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March 28, 1996

IBM JAPAN, REPORTING MUCH BETTER 1995, SEES BIG THINGS IN PERSONAL COMPUTERS

By CBR Staff Writer

IBM Japan Ltd has finally come out with its 1995 figures, and says that net profits soared 277% to the equivalent of $371m. Turnover was 9.2% ahead at $12,323m. IBM Japan’s domestic sales totaled $9,595m in 1995, up 16.2% from the previous year, but with more and more manufacturing moved offshore, exports tumbled 10.4% to $2,719m. For this year, the company aims for year-on- year growth of over 7% in sales and profits for 1996, president Kakutaro Kitashiro said yesterday. He said sales of personal computers, workstations and mainframe computers were expected to be active this year, and sales of software and services such as consulting were also expected to grow rapidly. Kitashiro reckons that the computer and information technology industry was likely to grow 7% to 8% year-on-year in 1996, and IBM Japan aimed to grow faster than the industry as a whole. IBM Japan’s target for personal computers is to ship over 800,000 this year, compared with the 600,000 it got away last year. The president said that although growth in the US personal computer market is expected to slow down this year, the Japanese market should maintain a rapid rate of expansion – usage of personal computers still lags the US and Europe, and percentage prices have fallen much more. IBM Japan reckons penetration of personal computers is still only 11%, compared with about 40% in the US. IBM Japan plans to leave its capital spending levels for 1996 at about the same level as 1995, which was $870m. The company plans almost to double its hiring of new graduates in spring 1997 to between 400 and 500 as it has almost finished restructuring – offloading excess or inappropriately skilled people into subsidiaries and early retirement – Kitashiro said.He said the company will focus this year on the network computing business, such as personal computers for the Internet and systems using groupware.

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