Remaining a ranking player in the fluid American personal computer market is expensive. Just ask NEC CORP. Having already committed $1.3 billion in cash and assets to PACKARD BELL NEC, INC. since mid-1995, including $300 million at the end of 1997, the electronics giant is in the process of investing another $225 million in the world's number-five maker of PCs. The Sacramento, California-headquartered company will use the money to support restructuring moves initiated in recent months (see Japan-U.S. Business Report No. 340, January 1998, p. 3, and No. 345, June 1998, p. 2). Even with the infusion of NEC capital, Packard Bell NEC is not expected to earn money until the second half of 1999 at the earliest. That forecast is more relevant now than before because once regulatory barriers are cleared, Packard Bell NEC will become a majority-owned NEC subsidiary and its results will be included in the Japanese company's consolidated statements. NEC had resisted this change, keeping its share of the PC manufacturer's voting rights at 49 percent. With the latest investment, its stake will go up to 52.81 percent.
Broadening its distribution channels to better reach small and midsized corporate customers, the NEC Computer Systems Division of PACKARD BELL NEC, INC. has tied up with direct marketer INSIGHT ENTERPRISES, INC. The Tempe, Arizona company sells via the telephone and the Internet. Businesses also have the option of purchasing equipment directly from NEC CSD or buying from an authorized reseller. NEC CSD products, targeted at the commercial market, include Versa notebook computers, Direction PCs, PowerMate desktop computers, Express5800 servers and MobilePro handheld PCs. Computers marketed under the Packard Bell name are aimed at the home market.
Staying in step with its bigger American competitors, the NEC Computer Systems Division of PACKARD BELL NEC, INC. announced that its line of high-end corporate desktop computers and its workstation series would be available in September with the fastest Pentium II processor currently available from INTEL CORP., a 450-megahertz part, as well as with that company's performance-enhancing 440BX chipset. Both families now use either a 350-MHz Pentium II processor or a 400-MHz version. Pricing for the PowerMate 8100 desktop system with a 450-MHz processor, 6.4-gigabyte hard drive and 64 megabytes of internal memory starts at $2,400. The dual processor-capable PowerMate 9000E PC workstation sporting a 450-MHz Pentium II, a 4.5-GB Ultra2 SCSI (small computer system interface) hard drive, 64 MB of internal memory and an 8-MB video card goes for $3,400.
To woo cost-conscious small and midsized business customers, the NEC Computer Systems Division of PACKARD BELL NEC, INC. introduced two PowerMate desktop machines priced right around $1,000. The PowerMate 5100 and 5100N offer a choice of a 266-MHz, 300-MHz or 333-MHz Celeron processor or a 333-MHz Pentium II processor. They can handle up to an 8.4-GB hard drive and come with Wake on LAN networking and other management tools.
The Consumer Division of PACKARD BELL NEC, INC. unveiled a new line of products tailored specifically for the sophisticated home user and the SOHO (small office/home office) market. The NEC Ready family of desktops spans a range of processors (a 300-MHz Celeron through a 450- MHz Pentium II), memory capacities (64 MB to 128 MB) and hard drives (6.4 GB to 13.6 GB). They also come with a Windows 98 software bundle, Internet and communications tools, multimedia features and productivity tools. Estimated street prices for the five NEC Ready products initially introduced run from $900 up to $2,400. Pricing for the first two NEC Ready Office PCs, which incorporate additional peripherals and business software tools, is expected to be $1,250 and $1,500, respectively.
TOSHIBA CORP.'s Irvine, California subsidiary, the top U.S. vendor of notebook computers, has released several more products. One, the Tecra 8000 family, is available from resellers in several standard configurations using 233-MHz or 266-MHz Pentium II processors, but it also can be custom-configured by TOSHIBA AMERICA INFORMATION SYSTEMS, INC. with display sizes of up to 14.1 inches and hard disk drive capacities of as much as 8.1 GB. New as well from Toshiba is the 4-pound, 1.1-inch-thick Portege 7000CT. Priced at $3,000, it features either a 233-MHz or a 266-MHz mobile Pentium II processor, a 12.1-inch TFT (thin-film-transistor) display and a 4.3-GB hard drive. The third addition is the value-oriented Satellite 4000 series, which starts at $2,000 for a notebook with a 233-MHz Pentium II processor, a 12.1-inch dual-scan display and a 4.1-GB hard drive.
The thinnest and lightest notebook computers built by SONY CORP. are in stores. The VAIO 505 SuperSlim is just an inch thick and weighs only three pounds, yet the two models feature a choice of a 200-MHz or a 266- MHz Pentium II processor with MMX technology, a 2.1-GB hard drive, 32 MB of memory and a 10.4-inch TFT screen. The base model sells for an estimated $2,000, while the other, which includes a Sony i.LINK port to connect with IEEE 1394-enabled devices, goes for $2,700 or so.
In the hope of returning its San Jose, California marketing subsidiary to profitability in the current fiscal year, ALPS ELECTRIC CO., LTD. is ending direct sales of printers through ALPS ELECTRIC (U.S.A.), INC. The company instead will focus on supplying these products on an original equipment manufacturer basis. The change will cost some jobs. The California operation also distributes other computer peripherals as well as automotive parts and electronic components.
The OKIPAGE line of LED (light-emitting diode) page printers from OKI ELECTRIC INDUSTRY CO., LTD.'s Mt. Laurel, New Jersey Okidata unit now includes a color model. The networkable OKIPAGE 8c outputs eight pages per minute in full color with a true resolution of 600 dots per inch. Shipments of the $3,500 or so desktop printer are set to start in late September. The OKIPAGE 8c will be released in Japan next year. It already is on sale in Europe. In time, worldwide sales are expected to hit 10,000 units a month.
Both NEC TECHNOLOGIES, INC. of Itasca, Illinois and EPSON AMERICA, INC. of Torrance, California have introduced color ink-jet printers for the SOHO market. The SuperScript 650c from NEC Technologies prints two ppm in color and six ppm in monochrome with a resolution of 1,200 dpi by 600 dpi. It is priced at $140 after a mail-in rebate. For its part, Epson America released three Stylus Color printers compatible with both Windows and Macintosh systems. The high-end Stylus Color 740 outputs 5 ppm in color and six ppm in monochrome at 1,440 dpi by 720 dpi. It lists for $280. The $200 midrange Stylus Color 640 offers the same resolution but prints 3.5 ppm in color and 5 ppm for black text. At the low end is the $150 Stylus Color 440, which delivers 2.5 ppm in color and 4 ppm in black and white at 720 dpi by 720 dpi.
An exchange rate of ¥145=$1.00 was used in this report.
Japan's biggest independent distributor of electronic components, MARUBUN CORP., and the world's largest electronics distributor, ARROW ELECTRONICS, INC., have agreed to form an equal partnership to exclusively serve Japanese companies in North America and in Asia outside Japan. The unprecedented pairing in the electronics distribution field is the result of three years of talks. They were initiated by Melville, New York-headquartered Arrow after concluding that it never would be able to get in the door of many Japanese multinationals without a connected partner. The North American operations of the Marubun/Arrow joint venture will start in the first quarter of 1999. The primary sales and marketing offices will be in San Diego and San Jose, California, with satellite offices in Portland, Oregon and Atlanta. The Asian part of the business will begin late this year. Singapore and Hong Kong will be the sites of the main sales offices. Marubun/Arrow will start off with about 100 customers in North America and 50 in Asia. These companies now do business with one or the other partner or both.
The first digital television sets are in stores, including a 56-inch, high- definition model from the PANASONIC CONSUMER ELECTRONICS CO. unit of MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. (see Japan-U.S. Business Report No. 345, June 1998, p. 3). TOSHIBA CORP. hopes that customers curious about the new technology also will take a look at its IT Vision interactive sets, which will be introduced in October. These sets, the first of their kind to arrive in the United States, use an engine or adapter developed by WINK COMMUNICATIONS, INC. of Alameda, California to tap into the information stream transmitted by broadcasters in the vertical blanking interval of each TV frame. In Japan, broadcasters use the IT Vision technology for television shopping and other services. In this country, the NATIONAL BROADCASTING CO. is starting IT Vision broadcasting. Toshiba hopes to parlay this launch into sales of 5,000 IT Vision sets in FY 1998 and 50,000 or so in FY 1999.
PIONEER ELECTRONIC CORP. has raised the bar in plasma display panels for public venue communications with the release of the PDP-V501X. Less than four inches deep and weighing under 95 pounds, the 50-inch diagonal screen can reproduce true XGA (extended graphics array) computer image resolution and is compatible with both high-definition and standard- definition television signals. PIONEER NEW MEDIA TECHNOLOGIES, INC. priced the PDP at $15,200. It is forecasting sales of 500 units a month.
In the latest reorganization of its North American video game operations, SEGA ENTERPRISES, LTD. will buy the commercial video game machine marketing division of SEGA GAMEWORKS L.L.C. The latter company was formed in April 1996 by Sega (46 percent), MCA INC. (27 percent) and DREAMWORKS SKG (27 percent) to open a projected 100 amusement centers in the United States over five years, but it has just five in operation. The divestiture of the marketing unit, which had sales of roughly $80 million in FY 1997, not only will pump cash into Sega GameWorks but will allow it to concentrate on opening and managing amusement centers. Sega's wholly owned Redwood City, California subsidiary will market video game machines to arcades.
An Americanized version of the Lovegety portable communications device — one of this year's hit products in Japan, especially among young men and women interested in meeting each other — will be in stores in early December at a price of less than $20. Users select one of six subjects, such as party. The Lovegety II sends out a signal. If someone in the vicinity also has chosen party, the machine starts to beep when the two people are within about 16 feet of each other. Developer ERFOLG CO., LTD. of Tokyo apparently believes that Lovegety II will duplicate the success of the original since it is projecting yearly sales of 1 million units.
Unable to build a market for its home-oriented acoustical relaxation chairs, BODYSONIC CO., LTD. liquidated its Las Vegas, Nevada marketing subsidiary. The Tokyo company sold its interest to a Singapore investment company that was a partner in the venture.
Convinced that fuel cells not only are the most promising power source for electric cars but also are technically possible, TOSHIBA CORP. and UNITED TECHNOLOGIES CORP. will collaborate on commercializing this technology. With input from the automotive industry, they plan to develop by 2000 a small fuel cell capable of generating 50 kilowatts of electricity. The product, which will be twice as energy efficient as a gasoline engine, could enter production in 2003. Toshiba and UTC have formed a company to carry out the work, with the Japanese partner having a roughly 10 percent share in the venture. Since mid-1991, the two have built 200-watt fuel cells for plant and office electricity generation through equally owned INTERNATIONAL FUEL CELLS CORP. of South Windsor, Connecticut.
An exchange rate of ¥145=$1.00 was used in this report.
With demand in Japan for liquefied natural gas forecast to jump 40 percent to 77 million tons in 2010, another trading company has signed on to a project to study the feasibility of exploiting gas reserves on Alaska's North Slope for export to East Asia. MARUBENI CORP. is working with ATLANTIC RICHFIELD CO., CSX CORP., FOOTHILLS PIPE LINES LTD. and PHILLIPS PETROLEUM CO. on the $100 million study. If the partners decide to go ahead, they will be looking at a $10 billion or so investment, including the cost of an 800-mile pipeline from the North Slope to a site near Valdez, where a liquefaction facility would be built. Production, which could start between 2005 and 2007, is projected in the range of 15.4 million tons a year. Marubeni would export about 60 percent of that volume to Japan, with the balance going to South Korea and Taiwan. MITSUI & CO., LTD. and MITSUBISHI CORP. are weighing participation in an EXXON CORP.-led Alaskan LNG project envisioned for the same time frame (see Japan-U.S. Business Report No. 337, October 1997, p. 4).
An exchange rate of ¥145=$1.00 was used in this report.
In an unusual, perhaps unprecedented move for a Japanese financial institution, TOYO TRUST & BANKING CO., LTD. is transferring responsibility for managing investments in non-Asian stocks to its American and European subsidiaries. Its Manhattan operation will set up an asset management division that will work with investment manager WELLINGTON MANAGEMENT CO., L.L.P. of Boston. Toyo Trust manages about $55.2 billion in assets, primarily corporate pension funds and postal savings system money.
The drive for efficiency among Japanese financial services providers sometimes involves seemingly small steps. For instance, DAIWA SECURITIES CO., LTD.'s American subsidiary is outsourcing the work of its Chicago futures execution and settlement unit to specialist GELBER GROUP INC., also headquartered in Chicago. The brokerage house's Manhattan operation will retain its futures sales and trading staff and remain a clearing member of the Chicago Board of Trade and the Chicago Mercantile Exchange.
An exchange rate of ¥145=$1.00 was used in this report.
RIGHTWAY FASTENERS, INC., a Columbus, Indiana manufacturer of high- torque tension bolts for the automotive industry and cold forgings, has completed a $3.5 million, freestanding surface treatment plant. When fully operational in the summer of 1999, the facility will allow the company to expand its current business of dacrotizing and electric zinc plating automotive parts. Rightway Fasteners, which now employs 115 people, is owned by MEIDOH CO., LTD. (48 percent), NAGOYA DACRO CO., LTD. (26 percent), TOYOTA TSUSHO CORP. (10 percent), SANNOHASHI CORP. (10 percent) and SUNNY DACRO CO., LTD. (6 percent). Reflecting the ownership ties, the company's main customers are the North American operations of TOYOTA MOTOR CORP. and NISSAN MOTOR CO., LTD. RFI had sales of $10 million in 1997 and is projecting revenues of $13.1 million for this year.
An exchange rate of ¥145=$1.00 was used in this report.
