On the other hand, all is not bleak. DoCoMo is reported to be financing a field trial of 4,000 users in the Tokyo area, basically for free (except airtime charges), and this will reportedly start in May. The applications for the field trials seem to have way surpassed 4,000.

The postponement caused DoCoMo's shares to drop, a just punishment - not for being fallible, but for failing to admit it. And there have been ripple effects - return on investments by all the 3G related services will be smaller, and slower, possibly. And there is more skepticism. Nevertheless, many experts are also relieved by DoCoMo postponed, claiming that there would have been serious operational failures, and that it's better to let DoCoMo get its ducks lined up.

We shall see, and continue to report!

Dan

Exchange Rate as of May 14, 2001

$1 US = 122.51 Yen

***ISRAEL-JAPAN NEWS***

+SPEEDNET PLACES ORDER FOR EQUIPMENT BY BREEZECOM

CTCSP, an Itochu Techno-Science subsidiary that sells wireless equipment, has received an order for wireless Internet connection equipment from high-speed Internet service provider SpeedNet. The equipment is made by Israeli wireless equipment producer BreezeCOM. The order covers both units to be attached to telephone poles and subscriber units for installation in residences and office buildings. Tokyo Electric Power, Microsoft and Softbank established SpeedNet in 1999.

+TDK TO LAUNCH SOFTWARE FOR BUILDING MPEG-4 IMAGE DISTRIBUTION SYSTEM

TDK plans to launch its "WanderStream" software package for distributing images in compliance with MPEG-4 system layers. TDK established the new system through collaboration with Israeli company Optibase.

***GENERAL TECHNOLOGY NEWS***

+NTT DOCOMO TO DELAY 3G MOBILE PHONE SERVICE

NTT DoCoMo plans to delay in the launch of FOMA, the company's third-generation (3G) mobile phone service. A trial operation will begin on May 30 (the date initially scheduled for the launch of FOMA), until the end of September. The trial will be limited to just 4,000 subscribers. A full commercial service for ordinary users will be postponed to Oct. 1. DoCoMo claimed that FOMA is a completely different system from the existing mobile phone services. Therefore, DoCoMo needs to spend more time conducting pre-launch tests to ensure the service to be stable and reliable.

The trial FOMA service has four features: (1) voice communications, (2) standard data communications, (3) packet data communications (maximum of 64kbps upstream, 384kbps downstream), and (4) a "multi-access" option that allows both voice calls and data communications to be used simultaneously.

+SUMITOMO AND WALDEN TO INVEST $160 MILLION IN START-UPS

Sumitomo and Walden International plan to jointly invest a total of $160 million in Japanese IT start-up firms. The two will jointly set up their first venture capital fund together with NEC and other major U.S. IT firms.

+AT&T SELLS STAKES IN JAPAN TELECOM TO VODAFONE

AT&T sold its 10% stake in Japan Telecom to Vodafone Group for $1.35 billion in cash. The transaction makes Vodafone the top shareholder in Japan Telecom with a 25% stake in the carrier.

+SONY AND ERICSSON INTEGRATE BUSINESS

Sony and Ericsson plan to integrate their mobile phone businesses and set up a 50-50 joint venture -- Sony Ericsson Mobile Communications -- in London to handle global mobile phone operations, from development and design to marketing.

+100 MILLION INTERNET USERS IN JAPAN BY 2004

According to InfoCom Research, an NTT Group research institute, the number of PC- and mobile phone-based Internet users in Japan will top 100 million in 2004. The number for 2000 is estimated to be around 45 million. As for accessing the Internet from home, users of high-speed lines like ADSL, CATV, and optical fiber are projected to increase significantly. Households using high-speed access are projected to reach 71.3% in fiscal 2004, a big jump from fiscal 2000's 1.9 %.

+50% OF JAPANESE HOUSHOLDS HAVE A PC

Half of all households in Japan own a PC, according to a survey of consumer trends by the Cabinet Office. The increase reflects growing use of the Internet and e-mail. PC ownership has been growing faster than ownership of other major consumer durable goods over the past few years. PCs are now more prevalent than dedicated word processors, which are owned by 37.6% of all Japanese households, and are approaching the prevalence of stereos.

+FIVE COMPANIES TO FORM BROADBAND VENTURE

A group of five companies will begin video distribution, interactive digital broadcasting and Internet phone services based on broadband communications. The companies are Mitsubishi, NTT Communications, Dai Nippon Printing, Japan SGI and OpenTV.

+SONY BEATS OUT NEC TO BECOME TOP PC MAKER

Sony became the largest maker of desktop and notebook PCs in April 2001, replacing NEC.

+DVD PLAYER SHIPMENTS JUMP 122% IN 2000

Japan’s domestic shipments of DVD players totaled 987K units in fiscal 2000, a year-on-year gain of 122.2%, according to the Japan Electronics and Information Technology Industries Association. Player prices fell, and the growing availability of content also sparked greater demand. Shipments of television sets equipped for digital satellite broadcasts totaled 190K units, and shipments of tuners for digital satellite broadcasts came to 390K units.

***NEW TECHNOLOGIES***

+NEW GROUP ESTABLISHED TO PROMOTE RECORDABLE DVD

Some 54 electronics firms and organizations established a recordable DVD council aimed at spreading use of the discs, which can record digital video and data. Among the firms participating in the new organization are Matsushita Electric Industrial, Toshiba, Hitachi, Hitachi Maxell, and Samsung Electronic.