Asia's Computer Challenge: Threat or Opportunity for the United States & the World?

By Jason Dedrick; Kenneth L. Kraemer | Go to book overview

NEC then shifted to a RISC strategy with its VR-series of processors based on designs by the U.S. company, MIPS. But RISC processors never made it into the mainstream PC market, thanks in part to the huge library of x86- compatible software and also Intel's ability to squeeze more performance out of the x86 architecture than many had expected. NEC's PC division continued to use Intel chips for the PC-98, and the VR series was relegated to specialized markets such as workstations and microcontrollers. Fujitsu did somewhat better, becoming a major producer of Sun SPARC processors for the workstation market. But as a group, the Japanese companies failed to make even a dent in the mainstream PC microprocessor market. By the mid-1990s, most Japanese PCs carried the "Intel Inside" label, a small oval symbol of Japan's continuing dependence on standards set in the United States.

Rather than defining standards for the PC industry, Japanese computer makers have been forced to develop software and hardware based on architectures controlled by U.S. companies. The strategy of technological imitation that worked so well in other industries has kept the Japanese companies in the lower margin decreasing returns segments of the industry. And with Intel's control over hardware standards expanding (e.g., into chip sets, multimedia features, and networking functions), profit opportunities in the rest of the PC hardware industry continue to shrink.


Summary

The preceding discussion considers the reasons for Japan's successes and failures in the PC era but leave some troubling questions. For instance, why were Japanese companies slow to recognize the importance of the PC, remaining fixated instead on the mainframe industry and IBM? Why didn't Japan produce a new wave of start-up companies to compete in the wide-open early days of the PC industry? Why has Japan been almost uniformly unable to develop an independent software industry? And why did most Japanese companies concentrate on the small Japanese PC market and make only half- hearted attempts to penetrate foreign markets?

The answers to these questions are complex, and they go to the heart of Japan's industry structure and corporate culture. The size, diversification, and vertical integration of Japan's computer makers are advantages in producing high-volume hardware products with stable technologies and long product cycles, but they are a liability in the PC industry, with its unpredictable market and technology shifts. Also, the hardware orientation of Japan's electronics industry has meant that software is not given the prominence it deserves, given its critical role in establishing technology standards. Finally, Japan's educational system has been very good at turning out a skilled manufacturing workforce, but it tends to stifle the kind of creativity and initiative that is needed in the innovation-driven segments of the industry.

A final question must be addressed. Why did the bureaucrats who had guided Japan's mainframe industry fail to come up with a successful strategy to help Japan compete in the PC era? This question becomes even more co-

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Asia's Computer Challenge: Threat or Opportunity for the United States & the World?
Table of contents

Table of contents

  • Title Page iii
  • Preface and Acknowledgments v
  • Contents xi
  • List of Figures xv
  • List of Tables xvii
  • 1 - Competing in Computers 3
  • 2 - Globalization of the Computer Industry 28
  • Conclusions 71
  • 3 - Japan and the PC Revolution 76
  • Summary 90
  • Summary 104
  • Conclusions 113
  • 4 - Asia's New Competitors 116
  • Conclusions 143
  • Conclusions 172
  • 5 - Asia's New Competitors 174
  • Conclusions 209
  • 6 - Findings from the East Asian Experience 211
  • 7 - Lessons for Companies and Countries 254
  • Summary 263
  • Conclusions 278
  • 8 - Competing in Computers in the Network Era 280
  • Conclusion - Asia's Computer Challenge 319
  • Appendix 321
  • Notes 325
  • References 343
  • Index 353
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