Japan-US Business Report LogoJapan-U.S. Business Report

No. 340, January 1998

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 Japanese Companies in the US


Becoming a big player in the American computer market is proving to be an expensive proposition for NEC CORP. Japan's top computer maker is in the process of pumping another $300 million into PACKARD BELL NEC INC., bringing its investments in money and assets in the U.S. leader in sales of personal computers for home use through retailers to $1.3 billion over the last 30 months. Sacramento, California-based Packard Bell NEC will use a significant portion of the latest capital inflow to build the
infrastructure to sell NEC-brand servers, desktop machines and notebook computers directly to corporate customers — a marketing strategy launched last summer (see Japan-U.S. Business Report No. 334, July 1997, p. 2). The rest of the money will be earmarked to better position Packard Bell NEC for a planned public stock offering in the next year or so. The company lost money in 1996 and apparently was barely profitable in 1997 because of the fierce price competition in the retail PC market. Executives see a stronger position in the business market through direct sales as the key way to strengthen profitability. With its latest injection of funds, NEC's stake in Packard Bell NEC's voting stock will go up to 49 percent from 19.84 percent.

On the product side, NEC CORP. is banking on the Express5800 HV8000 server to give a boost to PACKARD BELL NEC INC.'s sales to corporate customers. This system, which set a new world performance record running MICROSOFT CORP.'s SQL Server Enterprise Edition 6.5, is configured with eight 200-megahertz Pentium Pro microprocessors, each with 1 megabyte of Level 2 cache, 4 gigabytes of memory and Windows NT Server Enterprise Edition 4.0. An innovative board design created by NEC is said to maximize system throughput and performance. The Express5800 family is the leading Windows NT-based server in Japan. The various models in the line are marketed as ideally suited for Microsoft BackOffice applications, an area on which NEC and Microsoft are collaborating (see Japan-U.S. Business Report No. 336, September 1997, pp. 2-3).

The arrival of the sub-$1,000 PC, one of the factors hurting profitability at PACKARD BELL NEC INC., has persuaded TOSHIBA CORP. to quit the home desktop computer business. The company, the U.S. leader in notebook sales, moved into this market in September 1996 with the launch of the Infinia line of high-end, multimedia-oriented machines. Toshiba now will focus its marketing efforts on desktop systems for business use as well as laptops.

Direct-seller AKIA CORP., the last Japanese company to enter the American PC market, believes that it can capture share by appealing to technology enthusiasts who want the clarity and the flat screen of an AMLCD (active-matrix liquid crystal display) monitor with their desktop systems. Akia's Austin, Texas subsidiary is bundling the 14.5-inch Radiance monitor with the high-performance Elite VP, Elite VP Plus and selected Mystique desktop systems. An integrated Elite VP system, which is powered by a 300-MHz Pentium II processor, is priced at $3,999, for example.

Hoping to make faster inroads into the corporate market, HITACHI PC CORP. signed an agreement with MICROAGE, INC. to distribute its VisionBook family of notebooks and mininotebooks as well as its desktop systems. Tempe, Arizona-based MicroAge is one of the biggest suppliers of systems to corporations and government agencies. Among the Hitachi PC products that it is handling is the new VisionBook Traveler, a 2.7-pound mobile computer featuring a 8.4-inch color AMLCD display and a 133-MHz Pentium processor with MMX technology. MicroAge also will distribute Hitachi PC's recently announced VisionDesk, an all-in-one desktop computer with a Super TFT (thin-film-transistor) LCD display.

Just months after announcing plans to center all hard disk development work at AKASHIC MEMORIES CORP. (see Japan-U.S. Business Report No. 337, October 1997, p. 4), KUBOTA CORP. sold the Santa Clara, California company and a subsidiary as well as an Akashic company in Malaysia. The buyer, which paid an undisclosed price, was STORMEDIA INC., another maker of magnetic disks for data storage devices. Kubota bought Akashic in 1987 for roughly $15 million and subsequently invested about $308 million in the company. With excess production capacity among independent makers of hard disks, however, Akashic piled up an accumulated loss of $169.2 million.

Through a cooperative effort, TOSHIBA CORP. married its DVD (digital video disc) reference design board with MICROSOFT CORP.'s soon-to-be-released Windows 98 operating system. The DVD board, believed to be the first to support Windows 98, incorporates Toshiba's Timpani-I TC81203TB single-chip DVD system processor for high-quality DVD playback on PCs. This part integrates MPEG-2 (moving picture experts group) video decoding and video mixing, hardware-based copy protection processing, subpicture decoding and digital video port support as well as audio and video interfaces and a PCI (peripheral component interconnect) interface. Timpani-I is Toshiba's second-generation DVD system processor for DVD PC add-in boards and DVD players.

An exchange rate of ¥130=$1.00 was used in this report.

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