DOS/V, Windows, Prices, and the Future...

by Virginia Kouyoumdjian

The Japanese personal computer market represents an interesting phenomenon. Even though Japan has been at the forefront of the electronics industry for years, the rate at which both business and home users have embraced personal computers has rem ained slow.

Some of the reluctance probably has been due to "keyboard shyness." The vast number of kanji (ideograms) used in writing Japanese made typewriters impractical for everyday use. (Imagine the physical and mental effort required to use a typewriter with over 3,000 keys.) Users in most Western countries were able to make a fairly smooth transition from the typewriter keyboard to the computer keyboard. In Japan, however, the progression was rather more steep, going as it did from the pencil - still the fav ored writing tool in much of the business world - to the computer keyboard. The unfamiliarity of Japanese consumers with typewriters is probably a major reason why Japan has created and sustained a market for an intermediate machine: the Japanese wordproc essor. Whereas most other countries moved beyond dedicated word processors several years ago, even now - with a PC market in Japan of over 2.5 million units per year - there is a parallel Japanese wordprocessor market of over 2.0 million units annually.

Another significant reason for the reluctance of the home buyer to invest in a computer has been pricing. Until recently, personal computers, peripherals, and software in Japan commonly sold for twice or more the price of similar products in North Ame rica. The Japanese personal computer market was long dominated by NEC Corporation, which early on devoted considerable effort to addressing the particular difficulties of working with Japanese kanji characters. The effort bore fruit, and throughout the 19 08s, NEC had a home and business computer market share far in excess of 50%. NEC's seemingly unshakable position as industry leader in Japan, in turn, helped to keep prices high.

DOS/V and the "US invasion" Change came to the Japanese market in a spectacular fashion when IBM introduced IBM DOS version J4.ON, better known as DOS/V, in late 1990. The initial impact was small, but DOS/V paved the way for entry into the Japanese market of some of the highly comp etitive US computer makers that had revolutionized PC pricing. Compaq came into Japan in late 1992 and Deli in early 1993. They brought with them new types of retailing techniques and heavily bundled systems that allowed greater customizing for the user t han had been generally available previously.

DOS/V (so named because it requires at least a VGA monitor) was revolutionary because it took a software approach to displaying Japanese kanji. Whereas NEC's 9800 series and other Japanese computers apply a proprietary hardware (ROM-based) approach to handling kanji input and display, DOS/V handles the process via diskbased files and RAM memory. While marginally slower than the hardware approach, this has the great advantage of allowing the user of any DOS-based machine to enter and display Japanese ( no proprietary kanji ROM is needed).

NEC initially declared that DOS/V would have no impact on the Japanese market - and it did, indeed, take several months for other Japanese manufactures to move over to DOS/V. Now, however, the trend is undeniable. According to computer market research group IUC Japan, 226,500 DOS/V machines were sold in 1992; this rose by over 75% to 400,000 units in 3993, which constituted a 16% share of the Japanese market. In contrast, NEC's market share slid under the 50'% mark for the first time, to 49%, in 1993. (Apple, for comparison, showed a marked increase to 13%.)

PC prices in free fall

So, what has been the real impact of DOS/V? Has it revolutionized the Japanese PC market, or has it merely added one more option to an already crowded field ? The consensus of opinion seems to be that DOS/V per se is not something that is worth making a great deal of fuss, but that it has acted as a catalyst to bring about a number of changes that have altered the Japanese PC market considerably.

The impact that DOS/V has had on personal computer pricing has been amazing. When it became possible for manufacturers like Compaq and Deli to enter the Japanese market with their high-quality, low-priced systems, the downward drag on other manufactur ers' prices was inevitable. While 300,000 had once been an absolute minimum in terms of buying a basic machine, models started to appear on the market in late 1992 for less than 200,000 Prices plummeted to the 100,000 level with the debut of Deli's entry- level 386 machine in early 1993 Moving on to 1994, a quick scan of the new model introduction pages of magazine PC-Fan makes interesting reading. For each model introduced, the magazine quotes both the manufacturer's list price and estimated "street" pric e. For desktop models, discounts are generally in the 25% to 30% range. For laptop models, they are more often in the 10% to 15% range.

In conjunction with the introduction of DOS/V, changes in the retail environment - notably, an increase in large-volume, limited-service retailers have also helped to bring prices down. All of these factors contributed to the 15.2% growth in the Japan ese PC market in 1993, in the midst of a prolonged economic slump. IDC sees a further 13.3% growth in 1994, total volume of 2,835,000 units.

Some measure of standardization...

Aside from its effect on prices, the introduction of DOS/V has had another, perhaps more significant, effect on the PC market in Japan. It has helped to standardize what was formerly a market of numerous competing and incompatible systems into a much s impler three-way face-off. The three camps are now the NEC PC-98 standard (including Epson 98-compatibles), AT-compatibles (DOS/V machines), and the Apple Macintosh. In addition to IBM, Compaq, and Deli, major Japanese companies like Fujitsu and Toshiba a re now joining the DOS/V camp by offering AT-compatibility and DOS/V operating systems.

