Shinkansen: Missed The Boat?
Japan’s main artery of commerce, trade and tourism, the Shinkansen, is undoubtedly the world’s safest and most punctual high-speed rail system, but its tragic flaw may be that it’s arriving at the international platform too late. With a sprawling 2,500km-long rail network, there is limited growth potential within Japan, and it has now dawned upon bullet train operators that keeping their technology within Japan’s borders may see the sun set on the opportunity to export the pioneering high-speed rail system to the world.
Despite building the first bullet train network 50 years ago, the Shinkansen train system now faces competition from European, North American groups and the Chinese railway industry which are all eyeing a piece of the American railway pie. The Obama administration has even set aside $8 billion for a high-speed rail system as part of its effort to stimulate the economy.
JR Central, which operates the Tokaido line—Japan’s oldest and busiest network which plies between Tokyo and Osaka—designs and runs its own trains. The Tokaido line has been running since 1964 without a single fatal accident and an average service delay of 36 seconds last year. The company is now targeting projects in Florida and Texas, as well as a proposed high-speed link across the desert from Los Angeles to Las Vegas as these regions have little existing rail infrastructure. However, JR Central will now have to pit itself against a Chinese bidder for the L.A-Nevada project.
In a trickledown effect, Japanese electrical machinery makers are also redoubling efforts to clinch railway facility construction deals in overseas projects as a new avenue for revenue. Japan’s domestic market for train carriages is leveling off at an estimated 300 billion yen a year. In contrast, train projects worth about 1 trillion yen have been planned in Western countries and emerging economies, such as Brazil and China.
However, foreign companies appear to have seized the upper hand in the competition for railway projects, due to their expertise in handling inclusive services ranging from construction planning to train car design and traffic control. Indeed, three electrical machinery giants—Bombardier Inc. of Canada, Alstom K.K. of France and Siemens AG of Germany—account for 50 percent to 60 percent of global market share.
Hitachi Ltd. aims to win more orders by providing comprehensive train services. To achieve this goal, the company will consider alliances with other firms to offer services such as train maintenance and traffic control system management. With a 70 billion yen deal, Hitachi became the first Japanese company to supply high-speed train cars for a new railway system that opened in December in Britain, the birthplace of railways. Hitachi’s train has been well received for its light body and energy-saving functions, observers say.
Other Japanese companies are also jumping on the bandwagon. Kawasaki Heavy Industries Ltd. is developing a streetcar that runs at a top speed of 90 kph for services in the United States. Meanwhile, last month, Mitsubishi Electric Corp. started operations at a factory in Mexico where electrical motors, brakes and other train equipment are manufactured.
Publishers idle on iPad content
For a country that pioneered the electronic book, squints to read books on mobile phones, and professes paper-saving eco-consciousness, content for e-readers in Japan is surprisingly scant. Sony started a new chapter in mobile technology when it introduced the first e-reader for the Japan market called LiBRIe in 2004. Since then, many companies have attempted to launch their own take on the e-reader platform.
However, sales within Japan for the Sony e-reader were poor, despite faring well against the competition in the UK and U.S., and the e-reader was taken off the shelves in 2007. Fast forward six years and Japan is about to welcome Apple’s iPad to its shores. However, response from Japan’s publishing industry remains muted.
Magazine publishers such as Starts Publishing Corp., which publishes Oz Magazine for women, is set to distribute some of its content electronically, and will price these iPad periodicals at around 70 percent of the print edition prices. But the majority of the Japanese book industry seems content to stay offline and on the brick and mortar shelves. Unlike the U.S., where digital books have become an integral part of the publishing process, Japanese publishers generally convert titles into electronic data as an afterthought, if at all.
Part of the reason is the fragmented nature of Japan’s publishing industry which consists of around 2,000 publishing companies of which around 50 are big players, unlike the U.S. which is dominated by a core group of five or six major publishers. This hinders the establishment of an industry norm for contract terms and royalties for authors and electronic data management.
To get the industry on the same page, the Communications Ministry set up a panel in March to explore digital publishing, while a group of 31 major publishers has set up an industry association of e-book publishers. The association’s main task will involve creating a viable business model for the domestic e-book market by clarifying copyright issues and unifying the various formats.