A look at the IT industry in Japan and abroad

Don't Write Off Japan's PC Threat Yet

by John Boyd

During the 1980s, computer magazines and industry pundits in the US predicted an imminent invasion of Japanese PCs. They had reason to be paranoid: Japanese manufacturers had already ousted American firms from the consumer electronics industry, and they were ramping up to do the same in DRAMs, dot matrix printers, OA equipment, floppy disk drives, CRT and LCD screens, and keyboards. So why wouldn't US manufacturers worry that they might string all these components together and come up with a winning PC system?

Abortive assaults

One such attempt came when a dozen Japanese consumer electronics giants -- including Sony, Matsushita, Toshiba, Pioneer, and Yamaha -- got together to target the home computer market. Their inexpensive entree was an 8-bit Z-80 PC that used a ROM cartridge in place of a floppy disk, plugged into a color TV, and ran on an eXtended version of Microsoft BASIC (whence the name MSX). Bill Gates was one who predicted the MSX would take the world's home computer market by storm.

That particular tempest, though, blew itself out in a teacup. The PC industry was already marching inexorably to 16-bit processing, while Nintendo rode up from behind on Donkey Kong to stomp on MSX's precarious foothold in the game market.

Another perceived threat loomed when a Tokyo University associate professor, Ken Sakamura, came up with the idea of establishing "a revolutionary new computer architecture [that would be] a vision for the computerized society of the future." Sakamura named his vision TRON (The Real-time Operating system Nucleus) and rallied many Japanese electronics firms to support it. As interest peaked in the late 1980s, almost the entire Japanese computer industry were believers in the TRON vision. Firms busied themselves designing new chips, OSes, workstations and PCs, a futuristic keyboard, and even "smart" appliances to go inside intelligent TRON buildings. When James Farrell, editor-in-chief of IEEE Micro, predicted that TRON would grab a 25% share of the world's 32-bit market by 1993, some in the US worried aloud that TRON might become another barrier to American computer manufacturers.

Yet even as Japanese firms developed their products, events in the real world -- i.e., the market -- had already overtaken TRON, with alternative solutions being developed for the needs that had spawned TRON. Apple's Macintosh introduced ease-of-use computing; new generations of RISC and Intel x86 microprocessors surged ahead; and PC- and UNIX-based client/server systems helped break IBM's grip on the market and usher in a semblance of open computing and vendor choice. Today, few but Sakamura and his colleagues continue to insist that TRON remains a viable concept.

If the shoe fits, run with it

Ironically, as the '90s came around, the shoe was on the other foot, and US PC manufacturers found they were actually well positioned to blitz the Japanese market. Apple developed a Japanese operating system for the Mac and climbed into No. 2 spot, behind perennial market leader NEC. Meanwhile, IBM Japan helped establish the global DOS standard in Japan by adding extender code to its PC-DOS that would handle Japan's cumbersome writing system and display it on a VGA screen (hence its DOS/V moniker). And Compaq charged ashore, lobbing cut-price PCs that ignited a PC price war and fired up real competition.

Today, then, after past false alarms and a spectacular shakeup of the Japanese PC market by aggressive American PC vendors, many in the US believe they have little to fear from their Japanese counterparts. But they just may be wrong.

Now is precisely the time US vendors should be on guard. Last year, the Japanese PC market finally took off: 5.7 million units shipped, with the market growing a whopping 70%. In the process, Fujitsu, for one, showed some of the feistiness that has made it an international powerhouse in mainframes. Fujitsu recorded year-on-year growth of over 300% in PC sales, handily knocking Apple from the No. 2 spot.

In other significant moves, NEC recently upped its share in Packard Bell (which bought out Zenith Data Systems) and can be expected to exploit this foothold in the US market. Fujitsu and Hitachi, meanwhile, have moved aggressively to set up PC subsidiaries in the US. Remember, too, that Toshiba is the world's leader in portable PCs -- the fastest growing PC segment -- while other Japanese manufacturers are OEM sources for a variety of portables marketed by US firms. And consider that Matsushita and Sony, two of the world's largest consumer electronics manufacturers, are actively maneuvering to get into PCs via their multimedia know-how.

Things are cookin'

Yes, things are starting to cook in Japan -- and it ain't the raw fish.

Japanese firms finally understand that the PC is a product of strategic global importance. They also understand that if they want to be movers and shakers in the digital era, they had best grab a piece of the PC action.

No, now is not the time for US companies to be complacent.

In addition to writing for Computing Japan, John Boyd is the Tokyo correspondent for InformationWeek and writes the weekly "Computer Corner" column in the Japan Times, but he is otherwise available for hire if the fee is fat. He detests e-mail, though, so you can bug him at 6840615@mcimail.com, but don't expect an electronic reply!