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

July 2003 - Volume VI, Issue VII

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

Dan's Desk

From Triangle's CEO

Hello, all. Some Japan tidbits:

Goldman Sachs, July 2003: "JAPAN IN THE LIMELIGHT, LIKELY TO OUTPERFORM EUROPE…Our Japanese strategists believe the rally in Japan is sustainable and can be justified from a growth and value perspective." Pessimism re: overseas economies is receding, and business sentiment is improving. Other changes – corporate cross holdings unwinding, shareholder activism increasing, and incentive-based compensation gaining acceptance.

Windhover Information, March 2003: "Japanese [Pharma] players have always been far more interested in early stage deals [than non-Japanese Pharmas], WITH HALF TO TWO THIRDS OF ALL DEALS … SGNED PRIOR TO THE CLINICAL PHASE [emphasis DI]…. Japanese transaction volume remains high compared to previous years, with remarkable uniformity in the number of clinical phase …deals…" GOOD NEWS FOR SMALL BIO COMPANIES!

At Triangle Technologies we currently have 5 deals closing in the coming 3-5 weeks – 3 at the final signature stage, 2 just closed, 2 more about 1-2 months away. Most of them involve the titans of Japanese industry. The Israel issue comes up, but most importantly they are concerned that the product works, is reliable, will be shipped on time, and will not require too much maintenance. Stay tuned for details in the near future.

LET TRIANGLE TECHNOLOGIES MANAGE YOUR JAPAN BUSINESS FOR YOU. We have accrued years of experience as Japan ‘Virtual Country Managers,’ handling the entire market validation-penetration-expansion processes. Raising capital. Setting up joint research programs. Finding distributors. Training distributors. Winning strategic customers. Finding new applications for your technologies. We have experience with the details of licensing, distribution, investment, and joint development agreements. At a fraction of the cost, a fraction of the time.

Good luck!

Dan

***ISRAEL-JAPAN NEWS***

+TOSHIBA SELECTS SURF AND MOTOROLA FOR PACKET TELEPHONY SOLUTIONS

Surf Communication Solutions announced that Toshiba has chosen to integrate the Surf SMP Packet Telephony solution in its VoIP-enabled Wireless Infrastructure equipment. SMP is running on Motorola's MSC8101 DSP.

+SONY LICENSES WAVES' AUDIO TECHNOLOGY

Waves announced that Sony will license three of Waves' audio processors to be integrated into Sony's SonicStage Mastering Studio applications, which have begun shipping on all new Sony VAIO PCs in Japan and will be shipping worldwide in late 2003.

+POWER PAPER & TOPPAN FORMS IN PARTNERSHIP FOR COSMETIC PATCHES

Power Paper and Japan's Toppan Forms, a global leader in business communications and printing solutions, announced that they have entered a into a strategic relationship focused on advancing Power Paper's micro-power source technology and active cosmetic patches in the Asia-Pacific and Japan regions. Toppan Forms has also made a $2m strategic investment in Power Paper as part of the company's current fundraising round.

***BUSINESS NEWS***

+MORE THAN 14M OVER 75 YEARS OLD

The Japanese government has said in a report that the country now has 14 million or more people aged 75 or over. The report also says that almost 24 million Japanese are now over 65.

+KDDI CELL PHONE CONTRACTS SOAR

KDDI posted a net increase of 193,500 subscribers to its "au" mobile phone service in June, surpassing rival operators for the third straight month, according to the Telecommunications Carriers Association. The increase is due to the popularity of KDDI’s ring-tone features and camera handsets.

+NUMBER OF INTERNET USERS IN JAPAN TOPS 56M

The number of Internet users in Japan totaled 56.5 million at the end of February, up from 46.2 million a year earlier, and the number is expected to reach 61.2 million at the end of this year, according to publisher Impress Corporation. Nearly 40% of households connected to the Internet – an estimated 16 million homes out of a total of about 40 million – are connected by broadband, up from 18.5% a year ago.

+3G SERVICE MARKET TO REACH 69 MILLION SUBSCRIBERS IN 2007

According to a new study by IDC Japan, the 3G service market in Japan is expected to reach 69 million subscribers in 2007, and will account for 77.6% of the 88.9 million subscriptions in the entire cellular phone/PHS market. The 3G market is also expected to be worth $53.7 billion in terms of revenue, accounting for 81.4% of the total market revenue.

+BROADBAND SUBSCRIBERS TOP 10 MILLION

The number of subscribers to broadband Internet access services in Japan has topped 10 million in early June. Domestic Internet access service providers have experienced a 10-fold increase over two years.

