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Japanese Vc Rs Switch Into Slow Motion


International Business

JAPANESE VCRs SWITCH INTO SLOW MOTION

In just a few months, the videocassette recorder will turn 20. But don't expect a birthday bash in Japan for this boxy contraption that has revolutionized home entertainment.

Instead, the world's leading producers of VCRs are busy brooding over a different milestone: the 30th straight month of shrinking sales at home. Total VCR shipments in Japan this year will barely top 4.5 million, down from a high of 7 million in 1988. Forecasts for next year are worse. The reason: 80% of Japanese households already own a VCR.

On top of that, the Japanese face stiffer competition in the U. S., the world's biggest VCR market. Despite the recession, Americans are snapping up more than 1 million VCRs a month -- but are opting for low-end models from South Korea and Southeast Asia. Japanese VCRs now make up only half of U. S. sales, down from two-thirds last year. "Competition overseas is excruciating," says Tamotsu Harada, an official of Japan's Electronic Industries Assn.

To squeeze the last drop of profit from aging VCR technology, Japan's consumer-electronics giants are rushing out newfangled models to match every whim -- and more. Sanyo, JVC, Toshiba, Hitachi, and Matsushita have timed their moves well. The latest versions are coming out just as Japanese workers are pocketing hefty yearend bonuses. If they're winners at home, the new VCRs could hit the U. S. market next year.

These razzle-dazzle models don't come cheap. Toshiba's entry is a double-deck VCR that can record or play for 16 consecutive hours -- vs. a maximum of nine on most machines. The price: $1,330. Matsushita Electric Industrial Co.'s $1,230 machine is ideal for collecting successive episodes of TV shows on the same tape. In a new twist, viewers program a blank tape to record a show, using a simple bar-code device. After that, just pop in the tape, and it sends out the recording instructions.

UNSNARLED CORD. That's just the beginning. Live in a cramped apartment? Hitachi Ltd. is planning a compact version only half as wide as existing models. Tired of those spaghetti wires entangling your TV? Matsushita engineers are working on a wireless VCR that will send audio and video signals to the TV via infrared controls. A music lover? Victor Co. of Japan (JVC) has a VCR that performs all the usual functions and also makes near-perfect digital recordings of satellite radio broadcasts, which kicked off in Japan last March. And the sound quality matches a CD.

There's even one for sports fanatics who are too busy to watch an entire game. For $1,150, Sanyo Electric Co. offers a VCR that enables fans to monitor an event in audio, as they fast-forward through the tape. Special circuits pluck out sound bytes spaced six seconds apart and play them at normal speed. Exotic? Indeed. "But does anybody really need it?" quips one competitor.

Even if the gimmicks bomb, Japan's VCR makers can't expect much sympathy. They've already wrung extraordinary profits from this single technology: Throughout the '80s, Japan's manufacturers produced an average of $10 billion worth of VCRs a year. "They've made some serious money," says Nizam Hamid, an analyst with UBS Phillips & Drew International Ltd. in Tokyo. And there are still big bucks to be made in developing countries. Millions of consumers in India, Africa, and South America have yet to catch the first wave of video technology. Hamid also expects to see Japanese low-end-VCR plants sprouting up in Eastern Europe soon.

What's more, Japanese electronics makers are convinced that high-definition television (HDTV) will create demand for a whole new generation of VCR technology. Japan's global HDTV push remains hobbled by the lack of international standards. But that won't crimp production of new recording devices. Just take JVC. Earlier this month, it started supplying special VCRs to Thomson of France for that company's unique wide-screen TV sets. The Japanese may not create all the high-definition images in the future, but they're set on having their VCRs be the first to record them.Neil Gross in Tokyo


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