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No. 356, May 1999

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American Companies in Japan


The recession has been the undoing of RIOS CORP., a contract manufacturer of notebook computers and a supplier of peripherals and software that IBM JAPAN LTD. and RICOH CO., LTD. formed in 1990 to better integrate their own products. The Yokohama company stopped marketing in March and will be liquidated in June.

The need to cut costs and, at the same time, to stay up to date in information technology is proving to be a boon for companies like IBM JAPAN LTD. that operate and manage computer systems for other firms. The latest company to outsource its IT business to the subsidiary of the computer giant is MARUZEN SHOWA UNYU CO., LTD., a Yokohama-based trucking and cargo-handling firm. The contract runs for seven years.

In an unusual marketing move, DELL COMPUTER CORP.'s subsidiary has tied up with MATSUI SECURITIES CO., LTD. to sell PCs geared to on-line stock trading. The NetstockPC, available through Dell's Web site or telephone order center, comes in a desktop version for $2,200 and as a notebook for $3,100. Connectivity tools to Matsui Securities' Netstock Internet trading services are preinstalled. On-line trading is the fastest part of the midsized brokerage's business.

SILICON GRAPHICS, INC. is continuing to move aggressively to get its sales in Japan on an expansion track, mainly by focusing on the broad corporate market rather than on the computer graphics business for which its proprietary Unix machines are best known. The key to the new strategy is the company's first Windows NT workstation, the Visual Workstation 320 minitower system and the Visualstation 540 tower model (see Japan-U.S. Business Report No. 353, February 1999, p. 13). In an unusual decision for such a performance-oriented machine, SGI's subsidiary has contracted with a MARUBENI CORP. affiliate to the sell the 320 model in its 3,500 or so PC stores across Japan. KANTO ELECTRONICS CORP. thinks that it can sell between 3,000 and 4,000 units of the $5,700-and-up system in the first year. CANON SALES CO., INC. and five other firms also distribute the two Visualstation workstations.

As part of its broader market focus, SILICON GRAPHICS, INC.'s subsidiary has put together a package for data base users. The system combines the scalar SGI Origin 2000 supercomputer with the company's MineSet software for visualizing the results of data-mining analyses. Data base software from ORACLE CORP. also will be incorporated into the package under an agreement to be concluded by the end of May. To backstop this move, the SGI unit will form a technical support center to be run in cooperation with NIPPON STEEL INFORMATION & COMMUNICATIONS SYSTEMS INC.

Unwilling to wait any longer for INTEL CORP. to release its IA-64 processor but wanting to give buyers of its midrange servers an expansion path to that 64-bit architecture as well as to future versions of the company's own PA-RISC (reduced instruction-set computing) processor technology, HEWLETT-PACKARD CO. announced for worldwide marketing the HP 9000 N-Class enterprise server. It is the first platform in the industry to provide in-chassis upgrade compatibility to the IA-64 processor and forthcoming PA-RISC chips. HP also claims that the N-Class delivers twice the performance at half the cost of other midrange systems, particularly for on- line transaction processing and Web workloads, thanks to the use of up to eight 64-bit PA-8500 processors and the 64-bit HP-UX 11 operating system. In Japan, pricing of the N-Class starts at $125,000. As it normally does with HP 9000 servers, HEWLETT- PACKARD JAPAN LTD. will supply N-Class machines on an OEM basis to HITACHI, LTD., MITSUBISHI ELECTRIC CORP., NEC CORP., NIHON UNISYS, LTD. and OKI ELECTRIC INDUSTRY CO., LTD.

Of course, claims of the first, the fastest and the like are par for the course in the computer business. For instance, INTERNATIONAL BUSINESS MACHINES CORP. is touting its RS/6000 Model H70 as the fastest 64-bit four-way Web server and especially well-suited for electronic business, enterprise resource planning, supply chain planning and business intelligence applications. Powered by up to four 340- MHz IBM RS64-II RISC processors and running IBM's AIX operating systems, the rack- mounted H70 is said to provide a 75 percent Web-serving boost over its predecessor, the H50, at that model's original entry-level price. IBM JAPAN LTD. has priced the H70 from $42,900.

