More than in any other industry, the rapid spread of business-to-business electronic commerce, particularly the advent of industrywide Internet exchanges, affects the core operations of Japan's giant trading companies. However, they have been fairly quick to recognize the cost advantages, efficiency benefits and market-reach opportunities that the B2B model delivers. For instance, four of the five biggest traders — MARUBENI CORP., MITSUBISHI CORP., MITSUI & CO., LTD. and SUMITOMO CORP. — have invested in CHEMCONNECT INC. The San Francisco company runs the World Chemical Exchange, the largest on-line marketplace for chemicals and plastics of all kinds. Operational since July 1999, the ChemConnect exchange is an open, neutral marketplace where members can find trading partners, negotiate pricing and complete transactions on-line around the clock. They also have real-time access to supply and demand information and other industry news. The four trading companies, which all have significant chemicals and plastics businesses, join more than 5,000 World Chemical Exchange members, including such manufacturers as BASF AG, BP AMOCO CHEMICALS P.L.C., DOW CHEMICAL CO., EASTMAN CHEMICAL CO., GENERAL ELECTRIC CO.'s GE Plastics and PPG INDUSTRIES, INC.
The Pasadena, Texas unit of NISSAN CHEMICAL INDUSTRIES, LTD. — which has made organosilicasol, an organic solvent used as an additive in hardeners and anticorrosion agents as well as in polyester resins, since the latter part of 1997 — is expanding into a polishing agent for silicon wafers known as Snowtex. The company has designated roughly $9.2 million for a second plant that should be completed in 2001. Production of Snowtex, a colloidal silica sol consisting of microfine particles of silicon dioxide dispersed in water that can be used in a variety of applications, should add $27.5 million to NISSAN CHEMICAL HOUSTON CORP.'s annual revenues. It also could lead to the tripling of the company's work force to 30 people. Nissan Chemical decided to add Snowtex to its affiliate's product line because of expanding demand for the polishing agent from chipmakers operating in the United States.
A compound discovered by ASAHI CHEMICAL INDUSTRY CO., LTD. that shows promise in the treatment of obesity and diabetes will be exclusively developed, commercialized and sold outside East Asia by SMITHKLINE BEECHAM PLC. AZ40140 is a Beta-3 receptor agonist that breaks down fat in the body and promotes insulin production. Philadelphia's SB expects to begin clinical testing of AZ40140 in the United States later this year, focusing on the benefits of the drug for obesity. It will make milestone payments to Asahi Chemical during development and pay royalties on sales. In Japan and in neighboring countries, the Japanese company and its partner will jointly commercialize AZ40140. As part of the agreement, Asahi Chemical will codistribute in Japan SB's Avandia (rosiglitazone maleate), a treatment for Type II, or adult- onset, diabetes. That product is in Phase II clinical testing there.
SANKYO CO., LTD. will fund for another year, or until May 2001, work with METABASIS THERAPEUTICS, INC. on a new therapy for the treatment of Type II diabetes. Their collaboration, initiated in 1997, is based on the San Diego, California biopharmaceutical company's discovery of a series of potent and selective inhibitors of the gluconeogenesis pathway, which is responsible for the abnormal overproduction of glucose in the liver of patients with Type II diabetes. The partners believe that gluconeogenesis inhibitors will be effective in people who are both early- and late-stage diabetics, whether used alone or in combination with other diabetes drugs. The latter includes the class of drugs known as insulin sensitizers, such as Sankyo's Rezulin (troglitazone). Metabasis hopes to begin clinical evaluation later this year of the first diabetes drug developed under its pact with Japan's number-two drug firm.
In follow-on work, PROTEIN DESIGN LABS, INC. will humanize for FUJISAWA PHARMACEUTICAL CO., LTD. an antibody for the treatment of inflammatory and immunologically mediated conditions. Under the original July 1999 arrangement, the Fremont, California specialist in the development of humanized antibodies modified certain Fujisawa Pharmaceutical antibodies. The Japanese company will make an up- front payment of $1.5 million to Protein Design Labs as well as fund its research program.
The national rollout by WARNER-LAMBERT CO. of Benadryl Allergy/Cold FASTMELT tablets represents the launch in North America of YAMANOUCHI PHARMA TECHNOLOGIES, INC.'s WOWTAB quick- dissolving, without-water dosage form. The Palo Alto, California firm is in charge of the worldwide commercialization and introduction of specialized drug-deliv-ery technologies for parent YAMANOUCHI PHARMACEUTICAL CO., LTD. (see Japan-U.S. Business Report No. 364, January 2000, p. 2). To date, nine prescription WOWTAB products have been released in Japan.
An exchange rate of ¥109=$1.00 was used in this report.
Another new benchmark has been established in mainframe processing. HITACHI DATA SYSTEMS CORP.'s System 390-compatible Skyline Trinium Nine Series can support as many as 16 processors, each of which is capable of processing 262 million instructions per second. A fully configured Trinium Nine can crunch nearly 3,000 MIPS, or nearly twice the 1,600 MIPs delivered by reigning champion INTERNATIONAL BUSINESS MACHINES CORP.'s 12-processor Generation 6 mainframe system. HITACHI, LTD. hopes that the availability of the Trinium Nine, which can scale from a two-processor system all the way up to 16 processors, will reverse a precipitous two-year slide in its share of the S/390 mainframe or enterprise server market. The Trinium Nine was scheduled for release last fall. Instead, however, Santa Clara, California-based HDS introduced the 12-processor Trinium Eight Series (see Japan-U.S. Business Report No. 362, November 1999, p. 3). Although incredibly fast, these machines still allowed IBM to expand sales to financial, communications and other companies looking for bulk capacity to support their e-business activities.
All future Express5800 server, PowerMate desktop and Versa notebook models will be available with MICROSOFT CORP.'s Windows 2000 operating system, NEC COMPUTERS, INC. announced. The Windows 2000 family includes Windows 2000 Professional for desktop and notebook computers and Windows 2000 Server and Windows 2000 Advanced Server.
A year after releasing what it calls a microdesktop for space-constrained settings like call centers, NEC COMPUTERS, INC. introduced the PowerMate 2000. Powered by a 500-MHz Pentium III processor, the build-to-order system offers 64 megabytes or 128 MB of DRAM (dynamic random access memory), upgradable to 256 MB of 100-MHz synchronous DRAM, 6 gigabytes or 12 GB of hard-drive capacity, a 24X compact disc-read-only memory drive, a floppy disk drive, built-in 10/100 Ethernet support, two Type II CardBus PC Card slots and a like number of USB (universal serial bus) connections. Included in the estimated $2,500 price of the base model is a 15-inch TFT (thin-film-transistor) liquid crystal display monitor with a XGA (extended graphics array) resolution of 1024 x 768 pixels.
Still a relative newcomer to the extremely competitive American corporate desktop personal computer market, TOSHIBA AMERICA INFORMATION SYSTEMS, INC.'s Computer Systems Group is trying to carve out a niche for its Equium line by emphasizing the lower total cost of ownership that this state-of-the-art equipment can deliver. The latest series is the scalable Equium 7350 platform, which supports Intel processors ranging from a 433-MHz Celeron all the way up to a 733-MHz Pentium III and features Intel's 810e chipset with integrated graphics. An Equium 7350 powered by a Celeron processor starts at less than $750, while a system built around the performance-oriented 733-MHz Pentium III costs as little as $1,250.
In the notebook computer market, however, TOSHIBA AMERICA INFORMATION SYSTEMS, INC. CSG ranks as number one. To maintain that standing, the Irvine, California company has several new models in its various lines. In what is known as the desktop replacement segment, TAIS introduced the Satellite Pro 4200 series for small and midsize business customers interested in performance and multimedia capabilities. The Satellite Pro 4280ZDVD and the Satellite Pro 4280XDVD share a 500-MHz mobile Pentium III processor, 64 MB of SDRAM expandable to 320 MB, a slim, all-in-one drive design including a 6-GB hard drive, a 6X digital video disc-ROM drive and a floppy drive, and a USB port and two Type II or one Type III CardBus PC Card slots. The only difference between the two is the size of the TFT LCD display: 15 inches for the Satellite Pro 4280ZDVD, which costs about $2,900 with Windows 2000 Professional, and 14.1 inches for the $2,700 Windows 2000-compatible Satellite Pro 4280XDVD.
For business buyers that want increased performance and enhanced multimedia options but at a lower price, TOSHIBA AMERICA INFORMATION SYSTEMS, INC. CSG introduced the Satellite 2675DVD and the Satellite 2715XDVD. The latter pairs a 500-MHz mobile Pentium III processor with a 14.1-inch TFT LCD display for $2,400, while the former, which lists for $2,000, offers a 450-MHz mobile Pentium III processor and a 12.1-inch TFT LCD display. Common features include 64 MB of SDRAM system memory expandable to 192 MB, a combination 6-GB hard drive/4X DVD-ROM drive/floppy drive and one-touch Internet access.
TOSHIBA AMERICA INFORMATION SYSTEMS, INC. also continues to cater to budget-conscious business customers, offering them two more choices. Just $1,300 will buy the Satellite 2140XCDS with a 450-MHz AMD-K6-2 processor and a 13-inch Color Bright dual-scan display, while $1,600 will enable the buyer to upgrade to the Satellite 2180CDT's 475-MHz version of the processor and a 12.1-inch TFT LCD display. Both machines come with 64 MB of SDRAM, an integrated 4.3-GB hard drive/24X CD-ROM drive/floppy drive, a USB port and two Type II or one Type III CardBus PC Card slots.
The Windows 2000 Professional operating system also is shipping with three high-performance notebook models from SONY ELECTRONICS, INC. The VAIO PCG-F490K is the firm's equivalent of a desktop, made possible by a 650-MHz mobile Pentium III processor with SpeedStep technology, 128 MB of SDRAM and an 18-GB hard drive. Only slightly lower on the performance scale but $500 cheaper at $3,500 is the VAIO PCG-F480K, which uses a 600-MHz version of the mobile Pentium III with SpeedStep technology and features 64 MB of SDRAM standard and a 12-GB hard drive. Both models have a 15-inch XGA TFT LCD display and a 4X DVD-ROM drive with DVD movie playback capability. The other Sony Electronics' model using the new operating system is the VAIO PCG-Z505HSK SuperSlim Pro, which is just an inch thick and weighs less than 4 pounds. This design does not sacrifice performance, delivered via a 500-MHz mobile Pentium III, 128 MB of SDRAM and a 12-GB hard drive to a 12.1-inch XGA TFT LCD display. It lists at $3,200.
SONY ELECTRONICS, INC. has two other additions to its VAIO 505 SuperSlim Pro notebook line. The $2,500 VAIO PCG-Z505HE draws power from a 450-MHz mobile Pentium III engine and comes with 64 MB of SDRAM, 8.1 GB of hard-drive capacity and a 12.1-inch XGA TFT LCD display. For about $3,000, the cost of the VAIO PCG-Z505HS, buyers can get a 500-MHz mobile Pentium III chip, 128 MB of memory and a 12-GB hard drive, plus the same display as its mate. Both models also include the innovations that have made the VAIO line so attractive to multimedia enthusiasts, such as an iLINK (IEEE 1394) digital interface, a dedicated Memory Stick media slot for quick storage of graphics from cameras, DVgate Motion and Still Image Capture software, and PictureGear software.
The small to midsize business customer or SOHO (small office/home office) user who wants high- performance computing capabilities and the multimedia functionality available in the VAIO line but at a lower price, SONY ELECTRONICS, INC. introduced the VAIO PCG-F420 notebook. The estimated price of $1,700 buys a machine with a 450-MHz mobile Pentium III processor, 64 MB of SDRAM main memory, a 6-GB hard drive, a 4X DVD-ROM drive and a 13-inch display with a SVGA (super video graphics array) resolution of 800 x 600 pixels, plus the VAIO line's noted multimedia and PC networking software and an iLINK port.
FUJITSU PC CORP. has brought the advantages of the Microsoft 2000 Professional operating system to two of its notebook families. Four models in its mainstream LifeBook E Series of business machines have this capability. They are powered by either a 450-MHz mobile Celeron chip or a 450-MHz, 500-MHz or 650- MHz mobile Pentium III processor, the latter featuring SpeedStep technology. All come with 64 MB or 128 MB of SDRAM standard, a 6-GB, 9-GB or 12-GB hard drive, a flexible bay for a modular CD-ROM, CD- ReWritable or DVD drive, and a 14.1-inch TFT LCD display. Support for a wireless infrared mouse and a security panel are new features of the LifeBook E Series models, which start at $2,000. Customers also can choose Windows 2000 Professional on the relatively new LifeBook S Series, a line of ultrathin (about 1 inch) models that weigh less than 4 pounds with their lithium-ion battery. The new system uses a 400- MHz mobile Pentium III processor and provides 64 MB of internal memory, a 6-GB hard drive, an internal flexible bay and a 12.1-inch SVGA TFT LCD display. The LifeBook Application Panel, which has four programmable buttons for launching e-mail and/or software applications, is included in the LifeBook S Series' starting price of $2,300.
The 36-GB disk drives installed in HITACHI DA-TA SYSTEMS CORP.'s Hitachi Freedom Storage 5800 midrange storage subsystem now spin at 10,000 rotations per second. The company calculates that the new drives can improve read performance in transaction-oriented applications by as much as 40 percent compared with the industry-standard 7,200-rpm speed of the previous generation of HDS 36-GB drives. Fully configured, the Freedom Storage 5800, which works with a variety of Unix, Windows NT and Windows 2000 servers, can provide more than 2.5 terabytes of storage capacity in a single 19-inch rack.
For its part, FUJITSU COMPUTER PRODUCTS OF AMERICA, INC. is sampling a line of 10.2-GB-per- platter drives for desktop PCs that spin at 7,200 rpm and feature FUJITSU, LTD.'s new "silent" drive technology. Available in capacities of 10.2 GB, 15.3 GB and 20.4 GB, the high-performance MPF3xxxAH drives have a data transfer rate of 53.9 MB per second and a seek time of 8.5 milliseconds.
Given the interest in its initial CD-ReWritable disc drives, the Disc, Media and Systems Center affiliate of RICOH CO., LTD. introduced the higher-performance Ricoh MediaMaster MP7080 series for home users. The $240 unit combines a 8X CD-Recordable write speed and a 4X CD-RW drive with a 32X CD-ROM read capability. .....The Tustin, California-based unit of RICOH CO., LTD. also released ultrahigh-speed 12X media to support the first 12X CD-Recorders. The American-made multispeed Ricoh Platinum CD-R disc delivers 700 MB of storage or approximately 80 minutes of audio recording, plus a write speed that is as much as 33 percent faster than Ricoh's current 8X maximum discs. Equally important, Ricoh Platinum media is optimized for 1X, 2X, 4X, 6X, 8X and 12X recording. The lower speeds permit high-quality audio recordings, while the faster speeds are geared to large storage applications. A 25-disc pack costs less than $40.
Big ink-jet printer manufacturer SEIKO EPSON CORP. claims to be the first company to introduce a line of printers that can output photographic prints that rival those from commercial photo labs in terms of both quality and longevity. Breakthroughs in fade resistance are key to these claims. The EPSON Stylus Photo 870, EPSON Stylus Photo 875DC and EPSON Stylus Photo 1270, which come standard with new EPSON Photo Inks, also are said to deliver the first continuous edge-to-edge 4 x 6-inch snapshot printing system. Designed for both amateurs and professionals, the three machines range in price from $300 to $500.
The pioneer of computer graphics tablets and electronic pens, WACOM CO., LTD., has launched two products through it Vancouver, Washington unit. The Graphire Pen with Sign-it Plus and Graphire Pen & Mouse with Sign-it Plus combine Wacom's Graphire electronic pen and tablet hardware technology with software from Redwood Shores, California-based COMMUNICATIONS INTELLIGENCE CORP. to provide an easy and secure way to add verifiable electronic signatures and markups to ABODE SYSTEMS, INC. Acrobat PDF (portable document format) files. The pen lists for $100, while the pen and cordless mouse duo go for $120.
An exchange rate of ¥109=$1.00 was used in this report.
NIPPON CHEMI-CON CORP. is building a development center in suburban Chicago to bolster its standing as the largest maker and supplier of aluminum electrolytic capacitors in North America. The initial man-date for the $1.8 million facility, which should be operational in April with a staff of eight people, is to work on capacitors for use in hybrid and electric vehicles. Other, more medium-term objectives for the Chemi-Con Laboratory are to research large capacitors for such applications as trains as well as to develop small, lightweight capacitors. UNITED CHEMI-CON, INC., NCC's North American sales and engineering unit, is headquartered in Rosemont, Illinois. In addition to sales, service and field-engineering support personnel located around the country, United Chemi-Con has warehouses in Brea, California and Lansing, North Carolina. The latter is the site of its onshore aluminum electrolytic capacitor factory, which was acquired in the fall of 1992.
Ownership of another early Japanese factory in the United States is changing hands as a result of the corporate restructuring underway at home. PIONEER CORP. has decided to sell the DVD production assets of its PIONEER VIDEO MANUFACTURING, INC. subsidiary in Carson, California to DELUXE VIDEO SERVICES INC. With the sale of the plant's four DVD manufacturing lines and related equipment for what industry sources estimate was between $36.7 million and $45.9 million, Pioneer expects to improve economies of scale by consolidating most of its DVD production in Japan. The company acquired the renamed PVM in 1982. Its work force of some 160 people currently turns out about 100,000 DVDs a month. Deluxe Video, a subsidiary of RANK GROUP PLC, is a major supplier of VHS duplication, packaging and fulfillment services worldwide.
In a move designed to save both time and money, SONY CORP. reportedly will integrate the digital television research and development activities it now performs separately in Japan and at the Sony Technology Center at the company's huge production complex in San Diego, California. Among the areas apparently targeted for collaborative work, which will be handled via the Internet, are digital signal processor chips, decoders and software. The goal is to develop digital TV sets for release in Japan and the United States based on common specifications.
Computer, electronics and automotive companies around the world are quickly lining up to license SONY CORP.'s Memory Stick technology — a compact, stick-shaped recording media based on rewritable flash memory technology. Among the 46 companies interested in commercializing Memory Stick-compliant products are ADOBE SYSTEMS, INC., COMPAQ COMPUTER CORP., GENERAL MOTORS CORP. and TEXAS INSTRUMENTS INC. Memory Stick media now is available in storage capacities of 4 MB, 8 MB, 16 MB, 32 MB and 64 MB. A 256-MB product is slated for introduction in 2001.
An exchange rate of ¥109=$1.00 was used in this report.
The dismantling of big independent power producer and electricity wholesaler SITHE ENERGIES INC. is underway (see Japan-U.S. Business Report No. 362, November 1999, p. 7). The New York City company's majority owner, France's VIVENDI, and MARUBENI CORP., which has a 30 percent stake in the firm, have agreed to sell 21 power plants located in Pennsylvania, New Jersey and Maryland to Houston's RELIANT ENERGY for $2.1 billion in cash. With a net generating capacity of 4,276 megawatts, these facilities represent about a third of Sithe's operational capacity. The big trading company reportedly netted some $600 million on the sale. Vivendi and Marubeni continue to search for buyers for Sithe's other generating plants.
Building on a 1992 information-sharing arrangement, CHUBU ELECTRIC POWER CO., INC. and CONSUMERS ENERGY, a CMS ENERGY CORP. subsidiary, have agreed to form a purchasing alliance. Japan's third-largest electric utility and Jackson, Michigan-headquartered Consumers Energy, which ranks fourth in the United States among combined natural gas and electric utilities, see the tie-up as a way to gain leverage in purchasing materials for their operations. Before details of the alliance are finalized, representatives of the two companies will examine product cost, product standardization, new product development, electronic technology, resource and knowledge sharing, and procurement process improvement and streamlining.
An exchange rate of ¥109=$1.00 was used in this report.
The first nationally chartered Internet bank, Houston-based COMPUBANK, N.A., raised $36 million in its initial round of institutional financing. SOFTBANK FINANCE CORP. led the fund-raising, in which three major U.S. financial services providers also participated. Year-old CompuBank offers the same variety of depositary products and services to businesses and consumers that conventional brick-and-mortar banks do, plus the convenience of on-line banking and the higher interest rates on deposits and lower fee charges made possible by the absence of a physical presence. The Internet bank will use the money raised to expand its customer base as well as operations and to build up its capital.
One of the start-ups attempting to use the Internet to democratize investment banking by making initial public offerings and similar investments accessible to individual investors has caught the eye of another SOFTBANK CORP. affiliate. SOFTBANK VENTURE CAPITAL joined a number of other name venture capital firms in raising $52 million in follow-on financing for E*OFFERING CORP. of San Francisco. E*TRADE GROUP, INC., an initial investor in the 13-month-old business and another company in which Softbank has a stake, also invested. Along with partner E*TRADE, E*OFFERING participated in 47 public offerings in last year's fourth quarter alone. It will use the new capital mainly to expand its on-line products and to continue the development of its technology infrastructure.
SOFTBANK FINANCE CORP. agreed to help raise as much as $100 million for TRADESCAPE.COM, INC., a provider of so-called active stock trading systems for professional traders, institutions and active on-line investors that is in the process of acquiring MARKETXT, INC. Backed by a number of big brokerage houses, the latter organization is a recently authorized ECN (electronic communications network) that offers extended-hours trading for individual investors. New York City-based TRADESCAPE.com, in which Softbank Finance already is the largest investor, sees the combination as critical to maintaining its position as the leading provider of alternative trading systems for all equity market participants. Through its trading platform, registered broker/dealer subsidiary and third-party licensing arrangements, TRADESCAPE.com executed more than 150,000 trades a day with a volume in excess of 40 million shares in December. It will use the money from Softbank Finance and other investors to accelerate growth into the active on-line and institutional markets and for further technology development.
Continuing to build a name for itself as a venture capitalist, HIKARI TSUSHIN, INC. was one of a number of new institutional or private investors that joined previous investors in raising $27 million for GARAGE.- COM. The Palo Alto, California firm helps promising early-stage entrepreneurial businesses find financial backers in the venture-capital, corporate and "angel" investor communities. By its count, Garage.com has been instrumental since the start of 1999 in generating more than $100 million for 40 technology start-ups through its wholly owned broker/dealer subsidiary.
To facilitate its search for possible partners among the vast number of U.S. start-ups in the information technology field, NTT COMMUNICATIONWARE CORP., the software development unit of NIPPON TELEGRAPH AND TELEPHONE CORP., invested $5 million in the just-closed Bay III fund. Run by BAY PARTNERS, the $200 million Bay III fund is the Cupertino, California firm's newest early-stage venture-in- vestment fund. On average, Bay Partners invests between $2 million and $3 million in entrepreneurial firms ready to bring their ideas to the market. Like similar operations, it also provides strategic consulting, mentoring, executive search and financial planning advice.
Trader NISSHO IWAI CORP. is an established investor in up-and-coming American IT firms through a unit of its main New York City subsidiary. However, it decided to sharpen the focus of these activities by forming GLOBE LINQ, LLC as an independent business unit of its affiliate. The new company has approximately $30 million at its disposal. Like other venture-capital firms, it provides not only financing to promising start-ups but also managerial and operational support. What sets Globe LinQ apart, Nissho Iwai says, is that it is positioned to help the businesses in which it invests to break into foreign markets, particularly Japan. At least two examples back up this claim. The trader is the Japanese distributor for SONUS NETWORKS, INC. (see Japan-U.S. Business Report No. 358, July 1999, p. 35), a Westford, Massachusetts supplier of products for the Voice-over-Internet Protocol market in which Globe LinQ has a $3 million stake, while a subsidiary represents software developer XAACT TECHNOLOGIES, INC. (see Japan-U.S. Business Report No. 365, February 2000, p. 25); Globe LinQ invested $1 million in that Santa Clara, California firm.
OMRON CORP., best known as a manufacturer of automated control components, is following the same course, although not in such an institutionalized way. It has given a three-person team within OMRON ADVANCED SYSTEMS, INC. in Santa Clara, California responsibility not just for identifying promising North American IT start-ups but also for making the decision to invest. The group will have at least $18.3 million a year with which to work, but Omron could make as much as $91.7 million available annually if circumstances warrant. The team's primary decisionmaking criterion is to invest in companies that will help Omron expand its own IT operations either directly or through technology transfers rather than to seek capital appreciation. In the last three years, Omron has invested $22.9 million in North American start-ups.
Along with STANDARD & POOR'S CORP., the Tokyo Stock Exchange, the New York Stock Exchange and Germany's Deutsche Boerse are launching the first global stock index fund. As its name indicates, the S&P Global 100 Index will mirror the performance of the 100 multinationals making up the index. This select group incorporates 12 Japanese companies, including SONY CORP. and TOYOTA MOTOR CORP., 30 American corporations, such as AMERICA ONLINE, INC., GENERAL ELECTRIC CO., INTEL CORP. and MICROSOFT CORP., and DAIMLERCHRYSLER AG plus 41 other European businesses. Together, they represent roughly one-fourth of the world's total equity market capitalization. The fund's shares will trade on all three participating stock exchanges, enabling virtually round-the-clock trading. The S&P Global 100 Index is expected to appeal mainly to institutional investors.
An exchange rate of ¥109=$1.00 was used in this report.
