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No. 353, February 1999

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American Companies in Japan


COMPUTERS AND PERIPHERALS

For whatever reason, American vendors have won few government-funded contracts for supercomputers, whether traditional vector machines or massively parallel processing systems, lately. IBM JAPAN LTD. is a rare recent exception. It received an order worth $12.4 million from the Ministry of International Trade and Industry's Agency of Industrial Science and Technology for a RS/6000 SP parallel processing system. Equipped with 256 332-MHz PowerPC 604e processors, the Unix-based system will be installed by the end of March in AIST's information and calculation center. It will be used for complex scientific calculations, including materials research.

In a deal that could give IBM JAPAN LTD. a better chance of supplying hardware/software solutions to Mitsubishi Group companies, particularly financial data systems, the company signed MITSUBISHI ELECTRIC CORP. to market its RS/6000 line of Unix servers and also agreed to provide its Netfinity line of PC servers to the big electronics manufacturer on an OEM basis. The new relationship is off to a fast start. IBM Japan and MELCO will install a RS/6000 SP system at BANK OF TOKYO-MITSUBISHI, LTD. to handle settlements at the top commercial bank's nationwide branches via a network of 800 servers.

The slow but steady migration of workstation users from the Unix platform to Windows NT machines has trimmed SILICON GRAPHICS, INC.'s mainstream computer graphics business as much in Japan as at home. Its subsidiary has mapped out a comeback strategy, however. The centerpiece is SGI's first Windows NT workstation, the Visual Workstation 320 minitower line and the Visual Workstation 540 tower series. At the heart of these machines, which will be sold alongside the company's proprietary Unix workstations, is a custom-designed chipset known as Cobalt that is based on INTEL CORP. integrated circuits but includes SGI-specific chips for video, audio and three-dimensional modeling. The Mountain View, California maker claims that this part allows faster communications between the processor and video systems than is possible with the AGP (accelerated graphics port) chipset found in competing Windows NT workstations. SGI maintains as well that its machines offer better price/performance than other systems on the market. The Visual Workstation 320, which can handle two Pentium II processors, starts at $6,000 in Japan, while the Visual Workstation 540, a machine capable of harnessing the power of four Pentium II Xeon processors, has a base price of $10,600.

SILICON GRAPHICS, INC.'s subsidiary is betting that it can sell 20,000 Windows NT workstations in 1999. Roughly 3,000 of these sales are expected to result from an OEM deal with TOSHIBA CORP. The local unit's first OEM supply arrangement also marks the first time that the big Japanese manufacturer has sold Windows NT workstations. It currently sources Unix workstations from SUN MICROSYSTEMS, INC. for resale in Japan.

Another element of SILICON GRAPHICS, INC.'s strategy for reenergizing its Japanese business involves a partial reorganization of its subsidiary's operations. Four new business units have been formed. One handles direct sales of ERP (enterprise resource planning) and large data- base systems to corporations. Another manages workstation sales by distributors. The company now also has a stand-alone systems integration unit. The fourth new group is in charge of devising marketing campaigns.

Other U.S. computer makers are adding services to build their customer bases and revenues. HEWLETT-PACKARD JAPAN LTD., for example, has started a network technical support service. Through either telephone consultations or remote diagnostics during regular business hours, the HP Network Environment Support service helps customers locate and fix problems in their local area networks and wide area networks. The service charges vary depending on the size of the network. For its part, the Japanese operation of direct marketer DELL COMPUTER CORP. has launched a technical support program for its corporate customers. For a fee, they can receive help with hardware and software problems either by talking directly with a service representative or via fax or electronic mail. The assistance actually comes from a network services affiliate of UNISYS CORP.'s subsidiary under a worldwide services-support partnership agreement between the two parent companies.

The local unit of fellow direct marketer GATEWAY 2000, INC. has contracted with Tokyo-based THE POINT STUDIO to provide setup and training for buyers of its PCs. It also has tapped MARUBENI CORP. to provide Internet services to Gateway customers through one of the trader's affiliates. .....In another business-boosting move, GATEWAY 2000, INC.'s subsidiary has formed a sales division to market PCs to corporate Japan and the government. These potential buyers can order systems built to their specifications as well as customized software. Through this redeployment of its marketing staff, Gateway hopes to achieve a 20 percent gain in major- account sales.

