PCs Elude the Electronics Genius of Japanese

Japan struggles to open windows into the fiercely competitive American market

Americans buy Japanese cars, cameras, and television sets without batting an eye. But personal computers? No way.

Consumers are still far more likely to buy their personal computers from domestic sources than from Japanese giants NEC and Fujitsu. Which is something of a puzzle on both sides of the Pacific. For all their prowess in consumer electronics and miniaturization technology, Japanese manufacturers have repeatedly failed to crack foreign PC markets except by buying an existing company.

Even then, the results haven't been particularly encouraging. At the recent COMDEX trade show in Las Vegas, Nev., Japanese manufacturers again showed they are gearing up for a push into the American market. But no one is predicting that Japanese computers will suddenly flood store shelves the way Japanese cars flooded showrooms a quarter-century ago.

"We always pay attention to Japanese manufacturers," says Makoto Baba, a vice president at American-owned Compaq Computer here in Tokyo. "It's said that Japanese manufacturers will be a big threat tomorrow or next year. But that scenario hasn't happened."

If anything, Japan's PC companies seem to be slipping. NEC, the only Japanese manufacturer among the top five vendors worldwide, has seen its Packard Bell subsidiary lose sales this year and fall from No. 3 to No. 5 in third-quarter shipments, according to International Data Corp. Even in notebook computers, one of the few bright spots in Japanese PC manufacturing, top-selling Toshiba has lost market share to Compaq and IBM.

Here in Tokyo, few observers expect a turnaround soon.

"I don't think the Japanese will ever exceed the US in terms of the PC market," says Kousuke Aoki, director of the Multimedia Research Institute, a private information-technology research firm here. "There are so many negative factors."

The main reason for the slippage is great news for the consumer. American PC companies have become fiercely price competitive. In the past year, top-tier manufacturers have introduced desktop computers for less than $1,000.

Japan's own market sours

This push by the high-end into the low-end has made it tough for traditional low-price leaders, such as Packard Bell, to compete. It has proven especially difficult for market newcomers, such as Japanese companies, who are eager to make a big splash.

"Our corporate strategy is to be ranked as one of the top five [vendors] in the future," says Tadayasu Sugita, who heads the personal systems business group at Fujitsu Ltd. But "surviving the PC business takes volume." And though the Tokyo-based manufacturer expects a healthy 21 percent growth in worldwide sales in its current fiscal year, its projected US shipments of 250,000 PCs still represent a drop in the bucket.

Hitachi Ltd. has slightly more modest goals. "We first want to rank in the top 10 of the world," says Masataka Kimura, a marketing manager in the company's office-systems division. The company has had good success introducing a new line of portable computers in the US and plans to expand to Europe within the next year and elsewhere in Asia soon after. But to become a top -10 player by the turn of the century, Hitachi will have to sell five to six times the number of units it currently does, Mr. Kimura estimates.

Such goals will be difficult to meet, since Japan's own PC market has suddenly turned sour. Another challenge: Japan's largest PC manufacturer, NEC, is making the difficult transition from its own proprietary operating systems to the global standard set by Microsoft and Intel corporations. The move, announced in September, represents a big change for the PC giant, which once dominated the Japanese market with its proprietary system. But its market share fell dramatically as consumers and companies turned to standard systems guaranteed to run all the software being turned out.

"Society demanded such an information-technology upgrade," says Yoichi Kataoka, the company's vice president of domestic PC marketing.

In fact, the company has leapfrogged the industry by offering an emerging industry standard that will improve the performance of computer peripherals, such as printers, through a new type of connection.

Opportunities to compete

Interviews with Japanese users suggest that NEC may not face a hard time persuading Japanese consumers and companies to move to its new computers. But other vendors hope to take advantage of the situation.

"This gives us more opportunity for us to grow our market in Japan," says Mr. Baba of Compaq, which is currently the No. 6 PC company here. But "they will not allow any foreign manufacturers to be a huge player."

Of course, the opposite holds true in the US, where manufacturers show no sign of giving away their markets to the Japanese.

About these ads
Sponsored Content by LockerDome

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.

Loading...

Loading...

Loading...

Save for later

Save
Cancel

Saved ( of items)

This item has been saved to read later from any device.
Access saved items through your user name at the top of the page.

View Saved Items

OK

Failed to save

You reached the limit of 20 saved items.
Please visit following link to manage you saved items.

View Saved Items

OK

Failed to save

You have already saved this item.

View Saved Items

OK