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The race to build Malaysian PCs

By Amar Hakim
August 20, 1999

When Malaysian Azhar Mansor reached the resort island of Langkawi last week after 189 days at sea in his yacht Jalur Gemilang, he became the first person to sail solo around the world on a new west-to-east route.

But more amazingly, Malaysians kept vigilance with Azhar throughout his 25,000 nautical mile trek across the high seas, thanks to email and satellite links zeroing in on an on-board personal computer.

Had Azhar picked a later date for his intrepid voyage, there is every likelihood he would have carried on his yacht a made-in-Malaysia PC instead. The country, it seems, is ready to boast its own locally made PC. Recently, two companies, Mimos Bhd and PC Malaysia Bhd, announced plans to produce made-in-Malaysia PCs, with both claiming to be the "national PC project".

However glorious that may sound, the impending arrival of a "national" PC, or two, has stirred the dust on some serious issues among Malaysia's PC industry players.

One of the main concerns centers upon the Malaysian Government's tendency to protect nascent domestic industries from import substitutes by erecting various trade barriers. A perfect example would be the Proton national car, which was commercially launched in 1985 and has since enjoyed unrivaled domestic sales.

Proton currently commands an 80 percent share of the Malaysian passenger car market, due largely to the import duties that range from 80 to 300 percent, heaped upon imported cars.

In contrast to the automotive sector, the domestic PC industry has been relatively unregulated, with little or no tariffs on imported products and components.

This has resulted in a highly competitive environment where local manufacturers dabbling in PC clones go head-to-head with foreign brand names such as Compaq and Hewlett Packard in all market sectors--home user, corporate and government.

The tariffs have also been heading south as Malaysia is a party to the World Trade Organization's (WTO) Information Technology Agreement, which calls for the gradual reduction and eventual elimination of tariffs on IT goods by year 2000.

As far as the industry is concerned, tariffs are a non-issue. What many fear is the exclusive contract that the Government has awarded to Mimos Bhd, one of the companies in the race to build a Malaysian PC.



Amar Hakim has been a technology journalist for three years and just discovered that "mimos" in Greek means imitator. Email us your comments.


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