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No. 352, January 1999

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American Companies in Japan


COMPUTERS AND PERIPHERALS

In a rare recent endorsement of American supercomputing technology, the government-funded Institute of Physical and Chemical Research awarded COMPAQ COMPUTER CORP. and bidding partner MITSUBISHI SPACE SOFTWARE CO., LTD. a $1.1 million contract for a massively parallel processing system built by Compaq along with other hardware and specialized software developed by the MITSUBISHI ELECTRIC CORP. affiliate. The system, which uses the Digital UNIX operating system, will be powered by 130 of Compaq's heavy-duty 64-bit Alpha RISC (reduced instruction-set computing) processors. The order is scheduled for delivery before the end of March. The research institute figures that by going with a massively parallel system, it paid only about half of what a traditional supercomputer would cost.

Linux, the open source-code version of the Unix operating system, is winning converts in Japan faster than many analysts anticipated. As a case in point, Kyoto Sangyo University ordered from the bidding team of IBM JAPAN LTD. and FUJI XEROX CO., LTD. an information-processing system that uses Linux but that also can run Windows NT. The computer maker will supply the system's PC servers, while Fuji Xerox will handle systems integration and installation. The system is scheduled to go on-line in April of this year.

In an efficiency-enhancing move, IBM JAPAN LTD. contracted with SUMITOMO METAL INDUSTRIES, LTD. to handle build-to-order configurations of some of its space-saving desktop PC models. SMI believes that this business could produce sales to IBM Japan of $85.5 million in FY 1999.

The problems in Japan's banking system are providing IBM JAPAN LTD. an unparalleled opportunity to expand its various information services operations. Last year, one of the company's subsidiaries hired many of the people who had worked at a computer affiliate of failed HOKKAIDO TAKUSHOKU BANK, LTD. as well as in the bank's systems department (see Japan-U.S. Business Report No. 344, May 1998, p. 11). Now, IBM Japan has formed a systems development company with nationalized LONG-TERM CREDIT BANK OF JAPAN, LTD. specializing in the requirements of the financial industry. CSD SOLUTION CO., LTD., in which the computer manufacturer has a 9.9 percent interest, has on staff 130 people transferred from LTCB and a computer systems development subsidiary. Initially, the joint venture will provide computer services to LTCB group companies. In time, though, it hopes to win contracts to design systems for the additional services that banks and other financial institutions are expected to offer, such as telephone banking, mutual funds and 401(k)-type pension plans.

Japan's no-growth PC market has come close to claiming its first casualty among American competitors. Direct marketer MICRON ELECTRONICS, INC. has decided that it no longer can justify the costs associated with this expensive method of selling. It consequently is switching to sales through dealers, a change that will result in a one-time charge to earnings of $3.2 million. Industry analysts say that the Nampa, Idaho company, a latecomer to Japan's PC market, never was able to develop the name recognition of fellow direct marketers DELL COMPUTER CORP. and GATEWAY 2000, INC. Although market trackers are finding some signs of life in PC sales, U.S. suppliers continue to search for ways to bolster business. For COMPAQ COMPUTER CORP., one response is what has been dubbed technical support in a box. Users of the company's PCs can purchase from dealers a hardware- support package ("red box") or a software-support package ("green box") that gives them, for example, same-day, on-site repair service by Compaq technicians or priority telephone support. .....For its part, IBM JAPAN LTD. is trying the solutions approach. It has teamed up with the subsidiary of AVID TECHNOLOGY, INC., a leader in the field of image processing and editing software, to provide packages for such applications as creating three- dimensional animation graphics or editing television programming. The package consists of IBM Japan's IntelliStation and Avid's Symphony and SOFTIMAGE|3D.

To ensure that it remains a leader in the high-end Unix server market in Japan as well as elsewhere, HEWLETT-PACKARD CO. announced the HP 9000 V2500 Enterprise Server for the data center. As of mid-1999, the system will be able to harness the power of as many as 128 of the company's 440- MHz PA-8500 64-bit RISC processors thanks to HP's new scalable computing architecture and the 64-bit HP-UX 11 operating system. For now, it can be configured with up to 32 PA-8500 processors. Pricing starts at $609,400 for a two-processor machine with 1 GB of internal memory and a 4.3-GB hard disk drive. HEWLETT-PACKARD JAPAN LTD. believes that it can sell 400 of the V2500 server in its first year of availability. It also will supply the system on an OEM basis to NEC CORP. and OKI ELECTRIC INDUSTRY CO., LTD.