In bold move to protect sales of its Unix-based servers from the encroachment of PC servers, particularly in data center applications, SUN MICROSYSTEMS, INC. slashed prices on all its machines powered by the 300-MHz and faster UltraSPARC II processor. The cuts, which go as high as 34 percent, affect the latest versions of the high-end Sun Enterprise 1000 as well as the midrange Sun Enterprise 3500, 4500, 5500 and 6500 servers and low-end systems (see Japan-U.S. Business Report No. 354, March 1999, p. 15).

Price-cutting also has come to the already extremely competitive corporate desktop and notebook marketplace. IBM JAPAN LTD. was the initiator. Trying to bolster its position against the inroads of direct marketers, the company, the number-three seller to business customers, will cut the retail prices it suggests to retailers by roughly 30 percent on new models. COMPAQ COMPUTER CORP., frustrated by its continued inability to win more of corporate Japan's business, not only met this challenge but went further. It announced a new pricing structure that covers existing as well as new models. Moreover, Compaq's price cuts extend to PC servers and workstations as well as desktop machines and notebooks.

The rollout of PC servers featuring the performance-enhancing 500-MHz Pentium III Xeon processor or the Pentium III operating at the same clock speed is in full swing. For starters, COMPAQ COMPUTER CORP.'s subsidiary has on the market the ProLiant 6400R. With its innovative 7-inch rack-optimized design, this addition to the company's high-density server line is aimed squarely at space-constrained data centers. The ProLiant 6400R also delivers computing power through its support of one to four 500- MHz Pentium III Xeon processors with 512 KB, 1 MB or 2 MB of L2 cache. Prices begin at $13,300.

IBM JAPAN LTD.'s implementation of the latest high-end processor technology is found in four additions to the Netfinity family. The top of the line is defined by the Netfinity 7000 M10, which supports up to four 500-MHz Pentium III Xeons with a choice of three levels of L2 cache. Aimed at data base applications, this system starts at $17,500. The Netfinity 5500 M20, also configurable with up to four 500-MHz Pentium III Xeon processors, brings power and performance to departments, large workgroups or remote offices at prices as low as $15,000. Two-way processing using 500-MHz Pentium III processors is available to smaller departments in the Netfinity 5000 for as little as $6,800. Departments and small businesses requiring a file and print server can opt for the uniprocessor 500-MHz Pentium III -based Netfinity 3000 at prices from $5,800.

Companies looking for a midrange file, LAN and application server with the performance and the scalability provided by up to four 500-MHz Pentium III Xeon processors as well as enterprise-class availability have an option in NCR CORP.'s S50 server. This system, which starts at $22,300, also offers the choice of three mounting options: a pedestal kit for deskside, a short (50 inch) cabinet with mounting rails and a tall (77 inch) cabinet with mounting rails. NCR's subsidiary is projecting sales of the S50 at 1,000 units.

UNISYS CORP. also is claiming a performance record for its four-way implementation of the 500-MHz Pentium III Xeon processor. The Aquanta ES5045 also benefits, the company says, from its ability to tune the server to deliver optimum performance for enterprise-class applications using its mainframe expertise. This system, which sells for $41,700 and up, is one of four Aquanta ES5000 models that harness the power of the new processor technology. The midrange model, the Aquanta ES5043, has a starting price of $28,200. Both also are available as rack-mounted units.

Taking a different tack, the subsidiary of direct marketer DELL COMPUTER CORP. has introduced the PowerEdge 2300. This server is targeted at companies that want the performance of a 500-MHz Pentium III processor as well as the features of a high-end system but at a budget price. In Japan, that is $5,500. For even more budget- conscious corporate buyers, Dell introduced a new version of the dual-processor- capable PowerEdge 1300. Featuring a 400-MHz Pentium II processor, it lists for as little as $1,600. .....Fellow direct marketer GATEWAY 2000, INC. also hopes to win business from companies with tight IT budgets by offering a 450-MHz Pentium III processor as well as a 500-MHz version of the chip in the two-way ALR 8200 server for $3,900 and up.


