Japan home electronics makers plays dumb on smart TVs

May 18th, 2014 by Philip Brasor & Masako Tsubuku

Smart enough? The latest model LG net TV at Yamada Electronics

Smart enough? The latest model LG net TV at Yamada Electronics

Last year Panasonic ran up against a wall when it came out with its first dedicated “net TV set” for the domestic market. Though TVs had entered the Internet age years before, this new “smart” model in the home electronics giant’s Viera line was an all-in-one device. It hooked up to the Internet directly and basically acted as a computer monitor, so users could stream movies from on-demand services, watch YouTube videos, mirror their PCs and tablets, whatever, while also enjoying the usual offerings of terrestrial and satellite broadcasting.

Smart TVs were already available overseas, so in a sense Panasonic was playing catch-up, but it ran into opposition from the broadcast industry, which, perhaps justifiably, believed smart TVs bypassed advertisers, so at least one station refused to run commercials for the new Viera model, thinking the ads would make other advertisers uncomfortable. Eventually, the station changed its mind and started accepting the CMs, but the resistance is indicative of not only the media’s mindset, but that of the home electronics industry in general.

Some might call it a sympton of Galapagos syndrome, but the fact is Japanese manufacturers are in the smart TV race overseas. Panasonic and Sony both make smart TVs for the American and European markets, and they are available in Japan but are barely promoted. Given that Japan’s reputation as the world standard for television sets and home electronics in general has suffered in the last decade, it’s surprising that this sort of vanguard technology is being overlooked on the domestic front, but maybe it’s simply a matter of perception. According to an article published last summer in the New York Times, smart TVs are popular among younger consumers in Japan, but the TVs they are buying are not made by Panasonic or Sony. They’re made by LG, a South Korean company.

South Korean makers dominate the global television set market, accounting for more than 40 percent of TV sales in the world. Samsung is the leader, with LG a bit behind, followed by Sony as of 2012. In terms of smart TVs, Samsung alone commands about 25 percent of the world market, though LG is gaining, mainly through word-of-mouth, because of its superior usability, which includes a “magic remote” that basically works like a mouse or a track pad: just wave it in the air and the cursor on the screen moves accordingly. On foreign tech review websites, LG is becoming the favorite, and those who don’t like LG are people who don’t like smart TVs in the first place. But while Samsung still gets higher ratings overall and still sells more, LG is obviously making a concerted effort to surpass its compatriot rival.

In Japan this rivalry doesn’t exist, because Samsung has withdrawn from the TV market here. LG once withdrew, too, in 2006, but reentered in 2008. In 2010, the local affiliate announced that its goal was to capture 5 percent of the Japanese TV market by 2015. By 2013, revenues were even better than expected. More tellingly, 70 percent of the TVs they sold were eventually hooked up to the Internet, which showed that the people who were buying them were buying them for a specific reason.

This is important because the conventional wisdom about Japanese TV buyers is that they only care about one thing: picture quality, and Japanese manufacturers have always been considered number one in that regard. But with the advent of LCD and LED screens that have become cheaper for anyone to manufacture in bulk, the difference in picture quality between Japanese products and others has become less obvious, and in terms of price the difference can be a deal-breaker. A 42-inch LG TV sells for less than ¥90,000 in Japan, while a 42-inch TV by Sony or Panasonic tends to cost considerably more than ¥100,000. But LG smart TVs are marketed to be used on the Internet, and while Sony and Panasonic models supposedly have equivalent functions, they are downplayed.

Or at least they seem to be. After researching the functions of various smart TV models on the web, we visited two local discount electronics retailers, K’s and Yamada. K’s does not sell any Korean products, which is not unusual, and the emphasis on new TV sales was, again, on picture quality, specifically so-called 4K technology, which has brighter resolution for larger screens. Yamada carries LG, but when we asked the salesman to compare the features of the LG models to Japanese smart TVs, he said that the term “smart” was simply a promotional tool, as if it were advertising catch copy made up by LG, which is not the case at all.

Overseas, Sony and Panasonic used the term “smart TV” to describe their Internet-ready models, but the salesman insisted that there was no such thing as a smart TV except in LG’s catalogue and that the Internet functions were the same as those for Japanese TVs. But when we asked him to compare these features, he said there was nothing to compare until you got to the really high-end models. In essence, he said you got what you paid for: if you wanted a high-function Internet TV you had to pay for it.

This made no sense to us, and our confusion increased when we returned later and talked to a floor salesman who worked directly for Sony, meaning his job was specifically to sell Sony TVs. When we asked him to explain the Internet functions of his models he had to take out a brochure and check to see what they were. Smart functions apparently weren’t that important as far as sales pitches went.

This is only one store, and from what we’ve read larger electronics retailers, like Yodobashi Camera’s huge Akihabara outlet in Tokyo, do a better job of selling smart TVs, and LG is selling well in those stores because people who want smart TVs realize it’s the best deal for the money — at least in Japan. Obviously, part of the problem with getting people interested in LG is the Korean angle. There is certainly a negative perception attached to Korean products in Japan, where they tend to be thought of as inferior; which is hardly true and hasn’t been for decades. But the belief persists to the point that Samsung only sells smart phones and tablets in Japan and that’s because DoCoMo likes and supports its products.

Hyundai and its subsidiary Kia stopped trying to sell cars in Japan in 2009 because no one would buy them. LG is persisting on the Japanese market because the company believes it has a product, smart TVs, that Japanese people want but which Japanese manufacturers aren’t paying sufficient attention to. If Japanese manufacturers emphasized smart TV functions, consumers might notice that LG’s are more cost-effective, if not downright superior, so maybe they think it’s better not to make a fuss. In any case, when you read LG buyers gushing online about their purchases they are immediately bombarded with comments by people who wonder if they are “really Japanese,” because presumably a real Japanese person would never buy something from Korea. This opinion is exacerbated by the fact that Japanese media rarely report on the success of Korean products in the world. Maybe Japan really is Galapagos.

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2 Responses

  1. I’m not sure where you got this information from. I bought a Sony TV in Japan 3 years ago. It, and all the other Japanese brands I looked at, we’re smart TVs. These had Hulu streaming, YouTube, access to Sony movie and music service, as well as domestic movie rental services.

    But my smart TV, like many, isn’t even connected to the net. As many have found out, smart tv operating systems are clunky, slow and difficult to use. Add on boxes like Apple TV, Google and amazons equivalent and roku etc are at the forefront of this market. I don’t think people care about smart TVs any more.

    Finally, 3 years ago my Sony 46″ snart tv, led LCD, cost under 90,000 yen. This article is very inaccurate.

  2. A Chinese android TV box can run less than $50 for a multicore android 4.2 version. The interface is the same as a familiar android smart-phone, with a wireless mouse providing the imput. I can watch BBC, NHK english, pull content from a computer on the local network and play it – no matter what oddball video encoding method or subtitles were included with it, and do almost everything I could do with a PC, except get a cheap webcam to work with it for Skype. The problem with name-brand, built-in solutions, including Japanese ones is that they try to “get cute” with the interface. My friend’s cable TV box in Kamakura had an android interface buried deep within it, but for whatever reasons – probably security – the “report android version” function had been messed with so that few Play store apps could be loaded on it. As well, the remote with a tiny touch-pad was a disaster. Sticking an Android TV circuit board into a Japanese TV is not rocket science, or cost-prohibitive. Someone in management is just a bit scared of open systems. Perhaps they have good reason to be: Sony would not want its name on an android based smart tv that got hacked and started scamming its customers, sending spam and violating their privacy.

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