The viability of DOS/V increased further in 1993 with the introduction of Microsoft's Japanese-language version of the Windows 3.1 operating system. According to Microsoft Japan, 1.46 million packages of Windows 3.15 were shipped in Japan during its f irst year on the market. Windows in its present form continues to sit on top of DOS, the current releases of which are version 6.2 from Microsoft and 6.3 from [BM. Microsoft is working on the next version, which is likely to be available before the end of the summer, according to Kota Sekino, program manager of the Windows/MS-DOS Department at Microsoft Japan. Microsoft is extremely bullish on MS-DOS sales, expecting 1994 sales in Japan of 500,000 units for current versions.

The trend now is towards preinstalling software on machines before shipping. Microsoft estimates that 70"/0 to 80'1/0 of AT-compatible machines in Japan now come with Windows pre-installed. (This compares with 90% or more in the US.) The popularity of Windows 3.2 has extended to the NEC PC-98, with NEC offering its own v ersion of Windows 3.15 in addition to its own DOS operating system.

Is OS/2 still in the running?

Despite their enormous success so far, Microsoft and Windows still face stiff competition from IBM's own OS/2J operating system, which reached Japanese customers a year before Windows 3.15. Although Microsoft claims that it does not feel threatened by che long-term potential of OS/2J, IBM sees a limited future for DOS, with OS/2 as the heir apparent. According to Mac Jeffery, manager of media relations at IBM World Trade Asia Corporation, OS/2J already does what the next version of Windows will do, and it offers a Windows emulator to boot. Given Microsoft's poor track record to date in the speed of localiz ing its products (it took well over a year to get from the original version of Windows 3.1 to 3.15), there may be some incentive for the consumer to choose OS!2 instead. Microsoft, howeve r, expresses scepticism about OS/2's prospects, based on the dearth of native applications and what it describes as "incompatibility between various versions." If OS/2 succeeds eventually, it will be more likely to do so in the business rather than the pe rsonal market, according to Sekino of Microsoft Japan.

Does DOS have a future ?

The introduction of DOS/V into Japan has had quite an impact on the Japanese personal computer market, but the very existence of DOS in the long term is very much in question. There is an increasing perception that the DOS interface is outdated and nee ds to be replaced with something (such as OS/2) that will work much more smoothly with the strong trend towards object orientation. Also, all indications are that the next incarnation of Windows will be a complete operating system that will not need DOS t o run, thus signalling the beginning of the end of the DOS era.

The code names of the next versions of Windows 3.1 and Windows NT, "Chicago" and "Cairo" respectively, are currently two of the most popular buzzwords in the personal computer industry. There are as yet no confirmed details available on the timing of the release of the Japanese Chicago, but the English version should be available by the end of 1994. Microsoft says that the localized Japanese-language version should be ready within about three months of the release of the original English version.

The promise of Chicago

The Microsoft Windows "Chicago" Reviewer's Guide promises that this new version will "enhance the Windows platform on mainstream personal computers in many easy-to-use ways." This includes Plug-and-Play specifications that will make it possible to inst all and configure new devices automatically, a more intuitive user interface, 32-bit pre-emptive multitasking, and much-enhanced communications and networking capabilities.

One of the complaints that has regularly been voiced by Windows users is the fact that it rides piggyback on top of DOS and therefore does not provide a total escape from the character-mode boot messages that have been a ubiquitous feature of IBM comp atible systems in the past. Chicago will get rid of this problem because it will be an integrated operating system that offers a complete graphical user interface. Features such as the Windows Taskbar will, according to Microsoft, "lead to a l0-fold impro vement over Windows 3.1 to complete certain common tasks such as starting an application." This will obviously make it much easier to use for potential buyers, whether novices or power users. It will also create an interesting stand-off with Apple Compute r's Macintosh series, since it will eliminate some of the existing gap in terms of ease of use.

Another attraction of Chicago will be the enhanced compatibility it will offer with existing MS-DOS and Windows-based applications, even improving performance over the current Windows 3.1 in running MS-DOS based applications. Chicago will offer a modu lar architecture that will give the user much greater flexibility in customizing system set-ups and better control over installed components. The improvements of networking and communications will be of particular significance in the Japanese market, whic h is showing increased emphasis on the personal computer as an infermation exchange tool.

Of particular interest to the Japanese user will be the degree to which Chicago will provide Japanese language support. Chicago will offer significant new features, such as multilingual content support (also to be supported by "Cairo"). This provides the ability to display and edit text of various languages and scripts in a single document.

Making the PC truly personal

The imminent arrival of Chicago is likely to bring about even more changes in the personal computer market in Japan. There is still enormous scope for growth in the business market. It is not unusual to walk into the offices of some of Japan's largest corporations and find only the odd computer sitting on a solitary desk, like some "objet" that is there to be admired (or feared) rather than used. In the current climate of downsizing and open systems, there is plenty of room for something that will mak e the whole process of using computers easier and more efficient while also enhancing networking and com- munications

The Japanese consumer is attracted by the right combination of ease-ofuse and pricing. Now that DOS/V and affordable pricing have helped to make AT-compatible machines strong contenders in the domestic personal computer market, the impact of Chicago w ill doubtless be considerable. DOS/V broke through a barrier, but it could well be Chicago that really brings the personal computer "home" to Japan.