Through a series of acquisitions dating back to 1981, MITSUKAN CO., LTD. has emerged as the U.S. sales leader in food vinegars. It recently solidified this position through the $13.8 million or so purchase of SPEACO FOODS, INC. The Kansas City, Missouri-headquartered company has plants in Rogers, Arkansas, Lodi, California and Dallas as well as in Kansas City. In addition to producing an assortment of vinegars, Speaco Foods makes such other products as ciders, sauces, condiments and juices. Sales, particularly to private-label grocery wholesalers and retailers, run around $20 million a year. Not only does the Speaco Foods purchase boost the market share of NAKANO FOODS, INC., the actual buyer, to 37 percent, but it gives the Arlington Heights, Illinois-based company production capacity through the middle of the United States, complementing its eight factories on the East and West Coasts. Nakano Foods specializes in value-added products, such as seasoned vinegars. For that reason, while it is the sales leader, it ranks a distant second to San Francisco's BURNS PHILP FOOD, INC. in terms of volume.
An exchange rate of ¥109=$1.00 was used in this report.
The weakness in consumer spending in Japan has hit department stores harder than any other group of retailers, forcing them to take a hard look at all aspects of their operations. For MATSUZAKAYA CO., LTD., the nation's fifth-largest chain, that review has led to the decision to close the company's Los Angeles store, which has been in business since 1980. The shutdown will occur no later than this October, when Matsuzakaya will liquidate the subsidiary that runs the outlet.
An exchange rate of ¥109=$1.00 was used in this report.
Although assembly operations began less than a year ago, YUSHIN AMERICA, INC. believes that strong U.S. demand for its parts-unloading robots for plastic injection-molding machines will enable it to boost production to 100-plus units this year from 70 in 1999. The Cranston, Rhode Island company, in which YUSHIN PRECISION EQUIPMENT CO., LTD. has a 60 percent stake, also will add a series of three- or four-axis, all-servo-drive robots for injection molders with clamping forces from 500 tons to 3,000 tons. The robots assembled to date have been designed to work with smaller injection molders. Yushin America generated sales of $26.6 million in the year through March 1999 from the wide range of automation equipment it supplies for the plastics industry. In FY 2004, it hopes to double this figure.
The decision by BELOIT CORP., a big manufacturer of paper-making equipment, to go out of business is creating both problems and opportunities for MITSUBISHI HEAVY INDUSTRIES, LTD. On the negative side, MHI is likely to take a loss on the 20 percent share of the Beloit, Wisconsin-headquartered company that it has owned since 1986. On the plus side, after paying Beloit $22 million for certain paper-making machinery patents and intellectual property rights, the Japanese manufacturer is free to expand its own business. In particular, MHI will be able to sell equipment in regions outside Asia and Oceania, something that it could not do under its contract with Beloit. By combining its own expertise with its former partner's technology and trying to win over Beloit's customer base, MHI believes that it can lift sales of paper-making machinery to $458.7 million in FY 2000 — more than triple the projected total for FY 1999.
Fifteen years after BARUDAN CO., LTD., a manufacturer of embroidery and monogram machines, acquired a U.S. production base now located in Solon, Ohio, the company has gone to direct sales in North America. BARUDAN AMERICA, INC. bought the Greensboro, North Carolina-based sales and technical support divisions of its U.S. distributor, MACPHERSON MEISTERGRAM, INC., from WILLCOX AND GIBBS CO. Earlier, it had purchased its Canadian distributor from the same Carteret, New Jersey company. Barudan America makes single-head to 20-head Barudan embroidery machines and produces monogram machines under the Meistergram brand at its factory outside Cleveland.
Like other Japanese makers of construction equipment, YANMAR DIESEL ENGINE CO., LTD. hopes to make up for lagging sales at home by doing more business in the United States. It has formed a direct sales unit at YANMAR DIESEL AMERICA CORP. in Buffalo Grove, Illinois, where its U.S. diesel engine and tractor parts marketing operations are located. The main product is the ViO-70 compact hydraulic excavator. The 7-ton version of the ViO line with its distinctive rounded body, the machine is designed for confined urban work settings since the cabin, bonnet and boom bracket all stay within the track width when swiveling. The bucket capacity of the ViO-70 is 0.37 cubic yards; it can dig to depths of almost 14 feet. The marketing staff is directing most of its ViO-70 efforts to construction equipment rental companies.
ELLIOTT CO., one of the world's largest makers of steam turbines and compressors for the petrochemical, oil-refining, oil and gas, and power-generation industries, soon will be a wholly owned EBARA CORP. subsidiary. The manufacturer of pumps and air blowers will buy out equal partner MAN AG for an undisclosed price. Since June 1998, Ebara and the German company have shared ownership of Elliott, which had sales of roughly $400 million in the year through May 1999 and employs some 2,000 people worldwide. Both previously were minority investors and licensees of the Jeannette, Pennsylvania firm's turbomachinery technology. Elliott readily admits that its 32-year relationship with Ebara has helped to strongly position the company's products in Asia. Part of the Japanese manufacturer's near-term business plan is to accelerate its commercialization of cogeneration systems using Elliott's microgas-turbine technology.
Big plant engineering contractor JGC CORP. is working with GENERAL ELECTRIC CO. on a combined- cycle (gas and steam turbine) power plant that runs off a new fuel source. The Japanese company has devised a system that uses the product from further refinement of the heavy oil residues left after the distillation of gasoline and other petrochemical products. It calculates that the proposed combined-cycle power plant will have a 50 percent fuel efficiency. While that is below the 58 percent rating of today's most efficient equipment and the 60 percent operating efficiency of GE's just-unveiled next-generation H System gas turbine, JGC says that there is a trade-off in terms of lower initial investment costs. If their collaboration succeeds, JGC and GE will market the resulting combined-cycle system to the new breed of independent power producers as well as to traditional electric utilities in Japan and elsewhere.
An exchange rate of ¥109=$1.00 was used in this report.
A $300 million-plus expansion is underway at FUJI PHOTO FILM CO., LTD.'s huge manufacturing complex in Greenwood, South Carolina. The project includes a second plant for color photographic film and photographic paper and Fujifilm's first U.S. factory for X-ray film for the health-care industry. The two plants are to be completed in early 2001. Additional space in Greenwood's distribution facility, already the largest that Fujifilm operates anywhere in the world, is covered as well. The latest expansion boosts Fujifilm's investment in its South Carolina production center, which opened in 1989, to more than $1.3 billion. The new capacity will create in excess of 200 jobs, increasing employment at the campus to approximately 1,500 people. The 500-acre Greenwood complex now houses six manufacturing plants, plus the recently opened Greenwood Research Laboratories and the distribution center. The current production line-up spans 35mm color film and photographic paper, QuickSnap disposable cameras, DLTtape data-storage media, VHS-format videotape for the consumer and duplication markets, and presensitized plates and film for the graphic arts market.
ASAHI OPTICAL CO., LTD., the maker of Pentex-brand photographic equipment, and HEWLETT- PACKARD CO. have teamed up to develop state-of-the-art digital camera platforms. Their initial product, scheduled for summer release, is a 2-megapixel-class CCD (charge-coupled device) camera. Asahi Optical will manufacture the codeveloped product, which each of the partners will sell under its own name. The Japanese supplier of optical products and precision instruments has not released a digital camera model since August 1997. The alliance with HP should help Asahi Optical get back into this fast-changing market. HP has been active in digital camera technical development in recent years and has come up with an imaging technology that improves the overall image quality of each picture taken by adjusting for lighting conditions.
In a deal designed to make digital imaging more accessible to consumers by eliminating the need for a digital camera or a scanner to input pictures into a PC, MICROSOFT CORP. has arranged for the U.S. subsidiary of FUJI PHOTO FILM CO., LTD. to incorporate its Picture It! Express 2000 photo-editing software into every new Fujicolor photo CD. Thanks to this combination, people who chose to get their pictures back from Fujifilm photo processors on a CD can edit and enhance them on their PCs and then share them electronically.
The Long Beach, California subsidiary of SEIKO EPSON CORP. is offering EPSON Software Film Factory photo-management software for Macintosh users as well as for Windows-based machines. The $30 package allows photographers to import, catalog, edit and print pictures from their collections of digital images. One unusual feature of Film Factory is that, like a one-hour photo lab, it can process and print batches of photos.
ASAHI GLASS CO., LTD. has a new U.S. distribution arrangement for its Pictorico Ink Jet Media line of specialty papers for digital images. The Melville, New York subsidiary of digital camera maker OLYMPUS OPTICAL CO., LTD. gained exclusive rights to market certain newly cobranded Pictorico media to traditional retail outlets. It also will distribute other Pictorico specialty papers to these channels. AGA CHEMICALS, INC., which previously handled all Pictorico distribution in the United States, will market the media on-line.
An exchange rate of ¥109=$1.00 was used in this report.
More than a few Japanese multinationals experiment with different ways of doing business in the United States before introducing successful methods in Japan. The latest case in point is the decision by AN- RITSU CORP., a major maker of measuring instruments, particularly communications test equipment, to launch Internet sales in the United States this summer. Its Morgan Hill, California manufacturing and marketing subsidiary will be in charge of the $917,400 project, which involves construction of an intranet to transfer information on orders placed through the company's new home page to factories. Initially, test equipment for mobile communications equipment will be offered through the site. Anritsu sees Internet sales as key to boosting its affiliate's sales to $412.8 million in FY 2002, more than double projected FY 1999 revenues (see Japan-U.S. Business Report No. 360, September 1999, p. 8).
GOODMAN CO., LTD., one of Japan's major importers and wholesalers of medical equipment, will acquire INTELLA INTERVENTIONAL SYSTEMS, INC. in April. The Sunnyvale, California start-up makes a variety of interventional vascular products used in treating atherosclerotic lesions, including guide wires, balloon- on-a-wire systems, rapid exchange systems, over-the-wire systems and stent delivery systems. Goodman will pay roughly $10.5 million for Intella, which had sales of $7.2 million last year. The two firms have worked together on product development since 1996. Goodman, which is strongest in catheters, started selling Intella's products on an exclusive basis in the spring of 1998.
An exchange rate of ¥109=$1.00 was used in this report.
Booming demand for cellular telephones is benefiting ALLEGRO MICROSYSTEMS, INC., a specialist in mixed-signal integrated circuits. The Worcester, Massachusetts company, a SANKEN ELECTRIC CO., LTD. subsidiary, is ramping up production of IC sensors for flip-type cell phones. The part senses when the lid is opened or closed and sends a signal to the battery to turn the power on or off. Allegro now makes about 500,000 of the sensor monthly, but through an investment of $2.1 million this year, it will be able to turn out 2.5 million units a month. That will raise total monthly IC sensor output to 14 million units. Most of this production is for motor vehicles (see Japan-U.S. Business Report No. 362, November 1999, p. 11).
Chipmaker ROHM CO., LTD., a longtime producer in the United States, is moving its 10-year-old design and development center from San Jose, California to San Diego, where a number of leaders in the cell phone business are located. ROHM LSI SYSTEMS U.S.A., LLC will focus on high-performance system chips for the next generation of mobile phones. The relocated center will be staffed by 15 people, the same number who work in San Jose, but over the next three years, Rohm hopes to raise the total to 50 people. Most of Rohm LSI Systems' work is in the area of ASICs (application-specific ICs).
In a coup for SONY CORP. and its effort to make its Memory Stick technology the de facto IC recording media standard for the next generation of portable digital devices, TEXAS INSTRUMENTS INC. will develop semiconductors that help hardware manufacturers commercialize Memory Stick-compliant products. To date, Sony has been the sole maker of Memory Stick chips. The electronics giant will provide technical support to TI for such Memory Stick technologies as MagicGate copyright protection and ATRAC3 audio compression. TI will bring to the job its considerable expertise in DSP chips. Since it is the dominant supplier of DSPs for cell phones, analysts expect the company to devote part of its energies to designing ICs that make these products Memory Stick-enabled.
As part of the overhaul of its massive semiconductor business, TOSHIBA CORP. gave KINGSTON TECHNOLOGY CORP. complete responsibility for establishing a new supply chain management model for the company's DRAM business outside Japan. The partners describe the deal as enabling Toshiba customers to receive finished DRAM products when and where they need them. Fountain Valley, California-based Kingston, a manufacturer of memory enhancement products with facilities around the world, will be in charge of DRAM supply chain management, global logistics, module manufacturing, testing and order processing. For its part, Toshiba will continue to handle all customer contacts and will manage product positioning, customer relationship and ongoing sales activities. The new arrangement will be introduced first in North America and then extended this summer to Europe and Asia.
About a year and a half after closing its wafer-fab-rication facility in Irving, Texas, HITACHI, LTD. has returned to the city. This time, however, Irving will the center of the company's American semiconductor manufacturing equipment operations. Hitachi is building a facility to house sales, service, parts, customer technical training and support activities for the Semiconductor Equipment Group of its U.S. subsidiary. The building will include a state-of-the-art clean room as well as a 200mm (8-inch) and 300mm (12-inch) tool demonstration laboratory for Hitachi's etch, ion-beam, implant and gas-abatement systems. The Semiconductor Equipment Group currently employs 45 salespeople, technicians, engineers and other staff, but this number will be increased by 30 percent to support the new facility.
TOKYO ELECTRON LTD., Japan's top maker of semiconductor manufacturing equipment, is working with DOW CHEMICAL CO. to advance the development of processes and equipment modules for materials with a low or an ultralow dielectric constant for 0.13-micron and even smaller chip geometries using the Midland, Michigan company's SiLK semiconductor dielectric resins. The primary focus of their collaboration, which will be implemented on TEL's side through its Austin, Texas subsidiary, will be processes and equipment for spin-on deposition of low-k dielectric materials. Dow developed SiLK resins for use an an interlayer dielectric material for next-generation ICs. The product's characteristics produce devices with faster processing speeds and reduced "cross talk." SiLK and other Dow semiconductor- grade materials are available in Japan through a partnership with HITACHI CHEMICAL CO., LTD. (see Japan-U.S. Business Report No. 360, September 1999, p. 12).
IC assembler MITSUI HIGH-TEC, INC., one of the licensees of TESSERA INC.'s chip-scale packaging technology, is working with the San Jose, California firm to extend its BGA (ball grid array) CSP technique to next-generation products. At the heart of the new relationship is Tessera's WAVE (wide area vertical expansion) process, which the company believes will bring the benefits of its CSP packaging to such high-pin-count, high-performance products as high-speed memories, ASICs and processors. Mitsui High- tec and Tessera initially will develop a high-volume single-chip manufacturing process for the WAVE technology. Then they will partner on a wafer-level WAVE manufacturing process. The collaboration should position Mitsui High-tec to be the first assembler capable of offering the new CSP method to chipmakers.
Responding to the demand from semiconductor manufacturers for a higher-throughput scanner with both 200mm and 300mm wafer capabilities, the Semiconductor Equipment Division of CANON INC.'s U.S. subsidiary introduced the FPA-5000ES2+. This krypton scanner is engineered for the 150-nanometer design rule. With the speed enhancement of a 2-kilohertz excimer laser, the FPA-5000ES2+ can expose 125 200mm wafers per hour, or 25 percent more than its year-old predecessor. Among other improvements, it provides better overlay accuracy, minimized lens distortion and reduced wavefront aberrations.
An exchange rate of ¥109=$1.00 was used in this report.
Two SOFTBANK CORP. venture-capital funds threw out a $57 million lifeline to TOYS "R" US, INC.'s struggling on-line retail business. TOYSRUS.COM generated a tremendous amount of negative publicity when it was unable to deliver in a timely manner all the orders that had flooded into its site before Christmas. However, SOFTBANK VENTURE CAPITAL and SOFTBANK CAPITAL PARTNERS LP, which acquired an undisclosed minority position in Toysrus.-com, apparently looked beyond those problems and saw a company that has one of the world's most recognizable brand names and that, in their opinion, is positioned to become the global leader in children's products sold over the Internet. Toys "R" Us said that the Softbank money would be used to accelerate the development of Toysrus.com's infrastructure to support future growth. The same use will be made of the capital that the company received from three other U.S. private equity firms. As part of the Softbank deal, its two venture-capital funds bought warrants at a cost of $10 million to acquire 1.2 million shares of Toys "R" Us common stock at $13 per share.
SOFTBANK CAPITAL PARTNERS LP, which operates out of Newton Center, Massachusetts, also invested $31 million in ODIMO.COM (formerly Diamonddepot.com), which bills itself as the largest source of certificated diamonds, fine jewelry and brand-name watches on the Internet. The Fort Lauderdale, Florida-based company is majority owned by THE STEINMETZ DIAMOND GROUP, an international diamond trading organization. It and Odimo.com's other original investors put another $5 million into the firm. The diamond and jewelry e-tailer will use the $36 million to expand into Japan and Europe with help from SOFTBANK CORP.
For its part, SOFTBANK VENTURE CAPITAL of Mountain View, California led a second round of financing for REELPLAY.COM that raised more than $4.5 million. Launched in October 1999, the Santa Monica, California start-up is positioning itself to become the leading B2B on-line marketplace for the film and TV industry. It provides a forum for buying, selling and marketing motion pictures and television programming. To date, Reelplay.com has assembled a data base of more 5,000 new film and TV products from 1,000- plus film and television production and sales companies. It also has created unique Web sites for these properties. The company will use the new financing to continue its expansion.
A third round of fund-raising for TRAININGNET INC., which specializes in helping companies with skills training and professional education, generated $33.7 million, including money from new investor HIKARI TSUSHIN, INC. The Billerica, Massachusetts company will use the capital to both broaden and deepen operations in order to strengthen what it says is its top ranking in the on-line B2B marketplace for professional training. TrainingNet makes its products and services available through a variety of means: corporate intranets, the career sections of high-traffic Web sites, business and professional-oriented Web sites and its own Web site.
HIKARI TSUSHIN, INC., Japan's top distributor of cellular phones, also joined in a second round of financing that generated $27 million for FLOOZ.COM, INC. The New York City company is the creator of the Internet's Flooz gift-giving currency. Sent by e-mail, the "money" can be spent at more than 60 Floozworthy on-line stores. Flooz.com also offers a free, personalized reminder service for special occasions. The business will use the new capital to expand its sales and marketing efforts as well as to accelerate product development.
Other Japanese companies occasionally are willing to risk a few million dollars on pre-IPO companies in the hope not only of racking up capital gains but also of expanding their activities at home by partnering with the start-up. For instance, NISSHO ELECTRONICS CORP. participated in a $22.8 million third round of fund-raising for PROACTIVENET, INC. The Santa Clara, California firm is in what is known as the e- business transaction performance management field. Its recently announced eBiz.Site and eBiz.SP "intelligent" management solutions help Web-site operators improve the reliability and the performance of their sites in real time. ProactiveNet will use the proceeds from the latest financing round for sales, marketing and product development efforts. The company describes Nissho Electronics as its business partner in Japan, although to date, no plans have been finalized for ProactiveNet to move into the Japanese market.
Through its GLOBE LINQ, LLC information-tech-nology investment unit, NISSHO IWAI CORP. put up money for BIGFOOT INTERACTIVE during the direct e-marketing solutions company's latest round of funding. The investment in the New York City business, a unit of BIGFOOT INTERNATIONAL, INC., was a prelude to bringing Bigfoot Interactive's services to Japan. Under a licensing agreement, Nissho Iwai will introduce in April a Japanese-language version of its new partner's secure, Web-based software for creating and executing personalized, real-time e-mail marketing campaigns. Industry sources say that the trader and Bigfoot Interactive could form a Japanese joint venture as soon as this fall.
In a parallel move, NISSHO IWAI CORP. joined other investors in a second round of funding for ZKEY.- COM that totaled more than $14.2 million and announced plans to introduce the Los Angeles company's simplified and secure information exchange, storage and retrieval service in Japan in the spring. Zkey.com's ambition is to use its core technologies to make Internet-based content the standard medium for all information-exchange procedures. For the Japanese market, Nissho Iwai will localize some functions of the Zkey Web site.
With an eye on the rapid growth of Internet-ena-bled mobile phones in Japan, MITSUBISHI CORP. and its MC CAPITAL INC. investment banking unit put up funds for the first major outside round of financing undertaken by DEJIMA, INC. The Mountain View, California start-up is the developer of the AASAP (adaptive agent software architecture platform) technology for natural-language command and control of both fixed and wireless Internet applications. The two Japanese companies see considerable opportunity for Dejima's AASAP at home because this interface makes it easier for Internet services providers to deploy wireless data services and for consumers to access them.
A Tokyo start-up that specializes in developing software for the eXtensible Markup Language that plays such a key role in e-business activity has formed a marketing subsidiary in Beverly, Massachusetts. The INFOTERIA INC. unit, which is staffed initially by six people but could have as many as 20 employees in a year, not only will handle sales but also will gather information on Internet technical developments that could be used to hone its parent's software. Infoteria hopes to produce 30 percent of its projected FY 2000 sales of $4.6 million in the United States.
An exchange rate of ¥109=$1.00 was used in this report.
In fairly quick order, NEC AMERICA, INC. found a contract manufacturer to buy its 15-year-old Hillsboro, Oregon communications network equipment and automotive electronics plant and continue production under the NEC brand name (see Japan-U.S. Business Report No. 362, November 1999, pp. 12-13). Singapore's NATSTEEL ELECTRONICS LTD. will pay $200 million for the facility, which, by coincidence, generated sales on that order in 1999. It also has a three-year supply contract with NEC America that should go into effect April 1. NatSteel Electronics will take over the plant's 700-person work force. It says that no layoffs are planned, even though the factory is operating only at 60 percent capacity. To boost that rate, NatSteel Electronics hopes to win outsourcing contracts from other manufacturers. NEC will use the proceeds from the sale for Internet investments.
Like other Japanese makers of high-speed optical network equipment, HITACHI, LTD. is trying to position its products to capitalize on the huge amount of investment going into communications infrastructure in the United States. The company's Advanced Multiservices Network family, particularly the AMN 6100 DWDM (dense wavelength-division multiplexing) system, is a primary focus of this strategy. HITACHI TELECOM (USA), INC., which makes the AMN line at its Norcross, Georgia facility, announced two immediate enhancements to the AMN 6100 as well as a growth path over the next year-plus. One addition is transmux (transparent transponder/multiplexer) capability. This feature multiplexes OC-12 (622 megabits per second) and OC-48 (2.5 gigabits per second) circuits onto the OC-192 (10-Gbps) channels of the AMN 6100 for full utilization of the system's backbone transport bandwidth as well as savings in footprint and such other operating costs as power consumption. The other AMN 6100 upgrade available now is an optical add/drop multiplexer capability through which one-fourth of the system's channels can be added or dropped at an amplifier site. Upcoming enhancements include in-service growth to 64 OC- 192 channels (640 Gbps of capacity) or to 128 OC-192 channels (1.28 terabits per second of capacity).
Through a partnership with ARTISOFT, INC., a Cambridge, Massachusetts supplier of computer telephony and communications software, TOSHIBA CORP. is moving into the emerging world market for server-based PBXs (private branch exchanges) for small and midsize businesses. Such products allow for the integration of Internet technologies and give companies a common strategy for managing voice and data traffic. Under the three-year deal, which is being executed by the Telecommunication Systems Division of Irvine, California-based TOSHIBA AMERICA INFORMATION SYSTEMS, INC., the company will license Artisoft's TeleVantage PBX solution and customize it for incorporation with its Strata CS line of computer telephony systems and communications server products. TAIS and Artisoft will join forces on international marketing — including, perhaps as soon as next year, Japan — as well as on technical collaboration. As part of their agreement, TAIS made an equity investment of undisclosed size in Artisoft.
KYUSHU MATSUSHITA ELECTRIC CO., LTD. has joined such big names as CISCO SYSTEMS, INC. in investing in SHAREWAVE, INC. The El Dorado, California company is in the forefront of the drive to bring high-performance, multimedia-capable broadband wireless home networking to the mass market. Last spring, ShareWave teamed with Kyushu Matsushita Electric to accelerate the development of high- speed, low-cost home networking devices using its 11-Mbps wireless components and Whitecap network protocol (see Japan-U.S. Business Report No. 357, June 1999, p. 30).
KYOCERA WIRELESS CORP. is in operation, having completed the acquisition of substantially all of the assets of QUALCOMM INC.'s $1.4-billion-a-year CDMA (code-division multiple access) wireless handset business (see Japan-U.S. Business Report No. 364, January 2000, p. 10). San Diego, California- headquartered KWC is in charge of the design, engineering, manufacturing, marketing and customer service of existing Qualcomm digital cellular phones and new Kyocera wireless handsets. These products range from entry-level CDMA wireless phones to next-generation models with advanced PDA (personal digital assistant), Internet access and e-mail capabilities.
The first products previewed by KYOCERA WIRELESS CORP. are targeted at opposite ends of the market. Occupying the entry-level space are the QCP 2035, a trimode phone that operates on 1,900-MHz CDMA digital PCS (personal communications services) and 800-MHz CDMA digital and analog cellular networks, and the QCP 2008, an 800-MHz dual-mode CDMA digital and analog cellular handset. Both weigh just over four ounces and have changeable translucent faceplates. They feature talk times of up to 3.75 hours and standby times of up to 5.5 days in digital mode. At the other end of the market, KWC introduced the QCP 3035, a trimode CDMA phone with such features as a built-in speakerphone, voice- activated dialing, Web-browsing and e-mail capabilities, and rapid text-entry technology. All three products are expected to ship in the third quarter of 2000.
