Japanese Tech Stock Weekly Summary

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

Media, Entertainment and Gaming

• Microsoft Corp. (MSFT) announced that it has no plans to cut the price of its Xbox game console in Japan. The company believes the Xbox prices in Japan, the home turf of rivals Sony Corp. (SNE) and Nintendo (NTDOY.PK), are very competitive. The sales of the device in Japan have been seen as slow, in contrast with its popularity in the U.S. According to game magazine publisher Enterbrain, Microsoft sold 122,565 of the consoles in the first half of this year in Japan, while Nintendo sold 1.7 million units of its Wii and Sony sold 503,554 of its PS3 game machines. Earlier, Microsoft extended its warranty for the video game machine to three years, costing the company US$1 billion to $1.2 billion. The extension is a response to complaints from users. Microsoft also said it plans to launch its advanced Xbox 360 game console, the Xbox 360 Elite, in October in Japan.

• Sony Corp. announced its plan to launch a lighter, slimmer model of its PlayStation Portable handheld video game console in September. The company said it will sell the device for about US$170, following its decision to slash down the price of its PlayStation 3 by US$100 in a bid to increase sales of the game console. The new PSP is also described as 33 percent lighter and 19 percent slimmer than the current PSP.

Mobile/Wireless

• NextWave Wireless Inc. (WAVE), a provider of mobile communication technology, announced its decision to acquire a stake in IPMobile Inc. in a bid to start a high-speed wireless network in Japan this year. According to Mori Trust Co., a closely held Japanese property developer, it will sell its entire 69.2 percent stake in IPMobile to San Diego-based NextWave. The agreement follows NextWave's acquisition earlier this year of IPWireless Inc., a supplier of mobile network equipment based on a so-called fourth-generation technology called TD-CDMA. NextWave said in a separate statement that it will help IPMobile set up a network based on the high-speed standard by November. IPMobile is one of three companies that received licenses from the government in November 2005 toprovide wireless services, making them the first new entrants to the Japanese mobile market in 12 years.

Software

• Casio Computer (CSIOY.PK) announced that it has developed its first digital cameras with a video mode optimized for YouTube (GOOG). The device is fitted with software that can upload clips to YouTube with a single click. The cameras are the result of a deal between Casio and Google, which provides Casio exclusive rights to the YouTube features until the end of this year. The companies said the cameras will be released worldwide, starting in the U.S. in August and to be followed by Europe and Asia.

Semiconductors

• Toshiba Corp. (TOSBF.PK) announced plans to up its chip sales to 2 trillion yen (US$16.4 billion) from 1.2 trillion yen (US$9.8 billion) in the last business year by way of selling more NAND flash memory chips. The aim of Toshiba can be appraised amidst the growth of demand for NAND chips, used in cell phones, personal computers, digital cameras and MP3 players. To achieve the target, Toshiba is looking to boost the monthly capacity at its NAND plant in Mie Prefecture to 150,000 300-mm wafers by September. The company said it expects the flash memory output at the plant to climb to 200,000 chips.

• Industry sources indicate that a U.S. investment fund is pushing NEC Corp. (NIPNY.PK) to give up control of its ailing chip making unit, Electronics Corp., for a deal worth 154 billion yen (US$1.2 billion). According to a Goldman Sachs analyst, NEC is not about to accept the offer although it has the responsibility to present a restructuring plan to push NEC Electronics’s shares to 5,000 yen (US$41). NEC will also face the burden of explaining to its shareholders why it is refusing the fund’s proposal. Perry Capital, NEC Electronics' third-largest shareholder with a 4.8 percent stake as of the end of March, has been asking NEC to bring down its 70 percent holding in its chip unit to less than 50 percent in order to give NEC Electronics more leeway.

Disclaimer: IRG is not responsible for the accuracy of the news compiled within this article, which is based on publicly available information.