The world's largest manufacturer of foundry equipment, SINTOKOGIO, LTD., has expanded its stable of North American affiliates to five. Through ROBERTS SINTO CORP. of Lansing, Michigan, it acquired SANDMOLD SYSTEMS, INC., which designs, makes and installs green sand systems, foundry automation, sand reclamation systems and battery paste systems. The 90-employee SandMold Systems is based in Newaygo, Michigan. It also has an operation in Cleveland that designs and manufactures control systems for the foundry market and other customers. Sales in 1997 were around $20 million. Roberts Sinto, which employs 220 people, produces flaskless and tight flask molding systems as well as Shalco core equipment. It had FY 1997 revenues of some $40 million. Sintokogio's other North American subsidiaries are WIXON PRODUCTS, INC. of Wixom, Michigan, FINISHING ASSOCIATES, INC. of Southampton, Pennsylvania and SINTO AMERICA, INC.
To better cope with the downturn expected in the big American construction equipment market, KOMATSU LTD. reportedly plans by yearend to revamp its U.S. manufacturing operations. The world's number-two maker of earthmoving machinery will sell the Galion, Ohio plant of its wholly owned KOMATSU AMERICA INTERNATIONAL CO. subsidiary to HYDRAULIC TECHNOLOGIES, INC. The factory builds the hydraulics for Komatsu's locally made excavators and other machinery. Once the deal is finalized, KAIC will contract with the Lake Forest, Illinois-headquartered company for hydraulic equipment. As part of this transaction, Komatsu will shift production of the hydraulic excavators, motor graders and compaction rollers also made at the Galion facility to its Chattanooga, Tennessee factory, which now manufactures hydraulic excavators and wheel loaders. KAIC also has a plant in Peoria, Illinois. Komatsu has about 15 percent of the U.S. construction equipment market. In FY 1997, this business contributed around 40 percent of the parent's consolidated pretax profits.
SAKAI HEAVY INDUSTRIES, LTD., one of the three biggest makers of road- paving equipment in the world, is planning a major U.S. marketing push next spring in an effort to lift an American market share that now stands below 5 percent. The key to this thrust is the introduction of equipment designed specifically for the United States. The first such product to be launched by Sakai's New Castle, Delaware subsidiary will be a 10-ton- class vibration roller. An asphalt cutter will follow in June. Over the next two to three years, Sakai also expects to double its current network of 25 dealers, most of which are located on the East Coast. If all goes according to plan, the company's American sales will hit $34.5 million in FY 2000 from roughly $10.3 million in FY 1997.
Over the next four years, the Franklin Lakes, New Jersey subsidiary of MITSUI SEIKI KOGYO CO., LTD. will work with UNITED TECHNOLOGIES CORP. to develop machine tool and cutting technologies for faster, more accurate machining of what are known as fan integrally bladed rotors; these serve as the intake fan blades for jet propulsion engines. Machined from a single piece of metal, Fan IBRs offer power and safety benefits over conventional rotors on which blades are assembled. The platform for the collaboration, which will take place at the big aircraft engine manufacturer's East Hartford, Connecticut research center, will be a Mitsui Seiki-supplied machine designed specifically for high-speed, simultaneous, five-axis machining of the Fan IBR's complex geometries. As UTC and Mitsui Seiki refine the processing requirements, the Japanese company will be responsible for generating engineering designs, making prototypes and doing component fabrication.
Sometime during the summer of 1999, FUJI SEIKI MACHINE WORKS, LTD. will start exporting drilling machines and other machine tools to the United States. An affiliate of TOSHIBA MACHINE CO., LTD., the Shizuoka prefecture manufacturer will use its parent's U.S. marketing channels. There will be little or no overlap between the two companies' product lines because Fuji Seiki plans to specialize in machines for processing aluminum sheet in the aircraft industry.
With a distributor expected to be selected shortly, TAIZEN CO., LTD., a Shizuoka prefecture supplier of waste paper processing machinery, plans to begin sales in the United States next spring. The company's mainstay product will be the New Taizen, a machine for removing ink from waste paper that features an efficient kneading process. Taizen expects 20 systems a year to be sold.
An exchange rate of ¥145=$1.00 was used in this report.
In what would seem like a major gamble, DAIO PAPER CORP. will shortly open a suburban Los Angeles marketing subsidiary in preparation for launching sales of facial tissues to supermarket and drugstore chains. Japan's fourth-largest paper company and the top maker of tissues, which are sold under the Elleair brand, discounts the riskiness of its move. It says that while production costs might be higher in Japan, tissues sell for more in the United States than at home. Daio Paper expects to sell 220 tons of tissues a month initially and 1,100 tons monthly by late 1999.
An exchange rate of ¥145=$1.00 was used in this report.
Already a force to be reckoned with in several areas of the U.S. copier market, CANON INC. has set its sights on several additional segments, including XEROX CORP.'s high-volume territory. Its ammunition there is the NP 9120, a 120-page-per-minute system for centralized corporate reproduction departments and similar duplicating environments. This $115,000 product had a mid-September release date. Canon's main push, however, is into the relatively new market for digital multifunctional products, or combination copiers/network printers. It previewed the GP600, a 60-ppm unit that will ship in the fourth quarter at a price around $30,000. Canon also introduced a 24-ppm color laser copier/printer, the CLC 2400, that lists for just under $50,000. In addition, the company announced its first branded network laser printers, the 17-ppm LBP-1760 and the 24-ppm LBP-2460. These machines put Canon in direct competition with HEWLETT-PACKARD CO., which gets most of the laser engines for its printers from the Japanese manufacturer. Despite its newcomer status in all but the color copier segment, Canon is predicting that the just introduced products and their follow-ons will generate an additional $1 billion in U.S. sales in 2000.
An exchange rate of ¥145=$1.00 was used in this report.
MITSUBISHI CHEMICAL CORP. continues to shed or reorganize unprofitable U.S. manufacturing operations acquired as part of a late 1980s' diversification strategy (see Japan-U.S. Business Report No. 347, August 1998, p. 3 and p. 5). Its latest move is the sale of SERADYN, INC., a maker of infectious disease diagnostic reagents and test kits as well as uniform latex particles used in the production of diagnostic reagents, to ALEXON- TREND, INC. for a reported $6.9 million. MCC acquired the Indianapolis, Indiana supplier in 1989. The 125-employee company has sales of about $12 million a year, but it has been unable to break out of the red. New Brighton, Minnesota-based Alexon-Trend, which is in the same business as Seradyn, is a SYBRON INTERNATIONAL CORP. company.
An exchange rate of ¥145=$1.00 was used in this report.
The long and deep slump in the worldwide market for dynamic random access memories has claimed another Japanese-affiliated production venture in the United States. Effective September 30, OKI ELECTRIC INDUSTRY CO., LTD. closed its back-end facility in Tualatin, Oregon. Opened in 1990, the plant was assembling and testing 1 million 16-megabit DRAM chips a month at the time of the shutdown, plus 50,000 microcontrollers for the automotive industry. The move cost about 130 people their jobs. The assembly and test work done in Oregon is being transferred to a plant in Thailand. Oki Electric's sales, marketing and design operations in Sunnyvale, California are unaffected by the end of the Oregon operation. Earlier this year, MITSUBISHI ELECTRIC CORP. announced that it was ending DRAM wafer fabrication in Durham, North Carolina (see Japan-U.S. Business Report No. 341, February 1998, p. 7), and HITACHI, LTD. and TEXAS INSTRUMENTS INC. said that they were dissolving a partnership to make 16-megabit and later 64-megabit memories in Richardson, Texas (see Japan-U.S. Business Report No. 342, March 1998, p. 6).
Amid the upheaval in the international DRAM market, FUJITSU, LTD. affirmed its commitment to continued U.S. semiconductor production by announcing that the next generation of computer memories, 256-megabit parts, would be made exclusively at the company's Gresham, Oregon wafer fabrication facility. Volume production of these chips now is scheduled to begin in 2001. Fujitsu makes current-generation 64-megabit DRAMs at its FUJITSU MICROELECTRONICS, INC. unit's plant (see Japan-U.S. Business Report No. 337, October 1997, p. 7) as well as at a front-end in Iwate prefecture. Centralizing production of 256-megabit DRAMs in Oregon will save the company the huge cost of equipping both plants for production of the high-density memories. NEC CORP. disclosed recently that it would make future DRAM generations and other cutting-edge semiconductors at the NEC ELECTRONICS, INC. wafer fab in Roseville, California (see Japan- U.S. Business Report No. 346, July 1998, p. 7).
Meanwhile, NEC ELECTRONICS, INC. has teamed up with ADVANCED RISC MACHINES of Los Gatos, California to develop a memory controller that will enable system-on-a-chip devices powered by ARM processors to interface with NEC CORP.'s 64-megabit virtual channel synchronous DRAMs. By tapping into the virtual channel memory technology, the partners say, the linkage will result in a 50 percent increase in system performance and a 30 percent reduction in memory power consumption. Volume production of NEC's VC SDRAM is set to begin in October. The memory controller, which will be targeted at applications that demand higher performance memory, will appear later in the fourth quarter. .....NEC CORP. also is working with QUICKTURN DESIGN SYSTEMS INC., a Mountain View, California electronic design automation company, to provide the hardware and the software for fast and accurate verification of complex designs based on the chipmaker's 32-bit RISC (reduced instruction-set computing) V800 Series of microcontroller cores. As part of the deal, NEC ELECTRONICS, INC. joined Quickturn's Affinity Partnership Program.
At a cost of $3 million, GUNZE SANGYO, INC. increased its stake in MOORE TECHNOLOGIES INC. to 14 percent from the 2 percent acquired in 1996. The San Jose, California company manufactures epitaxial reactors for silicon wafers and provides epitaxial services at its Class 10 cleanroom facility. It employs about 80 people and had revenues of $11 million in the year through September 1997. Gunze Sangyo, a textile trader and clothing manufacturer that has interests in several U.S. high technology ventures, has served as Moore Technologies' distributor in Japan and the People's Republic of China since 1991.
With input from semiconductor production equipment trader and manufacturer TOKYO ELECTRON LTD. and test company W.L. GORE ASSOCIATES INC., MOTOROLA INC. has developed a method for testing semiconductors that it believes could cut production costs by 15 percent and manufacturing time by 25 percent. The burn-in technology allows the company to test chips in wafer form rather than after they have been sliced and packaged. Accordingly, the usually significant number of defective parts on a wafer can be identified before they are packaged. Motorola expects to deploy the new process at one of its Austin, Texas fabs in the first quarter of 1999. The three companies worked on the testing breakthrough for 18 months.
An exchange rate of ¥145=$1.00 was used in this report.
International trade over the Internet moved closer to reality when MITSUBISHI CORP. and CommerceNet, a Palo Alto, California-based industry association promoting electronic commerce over the Internet, announced the availability of standardized documents that support international cross-certification of digitally signed trade transactions. The documents, including a model electronic commerce trade agreement for trading partners, are the outgrowth of a pilot project launched in May 1997 by JapanNet and CommerceNet. They provided independent certification authority services for their respective clients, Mitsubishi and an unnamed American trading partner. JapanNet is a consortium of companies interested in electronic commerce that is spearheaded by the trader and backed by the Ministry of International Trade and Industry.
An exchange rate of ¥145=$1.00 was used in this report.
Stiff competition in the American market for cellular telephones and the transition from analog handsets to digital ones forced money-losing OKI ELECTRIC INDUSTRY CO., LTD. to end production of analog cell phones at its Suwanee, Georgia factory. In operation since 1984, the plant was turning out more than 100,000 phones a month when it closed. Roughly 110 people lost their jobs. Oki Electric continues to make automotive electronic parts in Suwanee. It also is doing research and development there on next-generation cellular phones. The company stopped making cell phones in Japan in 1995. Oki Electric's U.S. businesses reported a combined operating loss of $44.1 million in the year through March 1998.
JAPAN TELECOM CO., LTD.'s New York City subsidiary, which launched facilities-based domestic long-distance and transpacific calling services this summer (see Japan-U.S. Business Report No. 346, July 1998, p. 7), has acquired a 51 percent stake in AIRNEX COMMUNICATIONS INC. for an undisclosed amount. The San Ramon, California long-distance carrier has some 15,000 mostly Japanese customers, about 80 percent of which are individuals. Japan Telecom plans to wholesale capacity to Japan and other parts of Asia to Airnex while using its customer base to expand U.S. services.
Like JAPAN TELECOM AMERICA INC., KDD AMERICA, INC. now has its own network for providing communications services across the Pacific and within the United States. KOKUSAI DENSHIN DENWA CO., LTD.'s New York City subsidiary had been offering international and domestic telephone services to corporate and individual customers using capacity leased from local carriers. The Federal Communications Commission made the start of facilities-based transpacific services contingent on KDD cutting the fee it charges American carriers for completing calls in Japan to 15 cents per minute. Japan's biggest international carrier said that its rate had been below that level since July. Echoing JAPAN TELECOM CO., LTD., which was subject to the same condition, the company claimed that competition, not the FCC, forced the rate reduction.
Beginning this month, customers of NTT MOBILE COMMUNICATIONS NETWORK, INC.'s nine regional cellular service providers are able to make calls directly to the United States. Until now, they and other cell phone subscribers in Japan had to register first with an international communications company like KOKUSAI DENSHIN DENWA CO., LTD. that actually handled the call. The new service is the result of a tie-up with AT&T CORP. and its AT&T Wireless Services unit. NTT DoCoMo claims that its rates undercut those charged by KDD by roughly 25 percent.