After ending U.S. production of analog wireless phones in March 1998 because of rising costs and weak sales, MATSUSHITA COMMUNICATION INDUSTRIAL CO., LTD. is set to return this year to the huge American cellular market. Actual reentry plans are still in flux, however. One possibility is to resume output at MATSUSHITA COMMUNICATION INDUSTRIAL CORP. OF U.S.A. in Peachtree City, Georgia, which primarily manufactures automotive audio products. Alternatively, handsets could be supplied from MCI's offshore plants. Whatever the source, the initial products will be digital phones that operate on the TDMA (time-division multiple access) network, the most prevalent digital wireless standard in the United States. For the last two years, MCI, which is a far bigger player in Japan's cellular market than it is overseas, has kept its finger on the pulse of the U.S. mobile phone market through MATSUSHITA MOBILE COMMUNICATION DEVELOPMENT CORP. U.S.A. in Suwanee, Georgia.
Digital wireless network technology might not be as advanced in the United States as it is in Japan, but the sheer size of the American market makes this country a magnet for Japanese suppliers. SHARP CORP., for example, has forged an alliance with LUCENT TECHNOLOGIES INC. to codevelop CDMA-format digital cellular handsets and wireless multimedia devices. The partnership will draw on Sharp's expertise in making cell phones compact and lightweight and Lucent's strength in building CDMA network infrastructure. The first Sharp-brand CDMA handsets should appear on the market in the spring of 2001. .....For its part, SHINTOM CO., LTD., which now sells roughly 1 million analog cell phones here annually through its Torrance, California subsidiary, plans a September release of digital handsets that conform to the GSM (global system for mobile communications) standard. This format is most prevalent in Europe, but it is starting to make inroads in the United States. Other Shintom products scheduled for introduction this year include a dual-mode TDMA digital/analog handset.
TAIYO YUDEN CO., LTD., a manufacturer of high-frequency modules for communications, computer and other applications, has tied up with a second American company in an effort to get a head start on products based on the next-generation Bluetooth short-range wireless communications standard. Its latest alliance is with SYBERSAY COMMUNICATIONS CORP., a Sunnyvale, California start-up that is developing what it calls wireless personal link interfaces between people and devices of all types. These will allow consumers to operate cell phones, PDAs, PCs and other products hands-free using proprietary voice-recognition software. The agreement includes a $1 million equity investment by Taiyo Yuden as well as the provision of development funds to SyberSay. The first product to emerge from the partnership will be the SyberPod miniature wireless transceiver. It should be available later this year. Taiyo Yuden also will introduce SyberSay products in Japan. Its other Bluetooth alliance is with SILICON WAVE, INC. (see Japan-U.S. Business Report No. 362, November 1999, p. 11).
Continuing to gain ground on MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. in the digital studioand field broadcasting equipment market, SONY CORP. has landed a $15.6 million or so contract from NATIONAL BROADCASTING CO. The order includes MPEG IMX videotape recorders, which can transfer data at a rate of 50 Mbps, digital switchers, digital multieffect systems and monitors. Sony also is supplying digital broadcasting equipment to CBS CORP. (see Japan-U.S. Business Report No. 363, December 1999, p. 13) and to CABLE NEWS NETWORK INC. (see Japan-U.S. Business Report No. 356, May 1999, pp. 9-10).
An exchange rate of ¥109=$1.00 was used in this report.
Determined to cut procurement costs by 20 percent to get its business back in the black, NISSAN MOTOR CO., LTD. became the first Japanese automotive manufacturer to agree to join the Internet marketplace for parts that GENERAL MOTORS CORP., FORD MOTOR CO. and DAIMLERCHRYSLER AG just agreed to form. RENAULT S.A., the controlling owner of Japan's number-two vehicle builder, also will participate in the unnamed on-line B2B exchange. The Detroit-spearheaded venture will replace separate sites that GM, Ford and DaimlerChrysler had planned to operate. The trio expects to channel some $240 billion in annual parts spending through the exchange, which will be powered by technology from ORACLE CORP. and COMMERCE ONE, INC. The addition of some of the business that their suppliers do as well as purchases by Nissan, Renault and other future partners could boost the potential trading volume by several multiples. In the future, GM's three Japanese affiliates — FUJI HEAVY INDUSTRIES, LTD., ISUZU MOTORS LTD. and SUZUKI MOTOR CORP. — are likely to participate, as is Ford's MAZDA MOTOR CORP. unit. Analysts expect the Japanese participants to switch only a portion of their procurement to the Internet, primarily basic materials and commodity parts.
Although it has expressed qualified interest in joining this exchange, TOYOTA MOTOR CORP.'s initial venture into the world of B2B e-commerce in the United States will take a different direction. Its Torrance, California sales subsidiary is teaming up with I2 TECHNOLOGIES, INC. to pursue the $100 billion aftermarket for parts in this country. ISTARXCHANGE, in which TOYOTA MOTOR SALES U.S.A., INC. will have a majority interest, will be open to suppliers of everything from mufflers and spark plugs to accessories as well as distributors, independent retailers, dealerships and installers. Whether buyers or sellers, users of iStarXchange should be able to lower their transaction costs. The on-line marketplace could be up and running as soon as this spring. Irving, Texas-based i2 Technologies will provide the software and host and manage the service. iStarXchange will be located in Torrance and eventually will be staffed by 100 people.
Next year, HINO MOTORS, LTD. will broaden the lineup of commercial trucks it sells in the United States by introducing the cab-over Dutro. The 1,564 trucks that its Orangeburg, New York distribution unit sold in 1999 all were in the Class 4 to Class 7 segments, which run in gross vehicle weight from 14,000 pounds to 33,000 pounds. The Dutro, designed for deliveries in crowded cities, falls at the bottom of this range. To support the launch, HINO DIESEL TRUCKS (U.S.A), INC. is trying to sign up new dealers. It currently has marketing tie-ups with some 100 stores.
HONDA MOTOR CO., LTD., the first Japanese vehicle maker to build its products in the United States, has achieved another distinction. Its Marysville, Ohio factory has turned out 5 million Accord sedans. Production of this model, which ranks every year among the top-selling cars, began in 1982.
Few of its rivals at home have enjoyed the U.S. production and sales successes of this pioneering company. Certainly not MITSUBISHI MOTORS CORP. Its Normal, Illinois assembly plant, which currently produces the Galant sedan, Eclipse sports coupe and Eclipse Spy-der convertible, never has reached capacity operation of 240,000 vehicles a year. Japan's fourth-largest automotive firm is out to change that, however. It has made a $1 billion-plus commitment to plan, design, engineer and manufacture key products in the United States under the heading of Project America. These vehicles will be built on a common platform, the PA Series, that can accommodate powerplants, suspension systems and drivetrains adaptable to the demands of U.S. buyers. The first Project America model will be the next generation of the now made-in-Japan Montero Sport sport-utility vehicle. It will be the product of MITSUBISHI RESEARCH AND DESIGN AMERICA, INC.'s design studio in Cypress, California and engineering unit in Ann Arbor, Michigan and will be built by MITSUBISHI MOTOR MANUFACTURING OF AMERICA, INC. starting in 2003. Through 2005, the next generation of the Galant sedan, Eclipse sports coupe and Eclipse Spyder convertible will be planned, designed and engineered by MRDA and assembled by MMMA.
At a cost of $20 million, TOYODA GOSEI CO., LTD. acquired the Fluid Systems business of EAGLE- PICHER INDUSTRIES, INC. With plants in Brighton, Michigan and in England, this unit manufactures custom thermoplastic tubing assemblies for automative fuel, emission, brake, clutch and suspension systems. The renamed TG FLUID SYSTEMS USA CORP. employs 69 people and has annual sales of roughly $5.2 million. It joins two other wholly owned Toyoda Gosei production companies here: TG KENTUCKY CORP. of Lebanon, Kentucky and Perryville, Missouri-based TG MISSOURI CORP., both of which make such plastic interior and exterior parts as steering wheels and side molding. Toyoda Gosei also has a half interest in CALIFORNIA AUTOMOTIVE SEALING INC. of Hayward, California, a supplier of weather strip and trim (see Japan-U.S. Business Report No. 359, August 1999, p. 12).
Through an investment of $6.4 million to $7.3 million spread over this year and next, F.C.C. CO., LTD. hopes to be able to boost output of automatic transmission clutches at its JAYTEC, INC. subsidiary by enough that it can end the $27.5 million or so worth of parts that it now has to ship yearly from Japan to meet the requirements of HONDA TRANSMISSION MANUFACTURING OF AMERICA, INC. Portland, Indiana-based Jaytec currently can make 16,000 AT clutches daily for the Accord and Civic sedan and coupe and the Odyssey minivan. Once the additional capacity is fully operational in 2003, it will be able to turn out 23,000 units a day. By then, the local content of the clutches is expected to hit 95 percent from 70 percent. Last year, F.C.C. invested $9.2 million in 11-year-old Jaytec to increase production of AT segmented clutch friction disks (see Japan-U.S. Business Report No. 360, September 1999, p. 10).
KOYO SEIKO CO., LTD. has finalized plans for delivering 460,000 of its innovative column-type electric power-steering units to GENERAL MOTORS CORP. starting in 2001 for a sport-utility model (110,000 units) and a new Saturn model (350,000 units). Initial shipments will come from Japan. However, once the Roanoke, Virginia factory of KOYO STEERING SYSTEMS OF USA, INC. is operational toward mid-2001 (see Japan-U.S. Business Report No. 355, April 1999, pp. 10-11), it will be responsible for fulfillment of the roughly $91.7 million contract. Koyo Seiko's electric power-steering system has attracted attention because it improves fuel efficiency compared with today's dominant hydraulic unit.
An additional order from sole customer NEW UNITED MOTOR MANUFACTURING INC. is behind a $3.2 million expansion at SEKISO INDUSTRIES AMERICA INC. in Tracy, California. Within this year, the NIHON SEKISO INDUSTRIES LTD. subsidiary will expand its plant and install four more plastic blow-molding systems to turn out what is called a porous duct for engines and a dashboard air-conditioning duct for the 370,000 or so Toyota Corolla and Chevrolet Prizm sedans and Toyota Tacoma pickup trucks assembled annually by Fremont, California-headquartered NUMMI. SIA currently supplies the plant, equally owned by TOYOTA MOTOR CORP. and GENERAL MOTORS CORP., with wheel insulators and heat-shrinkable tubing. With the new product lineup, employment at SIA should rise to 30 from seven at present.
The combined floor space at NORTH AMERICAN LIGHTING, INC.'s already large plants in Flora, Illinois and Salem, Illinois will be expanded by more than 20 percent at a cost of around $27.5 million. Majority owner KOITO MANUFACTURING CO., LTD. expects the additional space to be ready by early 2001. It will house new process equipment to make lighting products for upcoming models built by FORD MOTOR CO., HONDA MOTOR CO., LTD., TOYOTA MOTOR CORP. and other customers. At the same time, NAL, which Koito set up in 1983 along with another Japanese company and a German partner, will divide product responsibility more clearly between its two factories. The original Flora plant will specialize in headlights, while the Salem factory, operational since 1987, will make rear combination lamps.
Increasingly stiff competition from a former partner forced CENTRAL MOTOR WHEEL CO., LTD. to reorganize its U.S. production operations. It merged CENTRAL MANUFACTURING CO., a Paris, Kentucky producer of steel and aluminum wheels, and wholly owned CENTRAL LIGHT ALLOY CO., a maker of aluminum wheels located in the same town, into CENTRAL MOTOR WHEEL OF AMERICA INC. In business since 1988, CMC initially was owned by Central Motor Wheel (40 percent), TOYOTA TSUSHO CORP. (20 percent) and what now is HAYES LEMMERZ INTERNATIONAL INC. The big Northville, Michigan wheel manufacturer eventually sold its shares in CMC to Central Motor Wheel, freeing it to go head-to-head with that company. The new Central Motor Wheel of America expects to produce 550 million wheels this year, including 520 million steel products, and to generate revenues of $168.6 million. For 2003, it is projecting output of more than 580 million wheels.
OHI SEISAKUSHO CO., LTD., which is trying to lessen its dependence on business from majority shareholder NISSAN MOTOR CO., LTD., has in hand its first order from GENERAL MOTORS CORP. Other than saying that the contract involved trunk latches and that shipments would start in 2001, Ohi released no details about the order. The parts will be made by OHI AUTOMOTIVE OF AMERICA CORP., which has manufactured such products as door hinges, hood, door and trunk latches, and seat adjusters for the last decade in Frankfort, Kentucky and, more recently, in Winchester, Kentucky.
Wholly owned SYNTEC, INC. of High Point, North Carolina is the latest U.S. manufacturing company set up by big automotive seating supplier TACHI-S CO., LTD. The venture was launched to fill an order from THOMAS BUILT BUSES, INC., headquartered as well in High Point, for seats for 15,000 school buses starting in January 2001. Tachi-S will spend $15 million on the Syntec factory, which will be located adjacent to Thomas Built Buses' plant. That will allow the major bus manufacturer to drive the buses next door after assembly for seat installation and then bring them back to its plant. The Syntec contract reportedly is the first time that Thomas Built Buses, which has about 30 percent of the school-bus market but also produces other types of buses, has outsourced any of its work. Syntec will have a work force of 60 when full-scale operations begin next year. For the year through March 2003, the company is forecasting sales of $20 million. Long established in the United States, Tachi-S is a partner in three separate production ventures that deliver seating systems to vehicle manufacturers and Tier 1 parts suppliers.
The decision by major bearing manufacturer NSK LTD. to sell its seatbelt unit to Sweden's AUTOLIV INC., already the number two in this field worldwide, affects operations in North America with an annual turnover of $70 million as well as businesses in Japan and Thailand. NSK has a seatbelt technical center in Bloomfield Hills, Michigan and a factory in Tijuana, Mexico. Autoliv is scheduled to take over these activities April 1. NSK and Autoliv have had a decade-long relationship on seatbelts in North America. In 1990, they opened an equally owned venture in San Diego, California to backstop the Tijuana factory.
KAWASAKI HEAVY INDUSTRIES, LTD. is projecting a significant expansion in FY 2000 in the volume of parts for aircraft auxiliary power units that it ships to HONEYWELL INTERNATIONAL INC. Through a long- standing partnership with the former AlliedSignal Inc., which in December merged with Honeywell Inc. to form Honeywell International, KHI is in charge of such APU parts as first-stage turbine blades for auxiliary power units installed on the A320 family of aircraft built by AIRBUS INDUSTRIE S.A. and on BOEING CO.'s current-generation 737 twin-jet series. In the year through March 2001, KHI expects to deliver to Honeywell International APU parts for 470 planes versus 330 planes in FY 1998.
An exchange rate of ¥109=$1.00 was used in this report.
In a major boost for its aerospace business, MITSUBISHI HEAVY INDUSTRIES, LTD. is partnering with BOEING CO.'s Rocketdyne Propulsion & Power unit to design and develop a new liquid oxygen/liquid hydrogen second-stage engine for the next generation of expendable satellite launch vehicles. Their goal for the code-named MB-XX engine is to engineer a high-efficiency, affordable and low-risk propulsion system. The first MB-XX derivative, the MB-60, is an engine with 60,000 pounds of thrust that Boeing plans to use for its Delta IV booster beginning in 2004. MHI brings considerable expertise to the project since it was the prime contractor for Japan's H-II rocket, which used a cryogenic propulsion system to power both of its two stages, and it has the same position on the derivative H-IIA project. Japan's top aerospace company will be in charge of developing the MB-XX engine's combustion chamber and control devices. It expects this effort to cost around $45.9 million. For its part, Rocketdyne, which has supplied the rocket propulsion systems for virtually every major U.S. space program, will work on the MB-XX's turbo pumps, nozzle skirts and other components and will be the engine's integrator.
MITSUI COMTEK CORP. of Saratoga, California joined a number of venture-capital firms in making an investment described as major in COLLABRIA, INC. The Menlo Park, California start-up is the developer of the Print Commerce solution, an Internet-based set of work-flow tools that automate the process of buying, managing and producing printed materials. The investment is part of a deal reached by MITSUI & CO., LTD. to form a business and technology alliance with Collabria. Under it, the trader will market Print Commerce to the huge Japanese printing industry as well as provide system localization and technical support.
Fast-expanding INTERNET RESEARCH INITIATIVE, INC., which provides engineering and management advice to corporations, among other Internet-re-lated services, has a U.S. subsidiary. The main job of New York City-based IRI, INC. is to forge tie-ups with American start-ups in the Internet support field. Of particular interest are application service providers. IRI also will be on the lookout for investment opportunities.
Economic data-base compiler IBJ-NIKKO INFORMATION SYSTEMS, LTD. has tied up with FACTSET RESEARCH SYSTEMS, INC. The Greenwich, Connecticut company is a major supplier of on-line integrated financial and economic information to financial services providers around the world. Under the agreement, FactSet will have access to IBJ-Nikko's INDB, which provides 14,000 data series extending back to 1950 and updated daily relating to economic, industrial and financial developments in Japan. IBJ- Nikko hopes to make similar arrangements with other foreign firms that operate integrated, on-line information systems.
Through its primary U.S. subsidiary, ITOCHU CORP. made a $10 million investment in NEWTON SENIOR LIVING in the form of a convertible preferred equity interest. The Needham, Massachusetts company is one of New England's largest owners, developers and managers of housing for senior citizens. NSL will use the Itochu money for current project development and operating capital. The trading company, which provided financing for two of NSL's early assisted-living facilities, has the option to inject another $10 million into the company. That is likely to occur in the third quarter. NSL and its partner plan to explore the possibility of bringing the U.S. firm's senior-living concept to Japan.
An exchange rate of ¥109=$1.00 was used in this report.
A Houston company that operates a global Internet-based exchange for buying and selling commodity chemicals, plastics and fuel products in bulk established an office in Tokyo. Through a local presence, CHEMATCH.COM hopes to sign up more Japanese companies as members. At present, 125 or so firms worldwide participate in the CheMatch.com marketplace, which is open for trading 24 hours a day, seven days a week.
In exchange for $2 million in cash plus future milestone and royalty payments, QUESTCOR PHARMACEUTICALS, INC. gave DAINIPPON PHARMACEUTICAL CO., LTD. an exclusive worldwide license to use its ppGpp Degradase and Peptide Deformylase technology in the development and commercialization of drugs. In January 1998, the Japanese firm had partnered with one of two firms that merged late last year to form Questcor. Under that three-year agreement, the pair applied the ppGpp Degradase and Peptide Deformylase technology to the discovery and the development of antibacterial compounds. After two years, Dainippon Pharmaceutical wanted to become more involved in the work, but as part of the deal creating Questcor, it was decided that the Hayward, California company would change the thrust of its activities. Licensing the research technology to Dainippon Pharmaceutical resolved the conflicting goals of the partners.
INTERNATIONAL BUSINESS MACHINES CORP. gave major photoresist supplier JSR CORP. the right to commercialize its deep ultraviolet bilayer resist technology. The JSR product, known as EIRIS, short for enhanced integrated resist imaging system, should be available in sample quantities in May. It consists of a silicon-containing resist that imparts high etch resistance and a thick antireflective coating. In what surely is music to the ears of industry executives, the Japanese manufacturer promises that EIRIS will allow semiconductor makers to turn out the next generation of ever-smaller and more complex chip designs using their existing production equipment. The alternative is to buy expensive lithography equipment like high numerical-aperture steppers to produce devices with finer line geometries. Commercial production of EIRIS is expected to begin in 2002 at one of JSR's domestic plants and at the Sunnyvale, California factory operated by its U.S. subsidiary.
An exchange rate of ¥109=$1.00 was used in this report.
Industry sources report that within the next year or so, COMPAQ COMPUTER CORP.'s subsidiary will assemble locally all of its products targeted at the corporate market in Japan rather than import them from Singapore. Sales to business buyers represented roughly 70 percent of the 450,000 or so units that the company shipped in 1999. Local production on a build-to-order basis will start this summer with the Deskpro line of corporate desktop machines, followed late this year by the ProLiant/Prosignia series of servers and then the Armada family of corporate notebooks. This sourcing shift had been expected to take place soon after the October 1998 merger of Digital Equipment Corp.'s subsidiary into Compaq's since DEC had a recently renovated plant in suburban Tokyo. The switch did not occur at the time presumably because production in Japan is more expensive than in Singapore. However, Compaq now apparently has decided that the big cut in delivery times made possible through local BTO production is worth the higher costs, which, in any case, will be passed on to corporate buyers.
The only products that COMPAQ COMPUTER CORP. will continue to import are its home-oriented Presario desktop and notebook systems since buyers rarely want them customized. Starting this month, Presario PCs can be ordered from Compaq DirectPlus, the company's on-line store. Until now, these models have been available only at stores through an exclusive distribution deal with CANON SALES CO., INC. The addition of Presarios to Compaq DirectPlus means that all the company's servers and corporate and consumer desktop and notebook PCs can be bought through the Internet. This marketing channel generated about 5 percent of Compaq's 1999 volume. It is gunning to raise this figure to as much as 15 percent in 2000.
Add three more names to the already extensive list of firms that have decided that it is cost-effective over the long run to outsource responsibility for their computer systems to IBM JAPAN LTD. One of the latest converts is DAISHI BANK, LTD., a Niigata prefecture regional bank. Starting in April, IBM Japan through the local unit of its parent's IBM Global Services group will take over operation of the bank's IT systems under a 10-year deal worth about $270.2 million. Major candy and snack food maker MEIJI SEIKA KAISHA, LTD. also decided to hand over to IBM Japan management and maintenance of the computer system that it uses for production planning and accounting. The company figures that the five-year outsourcing agreement will save it as much as $917,400 annually. For its part, PIA CORP., a ticket distributor and publisher, contracted with IBM Japan to handle systems development and management from this spring. As part of the arrangement, the computer giant will integrate Pia's existing equipment using IBM hardware and software.
IBM JAPAN LTD. should get some help this summer in handling its bigger outsourcing business. Under a tentative agreement with MITSUBISHI CORP., the two will share responsibility for running the data center owned by the trader's IT COMMERCE CORP. subsidiary. This will enable IBM Japan to shift some of its existing accounts over to this facility, freeing resources at its own nearby data center to manage the IT requirements of new clients. The Mitsubishi-IBM Japan relationship also will include cooperation in the areas of sales, planning and systems development.
In a move designed to upgrade technical support for users of its Netfinity PC servers, IBM JAPAN LTD.'s Web site will be deployed to troubleshoot problems. On it, the company will post 6,000-plus pieces of information culled from a data base of responses to questions asked of its parent's worldwide customer service departments. In most cases, IBM Japan hopes, users of the system can get step-by-step instructions for resolving problems once a description of them is entered. Responses via e-mail also will be available. The company thinks that the new service will be more effective than support via a help desk because of the frequent difficulty of explaining in detail the technical problems that servers encounter.
Under their recently announced e-business/net-working collaboration (see Japan-U.S. Business Report No. 365, February 2000, p. 15), the subsidiaries of INTERNATIONAL BUSINESS MACHINES CORP. and CISCO SYSTEMS, INC. will offer services to small and midsize customers in addition to members of corporate Japan, their original focus. The menu is much the same for the two groups of companies, centering on systems construction and support. The main difference is on the hardware side. For small and midsize firms, IBM JAPAN LTD. and Cisco Systems are promoting the Netfinity PC server and the networking equipment leader's firewall-equipped desktop routers. For big firms, they are pairing IBM's S/390 mainframe-cum-Web-server with Cisco Systems' high-end networking equipment.
In a tie-up that should help DELL COMPUTER CORP.'s subsidiary extend its market reach from the office to the factory floor, it and YOKOGAWA ELECTRIC CORP. will offer systems integration services to manufacturers interested in improving efficiency by combining their production, information and management systems. Dell brings to this endeavor not only its lineup of PCs and servers but also its integration expertise. Industrial automation leader YEC, which has made expansion of IT services a prime business objective, affords access to a large customer base. To be supported by a dedicated team at each company, the partnership is scheduled to be launched this spring.
DELL COMPUTER CORP.'s marketing unit has a new way to reach Japan's vast number of small and midsize companies. It was named the exclusive computer supplier for NTT DATA OFFICE MART CORP.'s orderit membership office-supply site. When any of the 12,000 or so member firms click on the PC icon on the orderit home page, they will be linked to a special Dell site. Until now, equipment from a number of computer manufacturers was available on orderit, but NTT Data Office Mart decided to go with one maker to facilitate delivery and service.
Two of Japan's top PC distributors — CANON SALES CO., INC. and DAIWABO INFORMATION SYSTEM CO., LTD. — will market HEWLETT-PACK-ARD JAPAN LTD.'s all-in-one OmniBook XE2 (see Japan-U.S. Business Report No. 364, January 2000, p. 15) and its high-end OmniBook 4150 notebook computer. The company decided to abandon its direct sales approach for these two products in the hope of making headway in the corporate market. That, in turn, is related to its goal of ranking among the 10 largest notebook sellers by 2002. Despite handing over the two models, HP Japan will work closely with Canon Sales and Daiwabo Information System in devising marketing, sales and advertising strategies.