The direct marketing strategies of DELL COMPUTER CORP. and GATEWAY 2000, INC. are taking sales away from COMPAQ COMPUTER CORP. in Japan as well as in the United States — or so it would seem from the world PC leader's decision to give Japanese customers the option starting this summer of ordering machines from its Internet site. The company simultaneously will release new Prosignia server, desktop and notebook models priced 20 percent to 30 percent below current machines. On-line buyers will be able to customize these machines by choosing processor type and speed, system memory size and hard drive capacity. The new Prosignia models also will be sold through Compaq's traditional value-added reseller and retail store channels. The company hopes to sell at least 20,000 PCs over the Internet in the first six months after its Compaq Customer Choice Model becomes available. In time, it would like to generate anywhere from 20 percent to 30 percent of its Japan business from on-line sales.

Rounding out its Sun Enterprise 450 line of Unix workgroup servers, SUN MICROSYSTEMS, INC.'s subsidiary introduced a model that can support up to four 400-MHz UltraSPARC-II processors with 4 MB of cache memory each. It joins models powered by 250-MHz and 300-MHz processors. With as much as 4 GB of main memory, up to 182 GB of hot-swap UltraSCSI (small computer system interface) internal storage and more than 6 terabytes of hard drive storage, the Sun Enterprise 450 family is designed for e-mail, data-base applications, clustering, Web service or ERP. A model configured with two 400-MHz UltraSPARC-II chips starts at $55,500.

Targeting the emerging market for interactive video-on-demand, CONCURRENT COMPUTER CORP.'s subsidiary put on the market the MediaHawk Video Server. This system incorporates the Fort Lauderdale, Florida company's system architecture and real-time operating system and provides a scalable performance exceeding 1,000 MPEG-2 digital video streams. Each stream is completely independent and interactive, allowing quick start, pause, rewind, fast forward search and fast backward search of each digital video stream. Concurrent says that the video streams are delivered with no degradation of performance or video quality regardless of the number of simultaneously supported digital video streams. The company's Japanese arm priced the smallest configuration of the MediaHawk Video Server at $35,400. In advance of introducing high-end servers powered by the next- generation Alpha 21264 64-bit RISC (reduced instruction-set computing) processor, the Japanese unit of COMPAQ COMPUTER CORP. released an AlphaServer Render Tower running off four to 16 powerful 600-MHz Alpha 21164A chips. Designed for the preproduction and postproduction entertainment and animation markets, the system can utilize either the Digital Unix or the Windows NT operating system. The Digital Unix version costs $197,300 for the top-end, 16-processor configuration. The Windows NT system, which supports four processors, lists for $137,200. The AlphaServer Render Tower is premounted in a rack, and each rack comes prewired for additional systems and has a built-in hub.

The fast growth of the Linux server operating system has attracted the attention of HEWLETT-PACKARD CO. It announced worldwide support for this freeware version of Unix across its NetServer family in cooperation with RED HAT SOFTWARE, INC., one of the top Linux distributors. The HP NetServer LPr will be the first system to run Red Hat Linux v5.2. It will be released in Japan in April. Designed for Internet service providers and corporate information technology departments, the HP NetServer LPr features one or two 400-MHz or 450-MHz Pentium II processors, two hot- swap hard disk drives and up to 1 GB of memory.

Quickly filling out its lineup of PC servers, a market it entered last fall, GATEWAY 2000, INC.'s subsidiary introduced the midrange ALR 8300. Built around a 450-MHz Pentium II Xeon processor with 512 KB of L2 cache, this system comes standard with 128 MB of ECC synchronous DRAM memory (expandable to 1 GB), a 9-GB hard drive, a 13X/32X CD-ROM drive, a 1.44-MB 3.5-inch diskette drive and seven PCI slots for $5,700.

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For cost-conscious small and midsized businesses, DELL COMPUTER CORP. released worldwide a workgroup server with a desktop system-like price. In Japan, the base configuration of the PowerEdge 1300 costs $2,100. That covers a 350-MHz Pentium II processor, 64 MB of internal memory, a 4-GB hard drive and HEWLETT-PACKARD CO.'s OpenView Network Node Manager Special Edition for system and network management of up to 250 nodes and HP's ManageX Special Edition for application and operating system management.