The Japan-U.S. Cable Network, a 13,000-mile, high-capacity, undersea fiber-optic network, has moved closer to reality with the signing of a formal construction and maintenance agreement by three Japanese communications companies and 30 American and European carriers and other investors (see Japan-U.S. Business Report No. 345, June 1998, p. 7). The backers of the $1 billion-plus project include JAPAN TELECOM CO., LTD., KOKUSAI DENSHIN DENWA CO., LTD. and NTT WORLDWIDE NETWORK CORP. as well as AT&T CORP., GTE CORP., MCI WORLDCOM, INC., PSINET INC., SPRINT CORP., BRITISH TELECOMMUNICATIONS PLC and CABLE & WIRELESS PLC. The investors also signed a supply contract with ALCATEL ALSTHOM S.A.'s Alcatel Submarine Networks, FUJI-TSU, LTD., NEC CORP. and KDD SUBMARINE CABLE SYSTEMS INC. The system is scheduled for completion by the second quarter of 2000. It initially will be able to handle 967,680 simultaneous voice calls, but it will be designed to scale to a capacity equivalent to more than 7.7 million concurrent calls. How much each investor will put up has not been disclosed.
A multinational alliance that includes PIONEER ELECTRONIC CORP. is working on an end-to-end digital system for the U.S. cable television industry that will be compliant with its OpenCable standards. The system will support such advanced digital video and interactive TV applications as interactive program guides, Internet browsing, video-on-demand and home banking. C-CUBE MICROSYSTEMS INC., a developer of digital video semiconductor products, will use its expertise to come up with a digital set-top box. The Milpitas, California company then will provide a complete evaluation board to Pioneer. Meanwhile, France's CANAL + will adapt its MEDIAHIGHWAY software and MEDIAGUARD conditional access system to the American market to advance set-top applications development. C-Cube subsidiary DIVICOM INC. will supply the digital head-end equipment necessary for the deployment of OpenCable-compliant systems. PIONEER NEW MEDIA TECHNOLOGIES, INC. will market the end-to-end system.
The Hitachi Internetworking unit of HITACHI COMPUTER PRODUCTS (AMERICA), INC. released a switch that bridges ATM (asynchronous transfer mode) and Ethernet environments at about $1,000 a port. The HiSpeed 160 edge switch combines 12 10/100-megabit-per-second ports and a pair of ATM uplinks that can provide either two separate connections or a redundant backbone connection. Local area network emulation software inside the switch makes the link between the packet-based Ethernet ports and the 155-Mbps, cell-based ATM OC-3 ports. The HS 160 also can be configured as a routing switch.
An exchange rate of ¥145=$1.00 was used in this report.
A FORD MOTOR CO. supplier is setting up shop in Bowling Green, Ohio. TOCHIGI FUJI INDUSTRIAL CO., LTD. has earmarked $18 million to build a plant scheduled for opening in May 1999. Before then, SUMITOMO CORP. will invest in TOCHIGI FUJI AMERICA MANUFACTURING INC., which will machine and assemble engine and powertrain components. The operation is forecasting sales of $35 million in FY 2002, by which time it hopes to be doing business with some Japanese transplants as well as with Ford. At home, NISSAN MOTOR CO., LTD. is Tochigi Fuji Industrial's main customer.
In another sign that Japanese automotive parts manufacturers are seeking business wherever they can find it, a HONDA MOTOR CO., LTD. supplier is building a plant in Austin, Indiana to produce body stampings for Subaru vehicles assembled at nearby SUBARU-ISUZU AUTOMOTIVE INC. Tokyo- based KIKUCHI CO., LTD. put up 60 percent of the capital for AUSTIN TRI- HAWK AUTOMOTIVE, INC., while TOA INDUSTRY CO., LTD. of Gunma prefecture, which generates most of its business from FUJI HEAVY INDUSTRIES, LTD., a part owner of SIA, has a 30 percent share in the new company. NISSHO IWAI CORP. owns the remaining 10 percent of Austin Tri- Hawk. Its $19 million plant is expected to be completed in April 1999. At start-up, the factory will operate at 60 percent of capacity. Over the medium term, Austin Tri-Hawk is looking for annual sales of $24 million.
By yearend, a $1.7 million expansion of FRANKLIN PRECISION INDUSTRY, INC.'s plant in Franklin, Kentucky should be completed. The wholly owned AISAN INDUSTRY CO., LTD. producer of throttle bodies and canisters expects to reach full operation of the additional capacity by mid-1999. At that time, it will be able to turn out 880,000 throttle bodies a year and 980,000 canisters for TOYOTA MOTOR CORP.'s North American operations and the Canadian joint venture between SUZUKI MOTOR CORP. and GENERAL MOTORS CORP. The expansion will boost employment to 350 people from 200-plus now. Franklin Precision Industry had sales of $31 million in 1997 and, for the first time since it opened in 1991, was in the black to the tune of $1.8 million. Revenues in 2000 are projected at $78.6 million.
Just months after completing one expansion, exterior plastic parts producer AEROQUIP INOAC CO. has embarked on another. The 10-year-old joint venture between INOAC CORP. (49 percent) and AEROQUIP CORP. (51 percent), which has developed into the leading U.S. supplier of blow- molded automotive spoilers, is spending $20 million to increase production at its primary Fremont, Ohio plant and at its blow-molding factory in Livingston, Tennessee. The expansion is expected to add 300 jobs and help the company raise sales 15 percent in 1999. Aeroquip Inoac also has a plant in Atlanta, which, like the Tennessee facility, was acquired last year from Aeroquip, a VICKERS, INC. company (see Japan-U.S. Business Report No. 336, September 1997, p. 8).
NIPPON SEIKI CO., LTD. is supplying head-up displays as a factory option for the 1999 Corvette from GENERAL MOTORS CORP.'s Chevrolet division. The Niigata prefecture manufacturer, which has made the instrument panel for the Corvette since the start of the 1997 model year, expects to ship 10,000 head-up displays a year.
After several years of market research, PIONEER ELECTRONIC CORP. will begin marketing car navigation systems in the United States early in 1999. The products use U.S.-developed map software. With sales in Germany and France expected to start around the same time, Japan's largest maker of car navigation systems hopes to see a combined total of 2,000 units a month sold. U.S. marketing will be centered in California, Florida and Washington.
Turning around its money-losing North American business is an objective that continues to elude MITSUBISHI MOTORS CORP. despite two big capital injections in recent years. In FY 1997, MITSUBISHI MOTORS MANUFACTURING OF AMERICA, INC. of Normal, Illinois and MMC's Cypress, California sales arm, MITSUBISHI MOTOR SALES OF AMERICA, INC., posted a combined loss of $48.3 million. The automotive maker's latest strategy for improving earnings is to merge the production and the sales units in the spring of 2000. MMC also is expanding its hiring of Americans for management positions at Mitsubishi Motors Manufacturing.
ALL NIPPON AIRWAYS CO., LTD. has contracted with BOEING CO. to convert one of its passenger 747-200 airplanes into a full-fledged freighter. Work on the ANA plane will begin in early 1999 at the aircraft maker's Wichita, Kansas Modification and Engineering Services unit. The conversion should be completed in about four months.
The Northern Indiana Commuter Transportation District, the operator of the South Shore Line along the southern rim of Lake Michigan, has awarded MITSUI & CO., LTD. a $17.2 million or so contract to supply electrical equipment for 56 rail cars that it has on order. The buy-American conditions attached to federally funded transportation projects require, however, that the parts be built in the United States. Therefore, the trader subcontracted the work to TOSHIBA CORP.'s Houston manufacturing subsidiary, a longtime producer of industrial motors. The contract covers such products as AC motors, controls and auxiliary power sources. Deliveries to the state-affiliated rail company will start in April 2001.
An exchange rate of ¥145=$1.00 was used in this report.
The Bellevue, Washington sales subsidiary of ICOM INC., a manufacturer of radio communications equipment for both amateur use and commercial applications, won a $12 million contract from the Department of Defense for high-performance transceivers to help soldiers communicate during battle simulations. The contract covers 22,000 of the Osaka company's IC- F3S transceivers. The first 1,800 units are scheduled to be delivered in October.
The second-largest North American producer of flat glass, Kingsport, Tennessee-headquartered AFG INDUSTRIES, INC., now is making automotive glass from scratch. The ASAHI GLASS CO., LTD. manufacturer spent $84 million to build a float glass plant in Richmond, Kentucky that can turn out daily 550 tons of the high-quality product required for automotive glass. Previously, AFG Industries bought float glass from competitors like PPG INDUSTRIES, INC. to make automotive sheet while mainly producing glass for windows and other construction uses. The automotive glass goes to another wholly owned Asahi Glass subsidiary, AP TECHNOGLASS CO. of Bellefontaine, Ohio, which makes safety glass for cars and trucks. AFG Industries has seven U.S. plants: Victorville, California; Spring Hill, Kansas; Richmond, Kentucky; Cinnaminson, New Jersey; Church Hill and Kingsport, Tennessee; and Bridgeport, West Virginia. Asahi Glass acquired a minority interest in the company, which also has two Canadian plants, in 1988 and took complete control in 1992.
Using ceramic tile processing technology that it developed, TOTO LTD., Japan's biggest maker of toilets, basins and bathtubs, is moving into a new business in the United States. It will open a company in San Francisco this fall to license to tile manufacturers its optical catalyst super hydrophilic technology, which essentially prevents condensation from forming on tiles. The subsidiary also will sell tiles made with the new process. Toto, which produces toilets and other bathroom fixtures in Atlanta and Morrow, Georgia, sees this diversification move generating $32 million in revenues in five years, including $23 million from licensing fees.
Two Japanese manufacturers of office supplies think there is considerable room for growth in the United States. Tokyo's ZEBRA CO., LTD. is projecting U.S. sales of $34.5 million in FY 1998 and double that in five years. To reach this goal, the company's Edison, New Jersey subsidiary will open a distribution center somewhere on the West Coast next year. Warehouses in the Northeast and in the South also are possibilities. For its part, TOMBOW PENCIL CO., LTD. predicts that U.S. revenues, derived mostly from correction tape, will double in FY 1998 to $9.7 million. The Tokyo-based firm is in the process of moving its Georgia warehouse into a space that is triple the size of the current facility. Meanwhile, writing instruments manufacturer PENTEL CO., LTD. has formed a team at its Torrance, California subsidiary to investigate alternative distribution routes for its products.
Eighteen months after EBARA CORP. agreed with RADIAN INTERNATIONAL LLC to explore the feasibility of building no-waste industrial plants in Southeast Asia, the tie-up has ended. Spokesmen for the Japanese company, a maker of pumps and air blowers that has moved into the environmental field in recent years, attributed this development to DOW CHEMICAL CO.'s sale of the Austin, Texas environmental engineering company and Radian's reorientation under its new owner toward environmental consulting.
An exchange rate of ¥145=$1.00 was used in this report.
A four-year collaboration between REGENERON PHARMACEUTICALS, INC. and SUMITOMO PHARMACEUTICALS CO., LTD. to develop the Tarrytown, New York partner's brain-derived neurotrophic factor for the Japanese market has progressed to the point that Regeneron licensed Sumitomo Pharmaceuticals to make and market BDNF. That agreement triggered a $5 million payment by the Japanese drug company, which will make additional payments dependent on the achievement of specific milestones and pay royalties on sales of BDNF in Japan. Regeneron and Sumitomo Pharmaceuticals are investigating BDNF for the treatment of amyotrophic lateral sclerosis, better known as Lou Gehrig's disease. Phase I clinical trials started this past spring.
A system for detecting oral cancer, which frequently is related to smoking, is coming to Japan, where the percentage of men who smoke is the highest in the world. OraTest developer ZILA, INC. of Phoenix, Arizona gave NIPPON SHOJI KAISHA, LTD. exclusive marketing rights to the five- minute mouthrinse test. The big drug wholesaler will pay a licensing fee and handle regulatory approval.
The subsidiary of PHARMACIA & UPJOHN, INC. is marketing two antibiotics for dogs to veterinarians. ANTIROBE, a brand of clindamycin hydrochloride sold in 25-milligram capsules, is indicated for the treatment of bacterial infections associated with wounds, abscesses and dental problems as well as for osteomyelitis. LINCOCIN, a lincomycin hydrochlorid product available in 100-mg tablets, is effective against most common gram- positive organisms, particularly streptococci and staphylococci.
An exchange rate of ¥145=$1.00 was used in this report.
To hold down costs in today's tight consumer spending environment, FAMILYMART CO., LTD. is replacing its expensive-to-maintain, nonstandardized computer systems with PC servers built by COMPAQ COMPUTER CORP. The third-largest operator of convenience stores in Japan ordered more than 5,000 ProLiant 1850R PC servers from Compaq's subsidiary in a deal worth roughly $41.4 million. Each FamilyMart outlet will get one of the just-introduced systems, which are powered by a 400- MHz Pentium II processor. The industry leader claims that the ProLiant 1850R is the first space-saving, full-featured, high-performance rack- mounted server. Installation of the FamilyMart machines should be completed by August 1999.
The performance of SILICON GRAPHICS, INC.'s Onyx2 supercomputer — a high-powered visualization platform designed to simultaneously process graphics, imaging and video data in real time — has been boosted with the release of a model incorporating the InfiniteReality2 graphics subsystem. An Onyx2 InfiniteReality2 system equipped with a pair of MIPS R10000 64-bit RISC processors begins at $232,800. At the same time, SGI's subsidiary cut the price of the Onyx2Reality, the Onyx2's current entry- level configuration, by 40 percent. With this system now starting at $97,700, the company claims that it is delivering the power of a visual supercomputer at a workstation price.
SILICON GRAPHICS, INC. also beefed up its Origin200 line of low-end, MIPS R10000-equipped Unix servers with the worldwide introduction of two additional products. The Origin200 225QC, targeted at the Internet market, uses a 225-MHz processor and a "matched-speed" cache subsystem to achieve industry-leading benchmark performance at a cost of just $22,500. For bandwidth-intensive applications, SGI has the Origin200 GIGAchannel workgroup server. Roughly $28,000 buys a system that the company says equals or even exceeds the peak bandwidth of many high-end enterprise servers that cost two to five times more than the Origin200 GIGAchannel.
