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California PC Maker Invades Japan With New Machine

April 11, 1990

LOS ANGELES (AP) _ A small U.S. computer company is launching a daring plan to sell PCs in Japan, introducing a machine it claims offers more features than the home- grown models that dominate the Japanese market.

AST Research Inc., a decade-old Irvine company, planned to unveil its new machine today in Tokyo.

The Dual SX-16 runs programs designed for IBM Corp. PCs and also for machines made by NEC Corp., the Japanese computer giant that dominates its home market much more than IBM does here. NEC has an estimated 70 percent of the Japanese PC market.

″I think it’s a bold move on the part of AST,″ said Sam Albert, a 30-year IBM executive who now heads his own computer consulting firm in Scarsdale, N.Y.

PC makers such as AST have multiplied in recent years, and now are struggling to set themselves apart from the rest. ″I’ve got to believe there’s at least 10″ makers such as AST, Albert said.

″It’s clear that Compaq and IBM are on the dealers’ shelves, and there’s only so much shelf space,″ he said. ″The market is getting crowded in the United States and people are looking for other shelves.″

AST, which lost $7.5 million on sales of $457 million last year, believes it can find those shelves in Japan, the world’s second-biggest market for PCs.

The company turned profitable again in the last few quarters after selling off its non-PC businesses, and spokesman Joel Don said it is poised to move into Eastern Europe as well as Asia.

A basic NEC computer, with no hard disk, no monitor and a 80386SX microprocessor from Intel Corp., costs about 390,000 yen, or the equivalent of $2,475, Don said.

A similar NEC ″clone″ computer made by Japan’s Seiko Epson Corp. costs 328,000 yen, or about $2,080, Don said.

AST’s computer will be priced somewhere in between, but officials said they believed it would still sell well because of its ability to run both the NEC and IBM programs.

″The Japanese cannot say that the product is missing features,″ AST President Safi Qureshey said in a telephone interview. ″It counters the arguments that American companies are lazy, just comfortable with the U.S. market.″

Don said the company probably will build the first machines at its Fountain Valley plant in Southern California, then shift production to Taiwan.

AST teamed with Japan’s Kawasaki Steel Corp. and Tomcat Computer Corp. to develop the computer, which will be sold under the brand names of Japanese distributors. AST is negotiating with several potential distributors, including Sharp Corp., Don said.

AST’s machine will have a hard time making inroads into NEC’s dominion because the Japanese are so loyal to the company, said Tim Bajarin of the Santa Clara-based Creative Strategies International computer consulting firm.

He noted that IBM and Apple already sell computers in Japan, and suggested they might be the ones who lose Japanese market share to AST.

Qureshey and Albert said they believed it likelier that the Epson machines would be the losers.

″My view is that the knockoff will take share away from the other knockoff,″ Albert said.

Qureshey said AST will be happy with just a small chunk of the big Japanese market.

″NEC is so dominant that a small percentage of their share means a lot to a small entrant,″ he said.

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