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No. 354, March 1999

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Japanese Companies in the US


COMPUTERS AND PERIPHERALS

Computer industry analysts long have wondered which of Japan's diversified electronics makers would be the first to acknowledge that it had a bleak future in the brutally competitive American personal computer market. The initial candidate is HITACHI, LTD. While not pulling out of the PC market, at least not right now, it is in the process of transferring the operations and the products of HITACHI PC CORP. to HITACHI DATA SYSTEMS CORP. Formed in mid-1995, Milpitas, California-based Hitachi PC markets the VisionBase line of PC servers, the VisionDesk series of desktop computers and various VisionBook families of notebook computers. The desktop and notebook machines soon could be history since Hitachi said that its emphasis in the future would be on PC servers. Regardless, the Hitachi PC name will be replaced in time by the Hitachi Data Systems designation. Until now, HDS, headquartered in Santa Clara, California, has marketed S/390-compatible mainframe servers and multiplatform storage systems as well as provided professional services. In late April, Hitachi will buy out the 16.2 percent share of ELECTRONIC DATA SYSTEMS CORP. in HDS (see Japan-U.S. Business Report No. 353, February 1999, p. 4).

In making HITACHI DATA SYSTEMS CORP. the focus of its North American information technology business, HITACHI, LTD. invested an additional $300 million in the company. A major portion of this money will be earmarked for HDS's professional services operations. The Santa Clara, California company also announced that at some unspecified time, it would meld its two S/390-compatible product lines. The HDS Pilot Series uses CMOS (complementary metal-oxide semiconductor) processors, while the HDS Skyline Series is based on ACE hybrid technology, short for Advanced CMOS ECL (emitter-coupled logic). The new mainframes will be complemented by the Windows NT servers previously sold by HITACHI PC CORP. and by Unix servers.

In the meantime, HITACHI DATA SYSTEMS CORP. introduced a new line of mainframes optimized for electronic commerce and networked applications that delivers, at a minimum, nearly twice the performance of the company's existing products. The Hitachi Skyline Trinium uses HITACHI, LTD.'s second-generation ACE technology, which combines the original ACE process with copper circuit interconnection — a first. Trinium performs at more than 1,000 MIPS (million instructions per second) when configured with four instruction processors and can top 3,000 MIPS with 16 processors. This high-end configuration, Hitachi calculates, can support more than 22,000 simultaneous enterprise resource planning users. To facilitate use of the Trinium as an e- commerce host, the mainframe has up to 64 gigabytes of main memory and as many as 512 discrete channel paths and supports up to 320,000 simultaneous input/output operations per second. For greater reliability, more of the Trinium's components are redundant. Four-way to 12-way Triniums will be available in the third quarter of this year, with 13- to 16-engine models coming in the first quarter of 2000. Hitachi hopes that the Hitachi Skyline Trinium will help it regain mainframe market share lost recently to INTERNATIONAL BUSINESS MACHINES CORP. In FY 1997, the company shipped 1,195 mainframes to the United States, but the number dropped to an estimated 1,000 machines in the year through March 1999. Analysts are not convinced that the Trinium will reverse Hitachi's U.S. market fortunes since IBM is coming out with products that promise comparable performance at a lower price.

At the same time, HITACHI DATA SYSTEMS CORP. announced a new entry- level mainframe server in the HDS Skyline Series. The 26th model in the line, the performance of the single-engine Skyline 113 is rated at about 88 percent of the previous low-end model. The company also unveiled four additional systems in the HDS Pilot P8 Series of enterprise servers. The three-, four-, five- and six-way turbo models address high-end customers' disaster recovery requirements.

