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(Nikkei BP Group)

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

New Year Special Features '99

  • Panasonic Computer Co. Aims to Earn 100B Yen in 2000: President
  • January 14, 1999 (TOKYO) — The Matsushita group’s personal computer business has been growing steadily.
    Panasonic Computer Co. (PCC), a company launched in February 1997 by Matsushita Electric Industrial Co., Ltd. to boost the PC business in defiance of the firm’s conventional divisional system, has seen its efforts bearing fruit.

    PCC’s sales for fiscal 1998 were estimated at 56 billion yen (US$498 million). Sales of its line of notebook PCs, Let’s note Series, and peripheral products have been growing 20-30 percent annually. With these two types of products, PCC aims to reach sales of 100 billion yen (US$890) in fiscal 2000.

    Company President Ryuichi Kurabayashi revealed the firm’s future business plan at a recent press conference.

    The following is the gist of the press conference compiled by BizTech.

    Beyond Withdrawal and Hardships

    Just in the past five years, Matsushita’s PC business has gone through a number of hardships: the end of the outsourcing business for IBM Japan Ltd., the ended sales of machines compatible with Fujitsu Ltd.’s FM-R model, withdrawal from the UNIX workstation business, unsuccessful entry into the DOS/V PC (PC-AT compatible machine) market and unsuccessful marketing of audio-visual PCs.

    Sales of WOODY, an audio-visual PC which combines with a television, have proven unsuccessful even though the product was regarded by market observers as original.

    I attribute the failures to: (1) delays in compliance with the industry’s standard, (2) over reliance on our conventional distribution routes, and (3) the limitation of management in line with the divisional system. In short, when we sell PCs, we use all our distribution networks.

    PCC was established to take care of marketing and merchandising. Its task is to bridge the gap between production and distribution at different divisions and affiliates. The organization is nothing like an internal venture company, but I call it a “venture” whenever necessary with an aim of ending the traditional sales method and focusing on certain businesses.

    Because I consider distribution as a sort of venture, I have been attempting to distribute our PCs in an unconventional way. As a result, our distribution cost has been reduced by 66 percent.

    More Let’s note Models

    Initially, we were reluctant to embark on manufacturing PCs. However, we decided to make mobile PCs upon strong internal requests. At that time mobile PCs were manufactured only by IBM, and we thought we wouldn’t lose much money even if we failed.

    Unexpectedly, however, the mobile PCs turned out very successful. Its sales accounted for 50 percent of our total sales for 1998. In sales of B5-sized mobile PCs, we are next to Sony Corp.

    For our 1998 winter models, we added new line ups such as a model with a mobile phone interface and one equipped with a charge-coupled device (CCD) camera. We will need to maintain such line ups even for the next models by releasing successor models. It is hard, but I think we will have to do it anyway.

    In addition, sales and profits of the peripheral products business are, to some extent, predictable compared with those of the PC business. Sales of DVD-RAM drives and other storage devices also will grow in the future.

    On the other hand, our display business is still unsatisfactory. Matsushita is supposed to be strong in display products. We aim to boost such sales. We hope to raise sales of peripheral products to the level of PC sales in the future.

    Direct Sales Planned in 1999

    Speaking of distribution, we are expecting home electric appliance shops affiliated with Matsushita to play a more active part in 1999.

    Sales at these shops handling only Matsushita products doubled in only six months during 1998. An increasing number of young, enthusiastic managers of these shops say they want to sell Let’s note.

    We also hope to launch direct sales. We aim to start domestic direct sales by the end of 1999.

    Related stories:
    Matsushita to Start Direct Sales of Personal Computers
    Sony Offers Low-Price Notebooks: Nikkei Personal Computing Survey

    (BizTech News Dept.)

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