The news was first reported by The Nikkei Business Daily, which said electronics makers were showing slow earnings growth due to problems with embedded software and slow product development.

JVC engineers declined to speak with DSO.com from Japan, but a company spokesperson was willing to confirm the report for us. He also said that JVC's operating-income decrease of 6.9 billion yen (approximately $59 million) in fiscal 2006 were caused, in part, by the "enormous amount of service costs caused by quality issues and the resulting elimination of available models" as well as "lost opportunities for potential sales of LCD TVs due to delays in product development."

The spokesman attributed approximately 22 percent of that decrease — or 1.5 billion yen (approximately $13 million) — to "quality issues and delays in product development."

To address these issues, he added, JVC evaluated the design department's management structure. A director in charge of technologies determined that the solution to JVC’s problem was "quality control management without compromise," the JVC spokesperson told us. As a result, JVC recently created a development process reform team, separate from the development groups, in each product category.

JVC has since created a development process reform team of 50 engineers. Ten members from each of five product categories will manage their respecive technology and development procedures. "The team of design reviewers intends to verify technologies from various angles to prevent design mistakes," the JVC spokesperson said. "These improvements will start in the group that makes camcorders and will then be expanded to all product categories. We are certain that these improvements will boost product quality throughout the entire company."