CEATEC 2004 & Japan's IT & Electronics Industries
The fifth staging of CEATEC JAPAN is nearly upon us. Optimism has returned to the industrial world this year, boosted by strong demand for mobile network-related products and car electronics equipment. Digital home appliances have been especially popular. In the Japanese electronics industry, domestic production reached peak levels of 25.4 trillion yen in 1997 and 25.1 trillion yen in 2000. In 2004, the figure also looks certain to exceed the 20.0 trillion yen mark.
However, as summer turns to autumn, and the memories of Japan’s successes at the Athens Olympic Games begin to fade, electronic parts and semiconductor manufacturers are starting to make inventory adjustments.
Mr. Kaoru Fushiki, Managing Director of Nikkei BP Planning, provides an overview of this situation as it pertains to CEATEC JAPAN and Japan’s information technology and electronics industries:
Judging from the previous four CEATEC JAPAN exhibitions, booths exhibiting products aimed at the individual, including cellular telephones, flat-panel-display (FPD) televisions, DVDs and digital cameras, have grabbed a great deal of attention. The same thing could be said of the Digital Network Stage and the Electronic Components, Devices and Industrial Equipment Stage, which were introduced last year. The success of new products and technologies showcased at CEATEC JAPAN 2003 reflected the current boom in digital consumer electronics.
In the former Japan Electronics Show, which merged with COM JAPAN to form CEATEC JAPAN, the Consumer Electronic Equipment Pavilion was colorful and vibrant, featuring many hostesses and mini-shows. Booths similar to this have continued since CEATEC JAPAN began in 2000.
But that’s not all. Many equipment manufacturers have booths promoting consumer electronics products and items for the individual as their main business. These booths offer various dreams and surprises for visitors.
It is not surprising that consumer products – notably cellular telephones, digital cameras and other electronic devices – have taken the place of computers in driving Japanese industry. In its broader sense, the term “consumer products” also encompasses fashion items, cars and travel goods. It is clearer than ever that “households” and “individuals” are the ones underpinning the market.
Viewed from another perspective, this trend may also be attributable to changes in industrial structures. For example, there are heavy industries, which operate under a long development and production lead-time of 10 years or more. And then there are communications industries, which have a lead-time of several years and whose customers are electric power companies, telephone companies, governments and regional authorities. Industries in the latter category are linked to infrastructure and government demand. They are often called “public investment industries.” However, their markets have weakened, and companies focusing on these markets are not performing well these days.
Under the “e-Japan” concept, regional authorities have made good progress in computerizing their operations. Here, the activities of application service providers (ASPs) have been remarkable. However, there are few displays at CEATEC JAPAN that showcase computer systems designed for regional authorities. Furthermore, systems and equipment developed as a result of public investment originally fell outside the scope of CEATEC JAPAN.
These public investment markets are now mainly limited to Japan. By contrast, consumer products aimed at the individual have for a long time competed on the world market, and Japan has become the launching pad for all kinds of information. Products aimed at the individual and reflect diverse lifestyles, values and preferences will gradually grow in status. This shows just how fierce competition has become.
It is only natural that these kinds of consumer booths fare well at CEATEC JAPAN. Conventional home appliance manufacturers have turned their attention to digital consumer electronics. Joining them are makers of information and communication devices and equipment, which have strengthened the digital consumer electronics sector. Overseas computer manufacturers and others have also entered the fold.
Electronics products can be classified into four categories: audiovisual (AV), information technology (IT), home and mobile. However, lines separating these categories have become increasingly blurred as more and more products are released that combine the IT and home categories, as well as the IT and mobile categories. Moreover, these once independent devices are now able to exchange data. “Connectivity” has become the buzzword. This year, there has been a plethora of new products, new proposals and new technologies in these sector
New Integrated Technologies and the Consumer
Connectivity has been the driving force behind the integration of AV and IT equipment, and of home and mobile devices. Connectivity involves many different technologies, including those related to audio, television, recording, communications, information processing, analog, digital, wireless and cable. And they all have their own standards. Manufacturers cannot afford to ignore the standards of other devices they want to “connect” with. This requires the ability to build integrated systems.
LSI manufacturers are all too aware of this need. LSIs have become core components in all kinds of electronic devices and equipment, including vehicles. This is because LSIs control the main functions of electronic devices.
At CEATEC JAPAN 2004, LSI manufacturers will display devices for digital consumer electronic equipment. These devices feature short development lead-times, low power consumption and high performance speeds. System LSIs, which serve as platforms for various kinds of digital consumer electronic equipment, are bound to capture plenty of attention. They are compatible with multiple AV standards, and with multiple communications standards that also cover memory chips. These LSIs can easily handle the basic functions of DVDs, car audio systems, cellular telephones and FPD color televisions. Then, it is up to the equipment manufacturers to customize the chips, adding their own unique technologies in such areas as sound, color and design.
The digital consumer electronics industry draws on the abundant experience and track record of Japanese home appliance manufacturers, who have been trained for many years by Japanese consumers noted for their heightened sensibilities and strict standards. This is an area in which Japan’s special capabilities can be demonstrated effectively.
Fusion of Consumer Products and Communications
Advances in broadband networks have underscored the shift in focus to network-able consumer products. Traditionally, home electronic appliances have operated independently. Consumers have enjoyed television programs by buying a receiver, plugging it into a power point and attaching an antenna. Interface with other devices has been mainly limited to connecting videocassette recorders (VCRs) and DVDs for recording and playback purposes.