Some analysts are surprised that NEC CORP. has not pulled the plug on its money-losing PACKARD BELL NEC, INC. subsidiary. Since mid-1995, the Japanese company has committed roughly $2 billion in cash and assets to the number-five worldwide PC vendor (see Japan-U.S. Business Report No. 348, September 1998, p. 2). The latest capital injection amounted to a reported $450 million, which NEC paid the Sacramento, California supplier for its European operations. The transaction raised NEC's stake in Packard Bell NEC to approximately 88 percent. The balance is owned by France's GROUPE BULL. Packard Bell NEC will use $200 million of the money to pay off loans. The rest will go toward further restructuring. The company indicates that previous such moves — centered on cutting fixed operating costs, consolidating operations, reducing staffing to about 3,000 people from 5,000 or so and refocusing distribution — have positioned it to be profitable in the second half of 1999.

Coming up with innovative products at competitive prices obviously remains key to PACKARD BELL NEC, INC.'s future. One such product, the company's NEC Computer Systems Division hopes, is the NEC Express5800 HV8600, an eight-way server utilizing 400-MHz or 450-MHz Pentium II Xeon processors that incorporates advanced features like 128 megabytes of 100-MHz synchronous DRAM (dynamic random access memory) with Level 3 cache. NEC CSD claims that this system, which includes the NEC Aqua II chipset for enhanced performance, proves that servers running Windows NT Server Enterprise Edition 4.0 can handle the large application loads typically reserved for more expensive RISC (reduced instruction-set computing) servers. The pricing of the NEC Express5800 HV8600 starts at $79,400 for eight 400-MHz Pentium II Xeon processors with 1 megabyte of cache each, 4 GB of ECC (error checking and correcting) RAM (random access memory) expandable to 8 GB, SecuRAID 530 with 32 MB of cache and battery backup, and redundant cooling and redundant/hot-swap power supplies. Storage capacity can run as high as 216 GB.

Simultaneously, the NEC Computer Systems Division of PACKARD BELL NEC, INC. became one of the first PC vendors to announce servers built around INTEL CORP.'s workgroup-optimized Pentium III processor. Available now is the NEC Express5800 LS2400 with one or two 450-MHz or 500-MHz Pentium III processors for workgroup collaboration, Web applications and e-commerce. A system that includes a single 450-MHz chip with 512 kilobytes of cache, 64 MB of internal memory, a 4-GB SCSI (small computer system interface) disk drive and integrated Ethernet capabilities starts at just $2,200. For large workgroups and satellite offices, NEC CSD released the NEC Express5800 MC2400. Also dual processor-capable, this server goes for about $3,400 if equipped with a 500-MHz Pentium III processor with 512 KB of cache, 64 MB of RAM, a 4- GB Ultra 2 SCSI hot-swap disk drive and integrated Ethernet. In the second quarter, the company will put on the market the NEC Express5800 ES1400 server with a 450-MHz Pentium III. Targeted at small businesses and workgroups, it will cost little more than a well-equipped corporate desktop machine.

The 450-MHz and the 500-MHz Pentium III processors also made an early appearance in the NEC PowerMate 8100 series of corporate desktop computers from the NEC Computer Systems Division of PACKARD BELL NEC, INC. This line also includes INTEL CORP.'s 440BX chipset, a 100-MHz front- side bus, accelerated graphics port architecture, Ultra ATA-33 SMART hard drives with capacities ranging from 4.3 GB to 20.4 GB and a suite of manageability software products. A NEC PowerMate 8100 with a 450-MHz Pentium III chip, 64 MB of internal memory and a 8.4-GB hard drive goes for about $1,800. Three hundred dollars more buys the same system with a 500-MHz processor.

The Computer Systems Division of TOSHIBA AMERICA INFORMATION SYSTEMS, INC. also announced corporate desktop systems featuring the Pentium III the same day that INTEL CORP. released the fastest processors currently available. The build-to-order Equium 7100 line from TAIS starts at $1,500. In a crowded marketplace, the Irvine, California company hopes to differentiate its products by the large package of manageability tools that comes standard as well by the ease of servicing and upgrading the Equium 7100 series of commercial desktop PCs.

