(Nikkei BP Group)
(No.1 High-Tech News Site in Japanese)
| PC, TV to Compete in Future: NEC Exec. VP
December 24, 1999 (TOKYO) -- Yoshi Takayama, executive vice president
of NEC Corp., said NEC's future rival will not be Fujitsu Ltd., Sony
Corp. nor Apple Japan Inc., but television. He recently gave an interview
to Nikkei Electronics, a magazine published by Nikkei Business Publications
|The domestic personal computer market for 1998 was enlivened by brisk
sales of the VAIO line of notebook PCs for individual consumers marketed
by Sony, and Apple's iMac boom, even though PC sales to corporate customers
dropped from a year earlier. The release of the Windows 98 operating
system by Microsoft Co., Ltd. of Japan also contributed to boosting
sales to individual users.
Nikkei Electronics interviewed eight major domestic PC
vendors about their prospects and product strategies for 1999. Following,
Asia BizTech features the interview with NEC's Takayama.
Nikkei Electronics: Could you tell us about the industry outlook
for the PC market in 1999?
Takayama: I have no idea about it. At the beginning of 1998, I
thought the market had hit bottom in 1997. But look at the poor sales
Nikkei Electronics: What were reasons behind it?
Takayama: PC sales to corporate customers were particularly disastrous.
The figure for the first half of fiscal 1998 through March 1999 dipped
below the previous year's level. Even though we are expected to see
higher sales for the second half over the previous year, it just means
that sales for fiscal 1997 were unbelievably bad. Sales to corporate
customers remain sluggish.
The only good news among other things is the market for individual consumers
has been improving since around June 1998. The market was stimulated
by the release and shipment of Windows 98 and the iMac. A variety of
such enlivening topics has also favorably influenced our sales, making
up for the flagging sales to corporate users.
Nikkei Electronics: Do you expect the market for individual users
to remain brisk in the future?
Takayama: We should still be careful. The market for individual
users is ruled by chance. The boom can subside so easily. I don't know
how long we can keep sales brisk....
Nikkei Electronics: Do you think the fads in Apple's iMac and
Sony's VAIO, both of which are big hits in the market for individual
users, are transient?
Takayama: You call them a hit, but the market share of the both
products does not even surpass 10 percent. It is still premature to
conclude that they have won a firm foothold in the market for individual
I hope the iMac boom is a transient one. As to VAIO, initially I thought
the boom was transient, but actually it stayed long. We are lucky, because
the VAIO line do not have products targeting corporate users yet.
Nikkei Electronics: Do you think that designs play a large part
now in selling PCs?
Takayama: It is true that PC manufacturers can arouse customer
interest by inventing new colors and forms. Shigeaki Saegusa, a composer,
told me that he is thinking of buying iMac. "But I will not use it,"
he said. "I will just place it in my living room because it looks so
cool." The point is that iMac serves as an interior decoration.
I know designs of our products are not hip. You don't have to tell us.
But it is not like we will make our PCs blue and purple and the PCs
will sell more. It will not work that way. We cannot sell more products
by just copying other companies' successes. Customers like those novel
designs because they were invented by Apple or Sony. NEC should pursue
Unfortunately, however, users currently regard NEC products as quiet
and nothing but office automation equipment. It is like our originality
is no originality.
I think we should change the way we have been, though. I am telling our
designers "It is now your turn, guys, to create something very 'NEC-like.'"
Nikkei Electronics: So, is it only designs that can make your
Takayama: No. It is important to show customers what they should
use their PC for. In the case of iMac, for example, the model is different
from conventional Macintosh machines. It is a model specifically made
for the Internet. Any customers who take a look at iMac can easily understand
that the product is to use the Internet.
Lately, I am repeatedly telling our staff, "Go back to the basics." The
PC market has grown this big because PCs have killer applications such
as word processing software and spreadsheet software. To go on to the
next step, we will need some new killer applications. I think the Internet
will be a key.
We have 3.8 million users registered with our customer list. Only 20
percent of them are Internet users, because the Net is difficult to
The Internet is an ocean of information. The word "net surfing" is popular
because only a handful of well-trained people can surf big waves of
the information ocean. If there are beaches where even people who don't
know how to swim can enjoy themselves, more people will visit such beaches.
In other words, we can sell even more PCs by inventing some system which
will help non-net surfers obtain information easily.
Nikkei Electronics: Which companies do you consider a rival for
the market for individual users?
Takayama: Our rival is not Fujitsu nor Sony. It is not Apple,
either. We will compete with televisions.
Unlike TVs, PCs have not established a firm foothold in people's daily
lives. Why don't they use a PC on holiday? They watch TV every day.
The most important task for now is to propose to users new Internet-based
ways to use a PC that are more closely related to their daily lives.
A TV appeals to one's sensitivity. A PC stimulates one's intellect. I
am saying that in putting together a PC and a TV, hardware is not important.
We will need to create contents that are associated both with one's
sensitivity and intellect.
Nikkei Electronics: Do you have any news for the market for corporate
Takayama: Of course the news is our new desktop models, which
use a liquid-crystal display monitor. Currently, 29 percent of desktop
models used at companies are LCD monitor types. These models are selling
like hot cakes. I predict that these models will account for more than
50 percent of all desktop sales to corporate customers for 1999.
I assume sales of the desktop models with an LCD monitor will even eat
up the market for notebook PCs. Currently nearly 50 percent of PCs used
at companies are a notebook model, but I think the percentage will go
down close to 40 percent in the future. Sales of the desktop PC with
an LCD monitor are that brisk.
Anyway, we are seeing an intensifying battle to secure LCD panels among
computer makers. Manufacturers of LCD panels are so bullish that they
intend to raise their prices....
Nikkei Electronics: In the United States, an increasing number
of PC makers started using x86 Intel-compatible microprocessors for
PCs targeting individual users. How does that impact NEC?
Takayama: I do not think use of an Intel-compatible microprocessor
presents any issue now.
NEC will also use more Intel-compatible chips in the future in the foreign
market via Packard Bell NEC Inc. of the United States. We do not mind
using products of Advanced Micro Devices Inc. or Cyrix Corp. (currently
operating under National Semiconductor Corp.) of the United States.
For the domestic market, we will continue to use products of Intel Corp.
of the United States. We are particularly on friendly terms with Intel.
Nikkei Electronics: Does that mean customers are not particular
about the brand name of the microprocessor anymore?
Takayama: Customers who plan to purchase a PC priced around 200,000
yen (US$1,740), or even up to 300,000 yen in some cases, are not particular
about a brand name any more, even though they used to stick to an Intel
product in the past.
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