Mitsui connection

Kaypro Corp. certainly was feeling its oats last week when it appeared for the first time before the New York Society of Security Analysts and set forth its plan to jump to the number three spot in the personal computer market by the end of 1985 from its current fourth-place standing.

Andrew F. Kay, chairman and president of the Solana Beach, Calif.-based portable microcomputer maker, went so far as to project the company's sales and earnings for the next three fiscal quarters— a highly unusual degree of candor for any company, said analysts at the meeting, and not necessarily the wisest move Kaypro could have made.

Several analysts were very surprised to hear Kay project earnings down to the penny; many felt he had nothing to gain by revealing such precise internal projections, especially if the numbers are not met.

Kay projected the following: second-quarter earnings of $4.5 million, or 12.5 cents a share, on sales of $35.4 million; third-quarter earnings of $6.6 million, or 18 cents a share, on sales of $45.7 million; and fourth-quarter earnings of $9 million, or 25 cents a share, on sales of $55.6 million.

Taking the first quarter, ended Nov. 30, 1983, into ac-count, Kay forecast fiscal 1984 earnings of $22.7 million, or 63 cents a share, on sales of $165.9 million. That contrasts with earnings of $12.9 mil-lion, or 39 cents a share, on sales of $75.3 million in fiscal 1983.

Asked about the blunt projections, marketing and product planning vice-president David A. Kay, son of the president, said that, based on backlog size and commitments from dealers, "we feel very confident." He declined to reveal the size of the backlog.

Aside from laying bare its earnings forecasts, Kaypro explained how it plans to move ahead of Tandy Corp. to be second in shipments only to IBM and Apple Computer Inc. by the end of 1985.

Director of marketing and strategic planning Blair G. Newman, who joined Kaypro in December, said part of Kaypro's future strategy will be to seek joint ventures with Japanese companies that are looking for a route into the U.S. personal computer market. The concept is to have the Japanese partner perform manufacturing of future products that will be sold in the U.S. under the Kaypro label.

Newman further noted that Kaypro will make increasing use of independent engineers and marketing consultants to help launch new products while keeping internal overhead costs to a minimum. To illustrate the strategy, he said a future Kaypro product label could read, "Designed in the U.S. by top independent technical talent, made in Japan by robots, and sold worldwide by Kaypro."

Newman and other Kaypro officials declined to identify the potential Japanese partner or partners except to note that the company is a trading firm that is "substantially larger than IBM." Kaypro said it would identify the partner at its annual meeting to be held today.

While Kaypro declined to identify its potential partner, Masahiko Nakayusa, general manager of the Electronics & Industrial Machinery Department of Mitsui & Co. (U.S.A.) Inc., who was present at the meeting with another Mitsui executive, Mitz Kurobe, confirmed that Mitsui was discussing joint-venture ...
(Computer Systems News, Feb 27, 1984)

Kaypro Corp. last week made good on its promise of seeking a Japanese partner and said it had reached a preliminary agreement with Mitsui & Co. (U.S.A.) Inc. that will result in Kaypro marketing and manufacturing Mitsui's M1 IBM-compatible personal computer in the U.S.

Kaypro also announced that it will introduce a transportable IBM Personal Computer XT-compatible model at the IBM PC Fair later this month in San Francisco.

The agreement with Mitsui, which was announced at Kaypro's annual meeting last week in nearby Rancho Santa Fe, Calif., calls for Kaypro to build the desktop base unit for the two-piece PC, while Mitsui will produce the stand-alone, lap-sized computer which can then be plugged into the base station and run IBM PC software. The system will be marketed under the Kaypro label.

Kaypro told the New York Society of Security Analysts two weeks ago that it was seeking a joint venture with a Japanese company as part of its future strategy (CSN, Feb. 27). At the New York meeting, Mitsui officials were present, and they confirmed that their company was in negotiations with Kaypro.