The release of the Pentium III also enabled SONY ELECTRONICS, INC. to beef up the digital video editing capabilities, music management and digital imaging functions of the VAIO Digital Studio PC series, which was launched last fall for the home market. Designed to allow users to do such things as create home movies and custom soundtracks, the PCV-E518DS features a 500-MHz Pentium II processor, 128 MB of SDRAM memory, a 17.2-GB hard drive, 8 MB of video RAM and a rewritable compact disc drive for $2,800.

The same engine also powers SONY ELECTRONICS, INC.'s innovative VAIO Slimtop LCD (liquid crystal display) home computer. The second product in the line, the PCV-L600, takes up roughly 75 percent less space than the typical desktop model. To achieve this small footprint, engineers used many notebook computer components, including a digital multimedia LCD, a slim CD-ROM (read-only memory) and floppy disk drive and a PCMCIA (personal computer memory card interface) card slot. The PCV-L600 also is the first Sony computer to ship with the company's built-in Memory Stick media slot, which enhances digital imaging capabilities and expandability. Pricing starts at $3,000.

The top seller of portable computers in the United States, the Computer Systems Division of TOSHIBA AMERICA INFORMATION SYSTEMS, INC., has achieved a major milestone: the production of 5 million notebook systems at its Irvine, California manufacturing facility. Not only are all the notebook computers TAIS sells in this country and in Latin America assembled at the factory, but so are the firm's Equium commercial desktop machines and Magnia server products.

The newest notebook computer to come off the assembly line at TOSHIBA AMERICA INFORMATION SYSTEMS, INC.'s plant is the Satellite 2535CDS. Designed for budget-conscious small businesses, students and home users, the machine has an estimated street price of $1,400. That buys a 300-MHz Pentium processor with MMX technology, 32 MB of EDO (extended data-out) DRAM, a 4.3-GB hard drive and a 13-inch color display. The package weighs 6.8 pounds and is just 1.7 inches thick, in large part because the 24X CD- ROM drive, diskette drive and hard drive are combined in a slim, all-in-one design.

FUJITSU PC CORP. has given mobile professionals working for midsized businesses four more choices in its LifeBook E Series of notebooks. The E342 model now defines the line's low end. Powered by the new 300-MHz Celeron processor, it includes 32 MB of internal memory, 3.2 GB of storage and a 12.1-inch SVGA (super video graphics array) TFT (thin-film- transistor) display for an expected selling price of $1,500. The three other additions to the E Series use mobile Pentium II processors running at 300 MHz, 333 MHz or 355 MHz, respectively. They feature 64 MB of RAM, hard drive capacities of 4.3 GB (E351) or 6.4 GB (E360 and E370), a Zip drive (E370 only) and a 13.3-inch XGA (extended graphics array) TFT display. Estimated street prices go from $2,200 (E351) to $2,600 (E360) to $3,100 (E370). All LifeBook E Series models have dual multifunction bays that enable users to hot-swap such bay devices as floppy and CD-ROM drives. .....At the same same, FUJITSU PC CORP. added a new entry-level model to its all-in-one LifeBook C Series, which is targeted at the SOHO (small office/home office) and higher education markets. The C353 provides a 300-MHz mobile Pentium II processor, 32 MB of system memory, 4 GB of storage and a 12.1-inch SVGA TFT display for $1,500 or so.

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With at least three Japanese companies bringing the mininotebook technology that is proving popular in Japan to the United States, the line is starting to blur between Windows-based laptop machines and devices running the recently released Windows CE Handheld PC Professional Edition Version 3.0 operating system. For instance, the LifeBook B112 mininotebook from FUJITSU PC CORP. uses the same 8.4-inch color TFT touch-screen display and stylus as a Windows CE H/PC Professional machine. It also is not much bigger, measuring 9 x 6.7 x 1.2 inches and weighing less than 2.7 pounds. However, the B112 runs Windows 98. It also delivers more power and performance with a 233-MHz Pentium processor with MMX technology, 32 MB of RAM and a 3.2-GB hard drive. Most notably perhaps, at a suggested price of $1,600, the B112 costs a lot more than a Windows CE H/PC Professional system.

