January 12, 2006

iPod success shows risk of Japan firms 'missing boat': minister

Thursday • January 12, 2006

Sony's failure to invent its 'own iPod' before Apple provides a lesson to other Japanese firms about the danger of being caught napping by foreign innovators, a government minister warned.

Heizo Takenaka, Japan's Minister for Internal Affairs and Communications, said Apple's lead over Sony, the inventor of the Walkman, in digital music players showed the need for wider reform of business practices and regulation.

"Apple's iPod provides a pointer to future possibilities as well as a lesson," Takenaka said in an interview with the Financial Times published Thursday.

"Although it would have been natural for a Japanese electronics company to have developed the iPod, unfortunately, the concept of distributing music over the net did not take off in Japan, so it was Apple rather than Sony that developed the iPod", he said.

Sony had indeed launched a digital player before Apple but failed to capitalise on it because of obstacles in developing the music download market in Japan, the newspaper noted.

Sony, an icon of Japan's postwar boom in technological innovation, is now struggling to reverse a slump in its fortunes by slashing 10,000 jobs as it heads for a annual loss of 10 billion yen (88 million dollars).

Takenaka said Japan's telecom and media industries needed to revamp outdated business practices and improve regulation. This could bring a five-fold expansion in annual sales for the two markets in Japan, he estimated.

"The media market is about 4,000 billion yen (35 billion dollars), the telecoms market is 16,000 billion yen so together they are 20,000 billion yen.

"Instead of fighting frantically over this pie, there is an opportunity to grow it to 40,000 billion yen or 100,000 billion yen."

He noted that US giant Time Warner's revenues alone were more than those of the whole Japanese media industry.

Takenaka said he had asked a special taskforce to draw up recommendations on reforming business practices and regulation by the end of June.

He believes outdated business practices, vested interests and regulatory obstacles are hindering the full development of goods and services that harness new technology and the Internet, the FT said. — AFP

No comments: