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(Nikkei BP Group)

(No.1 High-Tech News Site in Japanese)

News from NET and COM '99

  • NEC to Foray into Low-Priced PC Market
  • February 12, 1999 (TOKYO) — The age of US$1,000 personal computers will arrive in Japan soon, sparked by NEC Corp.’s new ValueStar NX R series, scheduled to go on sale in early February.
    NEC is following the lead of Compaq Computer KK and IBM Japan Ltd., both Japanese arms of major U.S. PC makers.

    NEC will offer two models for sale. The lower priced one, equipped with a K6-2 333MHz microprocessor from Advanced Micro Devices Inc., will be sold with a 15-in. cathode-ray-tube (CRT) display for less than 150,000 yen (US$1,320). Compared with the price of the ValueStar NX, which is the lowest end of all NEC models at present, ValueStar NX R’s price will be about 30,000 yen lower.

    With the spreading use of PCs, an increasing number of users are switching to new models or buying more PCs. “The target of our NX R is not beginners, but users who possess one or two PCs,” an NEC official said.

    In accordance with this strategy to sell to intermediate or advanced users, NEC will attach only three volumes of manuals to the ValueStar NX R, compared to the seven volumes for the ValueStar NX. Moreover, NEC will introduce an English-language basic input/output system (BIOS) for the new PC series.

    Retailers are welcoming the debut of NEC’s low-priced PCs.

    “ValueStar NX R will become a focal model in the upcoming spring sales campaign. According to our experience, PCs priced between 100,000 yen and 150,000 yen will sell well, and the main buyers are corporate users,” said an official of Laox Co., Ltd.’s Computer-kan (Computer Building), a major PC retailer.

    Compaq Computer KK was the first to sell US$1,000 PCs on the Japanese market, followed by IBM Japan and NEC. With the entry of major PC manufacturers into the low-priced PC market, the unfavorable image of cheap and low-quality US$1,000 PCs is likely to disappear, and the new PCs will probably become a hit.

    However, it is too early to conclude that all manufacturers will rush to produce low-priced PCs, and that the products will dominate the market in the near future. In the 1998 year-end sales competition on the domestic market, space-saving models equipped with liquid-crystal display monitors and notebook-type PCs sold well.

    Unless the prices of LCD panels go down, the prices of these PCs are unlikely to fall below the 200,000-yen (US$1,760) mark. Another problem involving low-priced PCs is that the lower their prices go, the less profit the manufacturers and retailers will gain.

    “The NX R price is set on the lowest possible level if we maintain the current level of user-support services. So we want to sell the NX series much more than the NX R series,” an NEC-related source said. The PC manufacturers’ next target, therefore, will be how to secure profits by selling US$1,000 PCs.

    Related stories:
    Toshiba, NEC Start Using AMD’s K6-2 Microprocessor
    Personal Computer Pricing Battle Intensifies in Japan

    (Nikkei Personal Computing)

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