TECHNOLOGY - Dec. 1, 1992

Canon PCs: At the recent Comdex computer show in Las Vegas, everyone kept asking Yasuhiro Tsubota why his company, Canon Computer Systems Inc. in Costa Mesa, is entering the personal computer market in the middle of a price war and recession.

One by one, PC manufacturers have been exiting the business during 1992.

“The shakeout is a good opportunity for us,” Tsubota explained in a recent interview. “The business is evolving quickly, and within three or four years we believe we will be positioned to take advantage of the changes. The technologies of the fax, copier, printer, and video machines are going to come together in the computer.”

Tsubota, a former adviser to Wunderkind Steve Jobs at NexT Computer Inc., thinks that Canon Computer, a subsidiary of Canon Inc. in Tokyo, is in a good position to sell PCs because it already has a sales network in place to offer office-related equipment such as copiers and printers to corporate customers.

And in the current price war, with brand-name machines coming close to matching the prices of competitors that make so-called clones, he sees customers returning to big-name vendors, such as Canon, that they can trust.

Tsubota said many of the office products that Canon sells will increasingly be tied to functions on the PC itself. So Canon decided that it had to deliver the core PC, along with other Canon-made peripheral products such as laser printers, to stay in the office-equipment business.

So far, about 100 computer dealers have bought the pitch, signing on as sellers of Canon PCs. That could be enough to ensure that the company’s initial efforts will be profitable, Tsubota said.

“We do not plan to lose money,” he said.

Now that the company has decided to move into PCs, the next question that Tsubota has to answer is where to build the computers as sales volume grows. His goal during the next three years is to hit $100 million in PC sales annually.

If Tsubota opts for heavy manufacturing, the company would have to build a large assembly plant in the United States, possibly in Northern California. If he chooses light assembly, the company could put together most of its components overseas.

The company has 120 employees.