IBM JAPAN LTD. has released more details about its plans for the subsidiary of SEQUENT COMPUTER SYSTEMS, INC., now an INTERNATIONAL BUSINESS MACHINES CORP. company (see Japan-U.S. Business Report No. 364, January 2000, p. 14). This month, IBM Japan will form a Web server unit by combining its Unix server division with the local operations of Sequent, a leader in systems based on the NUMA (non-uniform memory access) architecture. It allows large numbers of processors (up to 64 in the case of the Beaverton, Oregon company's products) to operate as a single system while being relatively easy to program and manage. IBM Japan plans to market for e-business applications Unix servers that incorporate Sequent's technology. These machines also will be the platforms for the implementation of Project Monterey, an IBM-led initiative to develop a high-volume, enterprise-ready commercial Unix operating system that supports both the IBM and the Intel architectures.
In the meantime, IBM JAPAN LTD. added to its Unix-based RS/6000 family of 64-bit RISC (reduced instruction-set computing) workstations and servers the first models featuring the new POWER3-II processor with its heat-lowering, performance-improving copper interconnects. The entry-level RS/6000 44P Model 170 workstation, priced from just $25,600, uses the 400-MHz version of the chip. It comes with 256 MB of system memory expandable to 2 GB, 9.1 GB of storage capacity that can be boosted to 72.8 GB, plus two 64-bit PCI (peripheral component interconnect) slots and four 32-bit PCI slots. For more demanding CAD/CAM (computer-aid design and manufacturing) functions, IBM Japan has the RS/6000 44P Model 270 workstation, which can handle one to four 375-MHz POWER3-II processors. All four configurations can be equipped with anywhere from 256 MB of internal memory to 8 GB shared and a disk drive capacity of 9.1 GB to 54.6 GB. A pair of 64-bit PCI slots and three 32-bit PCI slots are standard. Pricing for this model starts at $32,000. The top-of-the-line RS/6000 SP server also is available with up to four 375-MHz POWER3-II processors for $107,300 and up.
Returning to the price-sensitive part of the Unix workstation market, HEWLETT-PACKARD CO. introduced worldwide the HP VISUALIZE B2000. Targeted at cost-conscious electronic design automation and mechanical design automation engineers and designers, the workstation features the new HP VISUALIZE fxe three-dimensional graphics subsystem. Its power comes from a 400-MHz version of HP's PA-8500 RISC processor. HEWLETT-PACKARD JAPAN LTD. priced the HP VISUALIZE B2000 at $11,700. As with similar products, it is supplying the system on an original equipment manufacturer basis to HITACHI, LTD. and OKI ELECTRIC INDUSTRY CO., LTD.
Strengthening its lineup in the expanding Windows/Intel workstation and server markets as well as in their Unix counterparts, IBM JAPAN LTD. rolled out new IntelliStation workstation and Netfinity 5000 server models. The high-end IntelliStation Z Pro now is available with a 733-MHz Pentium III Xeon processor for $5,500 or an 800-MHz version of this engine for $12,700. The former comes standard with 256 MB of PC 600 direct Rambus DRAM memory, a 9.1-GB hard drive spinning at 10,000 rpm and an ELSA GLoria II graphics accelerator, while the latter ships with 512 MB of PC 600 RDRAM, a 10,000-rpm 18.2-GB hard drive and Intense-3D Wildcat 4110 graphics. For technical users on a tighter budget, IBM Japan introduced new Pentium III-equipped IntelliStation M Pro products starting at $3,700. At the same time, the company made the Netfinity 5000 server family more powerful by adding models that run off the 650- MHz and the 700-MHz versions of the Pentium III processor. These Windows NT Server 4.0 products are priced at $4,500 and $5,000, respectively.
ISPs and data center operators trying to fit ever-increasing numbers of servers into their facilities are the target buyers for IBM JAPAN LTD.'s rack-optimized Netfinity 4000R server. Measuring just 1.75 inches thick, 42 of these units can be stacked in an industry-standard rack. One or two Pentium III processors running at either 650 MHz or 750 MHz power this model, which has 18.2 GB of disk storage. A Netfinity 4000R with a pair of 750-MHz Pentium IIIs starts at $9,100.
COMPAQ COMPUTER CORP. merged its two server brands, dropping the Prosignia label and keeping the ProLiant name. To mark this switch, it introduced three products in the new, expansion-oriented ProLiant ML line. The entry-level ProLiant ML350, the replacement for the ProLiant 800 and the Prosignia Server 740, is aimed at growing small and midsize businesses looking for a value-priced server. Starting at $3,700, it uses either a 600-MHz or a 733-MHz Pentium III. The ProLiant ML370, the next generation of the ProLiant 1600 and 1600R, is designed for remote and branch office requirements. It offers the choice of a 667-MHz or a 733-MHz Pentium III. For companies needing speed, extensive scalability and high- availability features, Compaq is marketing the ProLiant ML530 as the follow-on to the ProLiant 3000 and 3000R. This system can draw on the power of two 800-MHz Pentium IIIs.
Beefing up its presence in the departmental server market, DELL COMPUTER CORP.'s subsidiary introduced the new PowerEdge 4400. This system provides improved availability through redundant, hot- plug-gable components and support for RAID (redundant array of independent disks). On the performance and scalability sides, the PowerEdge 4400 supports up to two Pentium III Xeon processors operating at 600 MHz to 800 MHz with a 133-MHz front-side bus, 128 MB to 4 GB of 133-MHz SDRAM memory and 9 GB or 18 GB of high-performance storage. The base configuration of the PowerEdge 4400 lists for $4,600.
The answer from DELL COMPUTER CORP. to both the space constraints of ISPs and data center managers and their requirements for performance and uptime is the PowerEdge 2450. This rack- mountable, dual processor-capable server is 3.5 inches high. Twenty-one of them therefore can fit in a seven-foot rack. If each has the maximum 91 GB of internal storage, the user has as much as 2 terabytes of capacity available. Performance is provided via Pentium III processors operating at 600 MHz to 733 MHz, plus as much as 2 GB of system memory. PowerEdge 2450 pricing begins at $3,300.
According to calculations by HEWLETT-PACK-ARD JAPAN LTD., the combination of performance and reliability delivered by the new HP NetServer LH 3000/3000r will enable it to sell 25,000 of these departmental servers in a year. The system can be configured with one or two Pentium III processors running at 600 MHz all the way up to 933 MHz, each with a 133-MHz front-side bus. Performance is bolstered by 133-MHz SDRAM internal memory. To ensure availability, the $8,100 and up HP NetServer LH 3000/3000r comes with hot-swappable/hot-pluggable disk drives and other components.
The corporate desktop market in Japan is hot and, like their Japanese counterparts, American PC suppliers are rolling out new products one after the other to exploit this demand. A number of these models are the launch vehicles for the Windows 2000 Professional operating system. For instance, world industry leader COMPAQ COMPUTER CORP. has installed the new operating system in at least one model in its four Deskpro lines: the value-oriented Deskpro EP Series, the performance-geared Deskpro EN Series Desktop for connected offices, the Deskpro EN Series Small Form Factor and the Deskpro EN Series Minitower. At a minimum, these machines, which start as low as $2,000, come with a 600-MHz Pentium III processor, 128 MB of internal memory and 10 GB of disk capacity.
For IBM JAPAN LTD., the Windows 2000 Professional launch model is part of the company's mainstream PC 300GL series, which now can run off Pentium III processors up to 800 MHz with a 133-MHz front-side bus. The Windows 2000-ready PC 300GL Model 6564, a tower design, lists for $2,600.
In quick order, the subsidiary of direct marketer GATEWAY, INC. expanded its new Select family of performance-oriented yet value-priced desktop PCs upwards. At the heart of the line is the Athlon chip with Enhanced 3DNOW! technology from ADVANCED MICRO DEVICES, INC. (see Japan-U.S. Business Report No. 365, February 2000, p. 16). As its name suggests, the Select 850 is powered by a 850-MHz implementation of the processor. It comes with 128 MB of system memory, 20 GB of disk storage and a 19-inch monitor for just $1,900.
HEWLETT-PACKARD JAPAN LTD. is trying to capitalize on the strength of the corporate PC market by selling through its on-line Business Store nine low-price HP Vectra models. The entry-level product, the HP Vectra VLi7, costs as little as $730 without a monitor. That buys a machine with a 500-MHz Celeron processor, 64 MB of internal memory and an 8.4-GB hard drive. The line's four HP Vectra VLi8 models have the same memory and disk capacity but offer additional features, such as integrated LAN (local area network) capability, a 600E-MHz Pentium III processor and, in the high-end, roughly $1,400 model, Windows NT 4.0. Rounding out this series is the HP e-Vectra, the first products in HEWLETT-PACKARD CO.'s new family of e-PCs. These modular machines, which have a removable hard drive, power supply and chassis, are one-fifth the size of traditional desktop PCs. Ranging in price from $815 to almost $1,200 (without a monitor), the HP eVectra PCs offer a choice of a 500-MHz or a 533-MHz Celeron or a 600EB- MHz Pentium III and 64 MB or 128 MB of system memory; an 8.4-GB hard drive is standard. The high-end HP e-Vectra comes preloaded with Windows 2000.
The three-model Optiplex GC series is DELL COMPUTER CORP.'s latest entry in the space-saving corporate market. Designed for networked environments, these products have an ultrathin chassis that is claimed to be 38 percent thinner than today's slim chassis. Inside is either a Celeron processor running at up to 500 MHz or a Pentium III with speeds as fast as 800 MHz combined with an 810E chipset, plus SDRAM or RDRAM memory expandable up to 512 MB. An Optiplex GC model equipped with a 500-MHz Celeron costs just under $1,100.
DELL COMPUTER CORP. also hopes that a space-saving design and cut-rate pricing will help it make headway in the SOHO and home markets. Its subsidiary is offering the Japan-only Dimension J433c desktop machine with a 433-MHz Celeron processor for just $595 excluding a monitor and the similarly localized Inspiron C433ST notebook, which uses the mobile version of the same chip, for only $1,600.
Chief rival COMPAQ COMPUTER CORP. also is deploying the pricing weapon to build sales in the home market. Its stylish Presario 3500 Series of desktop PCs costs as little as $730 without a monitor for a system powered by a 466-MHz Celeron processor, although the line extends up the performance ladder to a machine with a 550-MHz Pentium III and a CD-RW drive. For the mobile computer user, Compaq rolled out the all-in-one Presario 1600 Series for people interested in performance, which is delivered via mobile Celeron or mobile Pentium III processors, a 14.1-inch TFT LCD display and a DVD-ROM drive. For budget- conscious buyers, it introduced the Presario 1200 Series, which uses a 475-MHz version of the AMD-K6- 2 engine and comes with a 13-inch TFT LCD display. All of the new Presario models feature Compaq's Internet-access button. It instantly links users to the home pages of 11 local content providers.
Demanding professionals can access the benefits of the Windows 2000 Professional operating system in the office or on the road if they have IBM JAPAN LTD.'s new ThinkPad 600X. This 5-pound notebook uses the latest mobile Pentium III processors with SpeedStep technology and provides 64 MB of SDRAM expandable to 576 MB, a 12-GB hard disk drive and a 13.3-inch TFT LCD display with XGA resolution. Pricing of the ThinkPad 600X starts at $3,900. The new Windows operating system also is preloaded with the ThinkPad 570E. This $3,400 and up portable capitalizes on a 500-MHz mobile Pentium III processor, 64 MB to 320 MB of SDRAM, 12 GB of storage and the same display as the ThinkPad 600E.
COMPAQ COMPUTER CORP. enhanced the performance of two members of its Armada line of commercial notebooks — the ultraportable Armada M300 and the all-in-one Armada E500. The former, which supports the Microsoft 2000 Professional operating system, now is powered by a 500-MHz mobile Pentium III processor and includes a 12-GB hard drive and a 11.3-inch XGA TFT display. The latter draws on the performance features of the 450-MHz implementation of the mobile Pentium III chip. Equipped with 64 MB of RAM, a 12-GB hard drive and a 14.1-inch TFT LCD, the Armada E500 goes for $2,500.
Under a multiyear OEM contract, NETWORK COMPUTING DEVICES, INC. is developing and manufacturing thin-client terminals for HITACHI, LTD. Targeted at the ASP market, the FLORANET 130 is based on the Mountain View, California company's ThinSTAR 400 Windows-based terminal. This product uses a 166-MHz Pentium MMX processor and provides 32 MB of internal memory expandable to 288 MB. It also includes a pair of serial ports, one parallel port, two USB ports and 16-bit audio input/output. A localized version of NCD's ThinPATH Management Service operating system ships with the FLORANET 130. Hitachi already is selling the thin client for Windows NT server environments, but it will make a major marketing push now that Windows 2000 has been launched in Japan. The Japanese manufacturer said that it chose NCD's product because of its small footprint, manageability features and interoperability with Hitachi servers.
While most PC manufacturers were tweaking their hardware or marketing strategies, an on-the-roll-in- Japan APPLE COMPUTER, INC. was unveiling in Tokyo new iBook, PowerBook and Power Mac G4 lines for the world market. The revamped iBook portable for the personal user has double the memory (64 MB) and twice the storage capacity (6 GB) of its predecessor, but the price is the same $1,800 for these blueberry and tangerine models with their 300-MHz PowerPC G3 processor. Apple also used the occasion to debut the $2,000 iBook Special Edition, which uses a 366-MHz processor and comes in a graphite-color enclosure. The new PowerBook portables for the business user incorporate faster PowerPC G3 processors. About $2,700 will buy a system with a 400-MHz chip, 64 MB of internal memory and a 6-GB hard drive. For roughly $1,000 more, professionals can get what Apple claims is the fastest portable ever. This PowerBook uses a 500-MHz PowerPC G3 processor. It also provides 128 MB of system memory and 12 GB of storage capacity. Both new PowerBook models feature as well up to 10 hours of battery life and two built-in FireWire (IEEE 1394) ports. For desktop customers, Apple beefed up the performance of the Power Mac G4 line with Velocity Engine-equipped PowerPC G4 processors running at 400 MHz, 450 MHz and 500 MHz. These machines range in price from $1,800 to $3,900. According to Apple's calculations, it had 7.8 percent of Japan's PC-like market in last year's fourth quarter, making it number four. The company attributed its gain mostly to the popularity of the iBook and the iMac home desktop computer.
In a deal that could extend its business from desktop products to the portable market, big magnetic recording head manufacturer READ-RITE CORP. has a contract with FUJITSU, LTD. to develop advanced GMR (giant magneto-resistive) recording heads for 2.5-inch disk drives used in laptop computers. The storage requirements of this market will showcase the Milpitas, California firm's breakthroughs in areal density by packing more data into a square inch of platter space. Read-Rite already has shipped samples of its GMR heads to Fujitsu, which is one of the world leaders in 2.5-inch drives for portables.
The first of TROIKA NETWORKS, INC.'s innovative Fibre Channel solutions for managing the burden that e-commerce and e-business put on the corporate data-storage infrastructure is available through NIS- SHO ELECTRONICS CORP. (see Japan-U.S. Business Report No. 362, November 1999, p. 18). The SAN2 Controller 2000 is a PCI-to-Fibre Channel adapter that enables network managers to support and administer storage area networks and/or what the Westlake Village, California supplier calls system area networks with a single device. Nissho Electronics priced the Troika Networks board at $5,000. It is projecting first-year sales of this and other products from the start-up at $917,400.
The seemingly insatiable demand for storage capacity in today's increasingly networked corporate world is creating a ready market in Japan for what are called network-attached storage devices. The latest company attempting to exploit this demand is disk-drive maker MAXTOR CORP. It named NISSHO ELECTRONICS CORP. and NEWTECH CO., LTD. to distribute its MaxAttach NAS server appliances. They plug directly into the network in less than 10 minutes, according to the Milpitas, California company, and can be easily managed, configured and administered via a Web browser. Equally important, Maxtor says, MaxAttach devices, which offer 18 GB to 72 GB of storage, maintain fast response times despite increases in traffic. Nissho Electronics priced the appliance at $1,700. It is forecasting yearly sales of 10,000 MaxAttach devices and accompanying ReflectIt automatic backup and instantaneous data-mirroring software.
PROCOM TECHNOLOGY INC., which bills itself as a pioneer in the development of NAS technology, also jumped into Japan's market for this appliance. The Santa Ana, California company tapped TECHNOGRAPHY INC., a Tokyo-based provider of storage solutions, to resell and support the full line of NetFORCE products. Among their touted benefits is built-in software support for kanji, which enables users to set up and manage the devices in Japanese. Others include NetFORCE's seamless integration into all major networking environments and fault tolerance.
Like several of its American PC rivals, GATEWAY, INC. has moved into the enterprise storage market. The first product offered by its subsidiary is the $3,500 DataStation 8-U2 device for use with the company's high-end ALR servers. The external system stores 288 GB of data. Three of them can be linked together for a theoretical capacity of 864 GB. The data transfer rate is a brisk 80 megabits per second. The DataStation 8-U2 also incorporates a number of high-availability features, such as dual swappable power supplies.
The marketing arm of IMATION CORP. — one of the developers of the SuperDisk, which holds 120 MB of data on a 3.5-inch diskette — released a USB-compatible version of its SuperDisk drive for machines running Windows 98 and Windows 2000 as well as recent versions of the Macintosh operating system. Like similar Imation products, the SDD-120USBSL-B/T can read conventional 3.5-inch floppies along with high-capacity SuperDisks and at much faster speeds than floppy drives. The blueberry- or tangerine-color drive lists for $265.
In a major endorsement of its flash-based local storage solutions for the Internet appliance market, M-SYS- TEMS FLASH DISK PIONEERS LTD.'s DiskOnChip is part of the INFOX terminal commercialized by TOSHIBA TEC CORP., the top Japanese supplier of point-of-sale systems to supermarkets and convenience stores. The INFOX terminal is an integrated e-commerce system designed to handle card- credit, debit-card, IC-card and other types of payments at retailers participating in NTT DATA CORP.'s INFOX-NET network service. Newark, California-based M-Systems' DiskOnChip serves as the INFOX terminal's Windows CE boot device and provides local storage of such files as systems applications, drivers and credit transaction data. It also stores the INFOX's built-in TCP/IP (transmission control protocol/Internet Protocol) networking feature used to connect with the NTT Data network.
Two U.S. companies that specialize in putting any type of digital content — graphics, photos, sound or video — on CDs or the like that are the size of business cards are stepping up efforts in Japan in support of this new marketing tool. The local office of SQUARECD INC., which first offered CD-ROM business cards and then this message-sending medium on recordable CDs, is taking orders for DVD-ROM business cards. The SquareDVD, expected to cost $7.35 each, has a 400-MB capacity. The orders are filled at SquareCD's Keizer, Oregon plant, which can turn out 500,000 DVD cards a month. For its part, IACCESS.COM is marketing through its subsidiary the CD-ROM iAccessCard. This spring, the Bluffdale, Utah company also will offer its product as a DVD-ROM. Both SquareCD and iAccess.com will create multimedia sales, training and other material for clients or use customers' presentations.
In its latest diversification, COMPAQ COMPUTER CORP.'s marketing arm introduced a hardware-based solution that addresses the system throughput and performance bottlenecks created as secure servers handle more and more transactions encrypted according to the SSL (secure socket layer) protocol to ensure privacy and security over the Internet. The Compaq AXL200 Accelerator PCI Card tackles this problem by offloading all the compute-intensive exponentiation processing required by the SSL protocol. That frees servers to run primary business applications, whether home banking, on-line stock trading or e- commerce purchases.
An exchange rate of ¥109=$1.00 was used in this report.
The only company authorized by the Ministry of Construction to use steel framing in commercial or residential construction is embarked on a major expansion effort. Los Angeles-headquartered AMERICAN SILVERWOOD, INC. has worked in Japan since 1995, but it has found the going slow despite the cost, strength and fire-protection advantages of steel framing over American-style wood framing and especially over traditional Japanese construction techniques. To promote the use of steel framing in home-building, American Silverwood's subsidiary is tying up with 13 companies around the country. These distributors will cultivate relationships with local architects and contractors and license the U.S. firm's construction technique to interested parties. The American Silverwood affiliate also is forming a business development unit to make further inroads in the commercial construction field. It already has contracts from SKYLARK CO., LTD., Japan's top family-style restaurant chain, and two convenience store operators to build steel- framed outlets for them. American Silverwood thinks that it could build as many as 150 commercial facilities this year.
One of the largest commercial property managers in the United States is moving into the Japanese market. New York City's CUSHMAN & WAKEFIELD, INC. expects to have a 15-person subsidiary operational by early summer. Initial plans call for the staff to advise clients on the efficient use of space. They also will suggest ways that clients can boost property values that took a beating in the 1990s from the collapse of the asset "bubble." Recommendations on real estate investments are on Cushman & Wakefield's Japan agenda as well.
KENNEDY-WILSON, INC., one of the most active foreign real estate investors in Japan, added two office buildings with a combined value of $36.7 million to its portfolio. One property is in Yokohama. Its 86,000 square feet of space are fully leased. The other, an office building in central Tokyo with 27,000 square feet of rentable space, is 89 percent leased. For the near term at least, Kennedy-Wilson plans to continue to purchase buildings with strong cash flows and to hold these properties for five years or so. Given its use of low-cost nonrecourse yen debt, the Los Angeles-headquartered international real estate services business calculates that it can earn approximately 20 percent a year on its equity investments in Japanese buildings.
An exchange rate of ¥109=$1.00 was used in this report.
The Japanese appliance market, especially the home end of the business, has been tough on American competitors, even those teaming with a local company. That track record has not deterred MAYTAG CORP. The number-three U.S. appliance manufacturer has forged a three-part alliance with SANYO ELECTRIC CO., LTD. One thrust is joint development of major home appliances and floor-care products for cooperative marketing in Japan and elsewhere in Asia. Laundry and floor-care products as well as new cooking technologies already are on their list, but the new partners expect their first project will involve work on a high-efficiency washing machine for home use. Another facet of the alliance is mutual product supply. Under this part of the agreement, Sanyo Electric initially will distribute Maytag-brand high- efficiency commercial laundry equipment in Japan. In addition, Maytag and Sanyo Electric, itself a big supplier of appliances, will explore opportunities for joint purchases of parts in order to reduce costs and enhance design efficiencies.
The world's first DVD-Audio disc is the result of a technical collaboration between SONIC SOLUTIONS and PIONEER CORP. The new format is said to deliver unprecedented sound resolution to the listener. It also allows audio programming to be accessed interactively and presented together with video material. To create the DVD-Audio disc, Pioneer made use of Sonic Solutions' software-based DVD-Audio production system, the only such product available. The Novato, California firm's Sonic DVD Creator AV includes SonicStudio HD, a system for high-density audio production, and DVD Producer for authoring DVD Audio titles.
A B2B on-line marketplace for buyers and sellers of electronic components in Japan and other Asian countries could be operational as soon as the third quarter of 2000. Behind the initiative are NEED2BUY.COM, INC., which has sponsored such an exchange for American companies since May 1999, and MITSUBISHI CORP., a participant in the first round of fund-raising for the Westlake Village, California venture (see Japan-U.S. Business Report No. 364, January 2000, p. 9). With Need2Buy.com putting up 60 percent of the capital, the two formed a company to develop a B2B e-commerce site that is based on the U.S. partner's Internet technology but is tailored to the needs of Asia's electronic components market. Under Need2Buy.com's current solution, OEM buyers of electronic parts post requests for price quotes. Distributors and manufacturers that have signed up with the site then make bids, which the company's expert system screens for compatibility with buyers' requirements.
As soon as this summer, HYPERCOM CORP., a Phoenix, Arizona-based supplier of electronic payment solutions, could launch in Japan a localized version of its Internet-enabled card-payment terminal for retail point-of-sale locations. This product will combine the firm's ePic Internet technology with its ICE family of interactive, touch-screen terminals. In the United States, Hypercom touts the revenue-enhancing services and the efficiency gains that Internet-enabled terminals offer merchants in addition to their traditional card-payment functions. Interestingly, the manufacturer's subsidiary is promoting another benefit of the equipment: prevention of credit-card fraud by retail employees. With the Hypercom Internet- enabled terminal, the image of the receipt for a transaction appears on the screen, and the customer signs it using an electronic pen.
Start-up EVERGREEN SOLAR, INC., a supplier of photovoltaic or solar electric panels that is on the verge of ramping up to full production, is moving into Japan, currently the world's largest market for solar electric panels. Its exclusive marketing partner for both residential and commercial applications is KAWASAKI HEAVY INDUSTRIES, LTD. Evergreen Solar's String Ribbon polycrystalline solar cells are notable for requiring only about half the amount of silicon that competitors, whether Japanese or American, use. That lowers the cost of the panels for either dispersed power applications or complete power systems. In conjunction with the distribution deal, KHI invested $5 million in the Waltham, Massachusetts company as part of a fourth round of private financing that raised $18.4 million.
An exchange rate of ¥109=$1.00 was used in this report.
