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Ohtsubo Expounds On A Variety Of CE Issues

1/26/2004 02:00:00 AM Eastern

Fumio Ohtsubo, president of the Panasonic AVC Networks Company, took the long trip from company headquarters in Osaka, Japan, to deliver the opening day keynote for International CES. (See story at right.)

Ohtsubo spoke with TWICE after his keynote to discuss the renewed competition between CE and PC companies in digital entertainment, Panasonic's evolution into a "fashion technology" brand, shrinking product life cycles and when Blu-ray should be introduced.

TWICE: In the U.S. over the past couple of years the image of Panasonic has changed. It now is popular with women and with members of Gen-X and Gen-Y. How and why did the Panasonic brand switch from being perceived as an "industrial technology" company to a "fashion technology" company.

Ohtsubo: Panasonic changed from product oriented to a cool, fashionable image. We are now [perceived as moving] from a 'second maker' of technology to a 'first maker' with consumers. Our [former] image came from our traditional strict divisional system at Matsushita. The TV division was separated from DVD, and so forth and so on. There was no collaboration between divisions.

Digital technology broke the individual division system. Digital technology took us to a single product concept system. For example, TVs are now linked to DVD, which are linked to SD cards. It is a revolution for us.

Kirk Nakamura [president of parent company Matsushita Electric Industrial of Japan] has changed sales and marketing to work closer with the factories. Sales and marketing bring market factors, competitive issues and other opinions to the manufacturing side.

TWICE: In your keynote you said the industry should make products that are "easy to set up" and "easy to understand and operate." With all the talk about a renewed competition between the PC and CE industries, is it the ability of CE manufacturers to make products easy to use and understand a key advantage versus PC companies?

Ohtsubo: I fully agree. We build technology based on what the market wants and needs. Consumers are technologically oriented and want to buy our products. But after spending the day at the office at their computers many consumers want to enjoy entertainment and don't want a complicated unit.

The difference between audio/video products from the CE industry and products from the PC industry is that PC products are 'concentration' oriented. With many CE products you use one button to enjoy it, use it. With PCs you really have to concentrate and take several steps before you enjoy the product.

TWICE: Once again, in your keynote you mention, "As manufacturers we must provide a constant flow of exciting products and technology." With product lifecycles become more compressed is the opportunity for real profit from CE more compressed than ever?

Ohtsubo: One major issue for CE manufacturers is that our product lifecycles have become shorter and shorter. We have to fully utilize our engineering background to make products that are more unique and more difficult to duplicate. We have to develop a [software] platform, or middleware, to react to the market. Based on this type of platform development we can react [quickly] to the market and fully utilize our capabilities.

TWICE: There has been plenty of talk during the show about Blu-ray. Panasonic has said it will probably not introduce it in the United States this year, and for the industry to do so may be a mistake. Do you see any way Blu-ray will be introduced by Panasonic this year?

Ohtsubo: We are one of the founding companies behind Blu-ray. Development has been smooth and we could introduce it right away. But we are carefully observing marketing trends at this time. We need to see how many [consumers] want to record HDTV programming immediately. We also have to deal with the broadcasting industry, the content industry and deal with copy protection.

We have to balance this 'double-wheel' of Blu-ray — consumer demand and copy protection — that is very important. We are carefully watching these factors. Will they be resolved soon? Maybe. But by the end of the year? I don't think so. o

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