 Leading American computer vendors also are bringing the state of the art in processor technology to computer-aid design and engineering, graphics animation, visual simulation and other graphics-intensive applications. The first COMPAQ COMPUTER CORP. Professional Workstation to incorporate the 500-MHz Pentium III Xeon processor is the SP700. This dual-processor-capable system, which starts at $7,400, also features the new PowerStorm 600 high-end 3D graphics solution, which Compaq claims gives SP700 customers the fastest performance available in a Windows NT environment for demanding 3D graphics applications. .....At the same time, COMPAQ COMPUTER CORP.'s subsidiary released the Professional Workstation AP200, AP400 and AP500 lines built around one or two 500-MHz Pentium III chips. The AP400 and AP500 machines also have the new PowerStorm 300 graphics driver, which leverages the new processor to accelerate graphics-intensive applications. Reflecting the fact that AP stands for affordable performance, Compaq priced the base AP200 model at $2,400.

With the release of the fast, graphics-enhancing Pentium III processors, HEWLETT- PACKARD CO. introduced the HP VISUALIZE Personal Workstations, a new family of high-performance, Windows NT-based systems that complement the company's Unix- based HP VISUALIZE workstation line and its volume Windows NT-based HP Kayak PC Workstation family. Like its parent, HEWLETT-PACKARD JAPAN LTD. is using a build-to-order sales model for the HP VISUALIZE Personal Workstations, which are based on the HP VISUALIZE fx graphics architecture originally designed for the Unix version of this line. The X-Class model, which uses the 500-MHz Pentium III Xeon, starts at $10,300, while a P-Class system featuring the 500-MHz Pentium III goes for $8,100 and up. HP Japan believes that it can sell 7,000 HP VISUALIZE Personal Workstations a year by targeting sales directly or through resellers to technical and creative customers.

IBM JAPAN LTD. also is offering the new Pentium engines at a range of price points. For customers with the most demanding 3D applications and the largest data sets, there is the IBM IntelliStation Z Pro. Able to handle two Pentium III Xeon processors running at 500 MHz, these systems feature either the new IBM Fire GL1 or the Intense3D Wildcat 400 graphics adapter at prices beginning at $7,200. For corporate buyers that do not require that much power, IBM Japan has the IBM IntelliStation M Pro and the entry-level IBM IntelliStation E Pro running off a single or dual 500-MHz Pentium III processors and incorporating a variety of OpenGL 3D graphics adapters, including Matrox Millennium G200. Pricing of the M Pro starts at $6,100, while an E Pro workstation can be bought for as little as $2,200.

The competing 500-MHz Pentium III Xeon entry from GATEWAY 2000, INC.'s direct marketing force is the E-5250. Part of the company's line of managed PCs, the dual- processor-upgradable system comes with a Oxygen GMX2000 graphics card to accelerate 3D applications. The base configuration of the E-5250 500 costs $5,700.

The new kid on the Windows NT workstation block also is keeping up with the competition. SILICON GRAPHICS, INC.'s four-way-capable Visual Workstation 540 tower series now is available with 500-MHz Pentium III Xeon processors for prices starting around $11,200. Similarly, the Visual Workstation 320 minitower family, which can handle one or two processors, has been redesigned for the 450-MHz and the 500- MHz Pentium III. This line's pricing begins at $6,800. Both workstation models feature SGI's customized Cobalt chipset for faster communications between the processor and video systems.

