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TRADE wars between Japan and USA are common, but now there are major technology wars brewing. And the US companies may be getting an upper hand.
Japanese electronics have flooded markets worldwide with cheaply-produced and diverse products, but their capacity to be innovative does not seem to match their manufacturing capacity. This has left them short on new products in an already saturated market.
Many Japanese companies are therefore finding it difficult to hold their position. The message is clear: the market needs new products. What exactly this new wave of products will be is not clear, but soon the common portable computer may also contain a cellular phone and fax and video capabilities. But Japanese companies seem to be falling behind on big innovations.
For instance, industry cooperation had shaped Japan's jump into high definition television technology, HDTV. But now, as Japanese HDTV products are coming onto the market, they are suffering from a dated technology which sharpens the TV picture but does not convert it into a computerised form. On the contrary, a US joint venture between Zenith Electronics and American Telephone and Telegraph claims to have computerised images, allowing the user to manipulate the video, the way personal computers manoeuvre words.
The problem apparently lies in the Japanese mentality. Japanese companies do not pursue novel ideas even when they are invented in-house. In 1985, Toshiba had invented a new semiconductor called flash memory. Unlike other memory chips, flash chips do not require constant electrical charge to store information, which eliminates the need for bulky disk drives. This makes the chips ideal for portable electronic products. But instead of pushing its find, Toshiba decided to back a known product which most other Japanese industries were also pursuing.
Meanwhile Intel, an American company, which was being driven out of the market by Japanese goods, was intrigued by flash chips and decided to develop it further. The risk paid off. Intel now has an 80 per cent share of what some analysts say could one day be a multibillion dollar market. Japanese companies are also behind in other hot areas of technology research, such as videophones and computers that can read handwriting.
Obviously, as the world gets flooded with new consumer products, the human brain has to keep on innovating faster and faster to keep the mind amused and the money flowing.