Scalable data warehousing heavyweight NCR CORP. has replaced its Pentium Pro-based WorldMark 4300 server with the WorldMark 4400 system, which offers significantly increased performance through the use of up to four Pentium II Xeon processors running at either 400 MHz or 450 MHz. The new platform is designed for organizations that want to start off with a small (10-gigabyte range) data warehouse while having the flexibility to expand to more than 250 GB. Pricing of the Windows NT version of the WorldMark 4400 begins at $25,100. WorldMark 4400 systems running the Solaris operating system and NCR's version of Unix will be available in November. The company's subsidiary is forecasting sales of 500 WorldMark 4400 servers a year.
A competing product is on the market from UNISYS CORP., although it claims a performance advantage for the Aquanta QS/2. This stand-alone midrange server also can be configured with one to four 400-MHz Pentium II Xeon processors and with up to 8 GB of ECC (error checking and correcting) memory. The uniprocessor model goes for $28,200 and up.
With the corporate and home PC markets still stumbling along, American manufacturers continue to target new releases at the PC server market. For instance, HEWLETT-PACKARD JAPAN LTD. has a late October ship date for three additions to the HP NetServer L Series of enterprise, workgroup and departmental servers. It new top-of-the-line model is the rack- mounted, eight-way Pentium Pro HP NetServer LXr Pro8. This system costs $19,300 and up. Added to the middle of the line is a stand-alone or a rack- mounted departmental server, the HP NetServer LH 3, which is available with a 450-MHz Pentium II processor for a starting price of $9,000. For workgroups, HP Japan is offering the 450-MHz Pentium II-equipped HP NetServer LC 3 for $5,500. .....Going after the same market as the HP NetServer LC 3, DELL COMPUTER CORP.'s subsidiary released a version of its previously introduced PowerEdge 2300 workgroup server that also runs off a 450-MHz Pentium II chip. The basic configuration of the built-to- order, dual processor-capable system lists for $3,700.
The new 450-MHz Pentium II processor also is showing up in a PC workstation from DELL COMPUTER CORP., although the Precision Workstation 410 also can be ordered with either a 350-MHz or a 400-MHz part for as little as $2,400. The custom-configured system also has 2X AGP (accelerated graphics port) video and other features designed to appeal to power users.
COMPAQ COMPUTER CORP.'s local operation has added the second product to its Windows NT-based workstation line aimed at budget-conscious buyers that require high-performance features (see Japan-U.S. Business Report No. 346, July 1998, p. 12). The Professional Workstation AP200 offers a choice of a 350-MHz or a 400-MHz Pentium II processor. A system capable of two-dimensional graphics starts at $3,200 (the AP200 6350/2D+) or $3,600 (the AP200 6400/2D+), depending on the clock speed of the processor chosen.
Although recently introduced desktop and minitower PCs have failed to ignite demand in the corporate market, companies still are selectively releasing products in the hope that the new models will be the ones that pull sales out of their slump. For HEWLETT-PACKARD JAPAN LTD., the current candidate is the HP Vectra VE line with Pentium II processors running at various clock speeds and INTEL CORP.'s performance-enhancing 440BX AGPset chipset. A HP Vectra VE with a 266-MHz engine lists for $1,900, while one that uses a 400-MHz processor costs $3,100. HP Japan expects to sell 30,000 of the latest additions to the Vectra series.
By preinstalling the localized version of Windows 98 with its Pentium II- class DIGITAL PC 5510, DIGITAL EQUIPMENT CORP.'s subsidiary is trying to capitalize on the strong interest in Japan in the new operating system to lift sales. Power users can get a machine with a 333-MHz Pentium II for $2,700; a system with a 266-MHz chip goes for $2,000. Models also are available with a 233-MHz or a 300-MHz Pentium II.
Direct marketer DELL COMPUTER CORP. hopes that a price as low as $1,000 for a well-equipped desktop system will do the job. That is the list for the OptiPlex E1. Targeted at customers who run basic applications in single-tasking environments, it incorporates a 333-MHz version of the Celeron processor. .....MICRON ELECTRONICS, INC. also used this lower-cost engine to offer a Window NT 4.0-capable machine starting at just $1,200. The base model of the ClientPro CE Micro Tower runs off a 266-MHz Celeron processor with MMX technology. A model with a 300-MHz Celeron processor also is on the market.
Next year, DELL COMPUTER CORP. will go head-to-head with entrenched Japanese competitors in the market for thin, lightweight notebook computers. Although details have not been disclosed, the new product is expected to weigh less than four pounds. Portables, especially thin, lightweight ones, are much more popular in Japan than elsewhere, representing half or more of total PC sales. Dell's subsidiary is counting on the forthcoming line to boost notebooks from 20 percent or so of its total shipments to 25 percent or even 30 percent.
Notebook computer users who have large data storage requirements are the target customers for GATEWAY 2000, INC.'s new Solo 5150 line, which comes with a modular drive bay that supports an optional, low-cost DVD- ROM (digital video disc-read-only memory) drive. In the United States, the Solo 5150SE entry-level model, which features a 233-MHz Pentium II processor and a 14.1-inch TFT display, is priced at $2,300, plus $250 for the two-speed DVD-ROM drive. The high-end model, the Solo 5150XL, offers a 266-MHz Pentium II, more internal memory and extra hard drive storage for $3,300.
Manufacturers of PCs trying to find the next big seller no doubt are casting an envious eye on the sleek, all-in-one iMac from APPLE COMPUTER INC., which is proving to be as popular in Japan as it is in the United States. Slightly more than $1,200 buys a system with a 233-MHz PowerPC 750 processor, a 4 GB hard drive, 32 MB of memory, built-in networking, an internal modem and a CD-ROM drive. The iMac also has 512 kilobytes of performance-boosting secondary cache memory. In the hope of attracting new customers to Apple products, the company's subsidiary signed iMac deals with 20 or so nontraditional marketers in addition to selling the system through CANON SALES CO., INC. and its other usual channels.
The hype about the iMac overshadowed APPLE COMPUTER INC.'s release of its refreshed mainstay computer line, the Power Macintosh G3 Series, in Japan. A pair of desktop models are available with a choice of a 266-MHz or a 300-MHz PowerPC G3, as is a like number of minitower models running off a 300-MHz or a 333-MHz version of the Mac OS-optimized processor. All the new models feature speed enhancements and expanded video capabilities. They also are priced to move. Estimated street prices range from under $1,400 for the 266-MHz Power Macintosh G3 to $2,800 for the top-of-the-line 333-MHz minitower model. .....Simultaneously, APPLE COMPUTER INC.'s subsidiary introduced a Macintosh Server G3 powered by a 333-MHz PowerPC G3 processor for enhanced workgroup efficiency. It is selling for around $4,100.
Like PC suppliers, APPLE COMPUTER INC. is tightening controls on inventory to contain overhead costs in Japan's uncertain sales environment. Until now, the local operation has imported products every few weeks from the company's plant in Singapore and stored them in its own warehouse before shipment to retailers. Starting with the iMac, however, Apple is flying computers in daily to replace sold units. It also plans to go a step further and build an on-line network so that the company's major retailers can receive all of their Apple products directly from the factory on an as-needed basis. ADO ELECTRONIC INDUSTRIAL CO., LTD. and SHIMAMURA MUSIC CO., LTD. are expected to be the first retailers to participate in the new system.
MOTOROLA INC.'s subsidiary has expanded its lineup of single-board computers for industrial automation, data communications, telecommunications and similar low-end to midrange applications. The CPX2208 is an eight-slot CompactPCI (peripheral component interconnect) chassis. Available with either a Pentium processor with MMX technology, a mobile Pentium II engine or a PowerPC processor, the CPX2208 comes complete with central processing unit, memory, peripherals, power supply, Windows NT 4.0 and cables.
What SUN MICROSYSTEMS, INC. describes as the first board-level product that allows OEMs to design high-powered, scalable, embedded applications without having to retrofit servers built for business use is on the market. Costing just under $6,600, the SPARC-engine Ultra AXmp motherboard combines the power of four-way multiprocessing with the flexibility of standard 19-inch rack-mounted packaging. Typical applications for the board are high-end industrial control, Web hosting and carrier-class adjunct servers.
The Kodak Database System KD Series, a multimedia data management system that EASTMAN KODAK CO.'s subsidiary codeveloped with MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. for Japan, is on the market. The system uses the Internet to store and manage large volumes of images, video, audio and text. The data base can be accessed from any browser-equipped PC linked to a network, with fast downloads. Kodak's affiliate priced the base configuration at $36,200, but a more sophisticated version of the Kodak Database System KD Series can cost more than $206,900.
Companies with Windows NT systems have a new — but expensive — option for storing and backing up data bases and applications at speeds of up to hundreds of gigabytes per hour: the EMC Data Manager Symmetrix Path from EMC CORP. The Path software running on EDM and on a Windows NT server moves data directly from an EMC Symmetrix storage subsystem to an EDM tape backup system. The product is expected to appeal to businesses that want mainframe, Unix and Windows NT data on the same storage system or that have a Symmetrix storage system but do not have it attached to Windows NT servers. EDM pricing begins at $144,800, but that is on top of the substantial cost of a Symmetrix storage subsystem.
Among the 48 peripheral devices from 16 manufacturers initially announced for APPLE COMPUTER INC.'s iMac computer was the SDD-120USB Mac drive from IMATION CORP. Developed with help from MATSUSHITA ELECTRIC INDUSTRY CO., LTD., it comes with a Mac-formatted SuperDisk diskette from the Oakdale, Minnesota maker. The SuperDisk diskette provides 120 MB of storage. Standard 1.44 MB and 720 KB diskettes also can be used with the drive. Sold in the United as the SuperDisk USB Drive, the SDD-120USB Mac is priced around $230.
In another design win for DIAMOND MULTI-MEDIA SYSTEMS, INC., the company's Stealth II G460 was selected by FUJITSU, LTD. as the standard graphics accelerator for four of its FMV-Deskpower Pentium II desktop systems sold in Japan. The San Jose, California vendor's 8-MB product, which features INTEL CORP.'s 740 graphics controller, is a full 2X AGP accelerator for high-quality, superior-performance two- and three- dimensional graphics.
The three-year business relationship between EXTENDED SYSTEMS, INC., a developer and marketer of computer connectivity and mobile systems products, and distributor CF CO., INC. has evolved to the point that the two jointly set up a Tokyo liaison office for the Boise, Idaho-based company. A primary goal for the new operation is to expand sales of the JetEye PC infrared adapter, which allows wireless connectivity between Windows- based portable computing devices and desktop PCs (see Japan-U.S. Business Report No. 343, April 1998, p. 11).
An exchange rate of ¥145=$1.00 was used in this report.
Malls are the future of retailing in Japan. That at least is what a number of big American shopping center developers and/or operators apparently believe. The latest U.S. company with plans for the market is CHELSEA GCA REALTY PARTNERSHIP LP. The Roseland, New Jersey mall owner and operator has tied up with a pair of big-name firms — developer MITSUBISHI ESTATE CO., LTD. and trader NISSHO IWAI CORP. — to run 10 or so upscale factory outlet malls in the Tokyo-Osaka corridor and elsewhere in the country. The malls, which will have roughly 50 brand-name outlets each on sites ranging in size from 753,500 square feet to 861,100 square feet, will be built on leased land to hold down up-front costs. The partners' first mall is expected to open in two years. Prospective locations include Gotenba, Shizuoka prefecture and Kaizuka in Osaka prefecture.
Time-share operator SUNTERRA CORP. is off to a fast start in Japan. The San Mateo, California company now has three properties in operation. It opened the beach-oriented Sunterra Resort Minami-Boso in Chiba prefecture at the beginning of September and the Sunterra Ski Resort Naeba in Yuzawa, Niigata prefecture at the end of the month. They join Sunterra's initial time-share property, the Sunterra Resort Kawaguchiko in Katsuyama, Yamanashi prefecture (see Japan-U.S. Business Report No. 345, June 1998, p. 13). The company also has set up a marketing office in Tokyo.
An exchange rate of ¥145=$1.00 was used in this report.
LightCaster microdisplay panels, developed and made by DISPLAYTECH, INC., will be available next year through exclusive distributor NISSHO ELECTRONICS CORP. According to the Longmont, Colorado company, the innovative ferroelectric liquid crystal display panels produce images of unmatched clarity, color and intensity. They also are lightweight and inexpensive to manufacture, which makes them suitable for everything from cellular phones with integrated video to digital cameras to PC monitors and large-screen television sets. Given these characteristics, Nissho Electronics expects consumer electronics manufacturers to buy $3.4 million-plus worth of LightCaster products in the first year of marketing.
Many smaller American companies manage to build a strong position in Japan with little notice outside their field. A case in point is EUPHONIX INC., a maker of digital audio production products for music, film and TV postproduction, broadcast, sound reinforcement and multimedia applications. The Palo Alto, California company's subsidiary recently installed its 50th CS console for an unnamed buyer. Its customers include major record labels and movie studios as well as other firms involved in the professional audio business.
An exchange rate of ¥145=$1.00 was used in this report.
Retail and institutional investors interested in exploring the opportunities available to them as a result of the deregulation of Japan's financial services market can tap the expertise of a growing number of U.S. firms. The latest entrant is AMERICAN EXPRESS CO. As soon as it receives a license from the Ministry of Finance, which is expected to occur in November, the credit-card issuer's recently formed AMERICAN EXPRESS ASSET MANAGEMENT INTERNATIONAL (JAPAN) LTD. will begin to offer investment advice. Drawing on the resources of AmEx's American Express Financial Advisors unit, the new company will target its services to the more than 1.1 million AmEx cardholders in Japan. It also will explore ways to expand the institutional presence of American Express Financial Advisors. That group manages in excess of $200 billion in assets for some 2 million clients in the United States.