With Linux rapidly making inroads in Japan, the subsidiary of COMPAQ COMPUTER CORP. has followed in its parent's footsteps and introduced 10 server and workstation models preloaded with the open-source operating system. The Linux-enabled systems include the ProLiant 1850R, ProLiant 1600 and ProSignia 720 servers as well as the AlphaServer 800 and the AlphaServer DS20, all of which have found favor among Internet services providers. The Professional Workstation XP1000, which is based on the powerful 500-MHz Alpha 21264 64-bit RISC processor, also is Linux-ready. Compaq also leveraged the performance of its Alpha-based server and workstation platforms running Linux by introducing the Compaq Portable Math Library, which is said to give a 10-fold boost to the precision and the speed of mathematical calculations.

With market trackers predicting a strong increase in Japan's rebounding PC sales, U.S. vendors are offering corporate and individual buyers more choices. For example, DELL COMPUTER CORP.'s subsidiary is marketing a Dimension desktop machine with a 400-MHz Celeron processor that has as an integrated option IOMEGA CORP.'s new Zip 250 drive. It provides 170 times the capacity of a standard high-density 3.5- inch floppy drive , plus a far faster write speed. The Dimension V400c lists for under $1,400.

About the same amount of money will buy the GP6-466c desktop PC from GATEWAY 2000, INC.'s subsidiary. This build-to-order system runs off the 466-MHz version of the Celeron processor. So does the G6-466, which includes more bells and whistles for about $1,700.

The all-in-one Gateway Profile — the first product to emerge from GATEWAY 2000, INC.'s summer 1998 program to develop products specifically for the Japanese market — has proved to be such a hit with companies looking for space-saving technology that Gateway added a Windows NT version. With the Profile, the need for a desktop or tower case is eliminated since everything is built into the 15-inch color TFT LCD display (see Japan-U.S. Business Report No. 354, March 1999, p. 15).

HEWLETT-PACKARD JAPAN LTD. certainly believes that space-saving desktop PCs will sell, given its estimate that corporate Japan will buy between 25,000 and 30,000 machines in its new NetVectra series in the first year. Although not an all-in-one design, the hardware box is thin. Among the four models available is the NetVectra N30, which offers a choice of a 366-MHz Celeron processor for $1,700 or a Pentium II processor running at 400 MHz for $2,000.

Seeing strong prospects for desktop systems that target budget-minded but performance-conscious corporate customers, IBM JAPAN LTD. added 10 models to its PC 300GL and PC 300PL lines that range in price from less than $1,200 to $2,600. The latter buys the PC 300GL6277 with a 500-MHz Pentium III processor.

In a case of good timing, HEWLETT-PACKARD JAPAN LTD. reentered the corporate notebook computer market after a three-year absence just as sales were rebounding. Its initial offering is the OmniBook 4150, a full-featured but thin (1.4 inches) and lightweight (less than 6 pounds) system. Powered by a mobile Pentium II processor running at either 300 MHz, 333 MHz or 366 MHz, the OmniBook 4150 comes with a 14.1-inch XGA TFT display, 64 MB or 128 MB of internal memory and 6.4 GB or 10.1 GB of hard disk capacity. Pricing starts at $4,400. HP Japan plans to add other models in its attempt to sell 20,000 notebook PCs a year.

Svelte certainly is in when it comes to notebooks for mobile professionals, and INTERNATIONAL BUSINESS MACHINES CORP. has used an innovative "slice" design to achieve that goal in the ThinkPad 570. The system itself weighs only 4 pounds and measures just 1.1 inch thick. That includes a full-size keyboard and a 12.1-inch or 13.3-inch TFT LCD display, plus 4 GB to 6.4 GB of hard disk capacity and the choice of a 300-MHz, 333-MHz or 366-MHz mobile Pentium II processor. It does not include a floppy or a CD-ROM drive. Those are housed in a separate, snap-on UltraBase unit, which adds about an inch to the laptop's thickness and about 3 pounds to its weight, depending on options. IBM JAPAN LTD. has priced the 333-MHz mobile Pentium II version of the ThinkPad 570 from $3,000.


