OVER THE PAST several years, news of large company lay-offs has received scant attention, even when the lay-offs have happened at Sony, one of the world's most widely known brands.
But perhaps a more telling clue to what is happening in the business of consumer electronics is another piece of news from Sony on a US$2 billion joint venture with Samsung to manufacture liquid crystal display flat-screen televisions.
This joint venture combination would have been unthinkable five to 10 years ago and it marks an incredible transition for Samsung from competing primarily on price to competing on innovation, quality, anticipation of future market trends, branding and marketing. Will Chinese manufacturers be able to follow in the footsteps of Samsung and be the next in line to take on Sony in the global market?
There are many obstacles standing in the way of Panda and Skyworth in bringing themselves to the world stage. Some analysts point to their obvious deficiencies in marketing experience and understanding of the consumer markets elsewhere, but marketing expertise and insights can be relatively easily acquired. However, there are two real challenges for these Chinese manufacturers that are much more difficult to overcome.
Firstly, Chinese manufacturers do not yet have a case for heavy research and design.
Contrary to some beliefs, the consumer electronics industry has become almost a commodity industry where cost advantage is king. The industry is facing an increasing need for R&D as the differentiation between advanced computing devices and consumer electronic appliances decreases, and the concepts of home-networking and interacting consumer devices get closer to reality.