The broad business alliance between TRAVELERS GROUP INC. and NIKKO SECURITIES CO., LTD. (see Japan-U.S. Business Report No. 346, July 1998, p. 15) is moving ahead on schedule. The New York City financial services powerhouse has completed its purchase of 25 percent of the number-three Japanese brokerage house for roughly $1.5 billion. In addition, Nikko Securities has bought 51 percent of Travelers' SALOMON SMITH BARNEY JAPAN LTD. unit for an undisclosed price. Over the next year or so, the Japanese securities company will transfer to the soon-to-be-renamed NIKKO SALOMON SMITH BARNEY LTD. its corporate finance, capital markets and trading operations as well as its mergers and acquisitions group. Although Travelers' investment banking and brokerage unit is the minority partner in the joint venture, it will run the company.
The world's biggest mutual fund manager continues to broaden its reach in Japan. At the end of September, FIDELITY INVESTMENTS JAPAN LTD. launched its thirteenth local fund or investment trust, the Fidelity Strategic Income Fund, through DAIWA SECURITIES CO., LTD. The company already markets funds through NOMURA SECURITIES CO., LTD. and NIKKO SECURITIES CO., LTD. At the same time, Fidelity Investments Japan has lined up a sixth bank to sell its products once the ban is lifted December 1 on direct sales of investment trusts by banks. HYAKUGO BANK, LTD., a midranking regional bank that has its base of operations in Mie prefecture, will offer the investment vehicles at 10 to 20 of its branches.
Maintaining its reputation for innovative moves in Japan's financial services market, CITIBANK N.A. reportedly has teamed up with ASAHI CHEMICAL INDUSTRY CO., LTD. to offer adjustable rate mortgages. The one- , three- and five-year ARMs carry interest rates of 1.85 percent, 2.15 percent or 2.45 percent, respectively, which are lower than what banks charge on their mortgages. Although the Japanese partner is best-known as a chemicals manufacturer, it has diversified into the housing business.
The Citicard cash card issued to CITIBANK N.A. customers in Japan now has a debit function, thanks to a tie-up with MASTERCARD INTERNATIONAL INC. The automatic purchase system can be used both at home and abroad and with yen or dollar accounts. Starting in January, the postal savings system also will issue a debit card to its customers through an arrangement among the Ministry of Posts and Telecommunications, banks and retailers.
Although deeply discounted property prices in Japan make commercial real estate investments exceedingly attractive to outsiders, many obstacles stand in their way. Expansion-minded GE CAPITAL SERVICES CORP. hopes to get around these roadblocks by partnering with MORI BUILDING DEVELOPMENT CO., LTD. The developer, known for its marketing and management of office buildings in city centers, will identify properties for possible purchase by GE Capital Services and, if given the go-ahead, will negotiate with current owners and creditors, draft contracts and devise property management plans. Joint investments reportedly are an option.
Fifteen unnamed foreign investors, including three major U.S. hedge funds, are backing the $413.8 million DaVinci One Japanese real estate fund. It is buying office buildings, retail complexes and apartment buildings that already have tenants. The investors, which put up $124.1 million of DaVinci One's capital, expect to make money off of rents rather than from real estate appreciation. The fund already has bought eight properties in downtown Tokyo for about $69 million.
An exchange rate of ¥145=$1.00 was used in this report.
The convenience of lettuce and other salad ingredients ready to use right out of the package has come to Japan. The first seller of DOLE FOOD CO.'s product is INAGEYA CO., LTD., a supermarket chain that operates in Tokyo and in neighboring Saitama and Kanagawa prefectures. Priced from about $1.35 a bag, the salad makings now are available at 11 Inageya outlets but soon will be sold at more. Dole's subsidiary hopes to interest other grocery chains in the fresh-packaged lettuce mixes.
The seemingly strong demand in Japan for anything organic has persuaded the trading arm of KIRIN BREWERY CO., LTD. to launch imports of organically grown rice from the United States this fall for sale to restaurants and convenience stores. The 110 tons of American-produced rice that the company plans to bring in will be identical to popular Japanese short-grain varieties. The Kirin affiliate already imports organic vegetables and seasonings.
Undeterred by the turmoil in Japan's pet food market (see Japan-U.S. Business Report No. 347, August 1998, p. 15), H.J. HEINZ CO.'s subsidiary has introduced CHAMP!, a canned, all-natural dog food developed by BIOGLAN ANIMAL PRODUCTS, INC. of Tampa, Florida. CHAMP!, which costs $1.30 for a 14-ounce can, contains more than 30 naturally occurring enzymes for improved digestion as well as live cultures, antioxidants, protein and fatty acids.
In a major change in their relationship dictated by freshness considerations and helped by the yen/dollar exchange rate, ANHEUSER- BUSCH COS., INC. has given KIRIN BREWERY CO., LTD. the right to make Budweiser beer in cans. Under their 1993 arrangement, Kirin made bottled Bud and imported the canned product from Anheuser-Busch's Los Angeles brewery. Last year, 9.3 million cases of Bud were sold in Japan. An estimated 85 percent to 90 percent consisted of Bud in cans.
An exchange rate of ¥145=$1.00 was used in this report.
MAIL BOXES ETC., the San Diego, California franchiser of retail business communications and postal service centers, is moving into the Japanese market through a master franchise agreement with a subsidiary of big convenience store operator FAMILYMART CO., LTD. The partners preliminarily plan to develop more than 1,000 MBE centers over the next decade by capitalizing on the expected growth of the small office/home office market. They also hope the MBE stores will appeal to convenience- oriented consumers. The first MBE outlet, located in Tokyo, could be open as soon as this fall. Initially, the stores will be directly owned and operated by a joint venture to be formed by the two companies. Once the business gets off the ground, Mail Boxes' local affiliate will switch to franchises. MBE is a wholly owned subsidiary of U.S. OFFICE PRODUCTS CO.
An exchange rate of ¥145=$1.00 was used in this report.
Japan's economic woes are creating opportunities not only for expansion- inclined U.S. financial services providers but also for like-minded manufacturers. In the best example to date of this reality, CARRIER CORP., the world's biggest maker of heating, ventilation and air conditioning systems and equipment with 1997 sales of $6.1 billion, tentatively has agreed in effect to take over TOSHIBA CORP.'s HVAC business at home and abroad. On paper, however, the Japanese multinational will spin off its air conditioning equipment division, which posted FY 1997 revenues of $1.1 billion, and form a Japan-based company with Carrier. Toshiba will own 60 percent of TOSHIBA CARRIER CORP.; the UNITED TECHNOLOGIES CORP. subsidiary will control the balance. Carrier's TOYO CARRIER ENGINEERING CO., LTD. unit also will become part of the joint venture. It has annual sales of about $200 million. Approximately 2,200 of the 2,700 people who work in Toshiba's air conditioning equipment division will become Toshiba Carrier employees. Overseas, Toshiba will transfer its manufacturing operations in the United Kingdom to a new entity in which Carrier will have a majority interest. In Thailand, a company equally owned by Carrier and Toshiba Carrier will take over Toshiba's production venture. Finally, Carrier and Toshiba Carrier will establish sales and marketing ventures in the United Kingdom, Thailand and Malaysia in which the Farmington, Connecticut manufacturer is the majority owner. The Japanese firm's other foreign HVAC sales operations will be integrated into the American company's existing network. Carrier and Toshiba expect to finalize the deal in the first half of 1999.
As part of its strategy for doubling Japan sales by 2000, 3D SYSTEMS CORP. has introduced several new materials that expand the range of applications for its solid imaging products. For use with the high-end SLA-3500 and SLA-5000 rapid prototyping systems, the Valencia, California firm put on the market the Cibatool SL 5520 resin. It is intended for applications requiring high durability, accuracy, productivity and humidity resistance. New for the Actua 2100 3D printer are the first color materials — TJ-75B (black) and TJ-75G (gray). 3D Systems' distributor, INCS CORP. of Kawasaki, Kanagawa prefecture, is handling the new materials. FILTER SPECIALISTS, INC., a Michigan City, Indiana maker of standard and custom liquid filtration vessels, filter bags and filter cartridges, has moved into the Japanese market. Its initial product, distributed by TOYO SHOJI KAISHA, LTD. of Osaka, is the X100. Made of polypropylene, the $345 filter housing accepts either cartridges or bags.
An exchange rate of ¥145=$1.00 was used in this report.
APPLIED SCIENCE FICTION INC. has opened an office in Tokyo to complement its headquarters in Austin, Texas. The start-up has commercialized a preprocessing surface defect correction system that automatically cleans up film and negatives without changing the original. A scanner equipped with ASF's Digital ICE (image correction enhancement) technology captures unique data about the location and the character of defects, isolates them and then removes them. With current scanner technology, the only way to get rid of image defects or damage is by hand or with postprocessing software — time-consuming, expensive methods that yield marginal results. The new office is working with manufacturers of scanners to adapt the Digital ICE technology to their hardware and firmware.
An exchange rate of ¥145=$1.00 was used in this report.
A Los Angeles start-up that runs centers performing surgical vision correction, or refractive surgery, has gained an instant presence in Japan by acquiring a firm in the same business. Under a contract signed in June, VISION CORRECTION CENTERS bought VISC JAPAN K.K. for an undisclosed amount and converted the Tokyo company into its subsidiary. VCC will train ophthalmologists in the surgical treatment of such problems as nearsightedness at a cost of $6,900 to $10,300. Once it has a core of skilled surgeons, VCC will start opening refractive surgery centers across the country. Within a year, it hopes to have 10 such centers in operation.
Having decided to divest some slow-growth secondary product lines, PROCTER & GAMBLE CO. sold Japanese manufacturing and marketing rights to Milton, which is used to sterilize baby bottles, to KYORIN PHARMACEUTICAL CO., LTD. Milton is the local market leader among this type of sterilizing agent, with annual sales around $24.1 million. Tokyo- headquartered Kyorin also acquired the Milton trademark and manufacturing equipment from P&G's MAX FACTOR & CO. subsidiary in Kobe.
The Ministry of Health and Welfare cleared LUTHER MEDICAL PRODUCTS, INC. to sell its neonatal intravenous catheter. The 28 NN20 HFR, developed to address the specific requirements of the Japanese market, is a 28- gauge, neonatal intravenous catheter that offers a higher flow rate and greater ability to see the product under X-ray. The Tustin, California maker expected to ship 3,000 catheters to Japan initially.
OMEGA INTERNATIONAL TECHNOLOGY, INC., the developer of the ThruVU system for detecting corrosion and erosion in insulated and bare pipelines, has signed a technology licensing and marketing contract with CXR CORP. ThruVU uses technology that the Lakemoor, Illinois company refined to detect gamma radiation and X-rays as well as mathematical computation, software algorithms and a mechanical transport (crawler) system to identify pipeline defects. CXR, which has been demonstrating ThruVU's capabilities at oil-refining complexes, is marketing the system to oil and chemical plants, power generation plants and other facilities with pipelines.
An exchange rate of ¥145=$1.00 was used in this report.
A Pentium II processor with a clock speed of 450 MHz is now shipping from INTEL CORP.'s subsidiary. Priced at $675 each in quantities of 1,000, it is the fastest engine available for high-end corporate desktop machines, PC servers and PC workstations. Several computer makers, both Japanese and American, simultaneously announced new products incorporating the 450-MHz Pentium II chip. .....INTEL CORP. also released locally 300-MHz and 333-MHz versions of its low-cost Celeron processor. They list at $150 and $190, respectively, again in lots of 1,000 units. Both parts include a performance-enhancing secondary cache memory.
For a fee of $2.5 million, GATEFIELD CORP. licensed ROHM CO., LTD. to design, manufacture and market on a nonexclusive worldwide basis a broader range of the Fremont, California company's field programmable gate arrays. GateField's ProASIC (application-specific integrated circuit) family of nonvolatile reprogrammable products increasingly is used in embedded applications. Kyoto-based Rohm currently makes the ProASIC line using its own flash memory, but it is limited to parts with densities of less than 10,000 gates. In exchange for greater design and production flexibility, Rohm gave GateField reseller rights to standard ProASIC products that it develops.
The largest programmable logic device commercially available today has been released in Japan. ALTERA CORP.'s EPF10K250A device has 250,000 gates. Like other members of the Altera FLEX 10K family, the San Jose, California manufacturer claims that the new part offers more density and performance in smaller die sizes and at lower prices than high-density FPGAs.
TELECRUZ TECHNOLOGY, INC., a San Jose, California start-up that designs and manufactures customizable ICs for the interactive television market, formed a wholly owned subsidiary in Tokyo. The new company, which plans to open a technology development center, is working on forging alliances with local consumer electronics suppliers. For now at least, TeleCruz has outsourced production of its TC701 single-chip controller for interactive TVs to TOSHIBA CORP. This summer, the venture capital arm of FUJI BANK, LTD. and two big U.S. venture capital funds provided $8.7 million to TeleCruz in a second round of financing.
Chipsets optimized for Japan's next generation of CDMA (code-division multiple access) digital cellular handsets will result from a two-year extension of an agreement between QUALCOMM INC. and ASAHI KASEI MICROSYSTEMS CO., LTD. The prospective part combines three new chips from the San Diego, California CDMA developer with an AKM device that includes a phase-locked loop plus audio interface and voice coder/decoder. The chipset will enable the design of very small handsets. AKM is a wholly owned ASAHI CHEMICAL INDUSTRY CO., LTD. company.
Consumer electronics manufacturer ORION ELECTRONIC CO., LTD. designed into its new line of home DVD players the OTI-226 DVD decoder chip from OAK TECHNOLOGY, INC. The capabilities of the Sunnyvale, California supplier's part help the Orion DVD player deliver a theater-like experience at home, including Dolby digital sound, for both movie viewing and karaoke applications.
The flurry of product releases continues from NATIONAL SEMICONDUCTOR CORP.'s subsidiary. It has added to its line the LM2678, a high-current, high-performance step-down voltage regulator for desktop computers. The device converts power supplies ranging anywhere from 6.5 volts to 40 volts into 3.3, 5 or 12 volts with a conversion efficiency of more than 90 percent. The new LM385M3 device extends National Semiconductor's voltage reference portfolio down to the very low current range of 10 microamps to 20 microamps at 1.2 volts or 2.5 volts, respectively. These abilities plus a small package size make the device suitable for such portable applications as cell phones, personal digital assistants, laptops and portable instrumentation.
