Japanese Tech Stock Weekly Summary

by: IRG Ltd

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

Media, Entertainment and Gaming

• Nintendo Co. (OTCPK:NTDOY) announced plans to expand its presence in South Korea by helping South Korean software makers to develop localized computer game programs. The South Korean market is considered as one of the world’ fastest-growing game markets but it is currently dominated by local on-line programmers. Nintento Korea said it is presently working with 20 local software developers and plans to unveil diverse game contents that can be available on its console game machines. Nintendo said the South Korean market is important for Nintendo's global strategy, with the country’s game industry market estimated at US$8.2 billion in 2006, with US$670 million in exports. The plans of Nintendo, which cover its cooperative tie-up with Nexon Corp. and other South Korean companies will involve both financial and technological support. Nintendo launched its Korea operations early in January by introducing its latest portable game machine, Nintendo DS Lite, which is an advanced version of Nintendo DS. The company has so far sold about 30 million DS devices worldwide. In the first four months of its debut in South Korea, Nintendo sold 270,000 DS Lite versions, a figure that is considered by analysts as significant given that this happened in a country where online games such as Lineage and other MMORPG are dominating the market.


• According to the country’s Communications minister, Japan will start researching and developing technology for a new generation network to replace the Internet. The official said the appropriate organization will be set up this fall with cooperation from businesses, academia and the government to promote the technology. It is estimated that some 7.8 billion yen will be sought for the project in the fiscal 2008 budget. The new technology is envisioned to be faster and more reliable than the current Internet, with the country looking to lead the move in the development of post-Internet technology.

• Cable broadcaster Usen Corp. announced its decision to merge the operations of its subsidiaries UCOM Corp., a high-speed Internet service provider, and MEDiA K.K., an Internet Protocol telephone service provider, by October. For the latest business year to Aug 31st, 2006, UCOM reported a 37.5 percent rise in its net profit to 242 million yen (US$2.1 million) from the previous year, on sales of 24.3 million yen (US$213,000). MEDiA, however, posted a net loss of 332 million yen (US$3 million) in the same year. Usen currently holds a stake of 47.9 percent in UCOM and 75.2 percent in MEDiA.


• Industry sources said the Japanese government has issued an order for the Tokyo-based unit of Finnish mobile phone firm Nokia Corp. (NYSE:NOK) to submit a report on the recent problems of mobile phone batteries made by Matsushita Battery Industrial Co. The country’s Ministry of Economy, Trade and Industry issued the order under a law on safety of consumer products. Nokia Japan, which sells handsets equipped with Matsushita-made batteries in Japan, has been ordered to give details of two incidents in Japan and other cases abroad. Ministry officials declared that if Nokia Japan fails to submit a report within one week or produces an unsatisfactory report, the company will be fined up to 300,000 yen (US$2,627). The order follows the announcement made earlier by Nokia when it disclosed a plan to replace 46 million Matsushita-made batteries used in Nokia handsets free of charge because of the risk of overheating.

• Sanyo Electric Co. (OTC:SANYY) revealed that it is considering selling its mobile phone business in order to focus on profitable operations. Sanyo’s move is seen by industry observers as its way of hastening the company’s restructuring. The mobile phone business is suffering declining sales and an operating loss amid intensifying competition in Japan. Sanyo recently revised down its fiscal 2007 mobile phone sales forecast to 11 million units from 12.5-12.6 million units. In other developments, Sanyo is now in talks to sell its semiconductor business. Media sources said an agreement is yet to be reached, the delay is being cauesd by differing views about the price.


