Japanese Tech Stock Weekly Summary

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

Media, Entertainment and Gaming

• According to Enterbrain Inc., domestic sales of Nintendo Co.'s (NTDOY.PK) Wii videogame console have gone beyond 3 million units following the product’s launch in December 2006. In a separate development, Wii’s rival, PlayStation 3 of Sony Computer Entertainment Inc. (SNE), has sold 1 million units since its debut in November 2006.

• NHK disclosed plans to offer previously aired television programs on the Internet, with the media group targeting the offering for fiscal 2008. According to the plan, the broadcaster, which is funded by viewer fees, would provide programs aired in the previous week free of charge, with thosenot paying viewer fees to be charged. The plan did not specify which programs would be made available under the offering. There are also concerns such as copyright infringement as well as possible protests from commercial broadcasters that fear the continuing expansion of NHK's broadcasting services. In a separate development, BBC, Britain's public broadcaster, is expected to start a similar service this month, under which users will be able to download free of charge programs of the past week and keep them for up to 30 days. The offering will also allow programs to be replayed for seven days after first being viewed. As for NHK’s plan, it will require the revision of the nation’s broadcasting law. Earlier, a bill was introduced in the Parliament but that bill was not passed. If approval is given in the next Diet session, the service could begin in fiscal 2008.

• Recruit Co. announced its acquisition of an equity stake of 0.4 percent in Fuji Television Network Inc., done through a purchase of 10,810 outstanding shares on the market. The deal was valued at 2.7 billion yen (US$22.2 million). Market sources said the share purchase was carried out under a tie-up agreement between the two companies, which also includes Fuji TV's acquisition of a 0.5 percent stake in Recruit.

Internet

• Industry sources said Yahoo Japan (YHOO) is taking a chance on making an investment in kizasi Co. Inc. in a bid to increase its advertising revenue. The reports indicate that after kizasi increases its capital through an issuance of new shares, Yahoo Japan will buy 5 percent of them. The kizasi search engine ranks the most popular words on blogs. Under the agreement, Yahoo Japan and kizasi aim to develop a service that lists the hottest topics on Internet discussion boards, with the two partners then sharing revenue from advertising.

Mobile/Wireless

• Research in Motion of Canada (RIMM) announced the release of a new version of Blackberry in the Japanese wireless mobile market, with the Japanese language version of the device to go on sale this month. The company said Blackberry will be offered by NTT DoCoMo (DCM), Japan’s largest cellphone operator. Research in Motion is the market leader for mobile e-mail devices with more than nine million users worldwide of its BlackBerry, a handheld device which can access corporate email and is able to roam almost anywhere in the world. In September last year, an English language version was introduced in Japan aimed at multinational companies. Observers note that in Japan, where cellphones are able to send e-mails through their handsets, Blackberry remain low in terms of brand recognition.

• According to the study done by the country’s Ministry of Internal Affairs and Communications, the market for online mobile-phone services is set to reach 1 trillion yen (US$8.3 billion) by the end of the year. Based on surveys done, the report pointed to a market posting growth of 30 to 40 percent annually, a performance ascribed mainly to a market of young clients using the surge in technological changes. Improved data transmission speeds and billing plans that charge flat rates for data communication transmissions are also factors that the surveys have identified as helping the growth of the industry. The study said that, at the end of 2006, the overall market value of online mobile phone services was 928.5 billion yen (US$7.6 billion), a 28.5 percent increase over the previous year and more than triple the 298.6 billion yen (US$2.4 billion) posted in 2002. The report also noted that the market for mobile commerce services, online stock trading and web auctions has posted significant growth so that at the end of 2006, commissions and fees for such services registered a 38 percent rise to 562.4 billion yen (US$4.6 billion), over the previous year. The sales of content-oriented services went up 16.2 percent to 366.1 billion yen (US$2.7 billion).

• KDDI Corp. (KDDIF.PK) revealed its decision to slash the monthly basic fee for its wireless service by half in a bid to counter cheaper plans offered by smaller rival Softbank Corp. (SFTBF.PK). KDDI said it will make available the cheaper fee from September to customers who sign up for a two-year contract.

Hardware

• According to Tokyo-based market research firm BCN Inc, Nikon Corp. (NINOY) has sold more digital single-lens reflex cameras than rival Canon Inc. (CAJ) in the first half of 2007. With the performance, Nikon got a 47.5 percent share of the domestic market from January to June, with Canon coming in at No. 2 with 36.5 percent. The report said this marks the first time that Nikon has held the top spot over a half-year term. The company has topped the market before but on a monthly basis only. The third place has always been a site for intense competition. In the first half of this year, Pentax Corp. came in third at 6.7 percent, followed by Sony Corp. at 4.5 percent and Olympus Corp. (OCPNY.PK.PK) at 4.3 percent. By May and June, Olympus grabbed the No. 3 slot, with its E-410 model. Olympus described the device as the world's "smallest, slimmest and lightest" digital SLR camera.

Semiconductors

• Cree, Inc. (CREE), a market leader in silicon carbide (SiC) power semiconductors, announced that it has entered into an agreement with Nihon Inter Electronics Corporation [NIEC]. Under the agreement, NIEC will introduce a line of silicon carbide (SiC)-based Schottky power rectifier diodes in Japan with die manufactured by Cree, Inc. NIEC is a world leader in silicon-based Schottky diodes, and Cree is the leader in silicon carbide-based Schottky diodes. NIEC was founded in 1957 and was the first company to manufacture power silicon rectifier diodes in Japan. The company is a leader in power management. The company manufactures high quality power semiconductor products. Cree is considered a market-leading innovator and manufacturer of semiconductors and devices that enhance the value of solid-state lighting, power and communications products.

Ventures/Investments

• NextWave Wireless, a developer of broadband wireless infrastructure, revealed its decision to acquire a 69.2 percent stake in IPMobile, a Japanese company that is planning to install a network based on TD-CDMA technology from one of NextWave's divisions, IPWireless. NextWave, a privately held company, was set up in 2005 and has since completed several acquisitions. Some of its purchases include ISV PacketVideo, an Israeli streaming media company acquired in a deal valued at US$46.6 million and GO Networks, a WiFi developer, acquired for US$39 million. The U.S.-based company holds licenses on spectrum in a number of markets including Austria, Canada, Croatia, Germany, Slovakia, Switzerland, and the U.S.

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