NANOMETRICS, INC., a supplier of automated IC metrology equipment, signed INNOTECH CORP. to distribute its products. The Yokohama company has exclusive rights to sell, maintain and provide applications support for the Sunnyvale, California maker's Metra overlay registration and critical dimension measurement system. For the NanoSpec 8000 Series film analyzer, Innotech will share distribution responsibility with Nanometrics' subsidiary. The NanoSpec 8000 monitors and measures the thickness and the compositional quality of the films applied or grown on wafer substrates. The Metra monitors and measures the dimensions of the features generated on these films and determines their position relative to underlying features. In the period through March 1999, Innotech expect sales of Nanometrics' products to total $6.9 million.
An exchange rate of ¥145=$1.00 was used in this report.
Trying to make up for its relatively late entry into the Japanese market, EXCITE, INC.'s subsidiary bought the established on-line search service founded by a HI-TACHI, LTD. subsidiary. The former Hole-in-One site includes such services as travel and accommodations booking as well as a standard Internet search engine. The $344,800 purchase adds about 300,000 hits per day to Excite's own 1 million daily hits at its Japan site. However, this still puts the service a distant third behind the local presences of YAHOO! CORP. (10 million hits per day) and INFOSEEK CORP. (2.5 million). Formed last October, Excite's subsidiary is half owned by the Redwood City, California parent; ITOCHU CORP. companies and DAINIPPON PRINTING CO., LTD. put up the rest of the capital.
Tokyo's SUNMEDIA K.K. has been granted distribution rights to the COS MEDLINE Internet-accessible life sciences and medical bibliographic information service developed by Johns Hopkins University and Community of Science, Inc., an international research consortium. The Japanese scientific and technical infor-mation services company will localize the COS MEDLINE interface, easing access to the service's 3,900 journals in 40 languages from 1966 to the present and 7,300 reference weekly updates.
The company that Santa Monica, California-based GEOCITIES CORP. (40 percent) and SOFTBANK CORP. (60 percent) formed in June 1997 to host a cybercity picked film and camera maker KONICA CORP. to provide its Picture Box on-line digital image service to the 130,000 or so GeoCities subscribers. They can drop off negatives or exposed film at any of 300 Konica outlets, where the images will be scanned for pickup via the Internet. EASTMAN KODAK CO. initiated a similar service in Japan early this year (see Japan-U.S. Business Report No. 341, February 1998, p. 19).
The pioneer in Internet advertising, VALUECLICK, soon will strengthen its local presence. The Santa Barbara, California firm's pay-per-hit Internet advertising service has been available since last April through TRANS PACIFIC LTD., giving on-line advertisers and host Web sites a better idea of the true earning power of banner ads. ValueClick and its Yokohama marketing partner now plan to form a joint marketing operation. Trans Pacific has signed up 30 companies for ValueClick. It reports that the clients' banner ads are being clicked about 4,000 times a day. Advertisers are charged $0.07 to $0.14 each time someone clicks on their banner. The fee is split between ValueClick and the host Web site. The partners face competition from CYBER AGENT CO., LTD. of Tokyo.
Software written by VOLANO LLC has been selected by GEOCITIES CORP.'s subsidiary as its chat-room platform. San Francisco-based Volano added full double-byte language capability to VolanoChat and VolanoChatPro, the version GeoCities is using, allowing them to handle Japanese, Chinese and other tongues with complex character sets. Volano sales are handled by the SMIsoft Products Division of SUMITOMO METAL SYSTEMS DEVELOPMENT CO., LTD., which sees a bright future for the polyglot chat software in Japan as well as elsewhere in Asia.
TUMBLEWEED SOFTWARE CORP. is delivering a one-two punch to the Internet messaging market. First, it is completing localization of the latest version (2.0) of its Posta universal, secure document delivery software for Internet service providers and other large network operators. Three companies are marketing the product (see Japan-U.S. Business Report No. 343, April 1998, p. 18). Posta's comprehensive features and solid security already have impressed companies like NIPPON TELEGRAPH AND TELEPHONE CORP. Second, Redwood City, California-based Tumbleweed plans to open an office in Tokyo to support its marketing partners and to capitalize on the projected rapid development of Japan's Internet market.
Also seeking a bigger piece of the carrier-scale messaging market is SOFTWARE.COM, INC. The Santa Barbara, California business recently opened a subsidiary in Tokyo to build the Software.com customer base, which now includes KOKUSAI DENSHIN DENWA CO., LTD., and to work with such partners as the local operations of CISCO SYSTEMS, INC., DIGITAL EQUIPMENT CORP. and SILICON GRAPHICS, INC. These companies have successfully sold InterMail Post.Office Edition to ISPs and communications network providers for some months (see Japan-U.S. Business Report No. 346, July 1998, p. 21). With that foundation, Software.com plans to bring its entire line of Internet messaging products to Japan, including the Business Advantage, Consumer Advantage, Web and Standard editions of InterMail.
At the opposite end of the Internet messaging market, LOTUS DEVELOPMENT CORP.'s local unit has released electronic mail server- client software for customers using handheld computing devices powered by the Windows CE operating system. Starting at $4,100 for one server and 20 clients, Notes Mail R1.0J has integrated support for POP3 e-mail, group scheduling, news and discussion groups.
OPEN MARKET, INC. has forged an alliance with a FUJITSU, LTD. systems integration subsidiary to localize, market and support its Transact Internet commerce package and LiveCommerce Internet catalog application. The Fujitsu unit will offer turnkey Internet commerce solutions based on the Burlington, Massachusetts firm's products as well as consulting and integration services.
TV OBJECTS LTD. of Princeton, New Jersey has awarded NIKKI INFORMATION SYSTEMS CO., LTD. exclusive marketing rights to its Java program development tool, Applet Designer. The package automatically converts programs written in MICROSOFT CORP.'s Visual Basic into 100% Pure Java, making them cross-platform friendly.
With the debut of MICROSOFT CORP.'s Windows 2000 (formerly Windows NT 5.0) operating system still in doubt, other high-end corporate OS vendors are pushing their products through this window of opportunity. For instance, the subsidiaries of SANTA CRUZ OPERATION, INC. and INTERNATIONAL BUSINESS MACHINES CORP. have joined up to market IBM's latest version of Unix. UnixWare 7 is said to combine the power, capabilities and scalability of the Unix operating system with the power and economics of servers powered by INTEL CORP. processors.
In the more rarefied engineering workstation market, SILICON GRAPHICS, INC.'s subsidiary has released an update of its Unix variant to fend off encroachment by Windows 2000. Irix v6.5 is ready for the next generation of 64-bit processors and can handle the Year 2000 changeover. Irix pricing starts at $620 for a single-user license.
Through its subsidiary, INTEGRATED SYSTEMS, INC. has introduced a version of its OSEK embedded operating system for microcontrollers. pOSEK is tailored for the control systems of next-generation vehicles, which will link all systems (brakes, lights, steering, engine, transmission and passenger comfort) via a single computer bus. Sunnyvale, California- based ISI believes pOSEK's application-independent architecture can cut automotive software development time to just two months, one-tenth the current norm. That expectation is partly behind the company's forecast of $69 million in Japanese sales by 2001.
To further expand its share of the embedded communications OS market, GEOWORKS CORP. has ported its GEOS-SC wireless communications OS to the ITRON (Industrial TRON — The Real-Time Operating System Nucleus) specification, which is used in about a third of all Japanese devices with embedded software. The Alameda, California company's move gives ITRON users instant access to a modern graphical user interface, a rich set of program and data object libraries, support for Internet protocols, e-mail and Java, and a full-featured HTML browser — all of which requires very little memory and processing power.
SOFTWARE DEVELOPMENT SYSTEMS, INC.'s new subsidiary also is targeting the embedded market but with a different emphasis. The Oak Brook, Illinois firm has created a software package that lets makers of digital appliances simultaneously develop custom ICs and the applications for these chips. In its pitch to more than 200 makers of home appliances, cars and trucks, cameras and other consumer products, the subsidiary is stressing how the software can help shorten product development times. The system, which includes a compiler, a debugger and a simulator, lists for between $3,500 and $10,300. SDS believes that its sales in Japan will build quickly to $13.8 million a year.
To complement its fee-based, Year 2000 evaluation service for enterprise-level operating systems (see Japan-U.S. Business Report No. 345, June 1998, pp. 18-19), DIGITAL EQUIPMENT CORP.'s subsidiary has set up a no-charge Web page that allows individual PC users to check their systems for problems that will occur after midnight, December 31, 1999. The DEC affiliate also is offering a CD-ROM of tools and other software related to the Y2K problem for $70.
REASONING, INC. has licensed its Y2K audit and renovation software to TOSHIBA ENGINEERING CORP., which will use the Reasoning/2000 package to drive operations at its recently opened Transformation Center in Tokyo. Toshiba Engineering also will distribute the package. This deal is the first tie-up for the Mountain View, California firm's new subsidiary (see Japan-U.S. Business Report No. 343, April 1998, p. 20).
To boost the appeal and the ease of use of its flagship TME 10 network management software, TIVOLI SYSTEMS INC.'s Japanese operation signed agreements with two makers of network utilities: HITACHI SOFTWARE ENGINEERING CO., LTD. and the local unit of NETWORK ASSOCIATES, INC. Austin, Texas-based Tivoli will create tight links between TME 10 and HSE's Net Insite network monitoring package and Network Associates' Virus Scan utility, allowing administrators to invoke these tools through TME 10's console.
A new release of NotesView from LOTUS DEVELOPMENT CORP. promises simpler, out-of-the-box administration of Notes and Domino domains. Through the new graphical interface of NotesView 4.6, administrators can automatically inventory and map the network environment, view, verify and diagnose server topologies and upgrade both Domino and Notes software. Lotus's subsidiary priced NotesView 4.6 at $6,400.
To support its rapidly growing Japanese customer base, MICROMUSE, INC. opened an office in Tokyo. The San Francisco firm's Netcool service-level management package has been warmly welcomed by network, Internet and telecommunications services providers as well as by corporations operating global intranets. The easy-to-install package is highly scalable and flexible, allowing managers to adapt rapidly to changing network conditions and demands. The new Tokyo operation will coordinate technical and customer support efforts in the entire Asian region with Micromuse's existing Australian office.
GANYMEDE SOFTWARE, INC. has given local distribution rights to two of its network performance packages to Tokyo-based TOYO CORP. Pegasus, which costs $17,200, measures the end-to-end response time of networks, helping managers pinpoint problems before they occur. Chariot tests the hypothetical performance of networks using various hardware and software combinations. Network designers can check the effect of new hardware or software programs on a "virtual" network before actually implementing the changes. Toyo expects sales of the Morrisville, North Carolina company's products to hit $2.8 million a year. HEWLETT-PACKARD JAPAN LTD. also is marketing Ganymede Software products (see Japan-U.S. Business Report No. 347, August 1998, p. 23).
As computer systems and networks become more complicated and vital, automated computer information help systems have strained to keep up. To address this problem, TIVOLI SYSTEMS INC. has begun marketing the English-language version of its Tivoli Services Desk help system through ASSIST CO., LTD. of Tokyo. A Japanese version is promised for early next year. Tivoli integrated into this package its Problem Management, Change Management and Asset Management modules to track help requests, rapidly develop answers to hardware, software or network-related questions, and help disseminate companywide information technology policies.
A trio of network security products from AXENT TECHNOLOGIES, INC. is available from exclusive distributor NISSIN ELECTRIC CO., LTD., which has localized all of them. OmniGuard/Enterprise Security Manager defines, manages and enforces information security policies. NetRecon quickly probes a network for vulnerabilities both at the perimeter and internally. And Intruder Alert offers comprehensive network security monitoring that can detect and respond to attacks in real time. Nissin Electric has priced the packages from $3,600 to $69,000. It is projecting combined sales of $3.4 million the first year.
An alternative network security product developed by SYSTEM DESIGN INTERNATIONAL INC. is available through a new subsidiary of SANOH INDUSTRIAL CO., LTD. The Sanoh unit is using SDI's network security software and know-how as the core of its network security monitoring and consulting business. Fifteen customers and $1.4 million in sales are the unit's first-year goals.
Network monitoring software developer NETWORK FLIGHT RECORDER, INC. has appointed INTERNET INITIATIVE JAPAN INC., one of the country's oldest and biggest Internet service providers, as the first certified reseller of its products. IIJ plans not only to resell the Woodbine, Maryland firm's software, but use it to offer later this year a new network monitoring and security service, IIJ Network Security. NFR officials hope, however, that the IIJ deal is just the start. Their flexible package can be used to track bulk e-mail and "spam" activity, to operate network-usage billing systems and to automatically gather and store information from the Web.
New antivirus software for networks using APPLE COMPUTER INC. Macintosh computers is available from SYMANTEC CORP.'s local unit. Norton AntiVirus 5.0 for Macintosh Administrator, which goes for $675, allows a network manager to monitor and update the antivirus protections of each Mac client from a central location.
MICROSOFT CORP. expects to beat back the threat of cheap network computers with its Windows NT Server 4.0 Terminal Server Edition. The server software allows clients that normally would not be able to run the Windows OS to use applications written for Windows NT through a network connection. The new version is expected to have a street price of under $1,600.
