3. An Analysis on the Market of Electronic Information Products

3.1 Market Scale, Development Features and Growth Potentialities of the Electronic Information Products
Japan is the second largest market for electronics in the world. Among the four major industrial powers, Japan takes second place in the world in terms of the market sales value of electronics, ranking next to the United States.

Japan has a strong strength to contend with American, pioneer of the global information industry, in its semiconductor chip manufacture and digital cameras and notebook computers, etc., and shows an immense priority all around the world in its consumer electronics as represented by digital cameras. During the period of 1990-1999, the information industry in Japan has enable 2-million people to obtain employment. In 1998, Japan had a market volume of US$ 142.460 billion in its electronics. Among them, the electronic components, with a market volume of US$ 47.731 billion, 17% less than that of 1997, ranked the first and had a share 34% of the total market volume; and the electronic data processing products, with a volume of US$ 45.065 billion, 19% less than that of 1997, ranked the second and had a share 32%. In 1999, Japan had a market volume of US$ 143.422 billion in electronics, 0.6% higher than that of 1998. Among them, the electronic components, with a market volume of US$ 48.001 billion, 0.6% less than that of 1998, ranked the first and had a share 34% of the total market volume; and the electronic data processing products, with a volume of US$ 45.516 billion, 1% more than that of 1998, ranked the second and had a share 32%.

With an increased speed in the development of its informatization, Japan will have a continuously enlarged market scale in the information industry.

3.2 Sales Scale, Development Features and Growth Potentialities of e-Information Manufacture Products
3.2.1 Computers
In 1997, Japan had a sales value of US$ 0.658 billion in its computers and ranked the second among the 32 countries and regions listed in the Yearbook of World Electronics Data, accounting for 21.6% of the total computer market. In the past years, PC has been taking the lend I the computer market in Japan, with the production and marketing volumes both ranking the second in the world. The total PC outputs (pub in domestic market and exported abroad) have been increasing in high speed since 1992, and have reached to 8.391 million sets by 1996, with 34% growth for the totals and 41% growth for the exports. Among them, there are 3.751 -million sets of notebook PCs, with 40% growth for the totals and 42% growth for exports, compared with the same period of the previous year. Following a rapid increase in 1995 and 1996, PC has a less favorite sales since 1997, especially in the domestic market, with a decline in the total volume of goods delivery and exports. The total PC volume of goods delivery in 1997 was 8.174 million sets, 10% less than that in 1996. However, the sales of notebook PCs still had an 8% growth in the domestic market, while having an increasing trend in the global market. In order to strengthen and develop the markets for PCs, the manufacturers in Japan, on the one hand, have taken an active step to the oversea market, such as to American market and achieved success to a certain extent; on the other hand, they have been striving to develop new PCs. With a rapid development of informatization, the computer industry in Japan tends more to develop and provide the products and service, based on network environment. And in order to develop an interrelate technology, the computer manufacturers in Japan have formed the Decentralized Object Promotion Association. In addition, the manufacturers of hardware and software have established the roducts Support Union in bid to promote the technology development. In the meantime, the competitors have changed their business strategies to supply each other needs by manufacturing the mutual mating products, thus resulting in a change of direction from absolute competition to co-existence competition in the computer industry.
3.2.2 Semiconductors
Japan ranks the second in the world semiconductor market. Following a rapid increase in 1992-1995, the market scale of Japanese semiconductors began to decline (by 8.6%) in 1996 and to rise again in 1997, with a 4.4% growth and a 23.3% or so share in the world semiconductor market.
3.2.3 Consumer electronics
Although there has been a decline in the production and sales of consumer electronics in the past years, Japan still ranks first in the production of consumer electronics in the world. In 1997 Japan registered a sales value of US$ 12.6 billion in its consumer electronics, 1.6% more than that of the same period in the previous year, accounting for 165 of the total sales value of the 32 countries and regions in the world. With a rapid development of digital technology and networking, the digitalization of Japanese consumer electronics has been speeded up its development accordingly. In order to maintain its leading position in the global market of consumer electronics, Japan has made an active development in the digitalization of its traditional consumer electronics over the past years. As viewed from the home market, Japanese enterprises have basically completed the digitalization of consumer electronics, and have promoted in succession their products to market.

