Sales of computers and industrial electronic systems remained at approximately the same level as in the previous fiscal year, at 1,789.4 billion yen ($20,568 million), and accounted for 47 percent of net sales. Domestic sales of mainframe computers and small business computers declined as corporate investment in information systems continued to shift toward open systems. Falling unit prices were another factor that depressed sales growth. Despite falling prices, sales of PCs and CD-ROM drives rose significantly both in Japan and overseas. To cut costs, NEC dramatically stepped up overseas procurement of PC parts through its International Purchasing Office in Hong Kong and moved the production of some PCs for the Japanese market to Hong Kong.
In response to trends toward open systems, downsizing, and network computing, we reorganized our C&C Systems Group and created a new operating group, the Computers Group, in July 1994. While the Computers Group is responsible for the development and production of computers other than PCs, the mandate of the C&C Systems Group is to provide systems integration services and market a wide range of products, including third-party offerings. Under this new arrangement, both groups are focusing on specific customer needs and providing competitive products with global appeal.
During the period under review, NEC took advantage of its leading-edge technologies to enhance its systems integration capabilities. To improve our systems engineers' abilities, we upgraded our professional qualification system and introduced a skills recognition test. To raise efficiency in systems implementation, we promoted the use of application programs developed based on NEC's visual application development tool and introduced NRAD (NEC Rapid Application Development), an economical method of developing efficient client-server systems.
During fiscal 1995, NEC introduced in Japan the Parallel ACOS series, a new generation of mainframe computers that employ parallel processing technology. Based on complementary metal oxide semiconductor (CMOS) microprocessors, the Parallel ACOS series delivers price-performance ratios two to five times those of previous NEC mainframe systems. In addition, the series has been well received because it protects customers' existing software investments while offering a wide range of functions that facilitate integration with other platforms in an open environment.
In June 1994, NEC introduced the NEC Express 5800 series, the first Japanese-made servers especially designed for Microsoft's Windows NT operating system. This series includes models based on NEC's high-performance VR 4400 reduced instruction set computer (RISC) processor as well as models based on Intel's Pentium(R) processor. NEC Express servers meet users' needs for open systems and downsizing and are an ideal component of reliable client-server systems for mission-critical business applications.
In fiscal 1995, NEC shipped its nine-millionth PC-9800 personal computer. NEC retained its leading domestic market share during the period by strengthening its lineup of PCs, which includes low-priced desktop models now produced overseas as well as high-performance Pentium-based models featuring multimedia capabilities and easy upgradability. NEC was also the first in the Japanese market to introduce a Pentium-based notebook PC with a full-color TFT LCD.
In overseas markets, we enhanced our award-winning Versa line of notebook PCs with the addition of high-end Pentium models with multimedia capabilities, as well as a small notebook model. Previously available in the United States, Germany, the United Kingdom, and Asia-Pacific countries, the Versa is now sold in Italy as well.
NEC's multimedia PC, the 98MULTi CanBe, was introduced in October 1994. In addition to a CD-ROM drive and a pre-installed version of Microsoft's Windows(R) operating system, this popular PC features television and facsimile functions, a unique system of menus designed for beginning PC users, and intelligent CD-ROM access.
Krypton fluoride excimer laser ablation processing is a state-of-the-art technology that can be used for extremely detailed, high-quality processing of plastic, glass, and ceramic materials. Until recently, krypton fluoride excimer lasers have not been used commercially because of problems related to safety, operation, maintenance, and oscillation control. Using our expertise in laser technologies gained through experience in semiconductor production and other fields, we solved these problems and developed a small krypton fluoride excimer laser that can be incorporated into automatic production lines for industrial use.
NEC's 220-square-meter SuperScreen is one of the world's largest full-color image display systems. The device was put into operation at the Kawasaki Race Course in May 1995.
In January 1995, NEC and SEGA Enterprises, Ltd., jointly established SEGA Music Networks, Ltd., which provides on-line karaoke services through NEC's C&C-VAN (value-added network). NEC supplied the joint venture company with multimedia networking systems and servers designed to transmit karaoke data.
In June 1994, NEC established its first software R&D joint venture in China. The new company, NEC-CAS Software Laboratories Co., Ltd., is headquartered in Beijing.
In June 1994, NEC introduced the SX-4 series of supercomputers employing CMOS technology and delivering a maximum vector operations performance of 1 teraflop, the fastest in the world.
In September 1994, NEC announced the ECO-EWS, Japan's first environment-friendly workstation for the UNIX* operating system. The ECO-EWS not only features low power consumption and compliance with the United States Environmental Protection Agency Energy Star program but is also smaller and quieter than other workstations.
*UNIX is a registered trademark in the United States and other countries, licensed exclusively through X/Open Company Limited.