The regulatory freedom that independent power producers soon will have to sell electricity directly to major customers as well as to wholesale it to electric utilities has the interest of another American company. INTERGEN, equally owned by SHELL GENERATING LTD. and engineering and construction giant BECHTEL CORP., is talking with MARUBENI CORP. about a tie-up to build and operate generating plants. Using Boston-based InterGen's cost-saving technology for building generation facilities and operating them, the prospective partners figure that they can undercut the prices charged by Japan's 10 regional electric utilities by anywhere from 20 percent to 30 percent. TEXACO INC. (see Japan-U.S. Business Report No. 360, September 1999, p. 17) and ENRON CORP. (see Japan-U.S. Business Report No. 365, February 2000, p. 6) are among the other U.S. firms that think that Japan's electricity market is ripe for competition from outsiders.
An exchange rate of ¥109=$1.00 was used in this report.
Every month, the managers of more U.S. venture capital funds decide that money can be made in Japan. Among the latest believers is SUN MICROSYSTEMS, INC. Its subsidiary will draw on the $200 million investment fund that the major computer supplier set up in October 1999 to invest in 20 or so Japanese start-ups by the end of 2000. The goal of the fund is to promote innovation by companies developing products, markets and services based on Sun's technology and platforms. These firms most likely will be Internet-related. Sun is interested only in minority investment opportunities in entrepreneurial ventures.
Another convert is ANDERSEN CONSULTING LLP. It is drawing on money from two sources. One is a roughly $917.4 million private equity fund for investors interested in early-stage Internet-related businesses. About 10 percent of the fund will be earmarked for Japanese ventures. Like other start-ups identified for financing, the recipients also will receive managerial and other advice from Andersen Consulting's Tokyo office. The big business consulting company also plans to extend $1.2 billion in financial assistance over three years to later-stage Internet firms around the world to help them expand their business or go public. Again, some 10 percent of the money will be invested in Japan. Andersen Consulting's aim here is to win new clients for its services.
GENERAL ELECTRIC CO. certainly does not need to be sold on the potential gains from investing in Japan since it already owns an array of domestic financial services providers through its GE CAPITAL CORP. Now, however, it is pursuing returns in a new area: Japanese Internet start-ups. The $50 million E- Fund has been established for this purpose. Managers are looking in particular for companies providing the infrastructure for on-line securities trading and e-commerce or other types of Internet systems. An additional target is companies that run computer systems for other businesses.
On the heels of this announcement, GE CAPITAL CORP. agreed with DAIWA SECURITIES SB CAPITAL MARKETS CO., LTD. and SUMITOMO CORP. to establish a private equity fund (see Japan-U.S. Business Report No. 363, December 1999, p. 20). The partners initially will capitalize it at $183.5 million, although they hope to raise an additional $733.9 million from institutional and other investors. Many of the details still need to be worked out, but the fund, which could be set up as soon as April, will invest mainly in unlisted companies and in operating divisions spun off from major companies.
Individual investors now have a free on-line source of timely information on initial public offerings of stock by Japanese companies. The service, called Tokyo IPO, is provided by BARGAIN AMERICA CORP. It covers IPOs on all of Japan's securities exchanges in both English and Japanese. Weekly commentaries on the local IPO market also are available at Tokyo IPO's Web site as well as by e-mail. San Jose, California- based Bargain America got its start in Japan by selling over the Internet brand-name American products at U.S. prices. That still is the firm's main business, but it also publishes 11 e-mail newsletters in Japanese on a variety of subjects.
The first on-line debt trading system in Japan could debut by December of this year. It will be backed by a joint venture between EREORG.COM, INC. and MI-TSUBISHI CORP. The ereorg.com system enables institutional investors to buy and sell debt in the secondary market in an anonymous and secure environment. Analysts long have argued that the absence of a robust secondary debt market in Japan is one reason that it is taking domestic banks and other financial institutions so long to dispose of their mountain of nonperforming loans. The New York City firm's system should accelerate this process by creating a more active and more liquid market. Transaction times and settlement costs also should be reduced through the use of standardized contracts and other documents. In connection with the formation of the joint venture, MC CAPITAL INC., the New York City merchant banking arm of Mitsubishi, invested an undisclosed amount in ereorg.com.
BANK OF NEW YORK CO. plans to start operating in June the first Internet-based foreign exchange trading system in Japan. iFX Manager, which already is available in the United States and the United Kingdom, handles all phases of the foreign exchange process for institutional investors. Clients can manage transactions in multiple currencies and also can hedge deals through currency futures. Bank of New York will set up a round-the-clock system linking its Tokyo branch, where local customers will place orders, to offices in New York and London. In time, other banks will be allowed to use iFX Manager.
In its latest move to gain clients for its on-line brokerage services (see Japan-U.S. Business Report No. 363, December 1999, p. 21), DLJDIRECT SFG SECURITIES INC. opened a customer service center in central Tokyo. It is the first Internet stock trader to have a brick-and-mortar presence. Customer service representatives will brief people about on-line trading, including how to operate a PC. Interested investors also will be able to open brokerage accounts. .....DLJDIRECT SFG SECURITIES INC. customers soon will have access to a new high-return/high-risk product from GOLDMAN, SACHS & CO. The investment vehicle, which represents the securitization of options on some 50 Japanese stocks, is the first of a number of products for individual investors that the big investment bank plans to offer through on- line brokerage companies.
Now entering its second year of operations, NIKKO SALOMON SMITH BARNEY LTD. is thinking expansion. The investment banking and securities trading venture between CITIGROUP INC. and NIKKO SECURITIES CO., LTD. (see Japan-U.S. Business Report No. 354, March 1999, p. 19) plans to add 100 or so people this year to its 1,200-employee payroll to strengthen its position in both investment banking and product development. The company is especially interested in hiring more analysts to broaden its coverage of publicly traded stocks.
All of the formalities have been completed for the first foreign takeover of a big-name Japanese bank. At the start of March, LONG-TERM CREDIT BANK OF JAPAN, LTD. will emerge from bankruptcy under the ownership of NEW LTCB PARTNERS C.V., an international consortium formed by RIPPLEWOOD HOLDINGS LLC (see Japan-U.S. Business Report No. 364, January 2000, p. 17). The investor group will pay $9.2 million to acquire about 2.4 billion existing LTCB common shares and will funnel another $1.1 billion into the bank's reserves through the purchase of 300 million new common shares. For its part, the government will inject $2.2 billion into LTCB on top of the $33 billion of taxpayers' money it already has spent to rid the investment bank's books of bad loans. The deal took longer to finalize than first anticipated because of disagreements between the buyers and the government over the handling of the presumably sound loans still on LTCB's books and over New LTCB Partners' treatment of existing borrowers. The consortium, which includes such financial-industry powerhouses as GE CAPITAL CORP., believes that the New LTCB, as the bank temporarily will be known, can achieve a net operating profit of $458.7 million within two years of its launch.
PRUDENTIAL INSURANCE CO. OF AMERICA has taken over the half interest of MITSUI TRUST & BANKING CO., LTD. in PRUDENTIAL-MITSUI TRUST INVESTMENTS CO., LTD. In operation since October 1998, the joint venture was formed to manage and sell investment trust products (Japanese-style mutual funds). Neither company was specific about why they had parted ways, saying only that the relationship had served the purposes of both. For Prudential, that meant getting started in Japan's relatively undeveloped investment trust market. As of yearend 1999, Prudential-Mitsui Trust Investments ranked 16th among 32 foreign-affiliated investment trust companies with $733.9 million in assets under management. It had launched eight new products and developed ties with a number of distributors. For Mitsui Trust, the joint venture came at a time when its finances were weak. They now have improved, and the bank is set to merge with CHUO TRUST & BANKING CO., LTD. Prudential executives say that the company will continue to expand its investment trust product line, including beginning several aggressive new funds in the near term, as well as its distribution system.
AMERICAN INTERNATIONAL GROUP, INC., the top U.S. writer of insurance policies for companies, will help YASUDA MUTUAL LIFE INSURANCE CO. prepare for the introduction of defined contribution pension plans in Japan, now set for the early part of 2001. These will be similar to America's 401(k) pension plans. Interestingly, Yasuda Mutual Life expects to get some experience under its belt in the 401(k)-type pension plan market by first selling pension fund products designed by an AIG subsidiary to Japanese businesses in Hong Kong. That part of the relationship will be activated in December of this year. Later on, AIG and Yasuda Life will extend their alliance to the Japanese market.
Also with an eye on the arrival of 401(k)-type defined contribution pension plans in Japan, Manhattan- based ALLIANCE CAPITAL MANAGEMENT L.P. merged its two domestic units to improve efficiency. Asset manager ALLIANCE CAPITAL INVESTMENT TRUST MANAGEMENT, INC. took over investment adviser ALLIANCE CAPITAL MANAGEMENT (JAPAN), INC. At the end of last December, the new ALLIANCE CAPITAL ASSET MANAGEMENT, INC. managed $3.4 billion worth of assets. Its portfolio had been roughly twice as large at its peak in July 1998, but with most of Alliance Capital's investments in foreign debt securities, the value of its holdings took a big hit from the problems of developing markets and the rising yen. Alliance Capital Asset Management plans to rebuild its asset total by launching investment trusts that invest in stocks, especially Japanese stocks.
With money continuing to roll into its equity investment trust products, FIDELITY INVESTMENTS JAPAN LTD. plans to beef up its research department so that it can track more publicly traded Japanese companies. The firm's 13 analysts now follow some 500 major companies, but six more analysts will be added by this spring to broaden coverage.
The first product for individual investors from JANUS CAPITAL CORP., one of the top U.S. mutual fund managers, is available in Japan. NOMURA SECURITIES CO., LTD. is selling the Janus Global Technology Fund, which invests in Internet, communications, software and other high technology companies. In a marketing twist, the big brokerage house is selling the fund in both dollar and yen denominations.
ASAHI NVEST INVESTMENT ADVISORY CO., LTD. has rolled out the first investment trust developed in- house since the investment management units of METROPOLITAN LIFE INSURANCE CO. and ASAHI MUTUAL LIFE INSURANCE CO. formed the firm last summer (see Japan-U.S. Business Report No. 358, July 1999, p. 19). The fund, which has a cap of $275.2 million, invests in public and corporate bonds from around the world. An affiliate of MetLife's NVEST COS., L.P. manages the money. Asahi Mutual Life and 12 brokerage houses are marketing the fund.
In a sign of the times, AIU INSURANCE CO. is offering a policy that protects companies against lawsuits involving the contents of their Web sites. The Home Page Plus policy obligates the nonlife insurance unit of AMERICAN INTERNATIONAL GROUP, INC. to pay damages and lawyers' fees if a policyholder loses a libel case.
The world's largest independent asset valuation consulting firm has decided that the time is right to expand operations in Japan in light of the increase in mergers and acquisitions, securitization of assets and other transactions requiring supportable valuations. AMERICAN APPRAISAL ASSOCIATES, INC. already has an office in Tokyo. However, it recently decided to partner with SUMITOMO MARINE & FIRE INSURANCE CO., LTD. and that company's SUMITOMO MARINE RESEARCH INSTITUTE, INC. consulting unit to broaden its market reach. SMRI will introduce its clients to American Appraisal's services, which span valuations of virtually any type of asset for almost any purpose. To date, valuation consulting in Japan has been monopolized by domestic brokerage houses and accounting firms.
An exchange rate of ¥109=$1.00 was used in this report.
As part of a worldwide restructuring of its procurement, manufacturing and distribution operations, H.J. HEINZ CO. will close its plant in Utsunomiya, Tochigi prefecture at the end of August. Opened in 1982, the factory has five production lines that can turn out about 130 tons of sauces and soups a day. However, high raw material prices in Japan and the cost of labor there make the facility uneconomical. Heinz will transfer the sauces and the soups made at Utsunomiya to a plant in New Zealand. Some of the 79 local workers will be offered jobs at Heinz's new technical service center; the rest will be dismissed. The big Pittsburgh food processor has not yet decided what to do with the plant site.
In an unusual diversification, GRADCO SYSTEMS, INC., a manufacturer of sorters, feeders and other peripherals for copiers, fax machines and printers, acquired from an ITOCHU CORP. affiliate exclusive rights to distribute for five years frozen dessert products made by DIPPIN DOTS INC. of Paducah, Kentucky. The new business is being run by a Tokyo subsidiary recently formed by the Irvine, California- based company. Local management personnel have a 10 percent stake in the venture, which took over distribution agreements with 32 dealers. Gradco Systems explained its move by noting that the switch to digital copying and printing has curtailed the market for its traditional products. Therefore, the company is trying to find new ways to apply its distribution skills in Japan.
One hundred and counting. That is the number of Starbucks outlets open in Japan. All of these stores are located in the metropolitan Tokyo area or in the Kansai region. The joint venture between STARBUCKS COFFEE CO. and retailer/restauranteur SAZABY INC. that runs the Seattle company's Japanese operations opened the first Starbucks in August 1996. This year, Starbucks plans to expand into the Tokai region and down to Kyushu.
RAINFOREST CAFE, INC., the developer and operator of combination restaurant/retail facilities featuring a tropical rain-forest theme, will locate its first unit in Japan at the Ikspiari complex scheduled to open in July at the new Tokyo Disney Resort. The Tokyo Disney Rainforest Cafe will be run under a franchise agreement among the Hopkins, Minnesota firm, MITSUBISHI CORP. and ORIENTAL LAND CO., LTD. The 350-seat restaurant, which will offer an American menu, and retail space will be spread over two levels totaling 17,200 square feet. The rain-forest environment will be created through the pairing of animation and special effects.
Hoping to reverse falling ice cream sales at its outlets, HAAGEN-DAZS CO. will close the poor performers among its 84 stores in Japan — about 20 percent of the total — and replace them with better-located shops modeled on the dessert cafe it opened at the start of 1999 in Tokyo's Shibuya district. Interestingly, the bulk of Haagen-Dazs' revenues, which were flat in 1999 at $306.4 million because of the lagging outlet sales, comes from grocery stores.
An exchange rate of ¥109=$1.00 was used in this report.
Deciding to cut its loses sooner rather than later, FOOT LOCKER INC., the world's top retailer of athletic shoes, is pulling out of the Japanese market. Its wholly owned subsidiary was formed in June 1997. That fall, the first Foot Locker store was opened in Funabashi, Chiba prefecture. Four other outlets subsequently were established in the metropolitan Tokyo and Osaka areas. All but the store in the Shibuya section of Tokyo already have been closed. That shop was to be shuttered at the end of February, with the liquidation of Foot Locker's subsidiary following shortly thereafter.
The first TOYS "R" US, INC. store has opened in close-in Tokyo. Located in the big Sunshine City shopping center/office complex in the Ikekuburo area of the city, the store has a floor space of 31,700 square feet. That rivals the size of the shopping center's large department store. After selecting suburban locations for its first 90 or so stores, Toys "R" Us plans to build more outlets in Tokyo proper as it expands its Japanese chain to 100 stores.
Preparations for the rollout of Mail Boxes Etc. stores, which provide a range of business services in addition to mail boxes and package delivery, finally are underway. A unit of convenience store operator FAMILYMART CO., LTD., which San Diego, California-based MAIL BOXES ETC. named as its master licensee in the summer of 1998, has begun recruiting franchise owners in 14 prefectures. They, in turn, will sign up individual store operators. Two experimental Mail Boxes Etc. stores have opened in Tokyo.
An exchange rate of ¥109=$1.00 was used in this report.
A second transpacific partnership has announced plans to develop an Internet-based steel marketplace specifically for the domestic steel industry. This group pairs E-STEEL CORP., which launched a B2B e- com-merce site for the global steel industry in September 1999, with MITSUBISHI CORP. and MITSUI & CO., LTD. The trio expects to form a joint venture in April, with the New York City partner having a 19.9 percent stake and each of the trading companies owning a 40.05 percent interest. Their Web site should be operational in July. e-STEEL will contribute to the venture its e-com-merce technology for buying and selling steel over the Internet. Currently, more than 1,200 companies from 65 countries participate in the e-STEEL Exchange. Given the pivotal role of trading companies in Japan's steel market, Mitsubishi and Mitsui hope to capitalize on their connections to sign up 1,500 initial members of the local exchange, centering on other traders, wholesalers and their agencies, processors and end users. Commodity products, including steel sheet, pipe and H-beams, will be the first types of steel available through the Web site. Trading volume, the marketplace's backers project, could reach 5.5 million tons annually within three years. METALSITE, L.P. also plans to bring the efficiencies and the resulting cost savings of on-line trading to Japan's steel industry in a tie-up with traders ITOCHU CORP., MARUBENI CORP. and SUMITOMO CORP. (see Japan-U.S. Business Report No. 365, February 2000, p. 20).
The world's top supplier of stainless steel scrap is moving into the Japanese market and bringing with it its technology for producing less-expensive blended or meltdown stainless steel scrap to replace the clippings and turnings from the production of stainless steel that historically have constituted scrap. ELG METALS, INC. will put up 40 percent of the capital for JS PROCESSING CO., LTD., which will open a plant in Osaka in May to supply meltdown scrap to the Hikari Works of NIPPON STEEL CORP. The Pittsburgh company's partners in the venture are MITSUBISHI CORP. and MITSUI & CO., LTD. (19 percent each), NIPPON STEEL TRADING CO., LTD. (12 percent) and FUJIMOTO METAL CO., LTD. and SANGYO SHINKO CO., LTD. (5 percent each). The latter two firms will operate the Osaka facility. The meltdown scrap produced by JS Processing basically will substitute for what Nippon Steel has been importing from an ELG plant in Houston since last year. However, the joint venture hopes to expand its business beyond this volume — approximately 40,000 tons a year — and to sign up other manufacturers of stainless steel. To do so, JS Processing will have to find a way to overcome the stubborn shortage of stainless steel scrap in Japan.
EDGE TECHNOLOGIES, INC. and its manufacturing unit, ETREMA PRODUCTS, INC., have tied up with MORITEX CORP. on the marketing of and new uses for the Ames, Iowa company's so-called giant magnetostriction alloy. ETREMA's TERFENOL-D is a specially formulated iron-alloy smart material that changes shape in the presence of a magnetic field. That property makes TERFENOL-D suitable for such current applications as sonic and vibration sources, active noise and vibration control systems, and ultrasonic devices. As part of the deal, Tokyo-based Moritex, a manufacturer of fiber optics and machine vision systems, invested $1 million-plus in Edge for a roughly 3 percent stake in the privately owned company.
An exchange rate of ¥109=$1.00 was used in this report.
In a deal that remedies a major international weakness of its THERMO KING CORP. subsidiary, INGERSOLL-RAND CO. acquired a 70 percent interest in ZEXEL COLD SYSTEMS K.K. from a restructuring ZEXEL CORP. Terms of the deal were not disclosed. Minneapolis-based Thermo King is the world leader in refrigeration units for trucks and trailers. It also makes these units for rail cars and ocean- going containers and makes air-conditioning units for buses, trains and urban mass transit. This description applies almost exactly to Zexel Cold Systems' business, although its strength in refrigeration units for trucks and trailers is in lower GVW vehicles while Thermo King's is in larger vehicles. The American company will use the Tokyo joint venture's distribution channels to expand its market reach in Japan, where the demand for climate-controlled vehicles is rising because of the growth in shipments of perishable foods. Zexel Cold Systems also should give Thermo King better access to other Asian markets.
FLOW INTERNATIONAL CORP. has added to its primary business of manufacturing ultrahigh-pressure water-jet cutting and cleaning systems what it calls fresher-under-pressure equipment for food treatment. This system employs ultrahigh or hydrostatic pressure to address food-safety concerns involving products with an extended shelf life. It is suitable for both liquid and solid prepackaged foods (batch-mode processing) and integrated treatment and packaging of pumpable products (in-line processing). The subsidiary of Kent, Washington-based Flow International has priced the fresher-under-pressure system at $1.3 million. It hopes to sell two or three units a year to Japanese food processors.
SHIN CATERPILLAR MITSUBISHI LTD. is targeting first-year sales of 150 units for its redesigned WS510 small wheel loader. Equipped with a 1.18-cubic-yard bucket, the new model has a hydraulic transmission to improve operability and the largest engine in its class. The WS510 lists for $77,100, including an air- conditioned cab. .....Hoping to turn overseas sales of used construction equipment into more of a money- maker, SHIN CATERPILLAR MITSUBISHI LTD. contracted with CATERPILLAR REDISTRIBUTION SERVICES INC. to handle all of its exports. The Nashville, Tennessee unit of CATERPILLAR INC. could take as many as 200 hydraulic excavators and other pieces of equipment in FY 2000, primarily for resale through Caterpillar's distributors elsewhere in Asia. If this goal is hit, the Japanese joint venture's used equipment sales should total about $22.9 million, a gain of 50 percent or so from the estimated figure for FY 1999.
A ready market exists in Japan for clean, reliable and efficient on-site power sources. That at least is one reading of the ability of CAPSTONE TURBINE CORP. to quickly sign up distributors for its 30-kilowatt Capstone MicroTurbine. In the latest deal (see Japan-U.S. Business Report No. 363, December 1999, p. 24), MEIDENSHA CORP. and SUMITOMO CORP. have teamed up to market the Woodland Hills, California manufacturer's microturbine products and to package them into combined heat and power systems. The trader will import the Capstone MicroTurbine and build a nationwide maintenance network.
Meidensha, a maker of heavy electrical equipment, will develop stationary applications for the microturbine and provide systems integration and after-sale service for its customers, which include some of Japan's biggest electric utilities. So sold are Sumitomo and Meidensha on Capstone Turbine's technology that they made a joint equity investment in the privately owned company.
NORTHWEST POWER SYSTEMS is exploring the residential market in Japan for fuel-cell systems in cooperation with trader TOKYO BOEKI LTD. and CORONA CORP., a major maker of home heating and cooling units. Two NPS prototype residential fuel-cell systems will be field-tested until the end of 2000 in a fully functional, 1,500-square-foot house built by Niigata prefecture-based Corona. The trial will determine what changes need to be made to the system to make it locally marketable. The NPS test units will generate approximately 2.5 kw of electricity. Through their heat exchangers, each system will produce another 2.5 kw that can be used for water and space heating. Bend, Oregon-based NPS, a subsidiary of IDACORP INC., says that its fuel-cell systems are powerful enough to meet the base load requirements of the typical Japanese home if batteries are used to cover peak load periods. For Tokyo Boeki, its work with NPS complements its role as the sole distributor of HONEYWELL INTERNATIONAL INC.'s microturbine power generators.
An exchange rate of ¥109=$1.00 was used in this report.
The list of Japanese firms licensing from FLASHPOINT TECHNOLOGY, INC. the standardized Digita software platform for intelligent digital imaging appliances continues to grow. ASAHI OPTICAL CO., LTD., the maker of the Pentax brand of cameras, recently joined KONICA CORP., MINOLTA CO., LTD. and SEIKO EPSON CORP. It will incorporate the technology in its next-generation products for enthusiasts as well as for mobile professionals and other business users. The beauty of FlashPoint's Digita software platform is that it allows users not only to capture and view images easily but also to add text annotations, store and catalog them, and implement new imaging applications that run directly in the camera. .....Meanwhile, San Jose, California-based FLASHPOINT TECHNOLOGY, INC. announced that SEIKO EPSON CORP. is using Digita in a new line of digital photo printers. The software platform enables the ultra-megapixel EPSON PT-110 to edit, filter, template and output high-quality images from any type of digital camera without connecting the printer to a PC. The PT-110 is available now in Japan at a price of $640.
EASTMAN KODAK CO.'s subsidiary has broadened its line of film products. It is marketing under the Japan-only Gold MAX brand name Kodak's maximum versatility color film operating at speeds of 400 and 800. New as well is the Advantix 400 color film for any type of APS camera.
An exchange rate of ¥109=$1.00 was used in this report.
A surface profiler developed by KLA-TENCOR CORP. for analyzing the surface topography of substrates measuring up to 920mm x 920mm will be manufactured and marketed exclusively by TOHO TECHNICAL CORP. The San Jose, California company will provide the software for the system, which can handle all types of state-of-the-art R&D and production flat-panel displays and their color filters, glass substrates and other components. The Toho FP-20 profiler also can accommodate large printed circuit boards. Aichi prefecture-based Toho Technical hopes to sell more than 20 profilers in the initial year of marketing in Japan, South Korea and Taiwan as well as in the United States. It priced the least expensive of the three available models at $275,200.
TEKELEC of Calabasas, California has delivered its velOSity diagnostic system to NEC CORP. for testing wideband-CDMA or third-generation mobile communications equipment for deployment in Japan. The big communications equipment maker is using the solution to perform functional and capacity testing of ATM (asynchronous transfer mode) protocols and interfaces. The Tekelec product is designed to handle the follow-on generation of wireless networking known as UMTS (universal mobile telecommunications systems). This standard will unite the currently different standards of the United States, Europe and Japan for digital cellular phones.
The subsidiary of AGILENT TECHNOLOGIES, INC. is marketing the Telegra line of test and analysis systems developed by HEWLETT-PACKARD CO. for testing fax systems across conventional and IP- based networks. Two of the products address end-to-end testing of IP fax systems, VoIP gateways, fax servers, fax machines, fax modem devices and traditional and IP-based fax networks. The Agilent Telegra D, priced at $11,900, is a notebook-sized system that can be carried into the field for mobile applications, while the $24,800 Agilent Telegra M is a rack-mounted system designed for test laboratories and network and service operational testing. The third product, the Agilent Telegra VQT, provides a detailed analysis of voice clarity and delay as part of an end-to-end voice testing regime. According to Agilent, the Telegra VQT, which lists for $38,900, is the only such product that offers two different but complementary ways of measuring voice quality.
