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Japanese PC market to lag in '98

Japan's PC market will lag through at least the first half of 1998, according to a market research firm, but demand for portables will continue expanding.

    Japan's PC market will lag through at least the first half of 1998, according to a market research firm, but demand for portables will continue expanding.

    Sluggish growth throughout 1997 will continue into 1998, according to IDC Japan, which cites the hyper pace of PC model revisions as causing consumer concern about instant obsolescence. The Tokyo-based subsidiary of IDC Research predicts yearly growth of just 0.1 percent.

    There may be some hope in the anticipated introduction of the sub-100,000-yen PC, but that price point (about $770) might offer little solace for manufacturers. Margins are low on these machines, and industry analysts cannot agree whether they grow the market or "steal sales" from more expensive machines.

    Underlying the Japanese PC industry's tepid expansion are the Asian country's ailing economy and last spring's introduction of a consumption tax, according to the Japan Electronic Industry Development Association (JEIDA), a trade group. Early last month, JEIDA reported that Japan?s domestic PC shipments in the July-September period actually dropped 6 percent from the same period in the previous year, the first year-on-year drop since 1992.

    But JEIDA sees the PC industry recovering at the end of this year, contrary to IDC Japan's prediction.

    In addition to the sub-100,000-yen PC, the Japanese market's transition to Intel's Pentium II microprocessor and the anticipated debut of Microsoft's Windows 98 operating system should boost demand in the second half of 1998, according to IDC Japan. Though it was somewhat delayed, the introduction of the current version of the Windows operating system, Windows 95, spurred sales and analysts and vendors are anticipating a similar boost.

    Meanwhile, demand for portables is surging this year, perhaps topping 40 percent of all PC purchases when the final numbers are compiled. IDC expects the growth to continue in 1998, as mini-notebooks begin to assert themselves alongside more conventional portables.

    Desktops could decline slightly, but the debut of space-saving desktops with "flat panel" LCD monitors could enliven the market.