As in the United States, the market in Japan for application server software is red hot. For example, SANTA CRUZ OPERATION, INC.'s subsidiary released a new version of the Tarantella application-broker package. Tarantella 1.1 allows any client to run any server-based application without the need to install any software on the client computer. Interposing itself between the server and the client, Tarantella manages all of the interactions with the server while exchanging only requests and results with the client. A five-user license costs $2,700. .....Meanwhile, NETSCAPE COMMUNICATIONS CORP. has lined up five value- added resellers for its Netscape Application Server. FUJITSU BUSINESS SYSTEMS CO., LTD., FUJITSU, LTD., ITOCHU TECHNO-SCIENCE CORP., NEC CORP. and TOSHIBA CORP. will promote, integrate and support Netscape's app server (see Japan-U.S. Business Report No. 346, July 1998, p. 21).
In a major endorsement of its technology, UNIFY CORP.'s application server solutions are being used to develop an on-line library-management system for the Ministry of International Trade and Industry. The San Jose, California company's VISION AppBuilder and AppServer are the backbone of a system that will link 15 scientific libraries around Japan, creating a "virtual library" with access to more than 1 million volumes. WITH SYSTEMS CO., LTD., founded by HANKYU DEPARTMENT STORES, INC. but now partly owned by TOSHIBA CORP., is doing the systems integration work with input from Unify's Osaka subsidiary.
To meet the growing software demands of financial institutions facing a new deregulated environment, IBM JAPAN LTD. developed an integrated risk-management program. Credit Meter is tailored to the special needs, practices and structures of Japan's financial markets so that it can help domestic lenders better manage their loan portfolios. This help is not inexpensive. Credit Meter costs $137,900.
Paralleling the actions of its parent in the United States, INFORMIX CORP.'s subsidiary announced that it will release a Japanese version of its namesake data base for the Linux operating system environment. This free and open version of Unix is gaining adherents in Japan. The Menlo Park, California firm's port to Linux will improve the viability of Informix-SE as an enterprise platform.
The local operation of SAS INSTITUTE INC. has released a new version of its Scalable Performance Data Server to the rapidly growing Japanese data warehouse market. The Cary, North Carolina firm's SPDS 2.0, which starts at $14,900, scales rapidly and easily yet is highly stable. It also has many built-in checks to ensure data integrity and security.
Continuing a cascade of product introductions, ORACLE CORP.'s subsidiary renamed and released new versions of its data base design and development packages. Designer 6.0, priced at $3,400, Developer 6.0, which costs $2,500, and the $5,500 Enterprise Developer Suite — all formerly part of the 2000 family of development tools — offer tighter integration with the Redwood City, California firm's core data base products, including the latest Oracle8i. The tools allow users to develop data base-related applications that mesh with their business operations and practices, then deploy them via the Internet or an intranet. .....Other ORACLE CORP. products new to Japan are localized versions of its Key Web Creator 2.0 (known as Web DB in the United States) and Oracle Reports 3.0. The former makes data bases Internet-friendly, while the latter, which lists for $2,100, lets users extract and present data base information in many written and graphical formats.
LOTUS DEVELOPMENT CORP.'s Japanese unit has joined hands with FUJITSU, LTD. to develop and market three packages that work with the former's Notes/Domino groupware and the latter's enterprise-level hardware. Fujitsu has included Notes as part of its $2,100 OASys Super Office 6.0 suite of business applications. DBEAM for Domino middleware, which costs $3,400, connects multiple Fujitsu servers running the Lotus software. System Worker for Notes/Domino 4.0 manages enterprise-level networks powered by Fuji-tsu's big iron. It goes for $2,100 as well.
Meanwhile, LOTUS DEVELOPMENT CORP.'s local operation developed a unique product that helps IT managers link their Notes systems to enterprise resource planning software. LSCube 2.0 is an integrated development environment that expands on the Lotus Script language created by the parent company. Notes can become a "front end" for ERP applications, leveraging existing Notes setups. A developer license is priced at $3,400, and a five-user license begins at $17,200.
Giving ERP a green tint, ATRION INTERNATIONAL INC. of Reston, Virginia has formed a strategic alliance with a FUJITSU, LTD. systems engineering affiliate to distribute and sell its environmental, health, safety and transportation software. Atrion's CHEMMATE suite provides end-to-end EHS&T functionality that allows corporations to comply with local, national and international regulations. It also controls compliance processes and output enterprisewide. CHEMMATE furthermore delivers speed and cost advantages through optimization and management of regulatory constraints. The Atrion package works with such ERP packages as BAAN CO.'s Baan IV.
To help local firms fine-tune their production processes, AUTOSIMULATIONS, INC. has opened a subsidiary in cooperation with its parent, DAIFUKU CO., LTD., to market and support the AutoSimulations Productivity Family of manufacturing execution software. AutoSched, Real-Time Dispatcher, ISS Reporter and AutoMod help production managers make operations scheduling decisions in real time and let them optimize productivity based on historical data and manufacturing simulations. The Bountiful, Utah firm's APF software already is in use at more than 1,300 plants worldwide, including ones operated by FUJITSU, LTD., KAWASAKI HEAVY INDUSTRIES, LTD., KOMATSU LTD., NEC CORP. and NISSAN MOTOR CO., LTD. Daifuku acquired AutoSimulations in late 1996.
ASPEN TECHNOLOGY, INC. has landed a contract to install its manufacturing execution software at TONEN CHEMICAL CORP.'s Kawasaki, Kanagawa prefecture ethylene plant. The state-of-the-art process control center will deploy the Cambridge, Massachusetts firm's RT-OPT closed- loop, real-time optimization module, the DCMplus multivariate predictive controller and the Composite Linear Program add-on for combining stand- alone controllers into an overall system.
A comprehensive development, marketing and support pact has been signed by MANUGISTICS, INC. and NEC CORP. to penetrate the market for supply- chain management software. Although NEC already is a reseller of the Rockville, Maryland firm's SCM package, the new agreement allows the partners to develop solutions tailored to Japanese practices and to provide much greater integration and after-sales support.
Leveraging their respective expertise in call-center/sales force automation software and rapid application development environments, the subsidiaries of CLARIFY INC. and CAMBRIDGE TECHNOLOGY PARTNERS INC. have joined forces to develop front-office solutions for Japanese companies. The two expect customers to demand that front-office software (for example, call-handling, customer support and scheduling) be fully integrated with the back-office and ERP packages they are installing. That is a demand that San Jose, California-based Clarify and Cambridge, Massachusetts' Cambridge Technology Partners feel well-suited to fulfill. Although they will focus their immediate efforts on the Japanese market, the partners expect the alliance to extend to the entire Asian region in the future.
Point-of-sale software developed by PROGRESSIVE SOFTWARE, INC. is being installed at all STARBUCKS COFFEE CO. retail outlets in Japan. The Westport, Connecticut company localized the IRIS retail management software, which integrates front-end and back-end operations. IRIS also is being deployed at Starbucks' roughly 1,600 American and Canadian locations.
Underscoring how the power of PCs is revolutionizing the pharmaceutical industry, SIMULATIONS PLUS, INC. granted TEIJIN SYSTEM TECHNOLOGY LTD. exclusive distribution rights to its GastroPlus drug-absorption simulation program and its QMPRPlus add-on for pharmaceutical research. GastroPlus models the physical and chemical processes of the digestive tract to predict how compounds will be absorbed through the intestinal wall. The Lancaster, California firm's software will help drug companies speed the development and the testing of new products.
INTUIT INC. has updated its popular accounting package for businesses. The localized version of QuickBooks 6.0 now runs on Windows 98 and incorporates all relevant Japanese accounting standards, rules and practices. Intuit's subsidiary expects first-year sales of the $380 product to reach between 30,000 and 40,000 copies.
Merging more than 2,000 cross-section photographs of an actual human cadaver, LEARN TECHNOLOGIES INTERACTIVE L.L.C.'s Body Voyage CD-ROM presents an "in-depth" multimedia tour of human anatomy. The New York City educational software company has given distribution rights to VOYAGER JAPAN INC. of Tokyo, which expects to sell more than 3,000 copies to primary schools alone.
Targeting the emerging DVD market, AVID TECHNOLOGY, INC. has tied up with TOSHIBA CORP. to create a DVD production system using the Tewksbury, Massachusetts firm's nonlinear, digital video editing software and the Japanese company's PC hardware. Although DVDizer costs $103,400, this is one-tenth the price tag of competing systems. Toshiba will manufacture the system and preinstall the software, while Avid Technology will distribute the product through its existing network, made up of DAINIPPON SCREEN MANUFACTURING CO., LTD., IKEGAMI TSUSHINKI CO., LTD., TOSHIBA ENGINEERING CORP. and TOSHIBA INFORMATION SYSTEMS CORP.
Hoping to ride the wave of popular interest in video-via-PC, SMITH MICRO SOFTWARE, INC. signed a distribution agreement with MARUBUN CORP. The big electronics marketer will handle the Aliso Viejo, California company's two videoconferencing packages, AudioVision and VideoLink, as well as VideoLink Mail, which allows users to record and save video messages and send them over the Internet.
NETWORK ASSOCIATES, INC.'s subsidiary has released a localized 128-bit version of its Pretty Good Privacy encryption utility for businesses and home PC users. It has been shown that ordinary PCs can work cooperatively to break 40-bit key-coded messages. Consequently, the Santa Clara, California firm expects a warm welcome for the new version's beefed-up security. PGP Personal edition 5.5.3J retails for less than $70, while the feature-laden PGP Suite 1.0 for enterprises is priced at $75 per user in units of 1,000.
To hunt down and eradicate the many files created when a software program is installed, the local operation of QUARTERDECK CORP. released two versions of the CleanSweep PC uninstaller utility. The regular- strength version, which goes for about $47, handles most situations, while the $68 Extra Strength version can deal with compressed and encrypted files. Both versions can clean out browser file caches and delete unwanted "cookies," ActiveX controls and plug-ins. The Marina del Rey, California firm's subsidiary expects combined sales to hit 80,000 units the first year.
UNIGRAPHICS SOLUTIONS INC. is expanding the product line distributed by SEIKO INSTRUMENTS, INC. Seiko has been marketing the Maryland Heights, Missouri firm's Solid Edge computer-aided design system for mechanical assembly and parts modeling (see Japan-U.S. Business Report No. 347, August 1998, p. 25). Now, however, it is handling the full suite of Unigraphics' CAD modules, including Solid Modeling, Feature Modeling, Freeform Modeling, Drafting, Reality, Fly-Through, Photo and Geometric Tolerancing. Seiko also developed customized modules using Unigraphics' application modules.
The Japanese operation of Concord, Massachusetts-based SOLIDWORKS CORP. has developed an add-on for its namesake three-dimensional CAD product. Available through distributor KUBOTA SOLID TECHNOLOGY CORP., RepairWorks enhances the capabilities of SolidWorks to import all types of CAD data through the IGES standard. KUSCO priced the utility at $3,300.
FREQUENCY TECHNOLOGY, INC. has switched exclusive distributors in a bid to boost sales. In June 1997, the San Jose, California developer chose AISYS CORP. to handle its Columbus 3D electronic design automation package for deep submicron chips. However, it recently handed this plum to SEIKO INSTRUMENTS, INC., apparently hoping to leverage sales off of the Japanese firm's CAD/EDA customer base.
Taking advantage of the ongoing deregulation of air travel services in Japan, OPEN SKIES, INC. of Salt Lake City, Utah has sold its OpenRes reservation system software to SKYMARK AIRLINES CO., LTD., the first domestic carrier to begin operations in 35 years. OpenRes has a user- friendly Flight Speed graphical interface for faster training times and lower training costs. It enables Skymark agents to book tickets at faster than average rates because OpenRes is optimized for speed.
AT&T CORP.'s research and development unit has embarked on an 18-month research project with Kyoto-based ATR Interpreting Telecommunications Research Laboratories. Their initial focus is automatic English-Japanese speech translation services for telephone operator assistance. They will allow Americans in Japan and Japanese in the United States to ask for telephone numbers, charges and connection assistance in their native language, have the request translated in real time for the operator and then have the operator's response translated for the caller. If the collaboration produces a commercially viable product, the contract could be extended to other real-time, telephony-based services, such as banking call centers, travel information and emergency assistance.
An exchange rate of ¥145=$1.00 was used in this report.
In a major expansion of its business in Japan, PSINET INC., the largest independent commercial Internet service provider, bought two domestic ISPs in the space of a few weeks. First, it acquired RIMNET CORP. for an undisclosed price. One of the country's biggest ISPs, Rimnet offers domestic and international Internet telephony, international Internet faxing and a variety of application-development services to roughly 70,000 dial-up customers and some businesses. It had revenues estimated at $15.2 million in the year through August 1997. PSINet then acquired TWICS CO., LTD., one of Japan's original ISPs. It primarily serves the SOHO market. Both purchases complement the operations of the Herndon, Virginia company's subsidiary, which has catered exclusively to corporate customers. Rimnet and TWICS subscribers now have access to PSINet's full range of services, including Internet faxing and voice, electronic commerce, security services, Web hosting and multimedia, global roaming for remote access, and intranet/extranet services. PSINet's frame relay- based, Internet Protocol-optimized network connects more than 400 points of presence in 12 countries.
ICON-TELEWAY INTERNET CORP., a company formed last November by Weehawken, New Jersey-based ICON CMT CORP. (48 percent) and TELEWAY JAPAN CORP. (52 percent), has completed an Internet data center in Tokyo and connected an Internet backbone based on Teleway Japan's high-speed, nationwide ATM backbone with Icon CMT's nationwide American backbone. ITIC now is marketing its comprehensive Internet, intranet and extranet services to corporate clients. It currently has 35 professionals on staff but expects to expand to more than 200 people over the next two years. ITIC will become an affiliate of KOKUSAI DENSHIN DENWA CO., LTD. December 1 when Teleway Japan merges with Japan's largest international communications provider.
