Thursday, November 01, 2012

Sayonara Panasonic, hello Samsung and Apple?

Taking a look at the charts of Panasonic and Sony today, in light of Panasonic's $9.6 billion loss for the year ($25 billion in losses over five years) and the steadily eroding Japanese consumer electronics business.  



While Panasonic, Sony, and Sharp have been getting killed in the TV and electronics marketplace (and in the share market) over the past few years, others have prospered. 

Apple, which is increasingly seen as more of a design-focused electronics maker, as opposed to a computer company, has seen its stock price quadruple in price over the last five years. 



The US design-meets-Chinese manufacturing combo has helped Apple out-innovate its competitors and undercut their cost structure. A strong yen has also hindered exports of Japanese electronics. 

Samsung has been rising to the top and is now dominating the smartphone market along with Apple. In fact, the two now account for 106 percent of handset profits. That's right, the total is greater than 100% when offsetting losses of the other handset makers. 

 

So while the Japanese firms (who ate everybody's lunch in the '70s and '80s) struggle, Apple, Samsung, and US-based Vizio are making hay. Look no further than the charts above; they clearly show the shift towards the dominance of Korean and US firms (aided by low-cost foreign manufacturing) in electronics. 

So if you're trading or investing in an industry, and you see a trend unfold like this, be sure to go long or short along the line of least resistance - that's with the trend and not against it.

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