Japanese Tech Stock Weekly Summary

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

Media, Entertainment and Gaming

• Sony Online Entertainment issued a denial on media reports indicating that Zapak Digital Entertainment Ltd, part of the Anil Ambani-led ADAG group, was buying the company. According to Sony, the company is not up for sale. The reports said that Zapak was buying Sony Online for about US$300 million. Sony Online is the game development and game publishing unit that is part of global electronics maker Sony (SNE).

Internet

• Acca Networks, a Japanese Internet services company, announced that it has altered its strategy after the WiMAX license was awarded to KDDI and Willcom. The company said it now plans to continue to work with partners to provide broadband over different technologies and infrastructures, including WiMAX. The company aims to provide seamless communication over wired/wireless communication networks. Acca said the company plans to restructure to be service oriented and provide value added services with limited capital investments, rather than a business model that demands huge capital investments.

Mobile/Wireless

• According to media reports, NTT DoCoMo (DCM), Japan's largest mobile carrier, is entering into a partnership with Google (GOOG) to offer search and e-mail on its handsets. Under the partnership, DoCoMo subscribers could have access to Google's search tool, Gmail e-mail service, Picasa photosharing software, and Google Calendar application, early next year via DoCoMo's i-Mode network.
• NEC Corporation (NIPNY) announced that it has entered into a framework contract with a leading Polish telecom carrier, Netia SA, for the supply of advanced, point-to-point wireless access systems, PASOLINK NEO. The new systems will be supplied to the 3G mobile operator P4 Sp.z.o.o.("P4"), a mobile operation arm of Netia. P4, a new 3G mobile operator, is accelerating improvement of its network infrastructure to enable provision of stable and high quality 3G services. PASOLINK NEO will be utilized to carry out transmission among mobile base stations. Under the deal, P4 said it plans to install around 10,000 hops (intermediate connection in a string of connections linking networks) in the next 5 years, with NEC expected to provide around 1,000 hops to the northern and middle areas of Poland, as well as to Warsaw, to fulfill the initial demands of the framework contract.

Hardware

• Sony revealed that it will cease production and sales of rear projection TVs in late February to focus on flat TVs. The company spokesperson said Sony will move its business resources to LCD and organic light emitting diode [OLED] televisions. OLED TVs feature an organic self-luminescent display, which does not require a backlight. In December this year, Sony launched the world's first OLED television.
• The Board of Directors of Japan-based Fujitsu General passed the resolution to cease its operations in the visual display business in the December meeting. Fujitsu General will discontinue participation in the visual display business at the end of March, 2008, and concentrate its operating resources on its core business of heating and ventilation equipment instead.

Ventures/Investments

• Matsushita Electric Industrial Co. (MC), Canon Inc. (CAJ), and Hitachi Ltd. (HIT) announced that they have reached a basic agreement on a tie-up in the flat-panel business. Under the alliance, Hitachi will reduce its interest in wholly owned subsidiary Hitachi Displays Ltd. to slightly more than 50 percent, with Matsushita and Canon holding the remaining stake equally. The three companies will jointly develop and manufacture OEL (organic electroluminescence) panels through Hitachi Displays. Hitachi Displays currently makes small and midsize LCD panels and is working to develop OEL panels. The report said Canon is considering using the output of OEL panels from Hitachi Displays to make monitors for digital cameras and other products, while Matsushita is looking to use OEL panels in its next-generation flat-panel TVs. Industry observers see the partnership as another major grouping following the Sharp Corp (SHCAY.PK) and Toshiba Corp alliance as well as the Sony Corp-Samsung Electronics Co group. In a related development, Matsushita said it has entered into an agreement with Toshiba on a deal that will give it control of IPS Alpha Technology Ltd., a manufacturer of LCD panels for TVs which is currently 50 percent owned by Hitachi Displays, 30 percent by Matsushita, and 15 percent by Toshiba.
• Canon Inc. announced that it has completed the acquisition of a 66.4 percent stake in Tokki Corp., a maker of equipment to produce organic electroluminescence displays. The company said the acquisition is part of Canon's efforts to produce the next-generation display panel on its own for use in digital cameras.

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