NEC Corp is one of the growing band of Japanese electronics companies which has revised its projections of revenue and profits for the current financial year ending in March 1993. Japan belatedly began feeling the worldwide economic recession this year and executives expect the difficult times to continue into next year. As reported briefly, for the first half of fiscal 1993 NEC saw consolidated sales drop 7.1% to $13,250m and its pre-tax profit slump 84%. By product sector, 49.7% or $6,989m ofNEC’s revenue came from computers and industrial electronic systems; 26.8% or $3,774m from communications systems and equipment and 17.7% or $2,493m from electronic devices. In each case this was an actual fall in revenue of 10%. NEC forecasts a significant loss for the year and one the strategies it is adopting in its more efficient management drive is the replacement of part of its year-end bonuses (Japanese employees typically get three to six months of their salary in bonuses twice a year) with coupons for electrical and computer goods from NEC Home Electronics. Cynics say the move kills two birds with one stone – as well as conserving cash, it helps to reduce growing stocks of unsold goods at NEC Home Electronics, currently being restructured under the control of the parent company. Speaking at a year-end event, the president of NEC, Dr Tadahiro Sekimoto claimed not be concerned about the advent of Compaq Computer Corp’s price-cutting foray in the Japanese market. Compaq’s Prolineas start at just over $1,000, less than half the price of the basic NEC machine. Not even deigning to respond to a price war, NEC subsequently added a new range of high-priced multimedia machines with in-built CD-ROMs. Dr Sekimoto’s response was the cultural differences one so often heard in Japan – that software equals culture, and people will always prefer the software that echoes their culture. Indeed the big strength of the NEC PC-9800 series in Japan is their ubiquitous presence in offices and homes and the enormous library of software titles available; the most popular Japanese word processor, IchiTaroo cannot run under DOS/V on the Compaq line.
