Dragged Into Battle

THE INITIAL STRATEGY WAS TO STAY ABOVE THE fray. As American firms like Compaq , and IBM brought low-cost personal computers to its shores, NEC, Japan's foremost personal computer manufacturer, controlling about 50% of the domestic market, loftily insisted that quality should take precedence over cost. But the price pressure got to the company. NEC has announced a new low-priced line, including one model for $1,740, about half the price of an earlier comparable machine.

Aggressive American manufacturers, who currently have about 15% of the Japanese PC market, quickly countered NEC's move with more slugging. IBM, together with the Japanese office-equipment maker Canon, announced the development of a notebook PC with a built-in printer that they would sell for $2,380. Fast-growing Dell Computer opened a subsidiary in Tokyo and began its famed direct sales to customers. In Dell's line: a PC for $780.