Why the Japanese PC Failed
Asianometry・20 minutes read
NEC dominated the Japanese PC market with the PC 98 standard before being disrupted by Wintel, leading to a decline in market share as competitors like Toshiba and Fujitsu embraced Windows-compatible machines. Fujitsu's aggressive price cuts and shift to Windows led to a significant increase in market share, while NEC phased out the PC98 architecture in favor of DOS 5, marking the end of an era of Japanese software isolation.
Insights
- Wintel, composed of Microsoft and Intel, disrupted NEC's 15-year dominance in the Japanese PC market by introducing powerful microprocessors and software solutions that enabled handling of East Asian languages, leading to a decline in NEC's market share and the entry of foreign competitors like Compaq.
- NEC's success in the Japanese PC market was built on specialized Japanese language support, a robust distribution network, and a vast library of third-party software, but their failure to adapt to the shift towards Windows-compatible applications and aggressive pricing strategies by competitors like Fujitsu ultimately led to the end of the PC98 era and marked a significant shift in the Japanese software landscape.
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Recent questions
How did NEC dominate the Japanese PC market?
NEC held 60% market share with PC 98 standard.
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Summary
00:00
"NEC's PC 98 Dominance Disrupted"
- NEC dominated the Japanese PC market for 15 years with the PC 98 standard, holding nearly 60% market share in 1991.
- Wintel, comprising Microsoft and Intel, disrupted NEC's monopoly in just five years.
- Japanese hobbyists used microprocessors from Intel, Motorola, and xylog to create desktop computers in the early 1970s.
- Early American microcomputer makers initially avoided the Japanese market due to challenges in handling East Asian languages like Japanese.
- NEC kickstarted the Japanese PC revolution with the tk-80 educational single board computer kit in 1976.
- NEC's pc8001, released in 1978, was the first Japanese microcomputer with a colored display and a floppy disk drive.
- IBM's guerrilla project led to the creation of the IBM personal computer (PC) in response to the success of hobbyist PCs like the Apple II.
- NEC's PC 9801, released in October 1982, quickly dominated the 16-bit PC market in Japan with 80% market share.
- Fujitsu's attempts with the fm8, fm7, and FM 11 microcomputers failed due to lack of compatibility and strategy execution.
- Seiko Epson produced PC 98 laptop and desktop clones, leading to a copyright infringement lawsuit with NEC but settling out of court.
17:30
Japanese PC Market Shifts Towards Windows
- IBM Japan and Toshiba produced Intel-based IBM compatible PCs, while the Ax Consortium, comprising smaller PC firms like Sanyo, Oki, Casio, and Acer, aimed to dislodge NEC with a variant of the IBM PC standard called Ax, which could handle Japanese characters with additional special video chips, making it costlier and lacking good application support.
- NEC's PC98 standard's success relied on specialized Japanese language support, a strong distribution and sales network, and a vast library of third-party application software, with NEC boasting 17,000 software packages by 1993, the largest in the country.
- Intel's development of powerful microprocessors like the 386 and 486 enabled PCs to handle Japanese kanji, leading to NEC's decline as they failed to catch on with their x86 compatible chips and DOS 5 software solution, which allowed foreign companies like Compaq to enter the Japanese market without complex hardware modifications.
- The release of Windows 3.1 J by Microsoft in Japan was a massive hit, selling 1.46 million copies in its first year, leading to a shift towards Windows-compatible applications and a decline in NEC's market share as competitors like Toshiba, Hitachi, and Fujitsu switched to Wintel or DOS 5 computers.
- Fujitsu's aggressive price cuts and shift to Windows machines led to a significant increase in market share, doubling to 17.5% in 1995, while NEC struggled to adapt, eventually phasing out the PC98 architecture in favor of DOS 5 machines in 1997, marking the end of an era of Japanese software isolation.
