Japanese Tech Stock Weekly Summary

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

Media, Entertainment and Gaming

• Nintendo Co. (NTDOY.PK) revealed its plans to offer support services in the form of Internet link to its popular Wii game console. According to Nintendo president, a network connection will allow clients to download games and information and also play with others online. The provision of support is expected to up the popularity if Wii and increase sales of both consoles and software. Nintendo said it will work with NTT Corp. to arrange support for helping people connect their Wiis to the Internet and set up a telephone service for technical support.

• Sony Corp. (SNE) announced that it has formed a U.S. advertising division that will place ads within PlayStation games. The new unit is expected to boost revenue at Sony’s console division.

Internet

• JTB Corp. revealed is plans to launch an online travel guide in Second Life, a web-based three-dimensional virtual world, for foreign tourists to Japan. JTB will provide information in such places as Japanese-style hotels, gardens and will allow municipal governments to promote their sightseeing sites.

Mobile/Wireless

• NTT DoCoMo Inc. (DCM) and broadband service provider Acca Networks Co. announced their move to join 14 other firms to launch next-generation high-speed mobile communications services. Together with the move, Acca Wireless Co., an Acca Networks subsidiary, submitted a license application to the communications ministry for the planned next-generation services under the WiMAX format. Acca Wireless, fully owned by Acca Networks, disclosed its plans to up its capital to 30 billion yen (US$255 million) from the current 300 million yen (US$2.5 million) through new share issuance for allotment to the parent, NTT DoCoMo and the 14 new partners. Eleven of the 14 partners will hold a combined 12 percent of Acca Wireless. They are Tokyo Broadcasting System Inc., Mitsui & Co., Itec Hankyu Hanshin Co., Keihin Electric Express Railway Co., KT Corp. of South Korea, Asahi Net Inc., NEC Biglobe Ltd., So-net Entertainment Corp., Nifty Corp., FreeBit Co., and YRP Business Development Institute Inc. The remaining 15 percent will be owned by JPMorgan Securities Japan Co. and investment funds Ignite Group Inc. and DCM. Acca Wireless plans to raise its capital eventually to 72 billion yen (US$612.1 million).

• According to the Japan Electronics and Information Technology Industries Association [JEITA], mobile phone shipments in Japan has climbed 39.1 percent to hit a total of 4.2 million units in August. The industry group attributed greatly the rise in the shipments to a surge in the number of handsets able to receive digital terrestrial television broadcasts. The report said that shipments of 3G handsets climbed 50.7 percent on year to 4 million units, compared to shipments of 2G handsets went down 93 pct to 17,000 units. Shipments of handsets for personal handy phone system (PHS) services posted a 44.7 percent growth to 217,000 units, posting the fourth straight yearon-year growth.

• Sanyo Electric Co. Ltd. (SANYY.PK) and Kyocera Corp. (KYO) announced that their reaching an agreement on the transfer of Sanyo's mobile phone business to Kyocera. With Kyocera given priority negotiation rights, Sanyo said it will continue further negotiations with the company toward a final agreement. The report said the transfer will cover Sanyo's wireless communication system business including mobile phone handset, PHS handset, PHS base station and WiMAX base station businesses, which reported aggregated consolidated sales of about 277 billion yen (US$2.3 billion) for the fiscal year ended March 2007. Sanyo developed mobile phones in Japan and mass-produced them primarily at its plants dispersed in countries such as China and Malaysia, with sales subsidiaries in Canada, Singapore, Hong Kong and Australia, and the U.S.

Software

• Fujitsu Limited (FJTSY.PK) and Fujitsu Frontech Limited announced their development of a PC Login Kit for use with the PalmSecure palm vein biometric authentication device. PalmSecure PC Login Kit comes standard with login-authentication software, enabling client-side authentication and eliminating the need to use an authentication server. The technology has allowed in other improvements have been incorporated, such as faster authentication speeds without a palm guide. With the new PalmSecure PC Login Kit, logins to PCs or applications can now be done using the highly secure palm vein biometric authentication method.

Information Technology

• NEC Corp. (NIPNY.PK) and Unisys Corp. (UIS) announced their signing of a memorandum of understanding agreement aimed at widening their collaboration to include enterprise unified communications solutions for customers. Those solutions are intended to help clients integrate multiple data and telecommunications streams to boost the cost efficiency of their information networks and improve business collaboration. Under the agreement, Unisys will integrate NEC's UNIVERGE IP architecture and solutions into the Unisys Communication & Collaboration portfolio that is based on Microsoft Exchange Server 2007, Office Communication Server (OCS) and Microsoft Office SharePoint Server (MOSS).

Ventures/Investments

• Arrow Electronics Inc. (ARW) announced that it has formed its first Japanese subsidiary called Arrow Electronics Japan GK (Arrow Japan). The subsidiary has acquired all of the share capital of Universe Electron Corp [UEC], a Tokyo-based distributor of semiconductor and multimedia products to major Japanese manufacturers and firms, which will change its name to Arrow UEC Japan KK following the acquisition. The new entity, Arrow Japan, will mainly aim at leveraging Arrow's broad linecard and expanding the company's partnerships with small- and medium-sized customers in the region. Arrow said its subsidiary will look into creating marketing relationships with existing customers as well as exploring growth paths.

• Media sources reported that Japan Airlines Corp. (JALSF.PK) and retail giant Aeon Co. have entered into an alliance that will see them working in wide-ranging business activities. First in their activity is the issuance of electronic money and mileage cards around next March. Under the agreement, JAL's JMB Waon card will serve as a frequent flyer mileage card and its mileage points will be convertible to Aeon's electronic cash called "Waon," while purchases made with Waon will count toward mileage points. The alliance will also see Aeon Co., the mass retailer, issuing an Aeon JMB credit card allowing holders to accumulate JAL mileage points through shopping that will also feature the Waon electronic cash function. JAL said it looks to issuing 2 million to 3 million of the new cards in a three-year period, including issuance to existing cardholders switching to the new card. The two companies said they are also considering selling their private-brand goods through each other's marketing channels, and working jointly to develop tour packages.

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