<<<< Japan High-Tech Update>>>>
A monthly review of the latest developments in Japan’s IT, telecom, and life sciences sectors

August 2003 - Volume VI, Issue VIII

Triangle Technologies is the leading Japan Israel business development and investment advisory firm
www.triangletech.com

Dan's Desk

From Triangle's CEO

+'LAMA KACHA?'

There is a popular Hebrew children's song, "'lama kacha?', yeladim, shoalim ve shoalim" or roughly translated, "kids keep annoying us by asking questions all the time, 'why is it this way?', 'why is it that way?'" Recently I have had a number of people ask me (again and again), why do their Japanese business partners keep asking them the same questions again and again?

I have thought about it, and here is my answer (so don’t ask me again ;-) ):

Reason #1 - they did not understand your 1st answer (or 2nd or 3rd). (As I have said before, when we point a finger at someone else, remember that 3 fingers are always pointed back at ourselves - that leaves a spare thumb, which could be pointed up at god, down at hell, or stuck in some other unusual place....) Roughly interpreted, that usually means that we did not really understand the first question, and as a result, did not really answer it. Or we answered it, but not specifically enough. Solution - give a highly specific answer, and ask if that addresses the issue, or if you misunderstood.

Reason #2 - they did not BELIEVE your first answer. As the (in)famous Isuzu ad from the 80's with the sleazy car salesman went: "We go from 0 to 80mph in 4 seconds..." Voiceover: “He's lying, isn't he?"

Reason #3 - they view a precise answer as extremely important, probably to serve as the basis of either an internal commitment or an external commitment to a customer, and they really want to pin you down on an answer before making the commitment. "Could you reconfirm that one thousand (1000) units will be delivered to our shipping agency by 12:00 noon September 1, 2003?" They are perhaps mercifully giving you a chance to think if you REALLY CAN COMMIT to the quantities and the delivery time. The negative implication is that, after confirming 2 or 3 times, and you don’t deliver, that YOU ARE AN UNRELIABLE COMPANY and will find yourself in deep sneakers. Solution - make sure you have your ducks lined up, take a deep breath, and COMMIT!

Reason #4 - they are testing for consistency, which is ONE very important indicator of predictability and reliability. Unexplained changes from T1 to T2 to Tn are a cause for concern, and if your answer drifts, both the answer AND the delta will need to be explained. We recently had a case in a technical test in which the results somehow IMPROVED significantly from the 1st test to the 2nd (we ended up doing 4 tests as a result), but the improvement had to be explained, and then repeated.

Of course, these characteristics are not unique to Japanese business partners and can be seen in the behavior of any partner that is trying to be careful, but as they say ”Japan is just like anywhere else, only moreso!"

Good luck

Dan

***TRIANGLE TECHNOLOGIES NEWS***

+CYOTA SELECTED BY JAPAN’S UC CARD FOR VERIFIED BY VISA

Payment security company Cyota has been selected by Japan’s UC Card to provide an end-to-end Verified by Visa (3D Secure) Internet payment security service. The service will be available to UC cardholders and merchants. UC Card is a member of Mizuho financial group, and with over 12 million cards, it is considered one of the top-3 Japanese card issuers by charge volume and number of cards. The service is hosted in Tokyo and is provided through Intelligent Wave Inc., Cyota’s partner in Japan. Triangle Technologies assisted Cyota in signing the distribution agreement with IWI and played a major role in negotiating the agreement with UC Card.

***ISRAEL-JAPAN NEWS***

+ISRAEL FILES SHELF REGISTRATION TO RAISE $420M IN JAPAN BONDS

Israel has filed a shelf registration with the Japanese Finance Ministry to issue up to 50 billion yen ($420 million) of Samurai bonds, this according to a report by Reuters. Recently, Israel raised $750 million in a successful bond issue to international investors.

+CCI CHOOSES CHECKM8 AS IN-HOUSE RICH MEDIA SYSTEM

CCI, Japan’s largest online media representative and a subsidiary of advertising giant Dentsu, has chosen CheckM8 as its in-house system for design and delivery of rich media campaigns on behalf of its clients. CheckM8 is partnering with Sumitomo Corporation in Japan.

***BUSINESS NEWS***

+RAKUTEN TO ABSORB INFOSEEK JAPAN, LYCOS JAPAN

Rakuten, operator of Japan's biggest online shopping site Rakuten Ichiba, said it will absorb its search-engine subsidiaries Infoseek Japan and Lycos Japan on Sept. 1 and combine them under Infoseek. Rakuten is aiming to strengthen its general Internet services, after clinching the No. 2 spot among Japanese-language Internet portal sites.

+FURUKAWA, SUMITOMO ELECTRIC TO MERGE TELECOM ANTENNA BUSINESS

Furukawa Electric and Sumitomo Electric Industries have said that they will integrate operations associated with production of antennas for use in broadcasting and telecommunications. The two companies will set up a joint venture around October and hand over their respective antenna operations to the venture.

+BROADBAND SUBSCRIBERS RISE TO 10.9M IN JAPAN

The number of subscribers to broadband Internet access services in Japan came to 10.9 million at the end of June, a rise of 451,000 over the preceding month, according to the Japanese government.

