Like Pac-Man, Japan nibbles away at the U.S. market
These days hardly a week goes by without another entrant into the burgeoning field of personal computers. During the past month. Burroughs and Digital Equipment Corp. announced that they were entering the hot market of microcomputers that generally sell for less than $5.000. Last week Sony, the masterly Japanese manufacturer of color television sets, videotape recorders, audio equipment and other consumer electronics, announced that it is also introducing a new desktop computer. The Sony SMC-70, which will sell for about $3,750 with standard accessories, is slightly more expensive than some of its competitors but produces excellent color graphics.
By itself the Sony machine should not cause serious concern to established firms such as Tandy Corp.'s Radio Shack, Apple Computer and International Business Machines Corp. The SMC-70 is aimed at the office-equipment market, where Sony faces stiff competition, and it will initially be sold only through Sony's 450 video-and office-machine outlets.
Sony's new product, though, highlights the Japanese interest in this estimated $2.4 billion market, which until now has been almost the private property of American firms. After the success of Japanese onslaughts into watches, cameras, calculators and copiers, many computer industry experts are worried. Says Ulric Weil, an industry watcher for the investment bankers Morgan Stanley: "American companies must take the Japanese seriously. Not to do so would be fatal."
As they have so often in the past, Japanese companies have proceeded slowly and cautiously into the personal computer market. As late as 1979, Japan accounted for almost none of the $447 million worth of personal computers sold worldwide. As the industry exploded, however, Japan's presence began to be felt. Last year Japanese manufacturers rang up sales of $210 million. The companies include a number of well-established firms with recognizable brand names in digital watches, stereo equipment and calculators: Canon, Hitachi, Toshiba, Seiko, Sharp and Casio. Nippon Electric Co., the giant electronics firm, is now selling $100 million worth of personal computer equipment in the U.S., and last week it introduced three versions of its latest model.
The Japanese have already won plaudits for the design and manufacturing quality of their machines. Says Marian Murphy, a vice president of ComputerLand, the largest retail computer chain, which has 210 stores in the U.S.: "Their hardware is as good as the American hardware." Experts are particularly impressed by the small handheld and portable computers that Japanese firms are producing.
U.S. manufacturers have usually been considered superior in two areas that are regarded as crucial to success in selling the small machines: distribution and software, the instructions that tell the computer how to perform specific tasks. The Japanese, however, have shrewdly avoided language and cultural problems by designing their computers to use American-made software. Moreover, some Japanese companies now expect to use their considerable experience in selling electronic equipment to both businesses and consumers to offset the current American advantage in marketing.