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

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Telecommunications

KVH Co., (NASDAQ:KVHI) a telecommunications service provider owned by U .S. investment firm Fidelity, will construct a large data center in the Japanese city of Inzai, Chiba Prefecture, at an estimated cost of 20-40 billion yen (US$185.8 million-US$371.5 million). KVH intends to tap demand among businesses looking to outsource information technology operations. The company acquired a plot of land in Chiba New Town, which is home to data centers for many financial institutions, from the government-affiliated Urban Renaissance Agency. The six-story data center will cover half the lot, and will be expanded as demand grows. Expected to come onstream in spring 2010, the facility will have a floor space of 30,000 sq. meters initially.

KDDI R&D Laboratories Inc. has developed a system for delivering free viewpoint video over the Internet. The research arm of KDDI plans to use the system for a trial service on its Web site this year. Within five years it hopes to integrate the system with the delivery of on-demand television programming over the Internet. In free viewpoint video, the viewer can choose to watch events play out from any angle. This is accomplished by filming the action from multiple angles using multiple cameras and then synthesizing the image data to generate a digital 3-D view. The new KDDI system uses data-compression technologies and selective processing of image data to create a 300mbps data stream, which is small enough for delivery to household Internet terminals.

KDDI is teaming up with Nippon Express Co. to enter the telegram market in a bid to break the grip held by NTT Corp. (NYSE:NTT). KDDI will start offering a telegram service on July 1, setting up nine delivery centers nationwide, with the goal of grabbing a 20 percent market share in three years. The telegram market is estimated at about 60 billion yen (US$557 million, down about 40 percent from a peak in fiscal 1996. But the market size has remained unchanged in recent years due to strong demand for telegram messages of congratulation or condolence on such occasions as wedding parties and funerals. By tapping Nippon Express' existing delivery network, KDDI plans to offer services that are 20 percent cheaper than NTT's.

Hardware

Matsushita Electric Industrial Co. (MC-OLD) plans to market ultra-small business-use personal computers globally by the end of the year, starting out with a product for nurses and then offering a ruggedized model for use at factories and construction sites. These PCs are to have screen sizes of 12.1 inches or smaller, with each model having functions targeting specific fields. The manufacturer behind the Panasonic brand plans to release the medical-use model simultaneously in Japan, the U.S. and Europe. This machine will have a touch panel instead of a keyboard, allowing for nurses in hospitals and those making house calls to input such data as blood pressure and treatments quickly with one hand.

Canon Inc. (NYSE:CAJ)  is expected to report a group net profit of around 210 billion yen (US$1.9 billion) for the six months ending June 30, a drop of 18 percent on the year and the first decline for an interim half since 2002. In addition to the yen's advance against the dollar, slumping demand for office equipment and rising materials costs are cutting into the firm's bottom line. Operating profit is estimated to fall 17 percent to 324 billion yen (US$3 billion), with the stronger yen likely lowering the figure by around 80 billion yen (US$753 million).

Sony Corp.’s (NYSE:SNE) shares fell the most in more than two months in Tokyo trading after the company's midterm plan didn't include products to beat the competition. The company plans to invest 1.8 trillion yen (US$16.8 billion), increase the number of businesses that generate at least 1 trillion yen (US$9 billion) in annual sales and connect 90 percent of Sony's electronic products to the Internet by March 31, 2011. The company also pledged to generate return on equity, or profit divided by book value, of 10 percent by the year ending March 2011. That's almost double the 5.8 percent average for the company in the past five years. The 10 percent target is not good enough to turn investors into buyers of Sony shares.

Internet

NTT Corp., Sony Corp. and others said that they will unify the technical standards for Internet Protocol television [IPTV] services. The standardization process will be led by a forum established by three major telecommunications services firms: NTT, KDDI Corp. and Softbank Corp. The forum has since been joined by a total of 15 businesses and organizations, as well as two individuals. Its members now include Sony, Matsushita Electric Industrial Co., Toshiba Corp., Sharp Corp. and Hitachi Ltd., as well as the five major commercial TV broadcasters in Tokyo and Japan Broadcasting Corp. The forum is to draw up unified standards by the end of August and urge Japanese IPTV service providers and consumer electronics makers to develop compatible technologies and equipment.

Source: Japanese Tech Stock Weekly Summary (6/23-6/29)