 COMPAQ COMPUTER CORP.'s subsidiary has added to its Armada notebook lineup an all-in-one design that provides integrated access to the diskette drive, hard drive, CD-ROM drive, modem and AC adapter. The Armada 1750, part of the company's Value Series, supports the mobile Pentium II processor up to 366 MHz and offers a choice of a 13.3-inch or a 14.1-inch color TFT LCD screen. A system for the Windows 95/98 environment costs $3,300; the Windows NT version lists for $3,500.

Home and small business users have three new options in portable machines. The marketing arm of DELL COMPUTER CORP. introduced the Inspiron 3500 C333GT, which, as its model number suggests, is powered by a 333-MHz Celeron processor. As little as $2,100 buys that engine, 32 MB of internal memory, a 3.2-GB hard drive, a 24X CD-ROM drive and 13.3-inch TFT LCD display. .....One alternative from IBM JAPAN LTD., the ThinkPad i Series 2611-436, is targeted at the novice computer user. Powered by a 300-MHz AMD-K6-2 processor and equipped with a 4.8-GB hard drive and a 13.3-inch TFT LCD display, it costs just $2,200-plus. For people seeking more performance, IBM Japan added to its ThinkPad 600E line the 2645-3JJ, which uses a 300PE MHz mobile Pentium II chip. It goes for about $2,700.

The iMac from APPLE COMPUTER, INC. is just as much a hot-seller in Japan as it is in the United States. The latest change should keep sales of the desktop machine rolling since Apple upgraded the iMac's processor to the 333-MHz PowerPC G3 from the 266-MHz version but left the price at $1,300.

The decision by Japanese banks to keep their automatic teller machines running for more hours could mean new business for ATM specialist NCR JAPAN, LTD. Its ATM JAPAN LTD. affiliate and another local company have teamed up to take over the servicing of ATM machines for banks that are seeing costs increase because of the longer operating hours. The new partners expect to sign up at least five nationwide commercial banks and the top regional bank. ATM Japan will focus on operating and developing monitoring systems, while its partner will be responsible for such jobs as putting money in the machines and troubleshooting.

A new, more versatile ATM will come on the market in May. Developed by MICROSOFT CORP.'s subsidiary with OMRON CORP., the Cyber Gate VQ4511 can be used for such things as on-line shopping or buying tickets for events or transportation in addition to an ATM's traditional functions of cash dispensing and deposit taking. The key to this flexibility is the use of the Windows NT operating system and Internet Explorer in place of the specialized software that conventional ATMs use. Over the next three years, Microsoft and Omron expect to sell 20,000 Cyber Gate machines, which will $25,000 and up. They think that much of this projected business will be generated by convenience stores looking for new ways to boost their traffic.

Companies seeking a single storage platform that can support the consolidation of mainframe and open systems data resident in corporate data centers have a solution in the latest product from STORAGE TECHNOLOGY CORP. The 9393 Shared Virtual Array enterprise disk storage system allows customers to manage both OS/390 mainframe and Unix storage environments from a common graphical user interface. StorageTek's SVA virtual architecture automatically and transparently manages the performance of storage subsystems as well as capacity utilization and overhead functions. In the United States, the Louisville, Colorado company has priced the system from $616,000 to just under $1.5 million.

As much as 1.5 terabytes of data can be stored by SUN MICROSYSTEMS, INC.'s StorEdge A5100 array, a major plus for data warehouse applications. So are the system's Fibre Channel connections, which supports high-speed communications. The StorEdge A5100 consists of new, high-capacity 18.2-GB drives operating at 7,200 rotations per minute and housed in a 14-drive enclosure; six of these can be linked together. Sun's subsidiary has priced the standard configuration of the disk array at $56,200.