In a move that generated a lot of speculation in the industry about motives, GATEWAY 2000, INC. released a Japan-only desktop PC powered by ADVANCED MICRO DEVICES, INC.'s 400-MHz AMD-K6-2 processor. This marks the first time that a build-to-order PC manufacturer adopted an AMD part. The compact machine has 64 MB of main memory (expandable to 224 MB), a 4.3-GB hard drive, an innovative 2X DVD-ROM drive that doubles as a 20X CD-ROM drive with a hardware MPEG decoder, and a 15-inch TFT LCD display. Available through Gateway's direct sales operation and at the three Gateway Country stores in Japan, the system has an estimated street price of $1,800 to $2,200.

GATEWAY 2000, INC. also attracted industry attention with the introduction of the Solo 3100 SE-DVD notebook PC. This machine includes a 2X DVD-ROM drive as well as Dolby 5.1-channel surround-sound Digital Theater speakers from BOSTON ACOUSTICS, INC. of Peabody, Massachusetts. For a real home theater experience, the portable can be plugged into a television set. For mobile computing, the Solo 3100 SE-DVD offers a multimedia-optimized 266-MHz Celeron processor, 64 MB of system memory, a 2.1-GB hard drive and a 12.1-inch TFT LCD display. The base system goes for about $2,500.

About $3,700 buys the mobile professional a COMPAQ COMPUTER CORP. notebook that runs the Windows NT operating system and is compatible with the forthcoming Windows 2000. This all-in-one portable is the latest member of the Japan-adapted Armada 1700 Value Series. Employing a 266-MHz mobile Pentium II processor and offering 32 MB of synchronous DRAM standard, a 4-GB hard drive and a 24X CD-ROM drive, the machine has a 13.3-inch TFT LCD display, a full-sized keyboard and dual integrated speakers. With the release of this system, Compaq cut prices on four other Armada 1700 Value Series models by up to 12 percent.

COMPAQ COMPUTER CORP. hopes to win over some of Japan's huge ranks of first-time home PC buyers with the feature-laden but aggressively priced Presario 5200 Series. These new models use the fastest ADVANCED MICRO DEVICES, INC. AMD-K6-2 processor, the key to pricing that in the United States runs from $900 to $1,300. The series features what Compaq calls the Creativity Action Center, which provides USB and gaming ports on the front of the machines for easy connection to joysticks, digital cameras and other peripherals, as well as ATI 2X AGP 3D graphics. Included, too, is a port for connecting next-generation digital displays.

The instant success of the iMac home computer in Japan no doubt has created more than a little envy among PC vendors. APPLE COMPUTER, INC.'s subsidiary intends to keep the sales momentum going with the release of faster, more colorful versions of the sleek, all-in-one machine. Buyers now have a choice of strawberry, tangerine, lime, grape or blueberry models in addition to the original teal. More important, the new iMacs are powered by a 266-MHz PowerPC G3 processor and include a 6-GB hard drive. And, they are priced to sell at $1,400 or so, 11.2 percent less than the original iMac (see Japan-U.S. Business Report No. 348, September 1998, p. 11). To spur sales of that model, Apple cut the price 28 percent to $1,100.

In its own words, APPLE COMPUTER, INC. "reinvented" its mainstay Power Macintosh G3. The new system has a faster processor (the 400-MHz PowerPC G3), plus up to 1 MB of 150-MHz or 200-MHz backside cache and a 100-MHz system bus. It also provides up to 1 GB of system memory, as much as 100 GB of internal disk storage, four PCI slots and additional ways to connect to external devices using built-in 10/100 Base-T Ethernet, USB and FireWire ports. The new Power Mac G3 also comes with the first built-in ATI RAGE 128 graphics accelerator for faster 3D graphics. In the process of adding capabilities, Apple also made the minitower smaller and introduced a side panel that swings open for instant access to all components.

The many companies in Japan that still use S/390 mainframes but have added Netfinity PC servers soon will have a way to directly connect the two types of hardware. IBM JAPAN LTD. has a late March ship date for the $21,200 Netfinity Escon adapter, which makes it possible to transfer data back and forth between the mainframe and the servers at a rate of 17 megabits per second.

With the IEEE 1394-compliant DVLink hardware/software solution, users of SILICON GRAPHICS, INC.'s O2 graphics workstation can receive and transfer multiple digital video streams simultaneously from other IEEE-enabled devices, such as digital video camcorders, as well as from other desktop systems at the standard's maximum data transfer rate of 400 Mbps. This capability, SGI says, makes it extremely simple and cost- effective to produce high-quality video on the desktop. The company's subsidiary has priced DVLink at $1,100.