Pricing for the system, scheduled to be available this summer, will be about $5000, said David Kay, Kaypro's marketing and product planning vice-president. Pricing wasn't announced for the XT-compatible model.

The Mitsui computer will be the highest-priced model in the Kaypro line, which currently tops out with the hard-disk-based Kaypro 10 trans- ... price of the system is high by Kaypro standards, Kay said that the new product still reflects the Kaypro strategy of offering a fully functional system.

Kay said the stand-alone, lap-sized component will still be a complete computer and will "do much more than the GRiD [Systems Corp. portable.]" Both the XT-compatible model and the new Mitsui unit will include bundled software, said Kay, which he said should allow the Kaypro models to compete more effectively in the market against the IBM PC and its new Portable PC.

Kay said the list price IBM's portable $2795 for the basic unit with a single floppy disk drive-is only "a down payment" on the system, which will require hundreds of dollars more to configure with software and an additional disk drive. Because of that, Kay doesn't expect the IBM introduction to have a significant impact on Kaypro's sales, even when the IBM unit becomes available in volume.

The deal with Mitsui will give Kaypro exclusive U.S. distribution rights for the product and will give Mitsui an entrance into the U.S. personal computer marketplace through already-estab-lished sales channels.

The new system, which has yet to be given a model designation by Kaypro, will be Kaypro's first computer that is fully compatible with the IBM PC. The company has been marketing optional 8088-based co-processor boards for its Models II and 4 portable computers that Kaypro said provide 60 to 65 percent compatibility with the IBM PC.

Kay said the move into the ... patible market was necessitated by the availability of the large library of software that runs under MS-DOS. In addition to IBM, Kaypro will be knocking heads with Compaq Computer Corp., Corona Data Systems Inc., Columbia Data Products Inc., TeleVideo Systems Inc. and others in the portable PC-compatible marketplace.

Kaypro is the third company to announce a hard-disk-based XT-compatible portable. Last October, Eagle Computer Inc. and Compaq introduced portables with 10-Mbyte Winchester disk drives. Tele-Video reportedly is also readying an XT-compatible portable computer.

In addition to the new-product announcements, Kaypro told its stockholders that it has solved its sourcing problems for both hard and floppy disk drives with the addition of new vendors and by entering into a licensing agreement with Drivetec Inc. that will result in Kaypro manufacturing high-capacity floppy disk drives for its new Robie desktop personal computer.

The company cited an inability to receive enough disk drives for the present $50 million inventory level. Kay said most of the problems stemmed from a shortage of Winchester drives for the Kaypro 10, but he noted that those problems have been solved with new sources. Kaypro had been buying hard disk drives exclusively from Tandon Corp. and now is additionally sourcing Winchesters from Seagate Technology and Microscience International Corp.
(Computer System News, Shortly after February 27, 1984)

The Kaypro Corporation said it had entered into a preliminary agreement with Mitsui & Company to market a new Mitsui computer on the Kaypro label. The manufacturer of portable computers said the Japanese model was a high end addition to the Kaypro line and said it would be priced close to the International Business Machines Corporation's Personal Computer. The company said that in three or four months it would also begin shipping a transportable, I.B.M.-compatible computer.
(New York Times, February 28, 1984)

Kaypro-Mitsui Venture

But Sharp and others may be given a tough run by Kaypro, which has teamed up with Mitsui, another Japanese computer manufacturer. Under the Kaypro label the two will market a computer that will be half desk model, half lap model, and designed by many of the same engineers who made the Radio Shack lap computer.

"There will be two parts, a notebook and a base," explained David Kay, Kaypro's vice president of marketing and product planning. The base will have standard disk drives and a traditional video screen. The "notebook," which probably will look like a lap computer and can be unplugged from the base, will have a flat liquid crystal screen of its own.
(New York Times, March 9, 1984)

"Yesterday they said that machine, developed by Mitsui, a Japanese company, had been delayed from six to eight months because of troubles with its flat screen display."
(New York Times, November 15, 1984)