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(Nikkei BP Group)

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

  • Japan’s PC Makers Expect Brisk Sales in 1999
  • March 17, 1999 (TOKYO) — With the rapid growth of the Internet’s popularity, sales of personal computers are expected to surge in Japan this year.
    Sales of PCs for business use are likely to increase at a steady pace, while sales of PCs for consumer use are expected to expand at a higher rate than last year.

    The number of Japanese people using the Internet topped 10 million at the end of last year, and it is expected to reach 20 million by the end of 1999. This is driving the growth of the PC market.

    An increasing number of business people, women office workers, and students are purchasing PCs to access the Internet or exchange email messages.

    Despite this favorable outlook, few PC manufacturers are satisfied with this situation. This is because of the trend of lowering PCs prices, which tends to hurt manufacturers’ profits.

    Although Japan’s PC manufacturers tend to utilize Microsoft Corp.’s operating systems and Intel Corp.’s microprocessors, until recently they have mainly developed or procured other parts and components on their own. However, in recent months they have begun using the same parts and components, which pushes down product prices.

    As a result, more manufacturers are purchasing the same low-priced components, enabling them to sell PCs at lower prices. In the United States, “US$500 PCs” are available, along with some “free PCs” that are distributed to customers free of charge.

    This tidal wave of declining PC prices is expected to hit the Japanese market within 1999.

    For PC makers that are gaining little profit from the sale of PCs and are experiencing “prosperity without profits,” the pressure to push down unit prices may further threaten their business.

    To survive this new set of challenges, the producers must review their traditional strategy of selling hardware at high prices to gain profits, and they must devise new corporate strategies.

    In 1998, Fujitsu Ltd. expanded its market share slightly by engaging in systems sales.

    In the same year, Dell Computer Corp. Japan, Sony Corp., Sharp Corp., Matsushita Electric Industrial Co., Ltd. and Gateway 2000 Japan Inc. posted double-digit year-on-year growth on a unit basis.

    (Nikkei Business)

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