Following is the market structure for major products:
1、 CTV
Market Capacity: 9.597 million sets were put in the domestic market in 1999, with a 0.6% decline
Market Share:
(1) Panasonic Electric 18.1 (-0.1)
(2) Sony 18.0 (1.5)
(3) Toshiba 12.8 (0.3)
Subtotal 48.9 (1.7)
(4) Sharp 12.4 (2.4)
(5) Aiwa 8.0 (1.2)

2、Refrigerators
Market Capacity: 4.789 million sets were put in the domestic market in 1999, with a 1.9% decline
Market Share:
(1) Panasonic Electric 23.4 (2.1)
(2) Toshiba 16.9 (3.9)
(3) Sanyo 16.4 (0.3)
Subtotal 56.7 (5.8)
(4) Hitachi 16.1 (2.6)
(5) Sharp 14.4 (0.8)

3、Undersized Sound Equipment
Market Capacity: 2.96 million sets were put in the domestic market in 1999, with a 13.2% growth
Market Share:
(1) Aiwa 24.1 (-1.5)
(2) Kenwood 19.0 (1.1)
(3) Sony 13.8 (0.0)
Subtotal 56.9 (-0.8)
(4) Panasonic Electric 13.6 (-0.6)
(5) Sony 12.0 (2.6)

4、Desktop VTR
Market Capacity: 6.84 million sets were put in the domestic market in 1999, with a 4.5% decline
Market Share:
(1) Panasonic Electric 25.0 (1.4)
(2) Sony 15.3 (0.2)
(3) Victor Japan 11.3 (-2.1)
Subtotal 51.5 (-0.6)
(4) Toshiba 11.2 (-1.3)
(5) Sharp 11.0 (-0.2)

5、Washing Machines
Market Capacity: 4.281-million sets were put in the domestic market in 1999, with a 3.7% decline
Market Share:
(1) Hitachi 22.5 (1.3)
(2) Panasonic Electric 22.0 (-0.9)
(3) Toshiba 20.2 (0.2)
Subtotal 64.7 (0.6)
(4)Sanyo 14.0 (-0.4)
(5) Sharp 13.2 (-1.1)

6、DVD Players
Market Capacity: 0.388 million sets were put in the domestic market in 1999, with a 61.7% growth
Market Share:
(1) Pioneer 38.0 (-6.0)
(2) Panasonic Electric 20.0 (-7.0)
(3) Sony 17.0 (-1.0)
Subtotal 75.0 (-14.0)
(4) Toshiba 15.0 (10.0)
(5) Sharp 8.0 (5.0)

7、Digital Cameras
Market Capacity: 1.682 million sets were put in the domestic market in 1999, with a 41.5% growth
Market Share:
(1) Fuji real film 28.8 (5.4)
(2) Olympus 25.7 (5.8)
(3) Sony 10.1 (4.8)
Subtotal 64.6 (8.4)
(4) Casio 7.2 (-5.7)
(5) Epson 6.9 (-3.8)

8、Videocorders
Market Capacity: 1.374-million sets were put in the domestic market in 1999, with a 0.3% decline
Market Share:
(1) Sony 50.9 (4.7)
(2) Panasonic Electric 22.2 (-2.3)
(3) Victor Japan 12.4 (-1.8)
Subtotal 85.5 (0.3)
(4) Sharp 11.8 (-2.7)
(5) Canon 2.5 (2.0)

9、MD players/Recorders
Market Capacity: 2.95 million sets were put in the domestic market in 1999, with a 12.6% growth
Market Share:
(1) Sony 37.0 (0.1)
(2) Panasonic Electric 19.7 (6.0)
(3) Sharp 18.8 (-0.5)
Subtotal 75.5 (5.6)
(4) Kenwood 9.7 (-1.8)
(5) Aiwa 5.3 (2.4)

10、 Lithium-Battery
Market Capacity: 383.34 million sets were put in the domestic market in 1999, with a 40.5% growth
Market Share:
(1) Sanyo 24.6 (3.6)
(2) Sony 24.3 (-6.7)
(3) Panasonic Battery Industry 20.3 (-1.2)
Subtotal 69.2 (-4.3)
(4) AT Batter 13.7 (1.7)
(5) GS 8.6 (0.1)

11、Logic IC
Market Capacity: Yen 23,000 trillion Logic IIC were put in the domestic market in 1999, 6.5% growth
Market Share:
(1) NEC 20.0 (0.9)
(2) Fujitsu 10.1 (1.0)
(3) Toshiba 9.0 (0.7)
Subtotal 39.1 (2.6)
(4) Hitachi 8.0 (0.0)
(5) Panasonic Electric 7.8 (0.9)

12、Indoor Air-conditioners
Market Capacity: 6.469-million sets were put in the domestic market in 1999, with a 1.3% decline
Market Share:
(1) Panasonic Electric 16.5 (-1.5)
(2) Mitsubishi 14.1 (-0.4)
(3) Toshiba Career 12.3 (0.3)
Subtotal 42.9 (-1.6)
(4) Hitachi 11.9 (0.9)
(5) Daikin Industries, Ltd. 10.4 (-1.3)