+JAPAN TO CREATE COMMON WEB SITE FOR ADMINISTRATIVE SERVICES

The Japanese government has said it plans to create a common Internet site by the end of fiscal 2005, through which citizens can carry out various administrative procedures, such as filing tax returns and applying for state exams. Under the plan, each central government agency will try to offer its services online as much as possible by the March 31, 2004 end of the current fiscal year.

+5 TELECOMS FIGHT NTT FEE HIKE

Five new common telecom carriers have filed a lawsuit to seek nullification of the government's approval for a hike in interconnection fees they pay when accessing NTT lines. KDDI, Japan Telecom, Poweredcom, Cable & Wireless IDC, and Fusion Communications said the telecom ministry's decision to allow NTT companies to raise the fees by an average 5% will severely damage their business.

***GENERAL TECHNOLOGY NEWS***

+JAPAN'S SOFTBANK TO OFFER SPEEDY NEW ADSL SERVICE

Japan's Softbank said it would offer a new ADSL Web access service that more than doubles the speed available now, keeping pace with rivals such as NTT West. Softbank, Japan's largest ADSL operator, will offer a downlink speed of up to 26 mbps.

+IBM, NTT TO LAUNCH REMOTE DATA STORAGE SERVICE

IBM Japan and NTT Communications have developed a computer system that backs up database information in a remote location via the Internet, and will start offering a service using it to companies as early as this year. The computer system uses a new communications standard called iSCSI, made for transmitting large volumes of stored data over the Internet.

+HITACHI, SONY TIE UP IN DATA BACKUP BUSINESS

Hitachi and Sony have said that they had agreed to cooperate in the data backup solution business in Japan. Under the agreement, Hitachi and Sony will jointly test large-scale high-speed data backup solution technologies by combining Hitachi's hard-disk equipment with Sony's tape storage equipment.

+YAHOO JAPAN, NIHON UNISYS TO TIE UP ON INFO PORTALS

Yahoo Japan and Nihon Unisys said they have agreed on a comprehensive tie-up to develop enterprise information portals (EIPs) for companies and local governments. The tie-up is designed to combine Yahoo Japan's portal development service for companies, and Nihon Unisys' computer software services and systems development.

+HITACHI, OTHERS ESTABLISH BIOMETRICS SECURITY CONSORTIUM

Hitachi, Mitsubishi, and other companies recently announced the establishment of the "Biometrics Security Consortium" (BSC) to promote biometrics technology in Japan. BSC aims to accelerate the development of Japanese technology, which could lead to a world standard, while preparing for emerging ethical and legal issues such as the handling of personal information. So far, 38 companies have indicated their intentions to participate in the consortium.

+KDDI, NTT TO LAUNCH BROADBAND MEDICAL DATA TRANSFER SERVICE

KDDI and NTT will separately launch a broadband communications service to transfer medical data, according to the Nihon Keizai Shimbun. The companies will develop new technologies to protect patient privacy for the service, which will allow doctors to receive an electronic medical record of a new patient from the patient's former hospital and use such information during treatment. The telecom giant plans to commercialize the service this year and market it to hospitals and other institutions.

+CENTER DEVELOPS ARTIFICIAL BONE MATERIAL SIMILAR TO HUMAN BONE

The Japan Fine Ceramics Center in Nagoya, a ceramics research foundation, said that it had developed the world's first artificial bone material that has characteristics closely resembling human bones, and has little negative impact on the user's body. The JFCC said the material, made by mixing titanium dioxide and resin, will be put into practical use as early as fiscal 2007, and will be used in treatment for such things as ruptured spinal disks.

+EXPERIMENTAL CHUGAI DRUG SHOWS PROMISE IN ARTHRITIS

A new rheumatoid arthritis drug from Japan's Chugai Pharmaceutical Co. has shown positive results in intermediate Phase II clinical studies developed together with Chugai majority stakeholder Roche Holding, according to company researchers. The MRA drug is a monoclonal antibody that blocks a receptor, known as IL-6, involved in inflammation.

+IC TAGS SEEN REPLACING BAR CODES

The Ubiquitous ID Center, headed by Tokyo University Prof. Ken Sakamura, has approved specification standards for IC tags that can replace bar codes for product management and adjustment in payment. By unifying specifications of tiny integrated circuit chips, the center,-in which 180 companies participate, including major electrical machinery and communications firms, expects that IC tags will be used in a wide range of fields other than just as dockets. Experts estimate that the IC tag market will grow from $2.5 billion in 2002 to $8.4 billion in 2008.

+MITSUBISHI HEAVY INDUSTRIES DEVELOPS SMALLEST 1KW HOME FUEL CELL

Mitsubishi Heavy Industries said it has developed the world's smallest home fuel cell in the class of 1k-watt generators. The new generator unit is of the type called Polymer Electrolyte Fuel Cell (PEFC). Mitsubishi Heavy Industries will start shipping samples of this fuel cell system at the end of this year.