Recently, however, the concept of communication has entered this domain, causing the fields of consumer electronics and communications to become integrated. This has seen the interactive connection of various types of consumer audio-visual (AV) devices that use networks for sharing and transmitting data (content). Products making possible AV over networks have been called home information appliances or personal information appliances. This communication is not simply a matter of cable or wireless communication, but also involves integrated circuit (IC) memory chips, or memory cards. These memory cards serve as bridges that connect devices, because they can be used, for example, to transfer images from a digital camera to a computer or printer.
These new digital home electronic devices require integrated technologies. For a start, the experience and technologies of appliance manufacturers, who are familiar with consumer tastes, must be married with information processing and communication technologies.
Consumer products come with a wide range of stringent requirements. For example, they must be small, light, energy-efficient, high-performance, noise-resistant, well designed and recyclable. Moreover, they are greatly influenced by fashion. The market life of such products is relatively short. By necessity, therefore, planning and development lead-
times have become much shorter, and production capacity has expanded. Small-lot production is adequate for products made to order or for a select market of enthusiasts. Once a product becomes popular and its manufacturer wants to obtain a certain market share, however, production must be large enough to penetrate the market in a short period of time. For example, to place several new products in 50,000 stores located throughout Japan, a manufacturer has to make more than 200,000 units. And they must be made within several weeks. On the other side of the coin, if a product fails to sell well, not only do manufacturers have to cancel production, but they are also left with piles of unsold stock.
Electronic components such as LSIs, switches and condensers, which lie at the core of digital home appliances, require short development periods together with capacity and stability of supply. Product lineup is also an important factor for makers of system large-scale integrated circuits (LSIs), which are mounted with processor cores that handle the image, audio and communication processing functions. Mass-produced LSIs, which can be used in a wide spectrum of electronics, from regular to high-end products, have a particular advantage because manufacturers want to use common application software.
Software and communication protocols are incorporated into system LSIs. Today, the same hardware (LSI) is used wherever possible, and differences in application and function are handled by software. This is to facilitate mass production of LSIs and permit shorter development time in accordance with program changes. With recent LSIs, it is possible to isolate the power supply within individual circuit blocks. This has been done so as to not affect yield ratios, even if seemingly unnecessary circuits have been integrated. These LSIs, which have common substrates, are called platforms. Of course, developing such LSIs requires advanced hardware and software technological capabilities.
Conventional manufacturers of general electronics products are well-placed to be able to realize this integration of technologies because they have all the necessary ingredients, from materials to parts, assembly and testing facilities, application software and markets. However, not many of these manufacturers are still around today.
Many companies make up for this shortfall by forming alliances with universities. These companies know where the market needs lie, but require the help of universities and specialist manufacturers with the technologies that can make such products a reality. Today, more and more companies are forming alliances with specialist manufacturers.
European and U.S. companies have also turned their attention to this new sector of digital home appliances. The market for devices used in digital home appliances is global in scale. The universality of this emerging market will serve to fuel competition, not only for technical advances but also for business expansion. This year’s CEATEC JAPAN provides an excellent opportunity for companies to showcase their efforts and ambitions in this area. It is quite likely that their respective efforts, along with their business policies, will form a basis for further differentiation.
We can expect that companies exhibiting in the Home and Personal Zone will station more engineers at their exhibits than usual. This will enable them to provide full explanations to visitors. In this way, they can better look after customers while also focusing on their in-house activities.
User-Friendly PCs
If you will allow me to sidetrack a little, you will find that many products made for the individual recently are also labeled user-friendly. The other side to this is that computers are being turned into teachers.
Traditionally, people have had to adapt to the needs of computers to properly operate them. For a long time, people have commented on the operability and user-friendliness of computers, as well as the inadequacy of their user manuals. Recently, manuals for software users have come in the form of CD-ROMs. Today, many older people want to use computers to process photos they have taken on their digital cameras. However, most manuals are produced by young people who have highly agile brains, with the result that they are hard for older people to understand. As people get older, their brains and nervous systems slow down (although this might apply solely to this author!). Completing the same task that one used to do when young takes longer when older. Similarly, when performing a task that has several steps, users can easily forget the first step by the time they have completed the last. For this reason, such tasks must be performed while referring to a written notes.
Understanding what appears on a screen is not actually the same thing as being able to perform a task. The required pages are all over the place. In the end, many people find they have to print out the entire contents of their manuals on CD-ROM.
I am eagerly looking forward to this year’s CEATEC JAPAN, where many exhibits will showcase products that appeal to the more fragile of human sensitivities. Look for catchphrases such as “Easy-to-operate digital home appliances,” “Digital home appliances that can be operated without reading a manual,” “Keyboards that are gentle on the fingers” and “Displays that are gentle on the eyes.”
About CEATEC JAPAN 2004
CEATEC JAPAN is one of the largest international exhibitions in Asia for the information technology (IT) and electronics sectors, including the fields of imaging, information and communications. CEATEC JAPAN 2004 will be held in the 5-day period from October 5 to October 9. The theme of this year’s event is “Ubiquitous Society–Digitally Enriched, Accelerating to the Next Stage.” Organizers of CEATEC JAPAN 2004 forecast approximately 700 exhibitors and 2,700 booths, as well as an increase in the number of visitors, to more than 200,000. CEATEC JAPAN 2004 will feature displays of digital products and network-related technologies and services, key factors that drive global markets, as well as high-level CEATEC JAPAN Conference programs. In this way, the event promises to further distinguish itself as a “forum for the announcement of new technologies and products.”
Contact:
CEATEC JAPAN Management Office,
Japan Electronics Show Association
Kohei Torikai,
Tel: +81-3-5402-7603,
Fax: +81-3-5402-7606,
E-mail: ceatec.info@ceatec.com