Thursday, 1 September 2011

So-To-Hi, Hi-So-To, To-Hi-So?

SONY, TOSHIBA and HITACHI (all Japanese electronics giants) are about to merge their LCD panel business in order to keep strong competition like Sharp, Samsung, LG and Taiwan's AU Optronics at bay and also strengthen the LCD arm of the business.

With 70% of the funding coming from the Japanese government, the projections for future growth are very optimistic - up to 180 billion yen by 2016 -  especially bearing in mind that all 3 companies have been reporting losses on the LCD business for a while now.

I don't dispute the fact that their very clever (and well-paid) accountants and business analysts have done due diligence with research to come up with these projections and numbers. Or should I?

Read the full story here..

As a simple consumer, the word Monopoly (and control of the market) comes to mind. This merger gives them 21.5% of the market and the largest chunk of the industry. With monopoly comes price fixing and all the related 'industry control' issues. I wonder if this is really for the benefit of the consumers (moreso as it is Government money being spent), or is this just another ploy to keep the shareholders and investors happy?

I also wonder if other countries and companies are considering following in their footsteps, current legislature permitting. Oh, wait a second, isn't that what Oracle has been doing for the past few years - buying up all the ERP software companies available?!

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