13、CD Players
Market Capacity: 2.414-million sets were put in the domestic market in 1999, with a 5.5% decline.
Market Share:
(1) Sony 40.5 (2.0)
(2) Panasonic Electric 39.7 (0.2)
(3) Kenwood 11.1 (-0.4)
Subtotal 91.3 (1.8)
(4) Aiwa 3.9 (0.1)
(5) Pioneer 2.8 (-0.4)

14、LCDs
Market Capacity: Yen 13,080 trillion LCDs were put in the domestic market, with a 27.0% growth.
Market Share:
(1) Sharp 18.5 (-0.9)
(2) Hitachi 9.8 (3.9)
(3) NEC 9.3 (-1.4)
Subtotal 37.6 (-0.5)
(4) Toshiba 7.6 (-0.4)
(5) Panasonic Electric 6.7 (1.2)

15、64-mega DRAM
Market Capacity: Yen 3,043 trillion 64 mega DRAM were put in the domestic market in 1999, with a 80.0% growth
Market Share:
(1) Modern Electronics Industries 23.0 (non-details)
(2) NEC 20.5 (-3.8)
(3) SAMSUNG Electronic 19.1 (-0.9)
Subtotal 62.6 (4.7)
(4) Hitachi 13.8 (0.2)
(5) Mitsubishi Motor 10.0 (3.8)

Market Capacity and Market Share of Multimedia in Japan in 1999
(Unit: %, the data in parenthesis refer to the up-down rate, compared with the previous year)

17、Household Game Machine
Market Capacity: 5.44 million sets were put in the domestic market in 1999, with a 11.1% decline.
Market Share:
(1) Sony Computer Entertainment 65.3 (4.1)
(2) Sega Enterprise 17.4 (0.3)
(3) Nintendo 17.2 (-4.2)
Subtotal 99.9 (0.2)
(4) Others 0.1 (-0.2)

18、Music Software
Market Capacity: Yen 5.695 trillion music software were put in the domestic market, with a 6.3% decline.
Market Share:
(1) Sony Music Entertainment 19.0 (1.6)
(2) Toshiba EMI 15.8 (5.6)
(3) Avex 11.0 (1.0)
Subtotal
(4) Universal Music 7.6 (-0.9)
(5) Victor Entertainment 6.5 (-1.8)
Source: Japan-Chine Information Economy Website

19、PHS Market
Market Capacity: 5.708 million sets were put in the domestic market in 1999, with a 1.3% decline
Market Share:
(1) NEC 27.3 (-0.2)
(2) Fujitsu 17.9 (0.8)
(3) Compag Computer 13.9 (-0.6)
Subtotal 59.1 (0.0)
(4) Hitachi 13.8 (-0.7)
(5) IBM Japan 11.9 (0.0)

20、UNIX Work Station Market
Market Capacity: 132,500 sets were put in the domestic market in 1999, with a 7.1% decline.
Market Share:
(1) SUN Microsoft Systems 38.5 (3.4)
(2) HP 18.9 (-1.4)
(3) Fujitsu 14.1 (2.2)
Subtotal 71.5 (1.7)
(4) NEC 10.9 (-3.5)
(5) IBM Japan 8.3 (1.9)

21、Market of Ink-Jet Printers
Market Capacity: 4.90 million sets were put in the domestic market in 1999, with a 46.3% growth
Market Share:
(1) CIKOU EPSON 50.2 (-0.8)
(2) Canon 30.7 (-1.9)
(3) HP 9.0 (1.0)
Subtotal 89.9 (-1.7)
(4) NEC 6.5 (1.5)
(5) Lexmark 2.5 (1.0)

22、Market of Fax-Machines
Market Capacity: Yen 273 billion sales volume in domestic market in 1999, with a 5.5% growth.
Market Share:
(1) RICOH 18.1 (0.1)
(2) Canon 13.4 (-0.6)
(3) Panasonic Electric System 12.0 (0.0)
Subtotal 43.5 (-0.5)
(4) Sharp 11.9 (0.4)
(5) NEC 10.2 (-0.8)

23、Market of Mobile Phones and Vahicular Phones
Market Capacity: 51.14 million sets were put in the domestic market in 1999, with a 23.1% growth
Market Share:
(1) NTT-DOCOMO (9th Sector) 57.4 (-0.1)
(2) J-PHONE (9th Sector) 16.0 (1.1)
(3) DDI (8th Sector) 12.2 (0.6)
Subtotal 85.6 (0.4)
(4) Japan Mobile Communication (IDO) 7.6 (-0.3)
(5) TU-KA (3rd Sector) 6.8 (-0.1)