• Red Bend Software Japan KK, the market leader in Mobile Software Management and Firmware-Over-the-Air [FOTA] update solutions for mobile phones and wireless modules, announced that its vCurrent Mobile FOTA software has been adopted by Toshiba Corp. for use in the WX320T handset for Japanese operator Willcom. With this deal, Toshiba becomes the fourth Japanese handset manufacturer to adopt vCurrent Mobile. Red Bend Software helps mobile phone manufacturers and network operators to accelerate the adoption of new services and features, respond rapidly to customer needs and reduce support costs through mobile software management solutions. LG Electronics, Motorola (MOT), NEC (NIPNY.PK), Sharp (SCHAY.PK), Sony Ericsson and other large handset manufacturers use Red Bend’s firmware over-the-air [FOTA] mobile client software to quickly and reliably deliver compact firmware updates to more than 150 million mobile phones in the hands ofconsumers. Red Bend Software is a privately held, venture capital-financed company with offices in China, Israel, Japan, Korea, the U.K and the U.S.

• Jamcracker, the on-demand services delivery company, and kitASP, the leading application deployment company in Japan, announced entering into a strategic partnership to provide communications service providers, ISPs, and IT service providers in Japan with an ondemand catalogue of packaged and custom application services for businesses and consumers. Under the agreement, the companies are offering over 100 application services from the Jamcracker Services Delivery Network [JSDN] catalogue and kitASP applications tailored for the Japanese market. The integration of the JSDN and kitASP’s application deployment infrastructure is also seen as allowing service providers to combine packaged software services from industry leaders including Microsoft, McAfee, and WebEx, with custom third party applications developed for the Japanese market. The Jamcracker Services Delivery Network enables Telcos, Internet Service Providers (ISPs), Value Added Resellers (VARs), and SaaS (Software as a Service) vendors to profitably deliver on-demand services to businesses and consumers. Jamcracker is a privately held company with headquarters in California, and offices in Bangalore, India. KitASP investors include Mitsubishi Electric Corporation and NTT Data Corporation.

• NTT-IT of Japan, a subsidiary of the NTT (NYSE:NTT), the worlds largest telecommunications company and VRMeetings, Inc, a minority owned company announced that they have entered into an alliance to introduce MeetingPlaza, a unified collaborative" web-conferencing solution to the U.S. market. MeetingPlaza, which is experiencing significant success and market share in Japan, transfers VOIP audio/visual web conferencing from equipment and software products to the PC, and integrates special collaborative tools for simultaneous use. MeetingPlaza is a "full duplex" (audio and video), web hosted solution that provides synchronous (real time) multi-party communications to up to 32 simultaneous participants (2,000 participants for large conferences). VRMeetings, Inc, founded in 2002 is a minority owned company and partner of NTT-IT, a subsidiary of NTT. VRMeetings is the exclusive Global marketer of MeetingPlaza.


• Sony Corp.'s (NYSE:SNE) U.S. electronics unit announced its decision to launch a marketing program valued at US$100 million in a bid to create interest in its big-screen televisions and related products. Sony Electronics called this campaign is its largest. Sony's ad campaign will cover print, Internet and television commercials and carries the slogan: "High Definition. It's in our DNA." A company official said the company targets "double-digit growth" in revenue from Sony's highdefinition products through the holiday season. The technology comes in products from digital cameras and Blu-ray DVDs to PCs and LCD TVs.

• Industry observers see the special editions of Walkman portable music player as addressing the female market. Sony Style (Japan) Inc., a Sony subsidiary, said it has teamed up with popular jewelry and accessory brand Abiste Corp. to create limited editions of the Walkman E010 series. The Walkmans, which come in pink, violet, black, blue or gold, have removable caps adorned with Swarovski glass crystals. Customers have to wait two months for delivery of the handmade products. Prices are set at 15,800 yen (US$138) for a 1-gigabyte model, 18,800 yen (US$165) for a 2-gigabyte model and 24,800 yen (US$217) for a 4-gigabyte model, with the prices including tax but excluding shipping fees.

Information Technology

• Fujitsu Ltd. (OTCPK:FJTSY) announced that it has agreed to supply information and technology infrastructure to Reuters (RTRSY), a British media and information service company. Under the 10-year agreement, Fujitsu will provide IT services to 17,500 Reuters employees in more than 100 countries to help them gain secure and smooth access to the company's internal systems. The agreement will also see some IT staff employees of Reuters transferred to Fujitsu.

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

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