What HEWLETT-PACKARD CO. calls the industry's first one-button disaster-recovery feature has been incorporated into the company's HP SureStore DAT8 and DAT24 digital audio tape backup systems. In the event of a hard disk failure, data corruption or other disaster, the touch of a button restores the operating system, configuration, applications and data files to their status at the time the last backup tape was made. The HP SureStore DAT8, which holds 8 GB of compressed data on a cartridge, and the HP SureStore DAT24 with its 24-GB compressed capacity work with the top four PC server and workstation brands: Compaq, Dell, HP and IBM. However, the HP One- Button Disaster Recovery System is compatible only with certain HP products. In Japan, those are the HP NetServer E50, E60 and LC3 and the HP Kayak Personal Workstation line. HEWLETT-PACKARD JAPAN LTD. priced the HP SureStore DAT8 at just under $1,700 and its larger counterpart at around $2,200. It is projecting combined sales at 30,000 units in the first year of marketing.

Clik! disks and drives were to be available in May from IOMEGA CORP.'s subsidiary. The disk is just half the size of a business card, but it can hold 40 MB of data. Both features make Clik! ideal for portable computers as well as such other products as digital cameras. The disk itself costs between $12 and $13. A complete Clik! package with an external drive, disk, connector cables and a PC Card goes for about $330.

IOMEGA CORP. expects to help SEGA ENTERPRISES, LTD. claim another first for its Sega Dreamcast video game console: the ability to bring game playing, Web browsing and electronic mail together in an integrated system. The two are working together to adapt the Roy, Utah company's popular 100-MB Zip drive to the game console. The new product, which also will allow users to download game updates from the Web to Zip disks, will be offered as a Dreamcast option, with availability expected in the third quarter. It will be designed to work independently or in conjunction with Dreamcast games.

Corporate customers have two additional high-performance laser printer options. LEXMARK INTERNATIONAL, INC.'s subsidiary is marketing a network-ready version of its departmental Optra S 2455 for $3,500. This machine outputs 24 pages per minute with a resolution of 1200 x 1200 dots per inch. The Optra S 2455n supports not only the Windows 95/98, OS/2 and Unix operating systems but the Mac OS as well. At the same time, IBM JAPAN LTD. is offering a made-for-Japan laser printer that, at $2,000, is 37 percent less expensive than its predecessors. The IBM 5589-K20, derived from the Infoprint 20, prints 20 ppm even on A3 (11 inch x 17 inch) paper. It is compatible with Windows 95/98/NT.

New 3DFX INTERACTIVE, INC. distributor NISSHO ELECTRONICS CORP. expects to sell at least 200,000 versatile Voodoo 3 Series graphics accelerator boards in the first year of marketing. The San Jose, California supplier's products handle both data and 2D and 3D graphics in what is said to be half the time of competing products. The 2000AGP board costs roughly $170, while the even faster 3000AGP add-on lists for $230.

The new FMV-PRO Series IA of Windows NT workstations from FUJITSU, LTD. feature the E&S Lightning 1200 graphics subsystem from EVANS & SUTHERLAND COMPUTER CORP. Optimized to work with the Pentium III and the Pentium III Xeon processors, the board provides OpenGL acceleration performance for 3D CAD and content-creation applications. This is the first Fujitsu design win for the Salt Lake City, Utah manufacturer of simulation and training visual systems and workstation graphics systems, even though the computer maker is one of four distributors of E&S's 2D and 3D graphics boards.

The latest Japan-targeted laser printer from SEIKO EPSON CORP. is driven by a controller designed by embedded imaging systems supplier PEERLESS SYSTEMS CORP. The LP-9200PS3, a 20-ppm monochrome desktop printer, is the third collaboration between the El Segundo, California company and the big printer manufacturer. It uses the PeerlessPage Object-Based Imaging System and QuickPrint 1800 graphics imaging coprocessor to boost performance while providing low-cost Japanese-language capability.

The SecurID family of user authentication products from SECURITY DYNAMICS TECHNOLOGIES, INC. has a new member. The SecurID 1100 Smart Card, designed to combine security with convenience, enables organizations to use a single card to protect their network and applications from unauthorized access and for such other varied purposes as employee identification and electronic purses. The Bedford, Massachusetts firm's marketing unit has priced the SecurID 1100 from $60.

An exchange rate of ¥120=$1.00 was used in this report.aaaaaa

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