For its part, SONY ELECTRONICS, INC., one of the first companies to offer a mininotebook, the VAIO 505 SuperSlim Series, in the United States, is blurring the line between mobile computing and digital imaging with the release of the VAIO CIX PictureBook. This machine integrates a swiveling CCD (charge-coupled device) camera with a VAIO 505 SuperSlim machine, thereby enabling users to capture, manipulate and share both still and motion images with the click of a button. Weighing just 2.5 pounds and measuring only 1.5-inches thick, the Windows 98-compatible PictureBook comes with a 266-MHz Pentium processor with MMX technology, 64 MB of SDRAM, a 4.3-GB hard drive, an 8.9-inch XGA TFT display and a 90 percent- sized keyboard. It lists for $2,300.

The convergence between laptops and handheld PCs running Windows CE Handheld PC Professional Edition Version 3.0 also is being fueled by enhancements to the latter group of products. For instance, the next- generation HPW-600ET announced by HITACHI AMERICA, LTD. for shipment in early summer has a 7.5-inch color, resistive-touch LCD display with VGA resolution (640 pixels x 480 pixels) and the 128-MHz version of HITACHI, LTD.'s SuperH SH-4 RISC processor. The system, which will start at $1,200, weighs less than 30 ounces and measures 8.7 x 6.3 x 1.2 inches.

The Dover, New Jersey subsidiary of CASIO COMPUTER CO., LTD., the first company to release a H/PC device running Windows CE in the United States, has introduced a palm-sized PC designed to support the new Windows CE for Palm-size PC Version 2.1.1 operating system. The Cassiopeia E-100 features the company's first color TFT LCD screen, which has a resolution of 240 pixels x 320 pixels for better readability. It runs off a 131-MHz VR4121 processor from NEC CORP. Shipments will start in early spring.

To handle development and sales of the Windows CE 2.0-compatible, multifunctional Clarion Auto PC for vehicles, CLARION CO., LTD.'s subsidiary formed CLARION ADVANCED TECHNOLOGY CORP. in Irvine, California. The company is shooting for annual sales of 30,000 of the $1,300 units. The voice-activated Auto PC integrates audio, navigation, wireless communications and computing functions (see Japan-U.S. Business Report No. 352, January 1999, p. 3).

YAMAHA CORP. is supplying magnetoresistive heads to SEAGATE TECHNOLOGY, INC., its first deal with the big Scotts Valley, California hard disk drive manufacturer. The order is thought to involve several million units. Yamaha is hoping to win a follow-on contract from Seagate for giant magnetoresistive heads, a technology that allows a huge jump in data density and, as a result, slim, higher-capacity drives for notebook computers. Before the Seagate order, the only company Yamaha supplied heads to was QUANTUM CORP.

At a cost of $10 million, PLAZA CREATE CO., LTD. acquired a 50 percent interest in CP HOLDING, INC. and a 40 percent or so stake in its CYCOLOR, INC. subsidiary. That Miamisburg, Ohio color printer company will use the money to extend its technology for making copies without the use of toner from text and graphics to photographic images. Such a development is of interest to Plaza Create since it operates a chain of film processing stores. Cycolor recently has received contracts worth a total of $10 million from four Japanese companies, including OMRON CORP. and SEIKO INSTRUMENTS, INC., for printer development projects.

The IMAGER line of digital document systems marketed by SHARP CORP.'s Mahwah, New Jersey subsidiary now includes the first product to offer network scanning capabilities. The AR-405 copier also can be connected to a network via the AR-PB2 internal print controller, thereby allowing printing from the desktop at a rate of 40 pages per minute with a resolution of 600 dots per inch. Sharp's Camas, Washington research and development unit developed the AR-PB2. The AR-405 has a suggested price of $12,300. The AR-PB2 costs $2,000 or, if bundled with an Ethernet network interface card, $2,300. The total price, Sharp points out, is less than separately buying a copier and a 40-ppm network printer.

