Japan's electronics industry is rising on the tide of economic recovery, with all major electronics manufacturers reporting positive numbers for the fiscal year that ended in March. The industry attributed its good fortune to the strong growth in demand for digital consumer electronic products, and it expects the upward trend to continue through the Athens 2004 Olympic Games in mid-August. The hope is that the Games will be the main booster for terrestrial broadcasting services, which started last December in Japan, and that they will stimulate consumers' demand for large flat-panel TV sets and DVD recorders.

"The economy's outlook becomes uncertain," however, in the latter half of this fiscal year, said Kunio Nakamura, president of Matsushita Electric Industrial Co. Ltd.

"It's impossible to predict. There are too many factors," echoed Nobuyuki Idei, CEO of Sony Corp.

Sony and Matsushita expect that sales will remain flat this fiscal year compared with last year. Pioneer and Sharp, however, look for double-digit growth.

Pioneer expects its plasma display panel and DVD products as well as its car navigation systems will be the largest contributors to the rise in sales this year. Sharp expects healthy growth for its charge-coupled devices, CMOS image sensors and liquid-crystal display panels as well as LCD TVs and camera phones.

Flat-panel TV sets, DVD recorders and digital still cameras constitute the hottest areas of Japan's consumer electronics market. Of the three products, digital still cameras and flat-panel TVs have emerged beyond Japan to gain popularity in the world market. This year, DVD recorders are poised to take off for the world market as well.

According to the Japan Electronics and Information Technology Industries Association (JEITA), Japan sold 623,000 units of the 723,000 DVD recorders shipped worldwide in 2002. Last year, Japan sold about 2 million of the total 3.6 million units shipped worldwide. Although Japan's share of the world market for DVD recorders dropped to 55 percent, the country still constituted the largest market for DVD recorders worldwide. And this year, sales in Japan are expected to increase to 3.5 million units. North America is expected to account for 2.3 million units; Europe is projected to buy 2.1 million recorders. A total of 9 million units is projected to be shipped worldwide this year, according to JEITA.

Matsushita, which holds the largest single share of the DVD recorder market, expects that 3.5 million DVD recorders will be sold in Japan, 3 million in North America and 3.4 million in Europe. It projects that total worldwide demand will surpass 10 million units.

Sales of DVD recorders in Japan have been boosted by the appearance of combination DVD and videodisk recorders. At present, 70 to 80 percent of DVD recorders sold in Japan have built-in hard-disk drives. Recent models have a capacity of 100 to 250 Gbytes, allowing them to store 100 to over 200 hours of VHS-quality TV programs.

DVD recorder sales have also been aided by the development of multidrive recorders by such manufacturers as Hitachi, JVC and Toshiba, mitigating the format conflict between Matsushita and Pioneer. Matsushita promotes the DVD-RAM format, and Pioneer leads the rival DVD-RW effort.

Now that the multidrive recorders are available, consumers don't have to worry about differences in disk formats. The multidrive disks can read DVD+RW and DVD+R disks but have no recording capability.

This year will be a special year for Blu-ray disk recorders. Sony has been the sole player in the Blu-ray disk recorder arena for one year, but Matsushita will enter the market in the latter half of this year at the Athens Olympic Games. Matsushita will introduce its first Blu-ray disk recorder in Japan in July. The company will position the recorder, which has a 50-Gbyte disk, as the high-end product in its DVD lineup for high-definition program recording.

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