+CYBER ATTACKS MORE THAN DOUBLED IN APRIL-JUNE

About 120,000 Web sites in Japan were subject to attacks by computer hackers or computer viruses in the April-June quarter of this year, more than twice the number in the previous 3 months, according to the National Police Agency. The average frequency for these attacks was 1,300 per day.

+MOBILE PHONE SHIPMENTS EXPECTED TO REACH 44.4M UNITS IN 2003

Japan's shipments of mobile phones in 2002, including PHS and 3G mobile phones, are expected to increase 2.3% to 44.4 million units in 2003, according to Yano Research Institute. The survey covered 32 manufacturers. By company share, NEC ranked first as a mobile phone manufacturer, with a market share of 19.2%. Panasonic Mobile Communications came in second with 16.9%, and Sharp was third with 11.7%.

+CAR NAVIGATION SYSTEM MARKET TO INCREASE TO 2.8M UNITS IN 2003

Shipments of car navigation systems have been growing rapidly in 2003, and based on statistics collected by Nikkei Market Access, 2.8 million to 3.0 million units are likely to be shipped this year, compared to a total of 2.223 million systems shipped in 2002.

***GENERAL TECHNOLOGY NEWS***

+NTT ISP UNIT TO LAUNCH BROADBAND-BASED BROADCASTS

A unit of Japan's NTT Corporation said that it is launching a broadcast service with two other firms through NTT's broadband network, heating up competition in the nascent market. The ISP said the new service, which will include "video on demand" as well as multi-channel TV broadcasts, will start trials this week to a limited number of subscribers, with commercial operations to begin in the winter. This launch follows a similar operation recently launched by Softbank, the largest ADSL operator in Japan.

+HITACHI, MITSUBISHI, NTT DEVELOP NEW ENCRYPTION TECHNOLOGY

Hitachi, Mitsubishi Electric, and NTT Corporation have announced their success in mutually researching and developing an implementation technology of an elliptic curve crypto-system, named "CRESERC." An elliptic curve crypto-system can encrypt the data using short key lengths at high efficiency, while maintaining a high level of security.

+JAPAN PLANS SUPER GRID COMPUTER

Japanese government and industry have teamed up to develop a supercomputer founded on smaller computers linked around the country. The Naregi (National Research Grid Initiative) plan hopes to create a supercomputer rated at 100 teraflops by 2007. The fastest computer today, Japan's NEC Earth Simulator, runs at 36 teraflops.

+TEPCO TO LAUNCH WIRELESS FIBER-OPTIC SERVICE

Tokyo Electric Power (TEPCO) has announces plans for launch a fiber-optic communications service using high-speed wireless access in the Tokyo metropolitan area later this year. The leading utility firm will link its fiber-optic network, installed on utility poles and other facilities, to customers' homes via wireless communications, making it unnecessary to run cables into homes.

+OMRON DEVELOPS LOW-PRICED OPTICAL DEVICES TO SPREAD FTTH

Omron Corporation has began shipping samples of four optical communications devices – a single-mode type 2 x 2 optical switch, a multi-mode type micro lens array, a 4-channel CWDM multiplexer/demultiplexer, and a single-mode type 1x8 optical switch. The company claimed to make a huge cost reduction in the procudtion of these devices, in an attempt to turn FTTH (fiber-to-the-home) into an affordable service.

***LIFE SCIENCES AND ENVIRONMENT NEWS***

+HEALTH MINISTRY: ONE IN SIX JAPANESE MAY DEVELOP DIABETES

About 1 in 6 Japanese adults may contract diabetes, reflecting higher levels of sugar and fat in their diet and the aging of society, according to a survey by the Japanese health ministry. Currently, about 7.4 million people suffer from the disease (7.2% of the adult population). The number of diabetics in Japan is expected to reach 10.8 million in 2010, and the cost of treating them totaled 1.12 trillion yen ($9.35 billion) in fiscal year 2001.

+JAPANESE RESEARCH INSTITUTE LEADS RACE TO IDENTIFY PROTEINS

The Institute of Physical and Chemical Research (Riken) is leading its U.S. and European rivals in the race to identify protein molecules and analyze their functions. Riken, which is leading the Japanese program, described the structures of 150 molecules in fiscal year 2002 - surpassing the 120 protein structures discovered by U.S. researchers. In addition, a majority of Riken's discoveries involved human and mouse proteins, which can lead directly to the development of new drugs. Fiscal 2002 was the first year of a 5-year Ministry of Science and Technology project that aims to identify the basic structure and functions of 30% of the roughly 10,000 proteins thought to be helpful in the development of new drugs.

+TAKEDA, KIRIN TO TIE UP IN DEVELOPING ANTIBODY DRUGS

Takeda Chemical Industries and Kirin Brewery reported that they have signed a licensing agreement on a human antibody-producing technology that Kirin had developed. Under the agreement, Takeda will utilize Kirin's human antibody-producing technology to make antibodies effective against antigens selected by the leading pharmaceutical company.