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Threat to NEC's Market Seen : Firms Tailor IBM Programs to Japanese

November 02, 1987|From Reuters

TOKYO — Nineteen Japanese firms are jointly developing an operating system that would allow IBM-compatible personal computers to run programs in Japanese, according to a spokesman for the group.

Development of the Architecture Extended-AX system would open up a wide range of English-language software to Japanese users. It would also give hardware makers a chance to sell cheaper PCs in the Japanese market, now dominated by NEC Corp., the spokesman said Friday.

Members of the group include such well-known electronics firms as Toshiba Corp., Mitsubishi Electric Corp., Sanyo Electric Co. and Sharp Corp.

"It's a direct approach on NEC's territory," said Richard May, electronics analyst at Barclays deZoete Wedd Securities.

NEC's computers, which are not compatible with International Business Machines products and are supported by copious software, had 52% of the domestic market in the year to last March 31, May said.

Some Models Ahead

Until recently, IBM PC/AT-compatible computers and architecture were inferior to NEC's domestic models, the AX group spokesman said. Displays had inadequate character resolution and processing speeds were slower.

"Now American models are ahead in some respects," he said.

At the same time, analyst May added, IBM PC/AT-compatible computer components, used worldwide, are rapidly falling in price and increasing in quality.

The group spokesman said, however, that the new operating system was not an attempt to compete directly with NEC.

"We want to expand the market by serving an international group which needs to compute in both Japanese and English," he said. "We would not have gotten such broad support if it were an assault on NEC."

But May said the bilingual market was too small to support such a project, adding, "These guys are ganging up on NEC."

The group spokesman estimated that 100,000 computers capable of using the AX system could be sold in the first year after it is developed. After several years, the market would expand to about 500,000 computers a year, he said.

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