National/Panasonic

By spending 8% of its annual sales revenues - a massive $4.2 billion, on research and development - National/Panasonic is confident that it can outperform its cheaper competitors in the digital age with better products.

Having spent two years at the American University of Cairo to learn Arabic in the mid-70s followed by many years in Riyadh and Kuwait, new regional managing director of National/Panasonic, Shoji Itoh is no stranger to the region.

He arrived in Dubai last November to take up his new job as regional managing director after a short period back in Japan as head of sales and marketing for the Middle East and North Africa. It is his first time in Dubai where the Japanese group faces tough competition from the Koreans and Chinese. But National/Panasonic has a clear strategy.

'We know the Middle East and first came here 50 years ago,' he says, 'The Koreans came here with attractive pricing five to ten years ago after the Gulf War. Pricing is the main issue, and our total sales are not expanding as fast as the Chinese and Koreans.

'But we have the advantage of supplying high quality digital products and that is where we see the future going. We will be concentrating on digital products.'

Mr. Itoh says the next six months will see a succession of new digital products from the Japanese manufacturer. In particular, new digital movie cameras, an upgraded version of its famous home theatre system and digital still cameras.

He also proudly displays a 512MB memory chip which will become the backbone of a series of exciting new digital products, 'This chip can hold the equivalent of eight CDs,' he says, 'You will soon be able to download your entire CD collection into your home entertainment centre or car audio system.

'We will also soon be introducing a DVD recorder that is intended to completely replace VHS video tape for recording television. This will be fully compatible with existing CDs, VCDs and DVDs. In Japan we also already have digital TV which is fully interactive with the user.'

There is no doubt that National/Panasonic's heavy spending on research and development is going to bring a strong competitive edge to its products over the next few years.

'The future Internet platform will not be the PC but the mobile phone,' says Mr. Itoh. 'We have 3G mobile phones ready for when the UAE introduces this system next year and this will bring video content to the mobile phone. This is the next step in the digital world.'

For the Middle East National/Panasonic is confident of maintaining double-digit growth, with certain countries offering the prospect of much higher growth rates. Mr. Itoh sees Iran and Dubai as hot spots with National/Panasonics' Jebel Ali base as an important hub for expansion.

This is partly down to the young population profile of the region, with half of its inhabitants under 20 years' old. And a huge unsatisfied demand for consumer products. But it also reflects a wider commitment from National/Panasonic.

'Our philosophy is to enhance the lifestyle of consumers through our products and to contribute to society, and boost business activity through innovative products,' says Mr. Itoh.