For smaller businesses and workgroups, the Fairfield, New Jersey unit of MITA INDUSTRIAL CO., LTD. has introduced the Mita PointSource Ai2020. This combination digital machine turns out 20 ppm as a copier and up to 18 ppm as a networked printer, also at 600 dpi. The base copier unit lists for $4,600.

What is billed as the world's fastest color ink-jet printer is on the market from SEIKO EPSON CORP.'s Torrance, California subsidiary. The Epson Stylus Color 900 outputs 10 ppm in color as well as up to 12 ppm in black and white at resolutions as high as 1440 x 720 dpi. Compatible with both PC and Macintosh platforms, the printer has an estimated street price of $450.

Despite all the advances in printer technology, SEIKO EPSON CORP. has not forgotten the impact dot-matrix segment. Its U.S. marketing arm has introduced the LQ-2180, a wide-carriage, 24-pin machine for printing invoices, multipart forms, reports, packing slips and labels at a rate of up to 480 characters per second. It lists for around $500.

Mobile professionals making presentations have a new tool in the CP- X955W LCD projector from HITACHI AMERICA, LTD. The projector works with diverse information sources, everything from desktop systems to handheld PCs. The resolution of the reproduced video and data images is true XGA (1024 pixels x 768 pixels). The CP-X955W's price of $12,000 also includes a remote control unit with a mouse function and a laser pointer.

A full line of presentation monitors is available from SONY ELECTRONICS, INC. with the release of the Sony Multiscan X9200 LCD rear-projection display. Developed for use as a computer or video presentation monitor in boardrooms and other exhibition-type environments, the display's image measures a true 50 inches. It uses three new Sony-designed 1.3-inch polysilicon TFT LCD panels within its optical system to provide XGA resolution (1024 x 768). Another selling point of the Multiscan X9200, which has an estimated price of $10,000, is its ability to accept computer and video signals from a variety of sources in a variety of formats.

In a deal that occurred in November 1997 but just was made public, BROTHER INDUSTRIES, LTD. acquired ZAPEX TECHNOLOGIES, INC. The Mountain View, California company is a developer of audio and video MPEG-2 technology. Since the takeover, Zapex has been working on an audio and video encoding solution that will help to bring down the still high costs of DVD (digital video disc) turnkey authoring systems. Its ZP board, scheduled for March release, uses only one PCI (peripheral component interconnect) slot for Window NT-based encoding.

Advanced metal evaporated tape, SONY CORP.'s most powerful recording media technology, is in production at the company's Dothan, Alabama factory. According to Sony, AVE tape provides the higher output signals necessary in small-format digital recording devices because the coating contains a larger percentage of magnetic material than is found in most magnetic tapes. That achievement, in turn, reflects the fact that AVE tape is made in a vacuum chamber and, thus, does not require the use of traditional binders. The Dothan facility initially is making AVE tape for use in data storage products. In time, presumably, it will produce this product for digital video tape. Sony opened the plant in 1977 to make recording media for sale in the United States. Today, the complex has more than 1,000 people involved in the production of consumer and professional video tape, audio tape and data storage media.

Competitor HITACHI MAXELL, LTD. is transferring some product planning operations to the United States from Japan. It also is assigning engineers from headquarters to the MAXELL CORP. OF AMERICA plants in San Diego, California and Conyers, Georgia and increasing the number of researchers at the company laboratory in Santa Clara, California. All of these moves are designed to strengthen Hitachi Maxell's U.S. data storage media business, although they should have spin-off effects for the video and audio tape that the company also makes here.

MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD., SONY CORP. and TOSHIBA CORP. have joined APPLE COMPUTER, INC., COMPAQ COMPUTER CORP. and PHILIPS ELECTRONICS NV in endorsing the high-speed IEEE 1394 digital interface. Invented by Apple, IEEE 1394 could become the industry standard for interconnecting new digital consumer electronics products and PCs. It offers a data transfer rate of up to 400 megabits per second. The six companies plan to form a patent pool to facilitate licensing the technology needed to implement the standard. They also will promote its industrywide adoption. iLINK is Sony's version of IEEE 1394.

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

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