Masaru Murai, president of Compaq Computer's Japanese subsidiary, apologetically guides a visitor past piles of computers in the halls and offices of the company's headquarters.
"We've been growing faster than we expected and don't have enough space," he says.
So fast that after only two years in Japan, Compaq K.K. must move to larger quarters.
Japanese personal computer companies have watched their sales slump in the sluggish Japanese economy. But Compaq, Apple and other U.S. computer makers are finding eager consumers in the world's second-largest computer market.
Last year, American companies' share of the Japanese PC market climbed from 15.1% to 24.2%, according to Dataquest, a market research firm. Each has taken a different route to higher sales, but together they have profoundly changed Japan's PC market.
"It's an anxious time for Japan's computer industry," says Takahiko Umeyama, an analyst for market researcher IDC Japan Ltd. "It needs to change because of the foreign vendors, but the changes are very difficult to make."
Several factors are weakening the once-invincible claim Japanese PC makers had on their home turf. Since cheaper American PCs were introduced in Japan two years ago, computer prices have dropped more than 60%. Japanese makers, who once were able to keep prices high by splintering the domestic market with non-compatible designs, are shifting to the worldwide IBM standard. Dealers and distributors once wed to a single maker have begun selling other brands, including imports.
Japan's market still has plenty of room for growth.
The average Japanese office has 10 PCs per 100 employees, contrasted with about 42 per 100 in the United States, IDC says. If wapuro --the dedicated word processors used widely to handle Japan's complex writing system--are included, the total is 16 machines per 100 workers.
But as PC prices drop, Japanese are beginning to buy computers to replace the word processors.
The biggest winner so far has been Apple.
Apple entered the Japanese market in 1983 but for years languished with expatriate managers, high prices and an exclusive distribution network.
"We thought it was the same market as the United States and tried selling the same computers," says John Floisand, president of Apple Pacific and acting president of Apple Japan Inc. "It took us until 1988 to discover what it took in terms of Japanese-language application software."
Macintosh sales began taking off in 1989 when a new Japanese management team signed up dozens of new dealers, introduced an improved Japanese-language operating system and encouraged development of Japanese software.
In Tokyo's Akihabara electronics retailing district, it is now the rare shop that does not display the Apple logo.
Nationwide, Apple has 3,000 resellers. That's still far short of market leader NEC Corp.'s 8,000 outlets. NEC's proprietary models still dominate the market with a 52.8% share--a slip of 0.6 percentage point from a year ago.
But Apple's market share rose from 8.3% to 13.9% last year, displacing Fujitsu as the second-largest PC supplier, Dataquest says. IBM Japan, meanwhile, wrested fourth place from Toshiba with 6.7%.