The launch of nationwide CDMA digital cellular services under the cdmaOne name by DDI CORP. and the pending rollout by NIPPON IDOU TSUSHIN CORP. (see Japan-U.S. Business Report No. 347, August 1998, p. 26) are providing additional sales opportunities for American vendors. Both wireless network operators have selected DSC COMMUNICATIONS CORP.'s INfusion Home Location Register as the external data base for their cdmaOne services. The Plano, Texas company's scalable IS-41 HLR system will allow DDI and IDO to manage their wireless subscribers, support roaming and mobility management, and add new revenue- generating services. Deliveries of INfusion HLR have started to both companies. DDI already uses this application with its personal handyphone system service.
With the start of cdmaOne services, KYOCERA CORP. and other Japanese manufacturers of handsets have begun shipping products to the two carriers. These handsets employ CDMA chipsets from DSP COMMUNICATIONS, INC. The Cupertino, California developer's chipsets, which deliver an IS-95-compliant solution for complete baseband processing, provide clearer voice quality to customers as well as longer standby and talk times because of their low power consumption.
The nearly 20 million subscribers to NTT MOBILE COMMUNICATIONS NETWORK, INC.'s cellular services soon could have access to an advanced personal navigation system. That service will be based on client-server wireless location determination technology that SNAPTRACK, INC. licensed to NTT DoCoMo. The San Jose, California company's technology combines the GPS (global positioning system) navigation system with a wireless communications infrastructure to deliver accurate, cost- effective location information. NTT DoCoMo will be the first carrier to commercialize SnapTrack's know-how.
Looking down the road to the time when the wideband-CDMA format could become the standard for wireless communications, AIRTOUCH COMMUNICATIONS INC. is talking to JAPAN TELECOM CO., LTD. and NISSAN MOTOR CO., LTD. about forming a company to offer W-CDMA mobile phone service. If the trio decides to go ahead, the new venture will engage in feasibility studies for the time being. San Francisco-based AirTouch Communications has small minority interests in six of the nine Digital TU-KA Group cellular services providers in Japan. Japan Telecom and Nissan also are investors in those companies. In addition, the American company and Japan Telecom own parts of the three Digital Phone Group carriers serving Tokyo, Osaka and Nagoya.
PACIFIC GATEWAY EXCHANGE INC., a facilities-based international communications carrier, has opened a subsidiary in Tokyo and applied to the Ministry of Posts and Telecommunications for a license to own and operate its own fiber-optic cable network in Japan. Once the Burlingame, California company receives a Type I license and builds a network, it will wholesale international capacity to local communications companies with Type II licenses. Until recently, KOKUSAI DENSHIN DENWA CO., LTD. had a minority interest in PGE (see Japan-U.S. Business Report No. 347, August 1998, p. 8).
What is said to be the fastest switch in the industry has been released by FORE SYSTEMS INC.'s subsidiary. The ForeRunner ASX-4000 is the first in a new family of ATM switches from the Warrendale, Pennsylvania manufacturer that can scale to more than 100 gigabits per second. In another first, the switch, which provides up to 40 Gbps of nonblocking switching capacity, supports OC-48c ATM ports, each of which delivers a 2.4-Gbps connection. Fore expects to sell 20 of the ForeRunner ASX-4000s in the first year of marketing for use as the backbone of large enterprise and high-performance desktop networks or for deployment by ISPs. A fully configured system with 16 OC-48c ATM ports is priced at $193,100.
Japan newcomer NBASE SWITCH COMMUNICATIONS tapped RIKEI CORP. to be the exclusive distributor of its Gigabit Ethernet switch. The GFS 3012 GigaFrame switch features as many as 12 switched Gigabit Ethernet ports and a sustained filtering and forwarding rate of up to 5.5 million packets per second regardless of load or packet type. The Chatsworth, California supplier's product also supports up to 64 ports in any combination of Ethernet, Fast Ethernet or Gigabit Ethernet. Rikei is marketing the NBase GFS 3012 as a backbone switch and as a Gigabit Ethernet desktop switch for mission-critical applications.
The BayStack 450 Switches are the latest addition to that line from BAY NETWORKS, INC.'s subsidiary. Available in either a 12-port or a 24-port configuration, each BayStack 450 has an adapter slot for Gigabit Ethernet, Fast Ethernet or 10/100-autosensing Ethernet ports. Up to eight units can be stacked together for a total of 224 ports. In the event that one switch fails, the Bay-Stack 450's fail-safe cascade stacking architecture ensures that the other switches remain operational. The 12-port model costs $3,500, while the 24-port model lists for $5,200.
The industry's fastest Ethernet interface card is how CISCO SYSTEMS, INC. describes the WS-X5410. Designed for the company's mainstay Catalyst 5000 and 5500 switches, the card costs $27,500.
A localized version of the 3Com Megahertz 10/100 LAN+56K Modem PC Card has been released by 3COM CORP.'s subsidiary. As the name suggests, the $205 card gives portable computer users connections to their companies' Ethernet or Fast Ethernet networks while providing downloads at speeds of up to 56 kilobits per second.
Computer telephony platform supplier ALTIGEN COMMUNICATIONS, INC. is working with NITSUKO CORP. to adapt its AltiServ system to the Japanese market. This system combines the benefits of traditional PBXs (private branch exchanges) with the advantages of computer telephony integration for such functions as automated-attendant service, voice messaging, automatic call distribution and electronic mail. AltiServ is designed for small to midsized businesses that have up to 100 phones and call centers. Development work is expected to be completed by the end of the year, with shipments starting during the first quarter of 1999. SUMISHO ELECTRONICS CO., LTD. will cooperate with Nitsuko and AltiGen in sales and marketing of turnkey AltiServ systems, which are likely to be priced between $15,000 and $22,000. To cement these new relationships, communications equipment manufacturer Nitsuko and three Sumitomo Group companies invested a total of $1.5 million in Fremont, California- based AltiGen.
The growth of the CTI market in Japan persuaded ASPECT TELECOMMUNICATIONS CORP., a provider of integrated call-center solutions, to open a wholly owned subsidiary in Tokyo. The San Jose, California firm already has lined up its first fully integrated call-center customer, BELLSYSTEM24, INC., one of the largest Japanese telemarketing and call-center outsourcing companies. Aspect's subsidiary is responsible for recruiting other customers for its automatic call distributors, CTI solutions, call-center management and reporting software, and automation solutions as well as for providing consulting and systems integration services and round-the-clock support.
The world leader in videoconferencing systems, PICTURETEL CORP., has released in Japan a high-performance system for such demanding applications as telemedicine, distance learning and executive conferences. The System 4000ZX, which is part of the Concorde 4500 line of group videoconferencing products, gives users the flexibility to create customized videoconferencing applications. The product also incorporates the Andover, Massachusetts manufacturer's PT716plus technology for optimal audio performance at lower transmission rates. PictureTel's subsidiary priced the standard configuration of the System 4000ZX at $31,000.
An exchange rate of ¥145=$1.00 was used in this report.
North Hollywood, California's INDUSTRIES WERTS, INC. has tied up with SAZABY INC., a designer of handbags and other personal accessories, to bring trendy West Coast-style clothes and other products to Japan. Tokyo- headquartered AMERICAN RAG CIE JAPAN, INC., in which the U.S. partner has a 20 percent stake, hopes to begin sales in October in the upscale Shinjuku area of the capital.
TOYS "R" US INC.'s subsidiary is the latest retailer in Japan to handle OSHKOSH B'GOSH, INC.'s clothing for infants, toddlers and children. The line now is available only at the in-store Babies "R" Us shop at the Toys "R" Us outlet in Sapporo. However, the big retailer plans to introduce the Oshkosh B'Gosh brand at its other Babies "R" Us shops across Japan. The clothing is priced between $20 and $35.
Sport shoe manufacturer CONVERSE, INC. sees children's footwear as a way to boost its business in Japan. The North Reading, Massachusetts company will roughly double to 27 the number of children's styles available for the spring/ summer 1999 season. With the broader selection, Converse believes that it can sell 500,000 pairs of children's shoes in 1999 versus an estimated 360,000 pairs this year, when products for kids are expected to represent about 8 percent of estimated total sales of 4.6 million pairs of shoes.
An exchange rate of ¥145=$1.00 was used in this report.
With Japan's car and truck market in a prolonged, deep slump, the Big Three U.S. automotive manufacturers are being forced to reconsider their sales and marketing strategies. FORD MOTOR CO. is perhaps further along in this process than its rivals. According to current plans, FORD MOTOR CO. (JAPAN) LTD. will spend something on the order of $140 million over the next two to three years to downsize and revamp its dealer network. The company has 289 sales outlets around the country selling imported products. A significant number of these dealerships sell only one or two Ford vehicles a month and consequently are losing money. Ford hopes to buy out the contracts of these operations or merge them with other outlets so that the remaining dealerships will have the volume of sales to make money by encouraging salesmen to push the Ford product rather than cars and trucks made by another manufacturer that also are sold under the same roof. While consolidating its current sales network, Ford has not ruled out signing up new dealerships that can sell several hundred vehicles a year.
The Visteon Automotive Systems unit of FORD MOTOR CO., the number-two U.S. car and truck maker's big internal and OEM parts production group, hopes to generate more business from Japan's automotive industry by opening a technical center in Toyota City, Aichi prefecture, the home of TOYOTA MOTOR CORP. The facility will be staffed by 20 engineers and other personnel.
GOODYEAR TIRE & RUBBER CO. plans to give BRIDGESTONE CORP. a run for its money in the local market for radial tires for heavy-duty equipment. For starters, the top American tire producer will take operational control of NIPPON GIANT TIRE CO., LTD. by increasing its stake in this Tatsuno, Hyogo prefecture manufacturer of heavy-duty tires to 65 percent. Nippon Giant Tire was formed in 1971 by Goodyear (50 percent), TOYO TIRE & RUBBER CO., LTD. (30 percent) and MITSUBISHI CORP. (20 percent). Goodyear will buy most of the trader's interest. Equally important, Goodyear and Toyo Tire & Rubber will spend $61.4 million to double capacity at Nippon Giant Tire to 2,200 tons a month within three years. The American partner will market 65 percent of this output.
The bankruptcy filing of OKURA & CO., LTD. has upended marketing arrangements in Japan for GULFSTREAM AEROSPACE CORP. and other American manufacturers of corporate jets and aircraft engines and electronics that had exclusive distribution deals with the trader. However, MARUBENI CORP. has reached a tentative agreement with the Okura bankruptcy administrator to buy that company's aerospace division. If the agreement is finalized, Marubeni will open negotiations with affected U.S. companies about representing them.
More than a year after it acquired MCDONNELL DOUGLAS CORP.'s operations, BOEING CO. will merge that company's Tokyo subsidiary into its own in October. The aircraft giant also plans before the end of the year to create two new groups within its subsidiary responsible for satellite launch services and satellite-based multimedia services — businesses that assumed greater importance at Boeing with the MDD purchase.
An exchange rate of ¥145=$1.00 was used in this report.
In a first for the defense industries of the United States and Japan, LOCKHEED MARTIN CORP. and MITSUBISHI ELECTRIC CORP. have reached a basic agreement to collaborate on the development of military hardware for sale to the Japan Defense Agency. Work on a new generation of missiles and radar are two of the areas reported to be under consideration. The decision to move beyond the standard licensing of American defense equipment for production by Japanese manufacturers was prompted by some obvious considerations. For Lockheed Martin, the world's top defense contractor and the prime subcontractor on Japan's F-2 fighter jet (see Japan-U.S. Report No. 344, May 1998, p. 10), the arrangement could better position it to win contracts for front-line equipment from JDA at a time of declining hardware procurement budgets. For MELCO, Japan's number-three defense contractor, the deal provides a way to remain in the defense business despite its high cost structure.
ECOLAB INC., the world leader in institutional and industrial cleaning and sanitation, has changed its Japan marketing strategy. For about $690,000, the St. Paul, Minnesota company's subsidiary sold the right to market 140 of its industrial and commercial cleaning products to DAI-ICHI KOGYO SEIYAKU CO., LTD. The sale also gave the Kyoto manufacturer of surfactants access to 94 Ecolab distribution channels.
Looking for a new source of business amidst the consumer spending slowdown in Japan, the subsidiary of big golf equipment supplier TAYLOR MADE GOLF CO. introduced a pair of golf bags designed for touring pros. The Staff Bags are priced at $320 or $360.
Contract facility management is not an unknown form of outsourcing in Japan, but it is a relatively undeveloped business, even though the cost pressures on domestic firms are increasingly heavy. Not surprisingly, JOHNSON CONTROLS, INC., which generates more than $1 billion a year from the management of facilities, believes that there are opportunities to exploit in Japan. It formed wholly owned JOHNSON CONTROLS INTEGRATED FACILITY MANAGEMENT CORP. in Tokyo to bring its approach to facility management to the commercial building market. That strategy enables firms to trim costs by using a single source to integrate facility services and consolidate purchasing. Johnson Controls IFM already has its first customer, MOBIL CORP.'s subsidiary. Under their integrated facility management services contract, facility budgeting, facility management and office services support at Mobil's Tokyo headquarters are handled by on-site staff provided by the Milwaukee, Wisconsin maker's affiliate. Over the next five years, the Japanese company expects to build its operations into a $469 million business.
Through its various units, OMNICOM GROUP INC., the world's largest advertising agency, is beefing up its position in Japan. First, its BBDO WORLDWIDE affiliate doubled its stake in I&S CORP. to 40 percent. That Tokyo-headquartered company is Japan's eighth-largest ad agency (see Japan-U.S. Business Report No. 346, July 1998, p. 29). Almost simultaneously, another Omnicom Group company, TBWA WORLDWIDE, which had 1997 billings of $3.4 billion, announced that it would acquire a majority stake in NIPPO CORP. from primary owner NISSAN MOTOR CO., LTD. and various of its affiliates. Nippo ranks sixteenth among Japan's ad agencies, with billings last year of $291 million. Through the takeover, TBWA Worldwide hopes to win the Japan advertising business of American and other foreign clients that it already represents.
An exchange rate of ¥145=$1.00 was used in this report.