The transition from film-based imaging in medical institutions to digital diagnostics has created a storage constraint at these facilities. The subsidiary of SILICON GRAPHICS, INC. and regional carrier NIPPON TELEGRAPH AND TELEPHONE WEST CORP. have developed a solution for this problem. Under their Medical Web initiative, the partners will take over from hospitals and the like the job of storing large- capacity data files. The service will network smaller SGI servers installed at medical institutions, such as the SGI Origin 200 machine, with powerful SGI Origin 2000-class systems located at a NTT West support center via high-speed leased lines. Digital images initially stored on-site will be automatically transferred to the support center every few months for archiving.
A DNA (deoxyribonucleic acid) sequencing aid commercialized by COMMONWEALTH BIOTECHNOLOGIES, INC. will be available on a nonexclusive basis through COSMOBIO CO., LTD. and KN INTERNATIONAL, LLC, both of Tokyo. The Richmond, Virginia firm's AccuTrac is used to clearly mark DNA sequencing data to eliminate errors in the sequencing process that otherwise would require costly and time-consuming manual verification of the test data. CosmoBio, a distributor of chemical and biological reagents for life sciences research, will market AccuTrac to its clients, while KN International will work directly with genome centers and drug companies doing genome-related research.
MYRIAD GENETICS, INC. gave FALCO BIOSYSTEMS LTD. exclusive rights to use its diagnostic techniques to provide genetic testing services — a major step toward more personalized medicine for patients. The BRACAnalysis genetic test for breast and ovarian cancer and the CardiaRisk genetic test for hypertension and cardiovascular disease will be the first products introduced by the Kyoto laboratory testing company. For the time being, the results will be analyzed at Myriad's Salt Lake City, Utah research center, but in FY 2002, Falco Biosystems expects to take over this work. The fast-expanding Japanese company (see Japan-U.S. Business Report No. 365, February 2000, p. 20) projects that the new business will generate revenues of $458,700 the first year. Falco Biosystems paid Myriad $3 million upfront for its renewable six-year license. The biopharmaceutical firm also is entitled to royalties on sales of its products. The line of Myriad genetic testing products can be expanded at Falco Biosystems' option.
Three of Japan's major clinical laboratories — including the largest, SRL, INC., and the number two, BML, INC. — will install TRIPATH IMAGING, INC.'s AutoPap Primary Screening System. This computerized system is designed to improve the detection of cervical cancer at the earliest stage. It employs the Burlington, North Carolina manufacturer's technology to distinguish between normal Pap smears and those that have the highest likelihood of abnormality. NIKON CORP. represents TriPath.
The Ministry of Health and Welfare approved R2 TECHNOLOGY, INC.'s ImageChecker for use in breast cancer screening. The first computer-aided detection system for mammography cleared for marketing in Japan, the system utilizes the Los Altos, California developer's signal-processing neural network technology to help minimize the possibility of false negative readings by radiologists. MARUBENI CORP. will distribute the film-based version of ImageChecker (see Japan-U.S. Business Report No. 357, June 1999, p. 9).
VIDAMED, INC. — the developer of the TUNA (transurethral needle ablation) System for the treatment of benign prostatic hyperplasia, better known as enlarged prostate condition — has changed distributors. MC MEDICAL, INC., a MITSUBISHI CORP. subsidiary, replaced CENTURY MEDICAL INC. as the exclusive representative of the Fremont, California company. MC Medical initially will handle the minimally invasive ProVu disposable catheter and the 7600 VTS generator. In connection with this deal, Mitsubishi made an equity investment described as modest in VidaMed.
The Hydro Med Sciences drug delivery division of GP STRATEGIES CORP. made MITSUBISHI CORP. its exclusive Japanese licensing representative. The Cranbury, New Jersey company's lead drug delivery technology is the Hydron Implant. This polymer-based device, which is implanted subcutaneously and is retrievable, can deliver a wide range of drugs at controlled, constant release rates for a year or even more. It currently is in Phase III clinical testing in the United States for the continuous delivery of a synthetic hormone to patients with prostate cancer. The trading company hopes to make drug delivery systems a key part of its medical operations.
Marketing of CLOSURE MEDICAL CORP.'s DERMABOND Topical Skin Adhesive could start as soon as the spring now that MHW has cleared for sale this replacement for sutures and staples for closing certain lacerations and incisions. ETHICON, INC., a JOHNSON & JOHNSON subsidiary and the world leader in suture sales, is in charge of marketing the product, which is based on the Raleigh, North Carolina manufacturer's proprietary cyanoacrylate technology.
With the expected April 1 launch of the government's home health-care program, the subsidiary of medical equipment supplier MALLINCKRODT, INC. sees considerable opportunity to expand sales of its portable home oxygen treatment equipment. Respirators, tanks and related products contributed just $6 million toward the St. Louis firm's Japanese revenues of $128.4 million in the year through June 1999. If all goes according to plan, however, these products could generate sales of $91.7 million annually in five years. Mallinckrodt currently sells nine products for home medical use, but it will add 14 American-made portable home oxygen treatment products to its lineup. The company also plans over the coming five years to boost its marketing staff to 500 people from 200 now, with most of the new employees assigned to home health-care products.
What manufacturer MILESTONE SCIENTIFIC, INC. claims is a virtually painless system for administering local anesthetic in connection with dental procedures has been cleared for sale. The Wand is a computer- controlled injection system with a single-use dispos-able handpiece. The Livingston, New Jersey firm's exclusive distributor, YOSHIDA DENTAL MANUFACTURING CO., LTD., already has ordered 1,000 system kits. One of Japan's largest dental equipment wholesalers and distributors, Yoshida Dental is responsible for ensuring that dentists are properly trained in the use of The Wand.
The types of laser vision correction procedures that can be performed using VISX, INC.'s refractive laser technology have increased. MHW gave the marketing go-ahead to the Santa Clara, California firm's VISX STAR S2 Smoothscan excimer laser system for the treatment of myopia, or nearsightedness, with astigmatism. More than half of Japan's population is estimated to have this problem. In May 1998, the ministry approved the use of VISX's excimer laser system for the treatment of corneal scars and dystrophies of the eye. The company's subsidiary, established in late 1997, is in charge of training doctors in laser vision correction as well as marketing and servicing the equipment.
An exchange rate of ¥109=$1.00 was used in this report.
Having already assigned the IBM JAPAN LTD. facility in Fujisawa, Kanagawa prefecture a greater role in the development and production of the company's hard disk drives, especially the Travelstar line of 2.5- inch drives for notebook computers, INTERNATIONAL BUSINESS MACHINES CORP. is taking the next logical step. It will fund the construction of a pilot wafer-fabrication plant at IBM Japan's Nasu, Shiga prefecture complex for the manufacture of ASIC chips for 2.5-inch drives. These parts will feature a line geometry of 0.25 micron. Apparently, not all the project details have been finalized, such as the timing and the cost, although the investment is likely to fall within the range of $36.7 million to $45.9 million. The latest Travelstar drive holds an awesome 25.3 GB of data (see Japan-U.S. Business Report No. 360, September 1999, p. 16).
TEXAS INSTRUMENTS INC., which has tied its future in the semiconductor business to DSPs, especially for cell phones, previewed a new generation of record-breaking DSP cores. Its TMS320C64x DSP core for broadband communications infrastructure applications, including 3G wireless base stations and digital subscriber line equipment, features a clock speed of up to 1.1 gigahertz and performs nearly 9,000 million instructions per second. According to TI's calculations, this tops by 10 times the performance of the TMS320C62x, the current industry leader, in key applications. TI also announced the TMS320C55x DSP core, which, it says, extends the battery life of cell phones four times com-pared with the TMS320C54x now found in 70 percent of the world's cell phones. It does that by slashing power consumption to six times less than the already power-efficient C54x. Both DSP cores are software-compatible with previous generations of TI parts, thereby reducing development times for product manufacturers.
Right before this announcement, TEXAS INSTRUMENTS INC. indicated that as part of its plan to invest more money in its DSP business in fiscal 2000, DSP production capacity would be increased at its subsidiary's Miho, Ibaraki prefecture wafer fab. Although other details are sketchy, the expansion will require an outlay of anywhere from $367 million to $458.7 million.
In its second recent tie-up with a first-tier Japanese semiconductor manufacturer, TENSILICA INC. — a provider of application-specific processor cores and software development tools for high-volume embedded systems — licensed its Xtensa processor technology to NEC CORP. That company will use the Santa Clara, California firm's processor generator to develop embedded processors for a variety of advanced but otherwise unspecified communications products. What sold NEC on the Xtensa processor technology was the flexibility it offered to add instructions and functional units without an extensive knowledge of the processor's microarchitecture. FUJITSU, LTD. also has licensed Tensilica's know-how (see Japan-U.S. Business Report No. 363, December 1999, p. 27).
A number of big makers of computer printers in Japan have designed into their products controllers from PEERLESS SYSTEMS CORP. Now, the El Segundo, California supplier of software-based embedded imaging and networking systems for digital document products has decided to make its ASIC chips broadly available there. It enlisted MARUBUN CORP. to sell a pair of Quickprint graphics coprocessors, the QP1910 and the QP1940, to manufacturers of high-speed monochrome products and production-class color printers and digital copiers. The distributor also will provide several value-added services to customers, including just-in-time delivery and ordering and shipping management.
In a move that certainly was unusual if not unprecedented, LIGHTSURF TECHNOLOGIES, INC. established an office in Tokyo the same month that it was founded. The virtually simultaneous launches are understandable since the Santa Cruz, California business provides wireless Internet digital photography technology, infrastructure and intellectual property and Japan is on the cutting edge of Internet-enabled cell phone technology. LightSurf's actual business involves integrated wireless digital photography chipsets and system software. It also licenses to development partners its ePhoto wireless digital photography architecture and eCommerce infrastructure.
With contracts in hand from most of the big names in Japan's consumer electronics industry (see Japan- U.S. Business Report No. 365, February 2000, p. 23) and digital satellite broadcasting services scheduled to start in December 2000, TERALOGIC, INC., a developer of ICs and reference designs for advanced TVs, set-top boxes and PC-TV convergence products, has decided that the time is right to initiate a major marketing push. The Mountain View, California firm's subsidiary and distributor MARUBUN CORP. will focus on three products: the TL850, a single-chip, all-format video/graphics processor for digital TV sets; the TL750, a single-chip graphics processor for the new category of products called personal video recorders as well as DVD players, digital set-top boxes and Internet TV sets; and the Janus IC, a single-chip, all-format digital TV decoder designed for the PC platform. Teralogic believes that this effort can raise sales to $9.2 million in fiscal 2000 and to double or even triple that total the following year.
At the end of 1998, COMIT SYSTEMS, INC., a provider of turnkey contract engineering services for electronic product development, opened a design center in Japan. To reach a broader audience, the Santa Clara, California company now has teamed up with APOLLO GIKEN CORP. The Yokohama-based supplier of printed circuit board design and manufacturing services will market Comit's services in the areas of ASIC design and verification, FPGA (field-programmable gate array) design and embedded systems design to its own customers, which include members of the Matsushita Group and SONY CORP. The alliance also gives Comit access to Apollo Giken's PCB design and manufacturing capabilities, thereby enabling it to offer more services to its American and European customers.
By yearend, industry sources report, AGILENT TECHNOLOGIES, INC., a major maker of automatic test equipment, among other products, will begin to assemble testers for system-on-a-chip products at its factory in the Hachioji section of Tokyo. The company reportedly has earmarked $4.6 million to install a produc-tion line capable of turning out 20 units a month, primarily to test system chips for communications equipment and digital home appliances. Agilent, which is particularly strong in test systems for mixed- signal chips, will be going up against Boston's TERADYNE, INC., the world ATE leader for SOC parts, and number-two and Japan market leader ADVANTEST CORP.
In April 1998, fellow ATE manufacturers LTX CORP. and ANDO ELECTRIC CO., LTD. forged a wide- ranging alliance that included codeveloping versions of the Westwood, Massachusetts company's Fusion SOC test platform for marketing in Japan. Ando Electric has released the first two products to emerge from this relationship. The AL7275, which tests at 125 MHz, and the 150-MHz AL7292 draw on the broad, integrated capabilities of the Fusion system to test high-speed digital, DSP and other devices with the same degree of expertise as mixed-signal devices and vice versa. Ando Electric believes that it can sell 40 units of the two models in 2000 for revenues of $45.9 million.
An exchange rate of ¥109=$1.00 was used in this report.
In a much anticipated move, a Japanese version of EBAY INC.'s person-to-person trading community has gone live. With more than 800 merchandise categories, visitors have access to a broad range of goods offered by sellers in Japan and priced in yen. Customers also can view merchandise listed around the world, with pricing either in yen or in dollars. eBay charges the equivalent of 20 cents to $2.20 to put something up for sale and a transaction fee of 1.25 percent to 5 percent of the item's price. To kick-start its Japanese auction site, eBay tied up with NEC CORP., the operator of one of Japan's top ISPs, BIGLOBE. The electronics giant took a 30 percent stake in EBAY JAPAN K.K. and agreed to promote the site through both off-line and on-line marketing. .....Simultaneously, EBAY INC. opened a merchant-to-person auction Web site for local users. Supershops allows individuals to bid on a wide range of goods offered by such vendors as MITSUI REAL ESTATE SALES CO., LTD., a broker of single-family homes and condominiums, used vehicle auctioneer AUCNET INC. and others.
Playing to the Japanese penchant for being part of a group, ECIRCLES, INC. has teamed with the subsidiary of ADOBE SYSTEMS, INC. to launch a fully localized version of its virtual community and affinity group portal. Besides on-line gaming, executives of the San Mateo, California firm expect the sharing of digital images to be a major draw of eCircles.com. Adobe's ActiveShare software makes it easy for users to post, share and print images from the Internet. Forthcoming communications applications include discussion groups, chat rooms and group calendars. A localized e-mail service also will be available.
Also with an eye on the Japanese shutterbug audience, Seattle's PICTUREIQ CORP. (formerly Digital Intelligence, Inc.) will integrate its photographic posting and editing technology into the virtual community portal run by JSIDE.COM, INC., a subsidiary of HIKARI TSUSHIN, INC. Based on imaging and video technologies licensed from ADOBE SYSTEMS, INC., PictureIQ is a device-independent imaging architecture that allows Web masters and makers of consumer electronics products to embed flexible, powerful and easy-to-use digital photography capabilities into their products. The PictureIQ technology is expected to be deployed sometime in the second quarter. It will be the first localized Web implementation of that expertise. Thus, Jside.com believes, it will draw even more people to its rapidly growing visitor and cell phone-based communities.
Japanese demanding professional images soon will have a new option. REALTIMEIMAGE, INC. is making its RenderView suite of on-line, collaborative tools available through an exclusive three-year master distribution agreement with MARUBENI CORP. and a subdistributor pact with DIT. CO., LTD. The San Mateo, California firm's technology makes it possible to view very large image and graphic files via the Internet in real time. Marubeni will localized RenderView, while Dit. will be responsible for managing all software-related installation and administrative operations. The pair will pitch RenderView to printing firms, pre-press shops, advertising agencies and graphics arts professionals.
Local audiophiles no doubt will applaud the forthcoming creation of an equally owned venture by LISTEN.COM, INC. and TRANS COSMOS INC. The San Francisco developer of a comprehensive digital music directory and one of Japan's leading Internet venture-capital companies will launch LISTEN.COM JAPAN, INC. later this year. It will offer a simple way to find, discover and legally download music by more than 50,000 artists via links to 400 Web sites. In connection with the announcement of this deal, Trans Cosmos' Bellevue, Washington subsidiary made an undisclosed equity investment in Listen.com, which previously received funding from all five of the world's major music labels.
HEWLETT-PACKARD JAPAN LTD. has jumped into the burgeoning market for on-line education, offering two software packages. The first creates a virtual classroom where instructors and students can interact in real time. The second is a nonsynchronous system for students preferring self-paced on-line courses. HP Japan is targeting training companies and conference management firms with an annual revenue goal of $1.8 million. Tuition for the real-time package starts at about $40 per hour per person, while a nonsynchronous course for 100 students over a three-month period costs $13,300.
With GPS (global positioning system) navigation aids an option on more vehicles sold in Japan and built-in mobile cellular communications systems being touted as the next "must-have" accessory, @ROAD INC. has teamed with HITACHI SOFTWARE ENGINEERING CO., LTD. to introduce its patented Web-enabled location technology. The Fremont, California firm's software integrates GPS, wireless data networks and Internet access to accurately locate vehicles and provide them with position-dependent information in real time. Obvious potential customers that Hitachi Software Engineering will cultivate include trucking companies and firms with employees in the field.
Already famed for the quality of personalized attention they deliver, Japanese services firms now will find it easier to take advantage of Internet technologies to boost their efficiency. The RTS Service Suite from RTS SOFTWARE INC. has been available since the spring of 1998 but only in English. However, the modules recently were completely localized and put on the market by OMRON ALPHATEC CO., LTD., one of the Waltham, Massachusetts firm's distributors. They handle automated service contract processing (RTS Service Contract), delivery of services (RTS Workforce Management), spare parts inventory and logistics control (RTS Service Supply Chain) and repair procedures (RTS Depot Repair). In addition, the RTS Service Suite has a business intelligence module and remote access tools that enable users to plan, analyze, implement and manage complex, distributed services operations.
With digital rights management of the software and other products distributed via the Internet becoming a growing concern, MICROSOFT CORP. has teamed with FUJITSU, LTD. and FUJITSU SUPPORT AND SERVICE INC. to offer on-line software license management solutions. Clients can use the solution's secure tools to deliver software via the Internet and also to track its usage and spread. Major software users will benefit by cutting software licensing costs, while software developers will guard against piracy. The three partners hope to sign up 1,000 customers for their services and to generate $91.7 million in revenues over the next three years.
SMARTAGE.COM CORP., a specialist in B2B e-commerce services for small companies, and SOFTBANK COMMERCE CORP., a wholly owned SOFTBANK CORP. unit, formed a joint venture to launch what the San Francisco-based partner says is the first comprehensive Web site for small business owners in Japan. SMARTAGE JAPAN CORP., in which SmartAge.com has a 44.4 percent stake, plans to go live with its Web site in June, helping small businesses to expand their operations and make money on-line by enabling them to create cutting-edge Web pages for marketing, on-line sales and other Internet functions. The Japanese Web presence will be SmartAge.com's first international effort. SOFTBANK CAPITAL PARTNERS LP is an investor in the U.S. company (see Japan-U.S. Business Report No. 362, November 1999, p. 11). For Softbank Commerce, the venture with SmartAge.com complements an agreement with VERTICALNET, INC. to set up a company to provide B2B e-commerce services for big companies (see Japan-U.S. Business Report No. 365, February 2000, p. 24).
OTSUKA SHOKAI CO., LTD. is marketing a members-only Internet portal featuring e-commerce and CALS (continuous acquisition and life-cycle support) services for the Japanese construction industry. Based on software and know-how from AUTODESK, INC. and MICROSOFT CORP., the portal is intended to help small firms in the field participate in e-com-merce and CALS work for larger companies. With training and consulting for members provided by the two American firms, Otsuka Shokai hopes to sign up 50,000 firms within three years.
Reasoning that every company uses office supplies, MICROSOFT CORP.'s local arm and FUJI XEROX CO., LTD. have codeveloped the B2B virtual Office Supply Marketplace. Utilizing Microsoft's proposed BizTalk version of the eXtensible Markup Language, Fuji Xerox built the B2B exchange using Windows NT, SQL Server and other Microsoft products. The partners hope within a year to have 100 firms buying and selling supplies via the exchange, generating sales of $185.3 million annually.
Going after the whole B2B market, ORACLE CORP.'s subsidiary is offering to build on-line exchanges to meet any customer need. This includes industry-specific B2B virtual marketplaces, such as the auto- xchange site its parent built for FORD MOTOR CO. and its suppliers, as well as horizontal exchanges that are open to any company and even regional-specific exchanges. Oracle also will try to recruit Japanese companies to participate in worldwide exchanges. It hopes to have the first B2B exchange on-line by midyear.
In part to defend its claim to operate the world's largest B2B trading community, COMMERCE ONE, INC. opened a Tokyo subsidiary. The office's mandate not only is to cement and enhance the Walnut Creek, California firm's ties with its existing partners and customers in Japan but also to persuade other companies there and elsewhere in Asia of the benefits of Commerce One's approach to B2B global e- commerce. Consisting of many open e-marketplaces, the Commerce One Global Trading Web enables buyers, suppliers and services providers regardless of industry or geographic location to reach a worldwide market at any time.
STERLING COMMERCE, INC. licensed its technology to NTT WORLDWIDE TELECOMMUNICATIONS CORP., the operator of the Arcstar global communications network, and KAWASAKI STEEL SYS-TEMS R&D CORP., a provider of systems and network integration services, as a prelude to a partnership effort to win a share of the growing market for e-business services outsourcing and consulting in Japan and other Asian countries. Drawing on the Columbus, Ohio firm's E-Business Center — a business process integration suite that allows companies to connect, collaborate, transact business and streamline relationships on-line — NTT Worldwide and Kawasaki Steel Systems will offer a variety of e-business software and service solutions. Kawasaki Steel Systems has distributed Sterling Commerce's GENTRAN family of e-business process integration solutions for the last three years.
With Japanese consumers gradually becoming more confident about shopping on-line, ELGRANDE.- COM INC. has decided to move into the market. It has a letter of intent to acquire Tokyo-based MDH CONSULTANTS INC. for $200,000 in cash and Elgrande.-com common stock. Once the deal is completed, the outfit will be rechristened SHOPENGINE (ASIA) CORP. It will take charge of developing a Japanese version of ShopEngine and entering other Asian markets. ShopEngine, Elgrande.com's flagship product, provides the tools for vendors to maintain a product and price data base on-line in real time from which a virtual store can be built. It also handles the fulfillment of orders and payment processes.
STYLECLICK.COM, INC. has brought its comprehensive e-commerce and on-line shopping enhancement know-how to local users through an alliance with ISP STYLECLICK-JP, INC. The Culver City, California firm provides more than just a virtual store for brand-name, stylish fashions and accessories, however. It also helps manufacturers and retailers promote and distribute their products on-line. In exchange for assisting Styleclick-JP to build and manage the localized Styleclick.com site, which was scheduled to launch in March, the U.S. firm will receive up-front fees of approximately $1.4 million. It also has rights to a share of the revenues generated by the new Web site.
Also going after the e-commerce solutions market is MAGIC SOFTWARE ENTERPRISES INC. Even though the Irvine, California firm's year-old-or-so subsidiary already has seven sales offices, it lined up five firms to market, sell and support the Magic eMerchant package. The five, which also agreed to use the solution as a basis for all future e-business programs they implement, are: AGREX INC., an affiliate of FUJITSU, LTD., NAV ASSIST CORP., SUMISHO 4S CORP. and TOSHIBA ENGINEERING CORP. In addition, PRICEWATERHOUSECOOPERS CONSULTANTS CO. was engaged to provide its consulting and integration know-how. Magic Software hopes that its strong position in the Japanese market for application development tools and its established base of 18,000 corporate customers will give it a head start in the e-commerce solutions race.
To help e-commerce sites provide a better virtual shopping experience, INFORMIX CORP.'s local unit has released a Japanese version of Informix i.Sell. The solution integrates the Menlo Park, California firm's powerful data base and application server technology with an e-commerce suite, tools, enterprise consulting and global services. The package allows Web sites to generate individualized pages and responses to visitors based on their customer profile and other data.
Convenient billing for on-line transactions clearly is a key to winning the loyalty of Japanese Web surfers. With that in mind, CARDSERVICE INTERNATIONAL, INC., which describes itself as the largest privately owned credit-card processor in the industry, became the dominant shareholder in e-commerce provider ZEUS CORP. in order to begin offering on-line account settlement services to local credit-card issuers and merchants. The Woburn, Massachusetts firm's $183,500 investment will allow Zeus to target small and midsize retailers with an e-commerce presence in its initial marketing campaign. Cardservice International also is using its link with Zeus to introduce two of its secure but user-friendly payment engines to on-line merchants in Japan: LinkPoint HTML and the high-end LinkPoint API, which allows participants to add secure sockets layer encryption capabilities to their products, services or custom storefronts.
In a similar vein, the joint venture that Reston, Virginia-based CYBERCASH, INC. formed in the summer of 1997 with SOFTBANK FINANCE CORP. and other investors has accepted a $2.5 million investment from SOFTBANK CORP. to boost its on-line credit-card settlement services for Internet malls and e-commerce sites. Cybercash currently has a 30 percent-plus interest in its self-named affiliate. The Softbank Group's share now is 49 percent versus 39.4 percent beforehand.
The advanced e-mail messaging solution and services offered by COMMTOUCH SOFTWARE LTD. have been chosen by TOSHIBA CORP. for its new Biz-Offi portal. The Santa Clara, California company's outsourced e-mail services will complement BizOffi's menu of business-oriented information. Commtouch first began providing Japanese-based outsourced e-mail services in 1997. Today, it claims nearly 1 million end users.