Protecting its flank as well in the high-end Unix workstation market, HEWLETT-PACKARD JAPAN LTD. introduced what its parent calls the fastest product in this category: the HP VISUALIZE Model C360. As with its new Unix server model, the company largely attributes the system's record-breaking performance in 3D mechanical computer-aided design and electronic design automation applications to the parallelism of its PA-RISC technology. The HP VISUALIZE Model C360, which uses a 367-MHz PA-8500 processor and comes with the HP VISUALIZE graphics package, lists for $34,000 and up. Given the performance available for this price, HP Japan expects to sell 25,000 units in 1999. MITSUBISHI ELECTRIC CORP. also will sell the new Unix workstation on an OEM basis.

HEWLETT-PACKARD JAPAN LTD. also is marketing new Kayak PC workstation models, another part of its parent's strategy to retain the title of the world's leading shipper of Unix and Windows NT-based workstations. The revamped HP Kayak XA and HP Kayak XU PC Workstation lines bring the performance of 3D OpenGL graphics to digital content creators, animation designers and mechanical and geoscience engineers at competitive prices by incorporating EVANS & SUTHERLAND COMPUTER CORP.'s AccelGALAXY graphics subsystem. A HP Kayak XA PC Workstation with a 450-MHz Pentium II processor, AccelGALAXY graphics, 128 MB of synchronous DRAM memory and a 10.1-GB hard drive has a street price of about $6,100, while a HP Kayak XU PC Workstation, which supports one or two 450-MHz Pentium II Xeon processors, starts at $7,600 for a package that includes AccelGALAXY graphics, 128 MB of SDRAM and a 9.1-GB Ultra SCSI hard drive. HP Japan is looking to sell 17,000 of the new Kayak models.

The already crowded PC workstation market has a new competitor: GATEWAY 2000, INC. The direct marketer hope to carve out a niche by providing state-of-the-art technology at extremely competitive prices. A case in point is the $4,700 starting list price on the Gateway E-5250, a system that runs off one or two 450-MHz Pentium II Xeon processors. For even more budget-conscious corporate customers, $3,000 will buy the 350- MHz Pentium II Gateway E-5200 PC workstation.

UNISYS CORP.'s subsidiary got a head start on the competition by putting on the market the first enterprise servers running off the 450-MHz version of the Pentium II Xeon processor. Capable of four-way processing, the Aquanta QS/2V and its rack-mounted counterpart, the Aquanta QR/2V, ship with a choice of 512 KB, 1 MB or 2 MB Level-2 cache, as much as 4 GB of ECC- buffered EDO (extended data-out) memory and 4-GB or 9-GB hard disk drives as well as seven expansion slots and six hot-swap drive bays. Unisys priced the base configuration of the Aquanta QS/2V at $20,500.

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Topping off its new line of PC servers (see Japan-U.S. Business Report No. 349, October 1998, p. 12), GATEWAY 2000, INC. unveiled the ALR 9200 enterprise server. Like other such products, the new model, which can harness the power of up to four 400-MHz Pentium II Xeon processors, runs Windows NT. However, the ALR 9200 also can support a version of the Solaris operating system written for the Pentium II Xeon processor, SCO UnixWare and Novell NetWare. Pricing starts at $16,200. Gateway's subsidiary has contracted with EUROTEC INFORMATION SYSTEMS K.K. to provide support services.

In the second quick upgrade of its workgroup server entry, direct marketer GATEWAY 2000, INC. released the ALR 7300. It is powered by one or two 450-MHz Pentium II Xeon processors. About $4,300 will buy a system with a single processor, 128 MB of internal memory, a 4.5-GB hard disk drive, a 13X CD-ROM drive, a diskette drive and six slots.

Although MICRON ELECTRONICS, INC. is changing its marketing approach in Japan, the company remains focussed on serving midmarket businesses. The latest product targeted at this segment is the NetFRAME 2100 server. This entry-level workgroup server supports one or two Pentium II processors and provides room to grow for the affordable starting price of $3,000.

