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The red warning light is flashing for the personal computer market.

Many stores in Tokyo’s Akihabara and other electronic shopping districts have gone bankrupt or have been forced to close down due to a slowdown in demand for home PCs. One factor is the delay of sales of the Windows 98 operating system, the successor to Windows 95.

But there is a larger factor: Consumers have recently started to doubt the wisdom of buying PCs. Apparently, some consumers now believe personal computers are expensive and difficult to use and are unsure as to what uses they serve. PCs are, therefore, at a crossroads.

“There is no hope,” an employee of a PC shop in Akihabara said. “Consumers started to avoid buying personal computers around the end of last year.” The situation in Akihabara is serious. So far this year, nearly 50 shops have closed or gone bankrupt.

Said an employee of another PC shop: “There are no factors to contribute to buoying up the yearend sales.” In 1995, domestic PC shipments soared about 70 percent from the previous year. In 1996, the growth rate dropped to 40 percent.

IDC Japan, a computer industry research firm, had earlier predicted domestic shipments for this year would reach 9.81 million units, an increase of 21.1 percent. But in September, it modified its prediction to 9.11 million units, an increase of 12.4 percent.

Multimedia Sogo Kenkyusho, an industry research institute, said the number of PCs sold in Japan’s three major electronic appliance districts — Akihabara, Osaka’s Nipponbashi and Nagoya’s Osu — declined by 21.3 percent in the April-June period from the corresponding period last year.

Tatsuyuki Saeki, vice president of IBM Japan, lamented that the Japanese market’s downturn is serious compared with the U.S. and European markets. One reason for the sluggishness is prices.

Last autumn, makers raised prices for new machines. Around the same time, experts say, consumers started to choose PCs by paying more attention to price than to function and ability.

Dell Computer of the U.S., which offers lower prices because it sells machines directly to consumers, has succeeded in selling 60 percent to 70 percent more PCs in Japan compared with corresponding periods of the previous year. When he visited Japan, President Michael Dell said the Japanese market is healthy and he does not think it is experiencing a slowdown.

Other companies have started to lower prices. In September, Compaq put a personal computer on the market priced between 130,000 yen and 140,000 yen. Japan IBM and Fujitsu plan to launch models priced less than 200,000 yen by the end of this year. The strategy is to reduce the price without reducing function and ability, IBM Japan’s Saeki said.

Companies have also started to improve after-service in response to consumer complaints that they are not given sufficient information on how to best use their computers. Fujitsu, for example, has opened showrooms and started computer classes for customers, and NEC will answer telephone calls from users on weekends.

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