CYPOST CORP. has completed its purchase of PLAYA CORP., the developer of the popular Yabumi instant messaging and e-greeting card service (see Japan-U.S. Business Report No. 362, November 1999, p. 27). The $3 million acquisition will give the Dover, Delaware developer of secure e- communications tools for use on the Internet and private networks an immediate market presence of 85,000 instant messaging users, 700,000 e-greeting card hits a month and 64,000 registered users of Yabumi's free e-mail service. By yearend, CyPost believes, the number of instant messaging users could reach 150,000.
Aiming at ISPs and operators of large intranets and extranets, FOURELLE SYSTEMS, INC. of Santa Clara, California released its bandwidth-optimization solution through KANEMATSU ELECTRONICS LTD. Venturi 1.5 improves bandwidth usage and availability by compressing text-based transactions up to 85 percent and graphics transmissions as much as 60 percent. In addition, Venturi's Intelligent Flow Control adjusts the randomness of packet flow on the Internet to reduce packet loss and redundant packet transmissions.
With e-commerce booming and the need for security growing in tandem, Tokyo-headquartered CADIX INC. cloned its San Jose, California subsidiary, CYBER SIGN, INC. (see Japan-U.S. Business Report No. 364, January 2000, p. 9), in Japan. CADIX owns 55 percent of the new firm. Its partners, each of which holds more than 10 percent of the venture, are: FUJITSU, LTD., MA-TSUSHITA COMMUNICATION INDUSTRIAL CO., LTD., the venture capital arm of NIKKO SECURITIES CO., LTD. and SOFTBANK CORP. Cyber SIGN's electronic signature technology uses the biometric data on the dynamics of a person's signature — speed, style, pressure and timing — to verify their identity during the act of signing. Its software is smart enough to track the natural changes of a signature over time as well as to allow for slight variations in a handwritten signature. The system is paperless and conducted in real time via the Web, allowing users to authorize and sign electronic documents and transactions from any Internet access point.
NETWORK ICE CORP. has released a localized version of its BlackICE Defender firewall through distributor TOYO CORP. (see Japan-U.S. Business Report No. 358, July 1999, p. 29). With its "no configuration" installation, BlackICE Defender is targeted at Windows 95/98/NT users with "always-on" DSL or cable-mo-dem connections to the Internet. The San Mateo, California firm's system tracks traffic, detects intrusions and blocks them without slowing other transmissions by using a minimum of system resources and memory.
Meanwhile, Portland, Oregon-based WEBTRENDS CORP. released its Firewall Suite 3.0 through SOFTBOAT INC. The package monitors the performance of a wide range of firewalls, gathering data on incoming and outgoing traffic, employee Web usage, bandwidth utilization by user or destination, protocol distribution and several other metrics that can help administrators analyze their security precautions and maximize the use of Internet resources.
Jumping into an extremely competitive market, ODS NETWORKS, INC. picked FORVAL CREATIVE, INC. to market and support its INTRUSION.COM, INC. subsidiary's portfolio of security software and hardware products. Designed to complement CHECK POINT SOFTWARE TECHNOLOGIES LTD.'s products, the Richardson, Texas firm's SecureCom security appliances, Kane Secure Enterprise (formerly CMDS) intrusion detection and analysis suite and Kane Security assessment and monitoring package provide enterprises with a comprehensive, in-depth defense against hackers.
By integrating packages from three U.S. firms, Tokyo-based ASGENT, INC. hopes to offer a similar multilayered approach to network defense for Unix-based systems. WEBTRENDS CORP.'s Firewall Suite 3.0 provides the front line of defense by monitoring and assessing firewall activity. Next, COMPUTER ASSOCIATES INTERNATIONAL, INC.'s AutoSecure Access Control for Unix authenticates users when they initially request access to a server. The final layer of protection is FRESHWATER SOFTWARE, INC.'s SiteScope, which monitors server and transaction activity behind the firewall. Asgent offers several combinations of hardware and consulting services for prices ranging from $4,800 to $8,200. It has set a sales goal of 500 integrated packages a year.
NETWORK ASSOCIATES, INC. named SUMITOMO CORP. as a primary distributor of its security software products. The trader joins ASSIST CO., LTD. and SOFTBANK CORP. in that position. Sumitomo has formed a 15-person team, including engineers, to build a security systems integration business around NAI's products. The group, which is expected to double in size by yearend, has the capabilities to assess a client's security measures, analyze their performance and design enhancements and improvements. Sumitomo hopes these activities will ring up $22.9 million worth of NAI software sales in 2000. After three years, it projects, software sales and integration services will generate revenues of $91.7 million annually. In conjunction with the new distribution arrangements, Sumitomo and Softbank each acquired a 1 percent stake in NAI's subsidiary, while Assist invested the equivalent of a 0.25 percent interest.
Signaling an increased commitment to the Japanese market, TRIPWIRE, INC. opened a Tokyo office to sell its intrusion detection and monitoring tools (see Japan-U.S. Business Report No. 362, November 1999, pp. 28-29) directly to customers. The Portland, Oregon firm's office will be staffed by 10 employees by the end of this year. They will work with Tripwire's existing roster of distributors, including a KYOCERA CORP. affiliate, MATSUSHITA INTER-TECHNO CO., LTD. and TOSHIBA INFORMATION SYSTEMS CORP. Tripwire, which launched English-language versions of its products in Japan in April 1999, expects its direct-sales efforts to produce revenues of $4.6 million in the first year. That projection presumably reflects the near-term introduction of a localized version of a server-installed program that detects tampering of Web sites.
Several Japanese PC retailers planned to begin selling the localized version of MICROSOFT CORP.'s latest operating system, Windows 2000, at midnight of its international debut day in anticipation of strong consumer demand. Even though experts say that business users will benefit the most from the all-new operating system given its links to Windows NT 4.0, retailers think that individuals will be interested because the package incorporates functions from Windows 98. An upgrade from that operating system has a street price of $155.
APPLE COMPUTER, INC. continues to lay the foundation for the debut of its new-from-the-ground-up Mac OS X operating system. With the Japanese market accounting for a significant share of global Apple sales and local Mac users some of the company's most loyal customers, Apple's subsidiary announced that the new OS will include the highest quality Japanese fonts and an expanded font set when it begins shipping. The fonts — 17,000 characters in each of six typefaces — will be licensed from DAINIPPON SCREEN MANUFACTURING CO., LTD. They are based on the Japanese firm's highly regarded Hiragino professional publishing font. Mac OS X will be preloaded as the standard operating system on all Macintosh computers beginning in 2001.
Aiming to push the open-source Linux operating system out of its current niche applications, the subsidiary of TURBOLINUX, INC. introduced a localized version of its San Francisco parent's clustering extensions for Linux. TurboCluster Server 4.0J is the first Linux implementation that allows users to link together multiple processors as a single node, improving the OS's suitability for mission-critical systems and such high-volume applications as e-commerce. License prices range from $1,200 for a two-server node to $2,300 for an unlimited number of servers. Those charges are less than a tenth of the price of comparable Unix clustering software, TurboLinux officials say.
Crosstown compatriot LINUXCARE, INC. established a subsidiary in Tokyo to meet the rising demand for Linux consulting and support. Besides providing localized versions of Linuxcare's four strategic business lines — professional services (consulting, integration, migration and customization), 24x7 technical support, Linuxcare University and Linuxcare Labs (vendor-neu-tral certification and benchmarking) — to Japanese customers, the new unit will be in charge of coordinating Linuxcare's entire Asian Pacific operations.
COMPAQ COMPUTER CORP.'s marketing arm introduced a compiler for the company's Alpha family of 64-bit RISC processors optimized for the Linux OS. The compiler currently is available for two languages: Compaq Fortran for Linux Alpha v.1 ($625) and Compaq C for Linux Alpha v.6.2 ($75). Its release should help firms migrate from legacy systems to the new Linux/Alpha environment. The sales subsidiary of Farmington Hills, Michigan-based COMPUWARE CORP. is trying to latch on to the popularity of ORACLE CORP. software for e-commerce applications by releasing a version of its debugger for PL/SQL source code. XPEDITER/SQL 3.1J offers improved handling of software "stalls" when waiting for locked objects, better step-through debugging features and greater support for global variables.
UNISYS CORP.'s subsidiary is marketing its own unique component model-based integrated development environment for Unix and Windows NT systems. Lucina (pronounced Loo-kee-na) cuts project times by encouraging the reuse of components as well as by allowing parallel creation and optimization of software modules. The Unisys unit, which will provide consulting and support for the new IDE, hopes to get 60 companies to try it over the next three years. A basic license for Lucina starts at $13,800.
UNISCAPE, INC. of Redwood Shores, California has licensed its Web-based multilingual software localization management platform to COMPUTER INSTITUTE OF JAPAN, LTD. CIJ will deploy this solution with its internal localization staff and will use it to manage via the Web Japanization projects handled by its Santa Clara, California subsidiary. The contract represents Uniscape's first foray into the Asian market, but executives see a growing demand in the region for the company's on-line multilingual management technologies because of the explosion of Internet and e-com-merce activity.
Also acutely aware of the Internet boom, IBM JAPAN LTD. has begun offering 24-hour technical support to e-commerce clients as well as to those in the emerging application service provider field. The round- the-clock service comes at the bargain price of $735 a month for existing IBM Japan customers.
One of the world leaders in information technology, San Diego, California's SCIENCE APPLICATIONS INTERNATIONAL CORP., has agreed to team with MARUBENI CORP. to offer IT consulting services throughout the Asian Pacific region. Their comprehensive menu will include e-commerce applications, Web security and computer system development and integration. The partners could establish a joint venture in Japan as early as April to implement their collaboration. Given SAIC's international standing and the explosion of interest throughout Asia in IT, Marubeni believes that this business could be producing annual revenues of $917.4 million within five years.
With the Internet and e-commerce exponentially expanding the boundaries of a company's computing environment, the need to keep track of every user, hardware resource and data store becomes both more important and more difficult. NOVELL, INC. and marketing partner NETSERVE INC. have teamed up to help customers handle this task. They are using the latest versions of the Provo, Utah company's Novell Directory Service. NDS eDirectory is tuned for e-commerce applications, while NDS eDirectory Corporate Edition can handle the needs of big multinationals. In both cases, the software makes administering and monitoring large, dynamic, heterogeneous computing environments a manageable task. The packages also allow applications and processes to share data and resources.
Piggybacking on the release of the Windows 2000 operating system, VERITAS SOFTWARE CORP.'s affiliate is offering an updated version of its popular network backup utility, VERITAS Backup Exec. Version 8.0 reads and writes directly to the MICROSOFT CORP. backup utility. It can share devices among Windows and Novell NetWare networks and back up and recovers Microsoft Exchange installations. A basic license has an introductory price of $990, while an advanced license starts at $1,500-plus.
A new utility that allows NetWare users to print documents on remote printers via the Internet is available from NOVELL, INC.'s subsidiary. NetWare Enterprise Print Services simplifies network printer management and is platform and protocol agnostic. The solu-tion does depend, however, on printer manufacturers building a new standard gateway to the Internet into their machines. To date, HEWLETT- PACKARD CO., LEXMARK INTERNATIONAL, INC., TEKTRONIX, INC. and XEROX CORP. plus SEIKO EPSON CORP. have done that.
NCR JAPAN, LTD. is lending its expertise in data-mining to a new business intelligence consulting project initiated by NTT COMMUNICATIONWARE CORP. The partners were to complete installation of a data- mining center at a NTT Communicationware facility this month and to launch client recruitment efforts. Besides providing accurate market trend analyses and forecasts, the two companies will use their data- mining resources to improve clients' customer relationship management systems. NCR Japan and NTT Communicationware expect the new business to produce revenues of around $91.7 million over the next five years.
Also in this market segment is the duo of CORVU CORP. and SHARP SYSTEM PRODUCTS, INC. The Japanese systems integrator has agreed to distribute the Minneapolis firm's business intelligence and performance management solutions as primary elements of its data warehouse product line. CorVu's CorBusiness helps users merge business visions, undertake competitive analysis and tailor metrics to enable effective execution of business strategies. Its CorManager is the only foreign "balanced scorecard" solution offered in Japanese. SSP officials expect it to raise the bar for competing products.
INFORMATICA CORP. has released an upgrade to its data integration packages that gives them multilingual capabilities. The Unicode extensions for PowerCenter, PowerMart, PowerConnect for SAP R/3 and PowerConnect for PeopleSoft were developed in cooperation with MITSUBISHI ELECTRIC CORP., the Palo Alto, California firm's primary distributor (see Japan-U.S. Business Report No. 357, June 1999, p. 26). MELCO already has sold licenses to the Informatica software to several companies described as among Japan's largest. MELCO also has paired Informatica's products with its own DIAPRISM data warehouse enhancement software and is reselling the bundle as a high-power, turnkey data integration solution.
INFORMATION BUILDERS has built a simple data integration and Web-enabled reporting and querying front-end for FUKUOKA BANK, LTD. Sold via and installed by the New York City firm's agent, ASHISUTO K.K., Information Builders' EDA, FOCUS and WebFOCUS products tie together the bank's various legacy mainframe systems and allow employees to access through the companywide intranet the records of any of the 3 million Fukuoka Bank customers in a few seconds from any of the bank's 142 branches. At the same time, customers can get account information on-line. Fukuoka Bank invested $10 million in hardware and software to implement the new solution.
Moving into the Japanese market, San Jose, California-based INPUT SOFTWARE, INC. signed a reseller agreement with WANBASHI ARCHIVES CO., LTD. for its InputAccel information-capture software. The localized version of InputAccel was developed with the Tokyo company's assistance. The software allows large volumes of information to be digitized and placed on-line. Input Software and Wanbashi Archives also have their first contract. It involves building an InputAccel system capable of digitizing more than 10 million credit-card applications submitted to JCB CO., LTD., Japan's largest credit-card issuer.
The subsidiary of Pleasanton, California-based PEOPLESOFT, INC. has engaged its PRICEWATER- HOUSECOOPERS CONSULTANTS CO. counterpart to help it localize and fine-tune the new version of its enterprise resource planning package, PeopleSoft 8.0. The pair has formed a 40-person localization and development unit that will recast the ERP software's user interface and feature set based on PWC's advice. After completing the makeover of the finance and human resources modules, the partners will work on the marketing/distribution management and manufacturing management sections.
ORACLE CORP. licensed its Oracle Applications ERP solution to HITACHI, LTD. for use in a new application service provider unit aimed at small businesses. Hitachi plans a three-stage rollout for its ERP service starting April 1. It first will offer e-commerce and Internet-based customer service management. It then plans to add on-line order and sales management services before completing its ERP menu with on- line procurement and purchasing services. The company plans to charge a base fee of $1,800 per month and $530 per user; such options as 24x7 technical support and custom development will be extra.
In a separate announcement, ORACLE CORP. revealed that FUJI SOFT ABC INC. will deploy the Oracle Applications ERP package to improve productivity and speed up operations throughout its administrative and manufacturing facilities. With Oracle's help, Fuji Soft ABC will custom-tailor Applications to its needs, beginning with accounting functions. The Japanese customer hopes to use Oracle's software to eventually integrate all aspects of its operations.
NIHON UNISYS, LTD. is marketing Expert CAM 2000, a computer-aided manufacturing suite developed in-house. Running on Windows NT systems, the program accepts data from a wide range of computer- aided design and engineering programs and formats, including IGES, JAMA-IS, Catia, I-DEAS and Unigraphics. Pricing of the package starts at $27,500; it also can be leased for $920 and up a month. Nihon Unisys hopes to sell 500 copies of Expert CAM 2000 the first year.
ENGINEERING GEOMETRY SYSTEMS has brought its 3D milling module to local users of its FeatureCAM v6 package. SolidM for FeatureCAM accelerates the creation of programs for computer numerically controlled machine tools by intelligently recognizing features in imported 3D CAD models. The add-on is available through the Salt Lake City, Utah firm's distributor, FCS INTERNATIONAL, INC., which aims to sell 120 units of the $5,500 program.
Mirroring the recent alliance between their parents, IBM JAPAN LTD. and the subsidiary of San Mateo, California-based SIEBEL SYSTEMS, INC. have teamed up to prepare five turnkey e-business packages. The first of the Start Now Series is a customer relationship management module, which the companies will jointly market and support. Future Start Now packages will be aimed at sales force automation, call center operations and data warehouse/mining.
Separately, SIEBEL SYSTEMS, INC.'s subsidiary is offering its CRM solution to midsize firms through agreements with local application service providers. The Tokyo unit arranges the software licensing through the customer's existing ISP or ASP. Its initial focus is Siebel for Workgroups, which is designed for midsize companies.
Taking the same tack, the sales unit of FIREPOND, INC. is leasing its Waltham, Massachusetts parent's Signature Plus sales force automation package and FirePond Application Suite via the expanding ASP community. A big selling point of this delivery method is the savings achieved by leasing the software from an ASP. For Signature Plus, the starting fee of $91,700 is less than one-tenth the cost of purchasing the package outright. INFORMATION SERVICES INTERNATIONAL-DENTSU, LTD. will provide the ASP infrastructure for FirePond. It also will help with marketing. The partners hope to sign at least 10 leases in FY 2000.
KANA COMMUNICATIONS, INC. has made a big splash in the Japanese CRM market. In just one month, the leading provider of on-line customer communications solutions landed its first customer — G-SEARCH LTD., a FUJITSU, LTD. subsidiary — opened an office in Tokyo and signed NIHON UNISYS, LTD. as a value-added reseller. In July, G-Search will implement the Redwood City, California-based firm's Kana Response platform to manage Web-based inquiries from the 3.6 million users of @nifty, Japan's top ISP. For its part, Nihon Unisys will offer the complete Kana 5 suite, which includes modules for on-line marketing, sales and service.
The marketing arm of ADOBE SYSTEMS, INC. has previewed a localized version of the San Jose, California firm's next-generation page layout program. Scheduled to ship in the fall, Adobe InDesign will offer the most extensive support ever for Japanese text and typography. It will form the basis for Adobe's professional publishing solutions in this key market. The nonproprietary Japanese composition engine will deliver full-featured and flexible typesetting of Japanese text, a first for the local desktop publishing market. In addition, InDesign handles many media types besides text, making it suitable for use in a wide range of fields.
The slugfest in the market for voice-recognition software is entering a new round. IBM JAPAN LTD. is on the verge of introducing a Japanese version of ViaVoice Millennium for Macintosh computers. The new iteration learns to recognize a user's voice much more quickly than earlier versions. It also adapts more facilely to individual speech patterns and preferences. ..... DRAGON SYSTEMS, INC. already has launched a counterattack by releasing a localized version of its Dragon Speech Select v3.6J. The Newton, Massachusetts firm bills itself as the "natural speech" company, and its software focuses on this aspect of speech recognition. Dragon System's subsidiary is marketing the package on an OEM basis to computer makers.
The Disney Interactive unit of WALT DISNEY CO. will work with Japan's leading third-party home videogame developer, SQUARE CO., LTD., to develop gameware for SONY CORP.'s forthcoming PlayStation 2 console. The development team will be led by Square's Tetsuya Nomura, the man responsible for the firm's wildly successful Final Fantasy series. Disney and Square hope to debut their first interactive title in Japan by yearend 2001 and in North America and Europe in 2002.
In April, SOLIDWORKS CORP.'s subsidiary will roll out a version of the midrange SolidWorks 2000 3D CAD package. It will be priced at $9,000. In preparation, the Concord, Massachusetts developer lined up another distributor. MUTOH INDUSTRIES LTD. agreed to make SolidWorks 2000 the centerpiece of its marketing efforts, even though it handles AUTODESK, INC.'s AutoCAD 2000 and Mechanical Desktop as well as NIHON UNISYS , LTD.'s high-end CADCEUS CAD/CAM system. SolidWorks 2000, which runs on Windows machines, is easy for engineers and designers to learn yet offers enough power to handle most needs. Through its various distribution arrangements, SolidWorks expects to sell 3,500 copies of SolidWorks 2000 within this year.
Coincidentally, NIHON UNISYS, LTD. released the latest iteration of the Japan-only CADCEUS. The new version is a much more comprehensive program, extending its reach to the entire process of designing and making products with integrated CAM and product data management modules. Nihon Unisys is targeting as initial sales leads the 600-plus current CADCEUS users. They include TOYOTA MOTOR CORP., which has made the program the core of its overall, integrated CAD/CAM system.
With wireless Internet access all the rage in Japan, SPYGLASS INC. has lined up a second distributor for its Prism Web content transformation and delivery platform. MITSUI & CO., LTD. joins FUJITSU, LTD. (see Japan-U.S. Business Report No. 364, January 2000, p. 30) as a reseller of the Naperville, Illinois firm's flagship product. Prism converts, optimizes and transmits Web content originally created for PCs to small- screen devices like cell phones and personal digital assistants. Mitsui will offer Prism to ISPs, content providers and communications carriers through its ASP operation. The package costs $91,700 per server processor. The trader projects Prism sales at $4.6 million a year.
An exchange rate of ¥109=$1.00 was used in this report.
The data-dedicated optical network that CROSSWAVE COMMUNICATIONS INC. is extending nationwide has given another lift to CIENA CORP.'s Japanese revenues (see Japan-U.S. Business Report No. 354, March 1999, p. 30). The Lithicum, Maryland manufacturer of DWDM equipment is shipping its advanced MultiWave CoreStream optical transport system to the joint venture among INTERNET INITIATIVE JAPAN INC., SONY CORP. and TOYOTA MOTOR CORP. through exclusive distributor NISSHO ELECTRONICS CORP. The CoreStream system, which consists of optical terminals, amplifiers and add/drop multiplexers, can scale to 2 terabits per second of capacity over a single fiber. It modular DWDM architecture enables carriers like Crosswave to expand capacity incrementally through any combination of OC-12 (622 Mbps), OC-48 (2.5 Gbps) or OC-192 (10 Gbps) optical interfaces. The latest Crosswave order reportedly is worth some $45.9 million. The build-out of the company's optical network is expected shortly.
ARRAY TELECOM CORP., a Herndon, Virginia supplier of carrier-class and enterprise IP telephony gateway products, has a $2 million-plus contract for its Array Series 3000 VoIP gateway system from TVS, INC., a provider of VoIP service through its nationwide IP-based network. The order covers 100 systems, which the data communications firm expects to deploy by yearend. TVS said that the excellent voice quality and the flexibility of the Array Series 3000 sold it on the equipment. Array Telecom is a COMDIAL CORP. subsidiary.
Competitor NETSPEAK CORP. has a contract to supply equipment to TELEMATRIX CORP., described as Japan's largest independent Internet telephony carrier. Included in the order are the Boca Raton, Florida firm's iTEL platform-based Gatekeeper and Route Server, which TeleMatrix will employ to better manage its network and to support such additional value-added applications as voice-enabled e- commerce. The scalable Gatekeeper handles more than 100 calls per second. The Route Server manages network resources and determines route priorities. TeleMatrix, which launched its IP telephony network in June 1997, operates more than 40 points of presence within Japan. Its primary customers are small and midsize businesses and consumers.
The major xDSL field trial conducted in Ina, Nagano prefecture for more than two years in the late 1990s has resulted in an order for participant PARADYNE NETWORKS INC. The Tampa, Florida manufacturer's Hotwire MVL (multiple virtual lines) system was selected by INFOVALLEY CO., LTD., an ISP owned by FUJITSU NAGANO ENGINEERING CO., LTD., for use in its new DSL high-speed Internet access business. DSL technology transforms existing copper telephone lines into high-speed digital networks. Paradyne's Hotwire MVL system, for instance, can transmit information at speeds of up to 768 kilobits per second. That makes it well-suited for such services as Internet access in homes and small offices.
In their second deal, C-COR.NET has won a contract to supply its FlexNet 900 Series radio-frequency trunks and bridges along with Navicor line extenders to TITUS COMMUNICATIONS CORP. Japan's number-two cable television operator will use this equipment, which works in the 862-MHz bandwidth and is adapted to the 55/70 frequency split required for Japan, to support the delivery of telephony and video services as well as Internet access over its cable networks. The State College, Pennsylvania manufacturer's hardware will be installed during 2000 in three Titus projects, two of which are in the Tokyo suburbs with the other located in Sapporo. Kobe's DX ANTENNA CO., LTD. is C-COR.net's distributor.
Server appliance designer COBALT NETWORKS, INC. has delivered to NTT MOBILE COMMUNICATIONS NETWORK, INC. Multimedia Mobile Qube devices for the company's small and midsize business subscribers. The MM Qube, based on the Mountain View, California company's open- standards platform (see Japan-U.S. Business Report No. 364, January 2000, p. 31), will provide core Web services and wireless Internet access to these customers. They also will be able to access their e-mail remotely via cell phones and a variety of notebook PCs and PDA devices.
