yuki Idei said Japanese electronics makers must work together to fend off increasing competition from overseas rivals such as South Korea's Samsung Electronics Co.

"Japanese electronics makers need to collaborate," Idei said in a speech at a show near Tokyo.

"We must co-exist in order to co-prosper. That's how Japanese companies are able to lead," he said.

Idei was speaking as Sony, Matsushita Electric Industrial Co and other makers started displaying new camera phones, flat-screen televisions and other products at the Combined Exhibition of Advanced Technologies, or CEATEC Japan. Japanese companies are seeking to show that their technology can maintain an edge over overseas rivals that have been gaining market share.

"Chinese companies and [South] Korean companies such as Samsung are making it hard for major electronic makers to compete," said Hideo Ueki, who helps manage US$6 billion in Japan equities at UBS Global Asset Management.

Sony, the world's second-biggest consumer electronics maker, had a 98 percent plunge in fiscal first-quarter profit after price competition hit sales of its camcorders, TV and audio products.

Sony and larger rival Matsushita Electric Industrial Co, maker of the Panasonic brand, are among 660 Japanese and overseas companies at the fourth annual Ceatec.

Idei said Japanese companies could learn from the example of Samsung, which was forced to change after a financial crisis hit South Korea in 1997. Samsung has since become the world's biggest maker of flat-panel displays and memory chips and the third-biggest mobile-phone maker.

"We are afraid that at Sony we are lacking the same sense of crisis," said Idei, adding that the company is in a better situation than Samsung was five years ago.

The strength of Japanese companies lay in cooperation, Idei said.

"In the West Coast of the US, company A wants to kill company B," he said. "That doesn't happen in Japan."

Products Sony is exhibiting at Ceatac include a DVD recorder developed with Matsushita Electric and other electronics companies. The machine can hold 23 gigabytes of data, compared with 4.7 gigabytes for a standard DVD.

Japanese companies are also counting on advanced technologies that enable the wireless linking of a range of consumer devices such as home appliances, TVs and cellphones to help drive growth as overseas competitors push out cheaper handsets, DVD players and other devices.

For Sony, CEATEC is its first chance to demonstrate its new video-game console, called PSX, which it plans to start selling in Japan by the end of the year.

The PSX marries a hard drive-based video recorder with the Playstation 2 game player.

Other exhibits include a Sanyo Electric Co flat-panel screen developed with Toshiba Corp and NEC Corp. The paper-thin panel, which Sanyo calls an organic electro luminescence display, emits light when electricity passes through it.

Growing demand for camera-equipped cellphones and flat-screen TVs has enabled some Japanese electronics makers to raise earnings estimates recently.

The 152-member Topix Electric Appliances Index, which includes shares of Canon Inc and Sony, has risen a quarter since the beginning of the year.

"This year we're seeing more exhibits for final products" rather than for components, said Jiro Iriye, director of the Japan Electronics Show Association, which helps organize the show.

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