Japanese Tech Stock Weekly Summary (Oct. 13-19, 2008)

by: IRG Ltd

The following is excerpted from IRG's weekly stock report:

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Mobile/ Wireless

Taiwan HTC Corp. sees falling mobile phone sales in Japan as a growth opportunity and is open to ties with local makers to grab a bigger slice of the expanding smartphone market. The financial turmoil has not affected HTC's business, and it is on track to sell 3 million Touch Diamond and Pro phones worldwide, with NTT DoCoMo (NYSE:DCM) and Softbank (OTCPK:SFTBF) launching its devices. While higher handset prices have caused overall sales of mobile phones in Japan to drop sharply, demand for smartphones which combine phones with computer-like capabilities is expected to grow steadily in Japan in coming years. The company expects smartphones to make up 5 percent of the Japanese mobile phone market in a couple of years, against the current 2 percent and compared with 17 percent in North America. Japan's carriers have been beefing up their smartphone lineups. NTT DoCoMo, Japan's biggest wireless carrier,  would sell Research In Motion's (RIMM) high-end BlackBerry Bold in early 2009, competing with No. 3 Softbank, which launched Apple's (NASDAQ:AAPL) iPhone in July. Japan's eAccess (OTC:ECLTF) has already introduced the Diamond, which is often compared with Apple's iPhone for its touch panel and interface, and its sales have been stronger than expected.


NEC Corp. will release a small notebook computer which is expected to sell for about 65,000 yen (US$643), about half what its lowest-priced notebook currently sells for. The company aims to grab a fifth of the rapidly growing market for mini notebook PCs. It believes that the strength of its brand and solid technical support will allow its new product to be competitive despite being 5,000 yen (US$49.20) to 10,000 yen (US$88.60) more expensive than models offered by U.S. and Taiwanese manufacturers. The new notebook PC will use Intel's (NASDAQ:INTC)  low-power Atom processor. Weighing about 1.2kg, it will have an 8.9-inch LCD and 160 gigabyte hard-disk drive. NEC placed an emphasis on operability by adopting a large keyboard. Taiwan's Asustek Computer released a low-priced ultra small notebook computer in Japan in January.


Elpida Memory Inc. (OTC:ELPDF) will cut its executives' pay after the company warned that it may post a loss for the second quarter. The company said that it would likely post a 40 billion yen (US$390 million) half-year operating loss due to price cuts amid a slowing economy. For the July-September quarter, the operating loss was expected to be 24.4 billion yen (US$240 million), following the previous quarter's 15.6 billion yen (US$153.4 million) loss. The firm disclosed a six-month forecast only, and the second quarter figure was derived by subtracting its first quarter results. The pay cuts will last either until March 2009 or until it posts a monthly operating profit. Its president, Yukio Sakamoto,
will take a 50 percent cut in salary, and other management will get 5-10 percent pay cuts.


KDDI Corp. (OTC:KDDIF) has built its first data center in Asia outside of Japan and China. The new data center will be operated by subsidiary KDDI Singapore Pte and will initially have some 1,000 sq. meters of floor space, with plans to expand to 1,500 sq. meters by 2010. It will be able to power servers with high processing capabilities, which customers are demanding. In-house power generation has also been prepared. By setting up the center, KDDI will be able to provide the advanced information services that client companies want, while cultivating foreign customers in addition to Japanese firms.