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Business

The blind watchmaker

TOKYO -- Calculators helped make Japan into a leading global electronics nation. Two Japanese consumer electronics makers, Sharp and Casio Computer, have been the top two calculator makers for decades. The futures look very different.

     The first commercial vacuum-tube calculators were made in Britain in 1962. Numbers do not face language barriers, and soon Japan came to dominate the market. Sharp released the world's first desktop calculator with all-transistor diodes in 1964. As made in Japan calculators spread across the globe, the nation developed technologies such as semiconductors, liquid crystal displays and solar batteries.

     Tokuji Hayakawa, Sharp's founder and first president, predicted that integrated circuits would be the next market driver after transistors. He invited a talented engineer, Tadashi Sasaki of Kobe Kogyo, which produced the first transistors in Japan, to join Sharp in 1964. The company introduced the world's first calculator built with integrated circuits in 1966. By 1969, it had a calculator with large-scale integrated chips on the market.

     Casio has competed against Sharp on calculators for decades. In 1972, Casio slashed the price of calculators by introducing the Casio Mini, a hand-held sized model, at 12,800 yen ($103). Sharp responded by releasing a model with an LCD in 1973 and one that was solar-powered in 1976. Sharp fended off pricing pressure by focusing on the functions of its devises.

     Haruo Tsuji, the Sharp's third president who took office in June 1986, promoted large-sized LCD panels. In 1999, the company released 20-inch LCD televisions. The technology has allowed televisions with large, flat displays that weigh much less than models with heavy Braun picture tubes.

     Mikio Katayama, the fifth president of Sharp, continued to focus on LCD. The clarity of recent ultrahigh-definition displays, such as 4K and 8K, is stunning. But it is not as shocking as the moment when LCD overtook picture tube TVs.

     As South Korean news provider JoongAng Daily reported in May on its website, South Korean LG Display's latest 55-inch model features organic light-emitting diodes displays that are as thin and light as wallpaper. The display is 0.97mm thick and weighs 1.9kg. Sharp perhaps should have focused on OLED.

     Masayuki Hakata, Casio's former managing director, recalls that his company gave up on producing devices on its own to cut capital spending. Instead, Casio has focused on enhancing functions of the devices. Casio has the majority market share in electronic dictionaries, which evolved from calculators. "If we stop, our products will be outdated," Hakata said.

     Many businesses advocate "selection and concentration" in their company strategies. In contrast, Tsuneji Togami, former president of Yamaha Motor who launched the industrial robot business during his tenure, explains the advantage of the principle of widening the field and being independent. According to Togami, a company should pay attention to niche opportunities in fields that competitors do not operate in. From experience, he knows that niche markets can become a major market over time and increase company stability.

     Casio's digital watch business, renowned for G-Shock, is a good example of this. The company first launched its digital watch business in 1974. For the period ending March 2016, Casio is expecting to post a 8 million units in G-Shock sales and record 33 billion yen in consolidated net profit.

     Sharp, which has concentrated on its LED business, posted a loss of 222.3 billion yen for the fiscal year ended March 2015. In May, President Kozo Takahashi announced a medium-term management plan that includes the sale of the company's headquarters and a voluntary redundancy program for up to 3,500 employees. The company has paid dearly for focusing on LCD for too long. The company is in trouble because it failed to develop strong new product lines.

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