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No. 350, November 1998

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Japanese Companies in the US


In a move that highlighted its primary business, SOFTBANK CORP. -- Japan's largest distributor of software but a company that has made a name for itself recently by buying into Internet ventures and other technology-related companies in the United States -- entered into a strategic alliance with INGRAM MICRO INC., the world's leading wholesale distributor of technology products and services, to distribute computer-related products on a global scale. The Santa Ana, California partner describes the goal of the tie-up as providing global account services to value-added resellers, including establishing joint purchasing programs, while leveraging each other's business knowledge and expertise in the markets each serves. Ingram Micro will be Softbank's exclusive partner in markets outside Japan that it serves. Conversely, Softbank will fulfill Ingram Micro's international sales in Japan. To cement their new relationship, each company invested $50 million in the other, an amount equivalent to about 1 percent of Ingram Micro's and Softbank's respective stock values.

Attaining its goal of returning to profitability in the second half of 1999 has forced personal computer manufacturer PACKARD BELL NEC, INC. to take "aggressive" cost-cutting actions. Those are headed by trimming its U.S. payroll of some 5,000 people by as many as 1,000 employees by yearend. The downsizing will occur across the Sacramento, California company's operations. The announcement of the layoffs followed several restructuring initiatives launched earlier this year and NEC CORP.'s decision to pump even more capital into the world's number-five maker of PCs (see Japan-U.S. Business Report No. 348, September 1998, p. 2).

Yet another part of PACKARD BELL NEC, INC.'s strategy for regaining profitability is to give the corporate world high-performance servers at value prices. In the latest such releases, the company's NEC Computer Systems Division introduced the NEC Express5800 HX4500 and the NEC Express5800 MC2400 servers. The HX4500 line of enterprise-class servers features up to four 400-MHz Pentium II Xeon processors with 512 kilobytes or 1 megabyte of Level 2 cache to meet the requirements of data base, transaction processing and Internet/intranet applications. Pricing starts at $13,900 for a machine with a single processor with 512 KB of cache. The MC2400 is a dual processor-capable departmental server that offers a choice of 333-MHz, 400-MHz or 450-MHz Pentium II processors, up to 1 gigabyte of internal memory, hot-swappable hard drives and an optional redundant hot-swap power supply and redundant system cooling. A version of the high-reliability server with a 333-MHz processor and 32 MB of random access memory costs $3,300.

Answering this challenge and then some, HITACHI PC CORP. introduced an eight-way Pentium II Xeon-based model in its VisionBase line of enterprise servers. One of the industry's first such products, the VisionBase 8880 integrates the same mainframe- derived features as other members of this series, including easy manageability, both locally and remotely, high-performance input/output for fast throughput, and redundant cooling, power supply and RAID (redundant array of independent disks) disk storage for improved reliability. Milpitas, California-based Hitachi PC expects to begin shipping the VisionBase 8880 in December.


Cost-conscious buyers are the target customers for the latest additions to PACKARD BELL NEC, INC.'s Packard Bell and NEC Ready desktop PC model lineups. Both models incorporate ADVANCED MICRO DEVICES, INC.'s less expensive AMD-K6-2 processor with 3DNow! technology. That choice helps to keep the price of the minitower Packard Bell 955 at $900 for a system with a 333-MHz processor, 64 MB of internal memory, an 8.4-GB hard drive, 512 KB of L2 cache and other features for multimedia applications and Internet access. The companion NEC Ready 9888, designed for the SOHO (small office/home office) market, also comes with a 333-MHz AMD-K6-2 processor with 3DNow! technology and the other features of the Packard Bell 955. However, a price just over $1,000 gets the buyer a SuperDisk drive that reads and writes both 120-MB SuperDisks and standard 3.5-inch floppy disks.

At the same time, PACKARD BELL NEC, INC. introduced the NEC Ready 340T notebook, which uses a 300-MHz AMD-K6 MMX Enhanced mobile processor. The estimated street price of $2,200 also buys a 13.3-inch TFT (thin-film-transistor) active- matrix color display, 64 MB of SyncDRAM (synchronous dynamic random access memory) memory, a 4-GB hard disk drive, a 24X CD-ROM drive and a 56-kilobit-per- second-capable V.90-compliant modem.

With strong initial sales of its thin, lightweight notebook computer at home, SHARP CORP. is optimistic about market prospects in the United States for the Mebius Note PJ PC-PJ1. Arriving on store shelves in mid-October, the $2,500 or so product is designed to go head-to-head with SONY CORP.'s VAIO line. Sharp already has shipped 3,000 Mebiuses and plans to export another 7,000 units to this country by next March, including a new model set for release in January.