In an arrangement that should give a major boost to AT&T CORP.'s network outsourcing and secure managed Internet access businesses for multinationals, NTT COMMUNICATIONS CORP. agreed to acquire a 15 percent interest in AT&T Global Network Services-Japan for $50 million. The long-distance and international communications unit of NIPPON TELEGRAPH AND TELEPHONE CORP., which will have two seats on AGNS-Japan's board of directors, has the right to increase this stake. More important than the equity relationship, though, the tie-up should help AGNS-Japan sell its networking professional services to NTT Communications' major corporate customers. In fact, the Japanese carrier will allow AGNS- Japan to use the NTT Com logo with its own logo. Equally critical, the AT&T affiliate will be able to tap NTT Communications' expertise in developing or enhancing solutions services for multinationals that want to free themselves of the responsibility for managing their increasingly complex corporate networks. The deal between AGNS-Japan and NTT Communications followed a spring 1999 memorandum of understanding under which AT&T and NTT agreed to collaborate on corporate network solutions (see Japan-U.S. Business Report No. 356, May 1999, p. 30).
In April, WINK COMMUNICATIONS, INC., the promoter of a system for delivering low-cost e-com-merce via TV sets, will acquire an undisclosed minority stake in MEDIASERVE CORP. The Tokyo company was formed in 1996 by MITSUI & CO., LTD. and TOSHIBA CORP. to process responses and create content for the Wink-based analog terrestrial interactive TV services that began in October of that year. The pending investment by the Alameda, California company reflects MediaServe's near-term expansion into digital response processing and digital data broadcasting via a digital high-definition TV broadcasting satellite to be launched later this year. Toshiba also will put more money into the company to fund the transition. A number of other big-name Japanese corporations are investors as well in MediaServe.
Investment bankers GOLDMAN, SACHS & CO. and MORGAN STANLEY DEAN WITTER & CO. will invest in start-up EACCESS LTD., which plans to offer high-speed, low-cost Internet access to small companies and consumers as soon as this fall using DSL technology. In the near term, eAccess expects to issue $4.1 million worth of new shares. The two Wall Street firms will buy a significant portion of the total, with Japanese venture-capital companies acquiring the rest. eAccess still has not decided all the operational details of its business, such as whether to build its own network or to use existing infrastructure.
Industry sources report that INTEL CORP. was one of the companies to acquire a stake in CYBIRD CO., LTD. through a third-party share allocation. The Tokyo-based start-up develops content for cell phones and PHS (personal handyphone system) handsets that can access the Internet. It currently has contracts with NTT MOBILE COMMUNICATIONS NETWORK, INC. and other major Japanese mobile communications services providers. Cybird will use the money raised, including the $917,400 thought to have been invested by Intel, to produce content for the third generation of cell phones that is set to debut in Japan in the spring of 2001. These devices will be capable of broadband Internet connections.
For some time, INTEL CORP. has seen cellular and other wireless communications products as a major growth market for its flash memories, chipsets, software and other technologies. The work it has been doing with Japanese manufacturers of these products now has been formalized in the second Intel Wireless Competence Center. Located in Tsukuba, Ibaraki prefecture, the center's job is to promote the development of wireless Internet access technologies, whether content or services, through tie-ups with local companies. Intel already has named its first four partners: CYBIRD CO., LTD., software developer JUSTSYSTEM CORP., ACCESS CO., LTD., also a software developer, and San Diego, California's PACKETVIDEO CORP., a supplier of a software-based broadband testing solution for 3G wireless networks (see Japan-U.S. Business Report No. 365, January 2000, p. 30). The first Intel Wireless Competence Center was established late last year in Stockholm, Sweden.
STARNET, which bills itself as the largest V.90 wholesale ISP in North America with more than 800 points of presence, has extended its MegaPOP network to Tokyo. The first such company to reach Japan, Palatine, Illinois-based StarNet plans to extend its services to Osaka and Nagoya in the coming months. That will give its ISP customers even greater marketing opportunities.
@NETWORK INC., a San Jose, California company set up last year by Japanese, American and Taiwanese investors, is offering to be the virtual subsidiary in Asia of U.S.-based e-commerce vendors. It has announced plans to develop a data and voice network, consisting of data centers in major Asian metropolitan areas, that is linked to the United States through a transpacific IP backbone. A hub in Japan will be at the center of this infrastructure, which will enable @Network to host, colocate and manage e- commerce Web content from American suppliers in one unified Asian network. It also will offer a variety of value-added services, such as Web content localization, consulting and marketing. At present, @Network is developing data centers in Tokyo and Osaka; five others are planned for Japan.
The stampede by American and domestic companies to build massive data centers in Japan to offer secure Web-hosting or colocation services to companies that have decided to completely or partially outsource management of the infrastructure that supports their Internet operations is behind the pending formation of a company to sell servers, networking equipment and software to these facilities. Spearheading the venture is the powerful trio of SUN MICROSYSTEMS, INC., CISCO SYSTEMS, INC. and ORACLE CORP. Other companies, including NTT DATA CORP. and TOKYO ELECTRIC POWER CO., INC., are expected to participate in the Internet Data Center Initiative venture. It will provide consulting services and technical support to data center operators in addition to marketing hardware and software.
Also targeting this market is EXTREME NETWORKS, INC. (see Japan-U.S. Business Report No. 356, May 1999, p. 32). The Santa Clara, California manufacturer's subsidiary has introduced two new BlackDiamond Layer 3 chassis systems aimed specifically at the demanding requirements of data centers. The BlackDiamond 6816 is claimed to be the industry's first product to scale routing and switching performance to more than 192 million packets per second. It also is said to deliver a market-leading port density of up to 192 Gigabit Ethernet ports or 1,536 10/100BASE-TX ports in a single chassis. The capabilities of the BlackDiamond 6808 are only slightly less impressive. It can move more than 96 million pps and can accommodate up to 96 Gigabit Ethernet ports or 384 10/100BASE-TX ports, with all switching and routing at wire speed. These switches also are the first to support 10-Gbps Ethernet connectivity.
In a worldwide release, INTEL CORP. unveiled a family of communications products and services designed to improve e-commerce transactions through faster on-line connections, security authentication and server response time. They will be marketed under the Intel NetStructure brand name. Among the products that Intel's subsidiary is introducing is the Intel NetStructure 7180 e-Commerce Director. Priced at $68,800, it is described as the first device of its kind to combine security acceleration and application- aware traffic management to up the speed of user authentication transactions by as much as 150 times. For its part, the Intel NetStructure 7110 e-Commerce Accelerator, which lists for $22,900, boosts the speed of e-commerce traffic by offloading the processing power needed by the server for secure Internet transactions.
PACKETEER, INC. — the Campbell, California supplier of the three-model PacketShaper line of products that helps ISPs and other operators of wide area networks to use bandwidth more efficiently by allocating it according to the needs of the applications running and the provider's objectives — has tied up with CHORI JOHO SYSTEM CO., LTD. The Osaka developer of network software will integrate Packeteer's products into its network systems to strengthen its Internet application infrastructure capabilities. That done, Chori Joho will move into the business of supplying network solutions to the new breed of application service providers.
In the latest wrinkle of its strategy for ensuring that it is the dominant supplier of networking equipment in Japan as well as in the world, CISCO SYSTEMS, INC.'s subsidiary tied up with well-connected JAPAN RESEARCH INSTITUTE, LTD. The new collaborators will design and develop solutions for companies interested in moving their business to the Internet, whether that activity be e-commerce, inventory control or otherwise. Cisco can draw on JRI's business management expertise along with its corporate insider status, while the Japanese company will be able to tap its partner's vast networking technology.
Communications adapters made by DIGI INTERNATIONAL INC. have been sold by SUMISHO DATACOM INC. for the last seven years. However, the rapid growth of ISPs, especially small and midsize ones, has opened a major new market for the Minneapolis firm's products because Internet POP servers incorporating remote access server adapters cost significantly less per port than router-based solutions. Attempting to exploit this fact, Sumisho Datacom and INTERNET PRO CORP., a Tokyo communications consultant, have tied up to build Pentium-based PC servers equipped with Digi DataFire RAS 24/48 remote access adapters and running the RED HAT, INC. version of Linux. Their products are scalable from 24 to 384 ports in a single server. Sumisho Datacom and Internet Pro, which provides the hardware and system integration services to configure the POPs as well as marketing and sales support, training and maintenance, already have built 78 servers that are operating in a high-traffic, 24 x 7 x 365 application.
New York's EXALINK, a supplier of platforms for the delivery of Internet-based services to all types of wireless devices, named NISSHO IWAI INFOCOM SYSTEMS CO., LTD. as its distributor. The company's turnkey eXa.Flow WAP (wireless application protocol) router is based on proprietary technology that supports WAP and other IP-based protocols. Exalink notes, however, that unlike a WAP proxy, protocol conversion is performed on the network layer with eXa.Flow. According to it, that means improved performance and quality of service as well as security policies that can be enforced in real time. For wireless operators, these claims should come down to the ability to provide advanced information and data services to their subscribers fairly simply.
One of the pioneers in wireless data communications services and technologies, GEOWORKS CORP., announced that TOSHIBA CORP. was the first company to license its flexible user interface technology. The Alameda, California firm's know-how is one key to making the recent wireless application protocol the global standard for mobile communications. Toshiba's license allows it to use Geowork's technology in a series of handsets.
QUALCOMM INC., the chief promoter of the CDMA digital cellular standard, and MATSUSHITA ELECTRONIC COMPONENTS CO., LTD. have codeveloped a CDMA module that works with both the AMPS (advanced mobile phone service) analog standard found in the United States and the PCS digital format. Modules that enable CDMA-based cell phones to pick up AMPS signals already exist, but the CRM3100 is the first product that is compatible with all three standards. Moreover, the partners say, the new module cuts power consumption by 20 percent, which helps to roughly double handset standby time. Matsushita Electronic Components will begin sampling the CRS3100, which will cost around $460, in April.
In a pairing of heavyweights, the subsidiary of LUCENT TECHNOLOGIES INC. and IBM JAPAN LTD. have launched Start Now for Customer Service, an integrated solution for call centers that have 12 to 25 operators. The service marries IBM Japan's Start Now customer relationship management software with Lucent's computer-telephony integration expertise and its Definity ProLogix PBX system, which is designed for small and midsize installations. The partners are touting the ability of the hardware to efficiently distribute calls coming in from customers. They also note that the Definity ProLogix system is easily expandable, allowing it to meet the requirements of growing call centers.
The subsidiary of facilities-based international carrier PACIFIC GATEWAY EXCHANGE, INC., which received a Type I operating license at the end of 1998, is marketing a low-cost international calling plan to retail customers, primarily small and midsize businesses and individuals. Subscribers to PGE Call can direct-dial 240 countries. The anytime charge for a three-minute call to the United States is 61 cents, or about 60 percent below KDD CORP.'s daytime rate. However, customers are subject to a minimum monthly charge of $9.20. PGE's low fees are based on the premise that it can attract a large volume of customers to PGE Call, which uses the Burlingame, California company's private line in Japan to connect with the publicly switched network there and in the United States, where all calls go regardless of final destination. In time, PGE Call is expected to produce annual revenues of $2.8 million. PGE, which has its own switch in Japan, got its local start by offering global high-bandwidth data and Internet services to carrier customers.
SEIKO EPSON CORP. has joined HITACHI CA-BLE, LTD. as a distributor of the ViewStation line of group videoconferencing systems from POLYCOM, INC., the number-one supplier of these collaborative products (see Japan-U.S. Business Report No. 364, January 2000, p. 31). Seiko Epson will promote the ViewStation equipment, for which a Japanese graphical user interface recently was introduced, with its own family of LCD-based projectors. San Jose, California-headquar-tered Polycom also will help Seiko Epson advance its New Meeting System concept. This idea encompasses media-rich, multisite collaboration over the Internet or through intranets by integrating IP-based videoconferencing units like the ViewStation with meeting-en-hancing peripherals as input devices and data projectors as output devices.
Just 15 months after IRIDIUM INC.'s global satellite phone and paging service was launched, DDI CORP., the majority (50.5 percent) owner of NIPPON IRIDIUM CORP., the operator of the Japanese part of the network, decided to pull the plug on its troubled joint venture with KYOCERA CORP. (10 percent) and other local investors. Although DDI and Kyocera had indicated after MOTOROLA INC.-spearheaded Iridium filed for Chapter 11 bankruptcy protection last August that they were willing to pump money into the Washington, D.C.-based company, they later changed their minds about Iridium's ultimate viability in light of the technical changes that have swept the wireless communications industry since the company was launched in 1991. That logically led to the conclusion that Nippon Iridium, which had only 4,300 subscribers, had no future. Also shaping DDI's decision to liquidate Nippon Iridium was the reality that it could not afford to go any deeper into debt on the Iridium project than its $229.4 million exposure given the fact that the company, Japan's number-three communications carrier, is scheduled to merge in October of this year with KDD CORP. and wireless services provider IDO CORP.
SPACE IMAGING, INC. of Thornton, Colorado added SHIKOKU INFORMATION AND TELECOMMUNICATION NETWORK CO., INC. as a distributor of the extremely high-resolution images of the earth captured by its Ikonos satellite. The Kagawa prefecture-based company will launch its marketing activities in June, targeting providers of ITS (intelligent transportation system) and GIS (geographical information system) applications, among others. MITSUBISHI CORP., which was instrumental in the formation of Space Imaging's subsidiary, also has rights to sell the detailed imagery from the Ikonos satellite.
An exchange rate of ¥109=$1.00 was used in this report.
Sooner than anticipated, OUTLAST TECHNOLOGIES, INC. arranged to have foam material based on its temperature-regulating technology manufactured in Japan. The Boulder, Colorado developer and marketer gave major foam producer INOAC CORP. exclusive rights for that application. More commonly, OUTLAST technology, which, when applied to material, absorbs, stores and releases heat as necessary, is incorporated in fibers and fabrics for outerwear, work clothing, footwear and the like. At the end of 1999, Outlast Technologies gave ITOCHU CORP. sole rights to import and distribute OUTLAST fibers, fabrics and foam (see Japan-U.S. Business Report No. 364, January 2000, p. 32).
The company that bills itself as the owner of the number-one brand of so-called dynamic climate control materials also thinks that Japan is fertile ground for its technology. FRISBY TECHNOLOGIES, INC. signed a product development and test-marketing agreement with BRIDGESTONE CORP. covering its ComforTemp DCC technology. On successful completion of a six-month trial period, the big tire manufacturer, which also is a leading maker of foam materials for consumer goods products as well as for automotive applications, will have exclusive rights to produce, distribute and sell ComforTemp materials for home furnishing products marketed in Japan. Elsewhere in Asia, Bridgestone will have nonexclusive rights to deliver materials for this end use incorporating Frisby Technologies' know-how. The pending license with the Winston-Salem, North Carolina company also will allow Bridgestone to supply ComforTemp materials to Japan's automotive industry for products sold worldwide.
TIMBERLAND CO., the marketer of a premium but popular line of footwear, apparel and accessories geared toward the outdoors, reacquired distribution rights to its products in Japan and other Asian countries from INCHCAPE PLC. The Stratham, New Hampshire company immediately formed a subsidiary in Japan to manage marketing of its line there. Inchcape took over distribution of Timberland products from another company in 1995.
Having forged potentially powerful equity and technical ties with FUJI HEAVY INDUSTRIES, LTD., ISUZU MOTORS LTD. and SUZUKI MOTOR CORP. in its drive to expand sales in Japan and the rest of Asia (see Japan-U.S. Business Report No. 364, January 2000, p. 32), GENERAL MOTORS CORP. now is exploring other ways to apply its partnership strategy to achievement of this goal. For instance, the e-GM e-commerce business unit of the world's top automotive manufacturer has approached TOYOTA MOTOR CORP. about using its Japanese-language Gazoo Web site to provide information to Japanese customers about GM products, such as prices and dealer locations. GM's subsidiary has its own Japanese-language Web site, but it has not been very successful in generating sales leads. Gazoo, in contrast, is the most frequently accessed virtual vehicle showroom in Japan. At first glance, GM might appear presumptuous in asking Toyota to share its Web site. However, the two automotive giants are co-owners of 16-year-old NEW UNITED MOTOR MANUFACTURING INC. in Fremont, California, and they currently have an extensive R&D collaboration involving new vehicle technologies.
Both of the American-associated on-line vehicle-buying services now have MITSUBISHI MOTORS CORP. as a participant. Japan's number-four automotive maker was one of eight car and truck companies linked with CARPOINT JAPAN K.K., a MICROSOFT CORP. affiliate, on its launch last year (see Japan-U.S. Business Report No. 362, November 1999, p. 26). Requests for information on Mitsubishi Motors products received by CarPoint are forwarded to 63 of the company's dealers in Tokyo as well as in surrounding Kanagawa, Chiba and Saitama prefectures. Now, MMC has signed on with AUTOBYTEL.COM INC.'s Japanese unit. During a test period that will last through May, 91 Mitsubishi Motors dealers in the Tokyo metropolitan area as well as in Aichi, Hyogo, Kyoto and Osaka prefectures will handle leads generated by Autobytel, whose computer will be linked with the automaker's OnlineCounter system. The number of participating dealers could be expanded if the Autobytel test is successful.
In forecasting first-year sales of its new Focus subcompact car at a robust 5,000 vehicles, FORD MOTOR CO. obviously believes that its latest "world car" will achieve the same relative success in Japan that it has enjoyed in Europe and especially in the United States since introduction last fall. The 1.6-liter Focus wagon, which went on sale at the beginning of March, incorporates a number of safety-oriented features. It has a suggested price of $18,300 or so.
The aircraft engine servicing business in Japan is on the verge of being reshaped. Late last year, GENERAL ELECTRIC CO., the world's top manufacturer of jet engines, initiated tie-up talks with ALL NIPPON AIRWAYS CO., LTD. and ISHIKAWAJIMA-HARIMA HEAVY INDUSTRIES CO., LTD. (see Japan- U.S. Business Report No. 363, December 1999, p. 39). Now, GE's chief rival, the Pratt & Whitney unit of UNITED TECHNOLOGIES CORP., has agreed to partner with JAPAN AIRLINES CO., LTD. on aircraft engine maintenance. Under the deal, the East Hartford, Connecticut-head-quartered company will acquire part of JAL's interest in JAPAN TURBINE TECHNOLOGIES CO., LTD. and all of NIPPON STEEL CORP.'s 49 percent stake for an undisclosed price. On completion, P&W will own 66.6 percent of Chiba prefecture-based Japan Turbine Technologies, which was formed in April 1988, and JAL the balance. Like the proposed GE consortium, the P&W-led company intends to seek maintenance work from other airlines in addition to being responsible for the servicing of JAL's fleet of planes, which are powered predominantly by P&W engines.
Business-jet aircraft manufacturer GULFSTREAM AIRCRAFT CORP. has delivered a fifth Gulfstream IV- MPA to the Air Self-Defense Force. The multimission plane, designated the U-4 in Japan, is equipped with a versatile interior that can be converted within an hour for passenger, high-priority cargo or medical- evacua-tion purposes. It also has a special 5-foot x 6-foot cargo door to facilitate medical-evacuation needs. The Gulfstream IV-MPA has a 4,220-nautical-mile range and can cruise at altitudes of up to 45,000 feet. Savannah, Georgia-headquartered Gulfstream is owned by GENERAL DYNAMICS CORP.
An exchange rate of ¥109=$1.00 was used in this report.
In the second expansion of their relationship, LIGHTPATH TECHNOLOGIES, INC., a manufacturer of optical products for the communications component industry, gave HIKARI GLASS CO., LTD. the right to produce products based on the Albuquerque, New Mexico firm's proprietary technologies, including its automated laser polishing and laser fusion processes. Hikari Glass' Asian marketing territory also was extended to include the People's Republic of China. The two companies tied up in March 1997 when LightPath tapped Hikari Glass, a maker of high-end optical lenses and prisms, to supply raw materials for its Gradium optical glass process. Then, in May 1998, the U.S. business gave the NIKON CORP. affiliate the right to distribute in Japan as well as in Singapore, South Korea and Taiwan its Gradium glass products with their unique light-bending properties.
MOTOROLA INC. has tied up with a second Japanese manufacturer of business forms and labels as it continues to promote its BiStatix RF identification technology as a replacement for bar codes. Last fall, Motorola and TOPPAN FORMS CO., LTD. agreed to codevelop and comarket "smart" label solutions incorporating the breakthrough BiStatix RFID technology (see Japan-U.S. Business Report No. 361, October 1999, p. 36). Its new codevelopment and comarketing partner is DAI NIPPON PRINTING CO., LTD., the world's largest printer. The expected results of both alliances are paper-based products containing information stored in chips that can be read and modified through a wireless interface. Tags based on BiStatix technology are scheduled to become commercially available from both companies sometime this year. Motorola claims several advantages for its smart labels over earlier generations of products enabled by RFID technology. Near the top of the list is cost. At less than an estimated 50 cents each, BiStatix labels will be half the price of other RFID labels. Moreover, BiStatix smart labels are readable even if they are folded, crumpled or ripped, and they can be printed on paper and other nonconductive surfaces using existing printing processes.
The golf craze in Japan might be over, but as the world's second-largest golf market after the United States, that country still commands the attention of U.S. equipment manufacturers. Premium golf club supplier ADAMS GOLF CO., for one, has established a wholly owned subsidiary to obtain direct feedback on its R&D efforts and to achieve greater control over its marketing message and distribution channels. The Plano, Texas company is the maker of the Tight Lies family of fairway woods, the SC Series Spin Control drivers and the Faldo Series Wedges.
With sales in FY 1999 predicted to be 29 percent below the year-earlier total, ACUSHNET CO.'s subsidiary is restructuring its golf club business in the hope of getting back on a growth track. Its Cobra brand of clubs is targeted at the midlevel golfer. He or she represents roughly 80 percent of the player population in Japan, but this large group is made up mostly of middle-age and older people. To better accommodate their needs, New Bedford, Massachusetts-headquartered Acushnet has brought out a new line of clubs under the CX1 brand. Moreover, next year, it will introduce irons and woods designed and manufactured specifically for the typical Japanese player. In the meantime, Acushnet's marketing unit is assigning sales people to four regions of the country in order to develop new distribution channels.
The fallout from the restructuring of NISSAN MOTOR CO., LTD. extends even to its advertising agencies. Japan's number-two automotive maker spends some $917.4 million a year on worldwide advertising, but executives of new owner RENAULT S.A. have complained that those outlays are not buying the brand image that the company needs. In response, HAKUHODO INC., which generates roughly $275.2 million in Nissan billings annually, is in talks with OMNICOM GROUP INC., the world's top ad agency and one of the companies that does ad work for the car and truck builder overseas, about tying up in order to implement the global brand strategy that Nissan wants. The two reportedly are weighing the formation of co-owned but separate units in Japan, the United States and Europe to roll out integrated Nissan campaigns in those regions.
DISPLAYSEARCH, an Austin, Texas market research and consulting firm that specializes in the fast- expanding flat-panel display business, has opened an office in Japan, the source of much of the activity in this field. With an in-country presence, DisplaySearch says, it will be positioned to provide even more detailed, accurate and insightful Japan market intelligence to its 350 clients.
The rapid growth of e-commerce and other Internet-based activities in Japan is starting to attract American companies that can collect market information and analyze it for clients. One of those firms is HARRIS INTERACTIVE, the sponsor of the well-known Harris Poll. The Rochester, New York company formed a Tokyo subsidiary with minority (20 percent) partner M&A CREATE INC., a marketing consulting firm, to undertake Internet-based market research projects for companies there. As elsewhere, Harris Interactive will perform this work by using a data base of on-line panelists, expanded to include Japanese individuals, and its proprietary technology. The joint venture also will conduct research in the United States and in other countries for Japanese clients.
As of April 1, the Tokyo subsidiary of KPMG LLP will have 120 people on staff versus 70 at present to advise clients in the broad field of e-business. The expanded personnel resources will result from the merger of the IT division of KPMG CONSULTING LLC's subsidiary with KPMG GLOBAL SOLUTION K.K. The reorganized company expects much of its work to come from helping Japanese companies make the transition to e-commerce, although its expertise extends to information systems installation and application service provider projects.
Companies interested in on-line advertising and Web marketing in Japan have a new source of help. MEDIA METRIX, INC., the pioneer of Internet and digital media measurement, opened a wholly owned subsidiary in Tokyo. The organization, its New York City parent says, will provide comprehensive, real-time meter-based Internet and digital media measurement products and services tailored where necessary to the needs of Japanese clients and the Japanese market. Media Metrix states that its key advantage in breaking into the local market is that it already has developed, tested and produced data utilizing its kanji meter. Consequently, its subsidiary can ensure the highest-quality data and the most representative sample.
LYRA RESEARCH, INC., a provider of publications, market information and custom research services involving the imaging industry, appointed consumer market researcher JDS CO., LTD. as its exclusive sales and marketing representative. The Newtonville, Massachusetts firm has more than 2,000 customers around the world for such publications as The Hard Copy Observer, which tracks the printer industry. Presumably, a significant number of subscribers are in Japan, given the international standing of that country's manufacturers of imaging equipment.
Outsourcing still is in its infancy in Japan despite a greater willingness among big companies to hand over to outsiders responsibility for their computer systems. Despite this reality, the subsidiary of PRICEWATER-HOUSECOOPERS LLP has set up an operation to provide administrative support to clients in the areas of finance, accounting and personnel. The thrust of this initiative is for companies to transfer their administrative personnel to PWC, which will retrain them so that they can work for other clients as well as for their original employer. The big accounting and consulting firm hopes to arrange outsourcing deals with three or four firms in the first year and to add between 200 and 300 employees from each to its personnel roster.
An exchange rate of ¥109=$1.00 was used in this report.