For now, American PC vendors have shifted their desktop market focus -- at least in terms of product introductions -- from the corporate sector to the home buyer. COMPAQ COMPUTER CORP. was about the only supplier to add products for businesses. And, as the name suggests, the new Deskpro Value Series is targeted at the cost-cutting company. Equipped with a 333-MHz Celeron processor, the Windows 98 machines start at $2,000.

Value pricing also is the common denominator of the new home-oriented PCs, although most manufacturers did add one or more machines with all the latest bells and whistles. For example, COMPAQ COMPUTER CORP., which is looking to double sales of home PCs in 1999 with help from distributor CANON SALES CO., INC., expanded its Presario family with four new models. Two use ADVANCED MICRO DEVICES, INC.'s less expensive AMD-K6-2 processor. The Presario 2274 has an estimated street price of less than $1,500. That covers a machine with a 300-MHz processor, 64 MB of internal memory, a 4-GB hard disk drive and a 15-inch monitor. For about $2,000, people can buy the Presario 5150, which uses a 350-MHz version of the AMD processor and provides 64 MB of internal memory, an 8-GB hard drive, a DVD drive and a 17-inch display.

DELL COMPUTER CORP. opted to go with a 333-MHz Celeron processor for the basic model of its Dimension V line, a choice that helped to keep the price around $1,500. That includes 128 MB of system memory, 6.4 GB of storage and a 17-inch CRT. GATEWAY 2000, INC. chose the same engine for the G6- 333C, one of four new models. The base configuration of 64 MB of internal memory, a 6.4-GB hard drive, a DVD drive and a 15-inch display costs under $1,400. The GP6-333CC, which has the same standard features but not the extras, is an even more affordable $1,100.

For its part, IBM JAPAN LTD., which recently introduced the inexpensive, Japan-only Aptiva DIJ home PC (see Japan-U.S. Business Report No. 351, December 1998, p. 12), extended the value-pricing concept to its notebooks. The ThinkPad i Series starts at $2,000 for the Model 1430, which sports a 266-MHz Pentium processor with MMX technology, 64 MB of system memory, a 3.2-GB hard drive and a 12.1-inch TFT LCD screen. About $300 more buys the Model 1450 with extra storage (4.3 GB) and a bigger display (13.3 inches). The ThinkPad family also has a new mininotebook. The $2,200 ThinkPad 235 uses the same processor as its cousins but has 32 MB of internal storage, a 4-GB hard disk drive and a 9.2-inch TFT LCD display.

In a first for the world's number-one PC seller, COMPAQ COMPUTER CORP. released a product in Japan before introducing it in other markets. That choice was not surprising given that the thin, lightweight Presario 1915 notebook for individuals was designed to capitalize on local market trends. Measuring about 1.5 inches thick and weighing roughly 4.5 pounds, the portable provides a number of extras, including a DVD player, a VD2-ROM drive and one-touch Internet access, for just $2,600-plus. The Presario 1915's power is supplied by a 266-MHz Pentium II chip.

Is the market ready for "wearable" PCs, particularly if they have a list price of $6,800? XYBERNAUT CORP., a pioneer in this field, soon will find out. Early in 1999, the Fairfax, Virginia company will open a wholly owned subsidiary to market its Mobile Assistant IV. The MA IV, with its head-mounted display, packs a 200-MHz Pentium processor with MMX technology, 32 MB of memory (expandable to 128 MB) and a 2.1-GB hard drive into a package about the size of a portable cassette player. Xybernaut hopes to sell 6,000 MA IVs in Japan in 1999 out of a worldwide total of 20,000 machines.

Enterprise storage and data management problems are no less severe in Japan than they are in the United States. That reality persuaded COMPAQ COMPUTER CORP. to introduce its open, standards-based solution, the Enterprise Network Storage Architecture. Comprising storage products, servers, network infrastructure, bridges and other linking devices, and management tools, Compaq ENSA, in the company's words, "transforms storage into a flexible, shared resource throughout an enterprise." It does this by pooling vast amounts of storage and automatically allocating capacity on an as-needed basis to distributed application servers.