A new generation of more powerful and feature-laden handheld PCs running the Windows CE 2.0 operating system is arriving on the market. For instance, CASIO COMPUTER CO., LTD.'s Dover, New Jersey subsidiary introduced the CASSIOPEIA E-11, which provides 8 MB of memory and comes with an easy-to-read 240 X 320-dot LCD (liquid crystal display) screen in a pocket-size configuration. The engine is NEC CORP.'s new VR4111 MIPS RISC (reduced instruction-set computing) processor, which was developed specifically for portable computers. The CASSIOPEIA E-11 retails for a suggested price of $400.

In the first quarter of 1999, the NEC Computer Systems Division of PACKARD BELL NEC, INC. will ship a next-generation NEC MobilePro handheld PC. The product will incorporate the just-announced VR4121 64-bit MIPS RISC processor. It also will support the simultaneously released Windows CE operating system, Handheld PC Professional Edition. Among other advances, the third generation of MICROSOFT CORP.'s H/PC software will deliver improved performance, support for USB (universal serial bus) peripherals and higher screen resolutions, new versions of Pocket Office and enhanced file-conversion capabilities.

Seventeen months after forming MKE QUANTUM COMPONENTS CORP. to design, develop and make magneto-resistive recording heads for disk drives, MATSUSHITA- KOTOBUKI ELECTRONICS INDUSTRIES, LTD. and QUANTUM CORP. have decided to disband the venture. The Japanese partner, a 51-percent owner, said that it and disk drive manufacturer Quantum were having trouble keeping pace with the technical advances in MR heads that competitors were making. MKE Quantum Components, which employs some 4,500 workers, has plants in Shrewsbury, Massachusetts and Louisville, Colorado. They will be sold. Matsushita-Kotobuki Electronics will take over an Indonesian factory.

Just five months after introducing the Hitachi Freedom 7700E, which provides multiplatform support across S/390, Unix and Windows NT operating environments, HITACHI DATA SYSTEMS CORP. upgraded the storage subsystem. The Santa Clara, California company, owned by HITACHI, LTD. and ELECTRONIC DATA SYSTEMS CORP., improved the subsystem's software to boost performance in open-systems environments by up to 30 percent. HDS also increased the 7700E's maximum cache size to 16 GB from 10 GB, thereby yielding additional performance gains by allowing the subsystem's FlashAccess feature to maintain even more data in the cache memory.

Strong demand in the United States for media for digital linear tape drives used to store data from mainframes and enterprise servers has persuaded FUJI PHOTO FILM CO., LTD. to earmark between $16.5 million and $24.8 million to add a DLT coating line at its multiproduct Greenwood, South Carolina complex. Fujifilm's DLTtape IV can hold 70 GB of data, assuming 2:1 data compression. The product also is supplied to QUANTUM CORP. for sale under the Milpitas, California company's name. Installation of the DLT coating line should be completed next April, with production scheduled to start in the summer.

November was the launch date for the HiFD, a 3.5-inch floppy disk codeveloped by FUJI PHOTO FILM CO., LTD. and SONY CORP. that has a storage capacity of 200 MB. That is the equivalent of nearly 140 of today's 1.44-MB floppy disks. It also is twice the capacity of IOMEGA CORP.'s Zip disk and two-thirds more than IMATION CORP.'s 120-MB SuperDisk can hold. In addition, the HiFD can transfer up to 3.6 MB of data per second. The combination of storage capacity and transfer rate makes the HiFD ideal for storing large text files, CD-quality music and digital video on a single floppy disk. Both the Fujifilm HiFD 200MB and the Sony HiFD media, which carry a suggested retail price of $14 and $15, respectively, are designed for Sony's new external HiFD drive. It has an estimated street price of $200.

CANON INC. is expanding its original equipment manufacturer arrangement with HEWLETT-PACKARD CO. covering engines for laser printers from engines for monochrome printers to ones for color laser printers. HP, the dominant player in the world color laser printer market, now sells a product that can turn out two to three pages per minute in color. KONICA CORP. supplies the engine for this laser printer. The Canon-built engine is twice as fast, which should enable HP to strengthen its position in the color laser printer market. Canon expects to ship several hundred thousand engines a year to the American company for color laser printers in addition to continuing to supply most of the engines for HP's monochrome laser printers.

An exchange rate of ¥121=$1.00 was used in this report.

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