Big companies have two new backup and archiving options. The Sun StorEdge L1000 Tape Library system from SUN MICROSYSTEMS, INC.'s subsidiary supports up to four DLT7000 digital linear tape drives and 30 cartridges. One of the deskside or rack-mounted units can handle as much as 1 terabyte of data with a throughput of 72 GB per hour. The base configuration starts at $308,000. Meanwhile, the marketing arm of Louisville, Colorado-based STORAGE TECHNOLOGY CORP. has released a new approach to storage capacity problems: Virtual Storage Manager. Working with the storage industry's Nearline automation architecture, VSM, stripped to its essentials, makes better use of existing space. It does this by initially storing data in a disk buffer and then grouping the information so that it can be stacked and written on a single tape cartridge. The cost of adding capacity without adding real space or real media is not inexpensive, though. VSM starts at $432,700.

MTI TECHNOLOGY CORP., a manufacturer of enterprise storage products, has moved into the Japanese market through a distribution agreement with SOLITON SYSTEMS K.K. The Anaheim, California company's Gladiator 6000 and 3000 series of RAID (redundant array of independent disks) devices provide high-availability, terabyte-class fault-tolerant storage solutions for UltraSCSI and Fibre Channel environments. These products start at $26,500. Soliton also will handle MTI Technology's StorageWare line of non-RAID disk and tape storage expansion products for Windows NT and Unix platforms. The new partners plan to work together to deliver SAN (storage area network) solutions for the Tokyo distributor's customers.

The Fireball line of 3.5-inch hard drives for desktop systems soon will have a new member. QUANTUM CORP.'s subsidiary is sampling the Fireball Plus KA, which is said to be the first 7,200-rotations-per-minute Ultra ATA/66 drive. To be available in capacities ranging from 6.4 GB to 18.2 GB, the new products also are the first to incorporate the Milpitas, California maker's Data Protection System for determining hard-drive functionality in PCs that exhibit system failure. The 18.2-GB Fireball Plus KA is sampling for $520.

IBM JAPAN LTD. is working with CLARION CO., LTD. to adapt INTERNATIONAL BUSINESS MACHINES CORP.'s 340-MB "microdrive" for the multifunctional Clarion Auto PC for vehicles (see Japan-U.S. Business Report No. 352, January 1999, p. 3). Clarion believes that it will need the capacity of this subminiature format when the intelligent transportation system comes into use. The main focus of the IBM Japan-Clarion collaboration is to make the microdrive vibration-resistant as well as immune to temperature changes.

The list of licensees of COLOROCS INFORMATION TECHNOLOGIES, INC.'s patented color imaging technology now includes CANON INC. It has the right to use this know-how in its copiers, printers and fax machines. The Atlanta company's previous Japanese licensees are MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD., MINOLTA CO., LTD., MITSUBISHI ELECTRIC CORP. and RICOH CO., LTD.

The subsidiary of CALCOMP INC. is projecting sales of 800 of the Solus 4 Model 54424 LP LED (light-emitting diode) networked plotter for CAD, graphics and document management applications. The system can output A to D-size (A4 to A1) plotting with a resolution of 400 x 400 dots per inch at a rate of 10 pages per minute for A-size plots. The plot scan can be as long as 26 feet and as wide as nearly 24 inches. At a cost of $29,200, Anaheim, California-based CalComp, a LOCKHEED MARTIN CORP. company, claims that the Solus 4 beats the performance and the pricing of comparable laser plotters.

PLANAR SYSTEMS, INC., the largest of the few U.S. makers of flat panel displays, has licensed its electroluminescent display product technology to DENSO CORP. on a royalty-bearing basis and agreed to share its manufacturing know-how with Japan's top automotive parts maker. The tie-up is expected to accelerate the use of EL displays in all types of vehicle electronic systems. Denso has worked on developing EL display technology for cars and light trucks, while Beaverton, Oregon-headquartered Planar has focused on the nonconsumer vehicle market, including aircraft, trains, taxis and long-haul trucks. Electroluminescent flat panel displays are known for their wide viewing angle, long life and reliability under harsh environmental conditions.

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

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