The relatively new line of Auspex NetServer NS 8000 network file servers from AUSPEX SYSTEMS, INC., which are dedicated to storing, serving and managing network data, now has a third member targeted at large corporate environments (see Japan-U.S. Business Report No. 350, November 1998, p. 15). The midrange 400 model incorporates the Santa Clara, California company's network-attached storage subsystem for greater storage density and other new features and functionality advances found in the other two products. Its pricing starts at $102,600.

DELL COMPUTER CORP. also has expanded its recently introduced line of PowerVault storage subsystems that can be shared by multiple host servers (see Japan-U.S. Business Report No. 351, December 1998, p. 13). The PowerVault 200S, which has an Ultra 2/LVD SCSI interface, scales from a minimum of 4 GB of storage and provides data transmission at a rate of 80 megabits a second. The base configuration costs $3,000.

IOMEGA CORP. has released its own high-capacity external Zip drive that works with the Universal Serial Bus interface, targeting sales at buyers of APPLE COMPUTER, INC.'s popular iMac computer (see Japan-U.S. Business Report No. 351, December 1998, p. 14). Only an English-language version is available now, but a localized Zip USB drive will be on the market in February.

Sales have started of the MO DataStation DS-640, an IBM JAPAN LTD. magneto-optical disk drive that accepts PC Cards. The disk in the initial unit, which costs $770, rotates 3,600 times a minute. A faster, slightly more expensive model will be released in February.

The Cyclone family of network print servers from COLORBUS, INC. has two more members. Designed to work with color copiers from either CANON INC. or RICOH CO., LTD., the $11,100 Cyclone Office and the Cyclone Professional make these machines on-demand networked color printers in Windows NT environments. The Irvine, California company's subsidiary expects to sell a combined total of 1,000 of the new Cyclone products annually.

Digital photo printing as well as standard PC-origin printing is possible with LEXMARK INTERNATIONAL, INC.'s Photo Jetprinter 5770 since the $510 printer can be operated without a PC. For both photos and text, the ink-jet printer provides a resolution of 1200 x 1200 dots per inch. In text mode, the Photo Jetprinter 5770 prints up to 8 pages per minute in black and white and as many as 4 ppm in color.

Hoping to streamline information distribution, FAMILYMART CO., LTD., the third-largest convenience store operator in Japan, ordered 5,400 color ink- jet printers from HEWLETT-PACKARD JAPAN LTD. The DeskJet 694C photo- quality printers will be placed in all of the company's stores to print out product-related information received from headquarters via in-store PCs. Installation is to be finished in February.

In a worldwide release, MICRON ELECTRONICS, INC. introduced a space-saving 15-inch TFT LCD flat panel display. Offered as an upgrade for the company's Millennia and ClientPro desktop machines, the display, which has built-in multimedia speakers, allows documents to be viewed in either landscape or portrait mode. In Japan, the product is priced around $1,100.

The NETSCREEN TECHNOLOGIES, INC. family of integrated security products is available through HITACHI SEIBU SOFTWARE, LTD. Unlike conventional software-based security solutions, the three-model line combines firewall, virtual private networking and traffic management functionality on a single, dedicated ASIC (application-specific integrated circuit)-based hardware platform. The NetScreen-1000, NetScreen-100 and NetScreen-10 operate at 1 gigabit per second, 100 Mbps and 10 Mbps, respectively. The NetScreen- 100 costs about $16,900; the NetScreen-10 goes for $6,800. The HITACHI, LTD. affiliate plans to sell 10,000 of the Santa Clara, California company's products within three years. HITACHI ELECTRONICS SERVICES, LTD. is providing support services.

Extending its string of design wins at FUJITSU, LTD., the Viper V550 graphics accelerator from San Jose, California-based DIAMOND MULTIMEDIA SYSTEMS, INC. is being used in several new desktop computers for the local market. The Viper V550 8-MB AGP (accelerated graphics port) accelerator is the standard graphics accelerator for the FMV-6400TX2 and FMV-6450TX2 Pentium II desktop systems for the corporate market, while the Viper V500 16-MB AGP graphics board is included in the FMV-DESKPOWER TVIII457 Pentium II machine for the power consumer market.

An exchange rate of ¥117=$1.00 was used in this report. aaaaaa

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