The company's profits have soared since it developed proprietary innovations for its range of consumer electronics products
Falling prices and increased competition from the mainland and South Korea have put many Japanese electronics firms in the doldrums in recent years, as analysts gang up on their seeming inability to respond to cost pressure and rival products such as Apple's iPod.
One company bucking the trend is Matsushita Electric Industrial, the conglomerate behind the global brand Panasonic. The world's largest consumer electronics manufacturer posted a 47 per cent jump in net profits for the fourth quarter last year on the back of healthy demand for its digital audio-visual products.
The strong financial performance owed much to the company's development of homegrown 'black box' technology for the Panasonic range of digital products, according to Yukihara Okamoto, general manager of overseas sales and marketing.
Mr Okamoto said that, faced with price falls of up to 30 per cent in consumer electronics last year, the company needed to develop proprietary technology to differentiate itself and charge a premium.
'China's entry to this market is definitely driving prices down, but if we follow the trend to compete on price alone it would be easy for the company to go bankrupt,' he said.
Panasonic's tactics are apparent in the pricing for the latest line of Lumix digital cameras. The company will sell the Lumix DMC-LZ1 at a US$50 premium over equivalent rival models with 3x optical zoom and four megapixels because it contains proprietary Mega O.I.S. image stabiliser technology.