24、PC Market
Market Capacity: 11 million sets were put in the domestic market in 1999, with a 37.5% growth
Market Share:
(1) NEC 23.4 (-5.5)
(2) Fujitsu 21.3 (-1.2)
(3) IBM Japan 10.0 (0.0)
Subtotal 54.7 (-6.7)
(4) Sony 7.6 (not in detail)

3.3 Market Scale, Development Features and Growth Potentialities of Information Service Industry
With the strengthening and promotion of informatization by the Government, the Japanese enterprises have made an increasing and progressive investment in informatization, and the information service has an enlarged market scale year by year. Due to the influence by bubble economy and the late development of informatization, a lot of information service enterprises have lost their vitalities and have to close down accordingly. The information service enterprises in Japan had shrunk in number from 7096 (including software enterprises) in 1991 to 5812 in 1995, while the employment retrenched from 493 thousand in 1991 to 407 thousand in 1995. The total sales volume had also declined tremendously. But with the revival of informatization, the marketing situation showed an improvement in 1996, and there was an increase in the number of information service enterprises and the employment. And the sales volume also climbed up to Yen 7.1435 trillion in 1996, with a 12.3% growth. Viewed from the whole trend of the current information service, the enterprises have been polarized in direction of development.
3.3.1 Software industry
Japan ranks second in the global software industry. There are 2 of 10 major world software companies and 3 of 10 major world system software companies located in Japan. Most of computer application systems are developed and integrated by Japan and the OS and application software adopted by most of application software developed by Japan.
The Japanese software companies concentrate themselves on the development of application software. Basic software and special software also have a share to some extent. The basic software as operating system is almost all imported from abroad. The United States is the biggest exporter of software to Japan. In 1996, Japan imported Yen 345.00 billion software from the United States, accounting for 90% or so of the whole imported abroad. Among them, Yen 229.1 billion belonged to the ensemble software, with a 66.4% share. Yen 87.3 billion to the application software with a 25.3% share. 6.1% software is imported from Europe and 2.8% from Asia. However, Japan has exported its software mainly to Asia, which accounted for Yen 3.0 billion with a 53.2% share in 1996, and next to America with a sales of Yen 1.4 billion, to Europe Yen 0.9 billion. The increased export of software to Asia has been cause by a raised demand in the CAD, CAM and control software of overseas Japanese companies. In addition, according to the investigation by CEESA on the game software of the special game machine, in 1996 Japan exported its game software with sales of Yen 122.7 billion in special game machine and Yen 1.7 billion in PCs, and the imported only accounted for Yen 1.0 billion.
In accordance with an investigation by the Ministry of Industry, the Information Service in Japan (including the development of computer software and the establishment, management and application of computer system as well as information handling), has had a continuously increased turnover for the past three years. The turnover reached to Yen 1.015 billion in 1998, 29.2% higher than that in the previous year; and it continued to rise by 5% in 1999, based on which there was a further 15.6% growth in 2000. The statistics also shows that the information service in Japan accounts for 1.98% GDP, with 570 thousand employment in all. It is highly expected to rise by 7-8% annually.

3.3.2 Information handling service
According to the "Real Investigation on Special Service" by the Ministry of Industry, the sales volume of commission information handling service was. Yen 1.052 trillion in 1996 with a 7.7% growth, accounting for 14.7% that of the whole information service. Among it, the online information handling service amounted to Yen 675.8 billion with a 4.3% growth, and VAN service Yen 231.8 billion with a 11.6% growth; whereas there was only a 1.15 growth for online commission computer service, and the sales of offline information service reached to. Yen 440.00 billion with a 14.3% growth. It is fore cased that in the whole information service the composition ratio of the future online and offline information handling service will tend to decline, whereas that of information system commission handling and operating service will show a progressive increase.

3.3.3 System integrated service (SIS)
SIS, a main stream in the information service industries, had a sales of Yen 1.2 trillion in 1996, accounting for 26.4% that of the total information service. There is a change in the existing SIS, i.e., a decrease of all-purpose machine-oriented SIS and a rapid increase of commission server SIS.
3.3.4 Database service
According to the Real Investigation on Special Service by the Ministry of Industry, the database service had a sales volume of Yen 1.2 trillion in 1996, with a 19.3% growth. Based on the figures in the summary of "database Accounts 1996 Volume" by the Ministry of Industry, Japan used 3350 databases for commercial service in 1996, in which 1165 from domestic and 2185 imported from abroad. Database is used widely in various industries, first highly in financial and insurance institutions, next in service including information service, mining and manufacturing, construction and real estate.