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

November 2001 - Volume III, Issue XI

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

Dan's Desk

From Triangle's CEO

*****Triangle Technologies’ Annual Japan Seminar*****

Dear Triangle Friends. With the support of many of you, over the years Triangle Technologies has grown from a 2-person company in Michmoret to a 15 person team with offices in Ramat Gan and central Tokyo.

I am happy to announce that we will launch what we hope will become a regular part of Israel's high tech seminar scene, Triangle Technologies' Annual Japan Seminar. The first seminar will be a chance to meet Triangle Technologies' team from Israel and Japan, hear our views of what the current opportunities in Japan are, and to learn about the major industry segments. Of course, you will also have a chance to meet with other entrepreneurs and high tech executives, learn from each others' experiences and exchange viewpoints.

We hope to see you December 18, 2001 at 15:00 at the Sheraton City Tower in Ramat-Gan. Please register in advance by writing to a_lewkowicz@triangletech.com (pre-registration is a must because space is limited).

***ISRAEL-JAPAN NEWS***

+EXPAND NETWORKS CONTRACTS WITH NTT COMMUNICATIONS

NTT Communications Corporation will OEM Expand Networks’ ACCELERATOR product line to enhance the network solutions business of its server/client applications in the Japanese market.

***GENERAL TECHNOLOGY NEWS***

+SONY, AOL TIME WARNER JOIN IN BROADBAND BUSINESS

Sony and AOL Time Warner will join forces in broadband operations. The companies plan to jointly develop browser software for audiovisual devices connected to networks. They also plan to cooperate in developing technology aimed at creating a home-use dedicated terminal that will serve as a gateway for digital content.

+PC SERVER SHIPMENTS UP 23%

A recent MultiMedia Research Institute (M2RI) survey found that Japanese PC server shipments rose 23% year-on-year to 146,000 units in the first half of fiscal 2002. By vendor, NEC shipped the most with a 24.7% share, followed by Fujitsu with 16.8%, IBM with 14.2%, Dell with 13.2% (a 7%+ increase!), Compaq with 12.3%, and Hitachi with 9.5%.

+ 71.6 MILLION MOBILE PHONE USERS

The Telecommunications Carriers Association ((TCA) claims that that the total number of cell and PHS subscribers in Japan as of October 31, 2001 was 71,603,100, up 0.8% from the previous month and up 15.1% year-on-year. Among the 65,918,400 cell phone subscribers (up 17% from last year), 58.9% were using NTT DoCoMo. The TCA further said that 46,181,900 devices were Web-capable, up 2.8% from a month ago and 111.8% from a year ago. The number of i-mode users was 28,638,000.

+1 MILLION CATV INTERNET USERS

According to the Ministry of Public Management Home Affairs, Posts and Telecommunications, the number of subscribers to cable TV Internet access services in Japan has passed the one million mark. When compared with 463,000 at the end of September 2000, the latest figure represents an increase by almost 2.5 times in a year.

+ASP MARKET TO REACH $690 MILLION IN 2005

According to IDC Japan the total expenditure for the ASP market as of 2000 was $20 million. IDC also estimates that the market will continue to grow at an average rate of 104.1% per year to reach $690 million by 2005. IDC cites the following factors: (1) In the prolonged economic stagnation, enterprises will continue to actively make use of ASPs in order to push forward their businesses more efficiently; and (2) With an ever-increasing importance of electronic commerce, there will be a strong need for CRM and e-commerce applications.

+NANOTECHNOLOGY MARKET COULD REACH $220 BILLION BY 2010

The Japanese market for nanotechnology-related products could grow to $220 billion by 2010, according to Michiharu Nakamura, corporate officer and president of Research & Development Group, Hitachi Ltd. According to Nakamura, roughly half will be accounted for by IT-related electronics, and another 30% by process materials used in components such as displays and magnetic storage media. The remainder of the market - in descending order of size - will consist of nanotech products for measuring/processing/simulation-related applications, as well as products for the environment/energy, the life science and aerospace sectors.

+JAPAN’S IT SERVICES MARKET CONTINUES TO GROW

According to IDC Japan, Japan's domestic IT services market will be valued at $64 billion in 2005, growing at an average annual rate of 8.4% through then. Companies will continue to invest in IT to improve efficiency. Within the overall information technology services market, the market for system construction services is expected to be valued at $12 billion in 2005, growing at an annual rate of 9.5% on strong investments in CRM and ERP systems.

+8 COMPANIES CREATE BROADBAND CONTENT DISTRIBUTION SYSTEM

An eight company consortium led by Internet Initiative Japan Inc. (IIJ), Cisco Systems KK and Oracle Japan have built a new broadband system for content distribution. The new system was built to make it easier for subscribers to handle video and other content from ADSL (asymmetric digital subscriber line) providers. It also verifies content ID information and user usage conditions to prevent illegal use. The other companies involved in the new system are EMC Japan, Itochu Techno-Science, Sun Microsystems KK, Sony Communication Network and Hewlett-Packard Japan.

+SONY’S BITWALLET TO DISTRIBUTE 8.5 MILLION E-MONEY CARDS

Sony affiliate bitWallet plans to distribute at no cost 8.5 million non-contact IC (integrated circuit) cards containing its Edy e-wallet system in 2003. The company will distribute the cards through convenience store chain operator am/pm Japan Co., as well as credit card companies like Toyota Finance Corp. Cardholders accessing the Internet via personal computers with special card readers will also be able to use bitWallet's e-money to shop online.

+E-LEARNING USED BY 3.4% OF JAPANESE ENTERPRISES

According to a survey conducted by Gartner Japan, 3.4% of Japanese enterprises use e-Learning as a tool to educate their workforce. Another 2.4% say they have plans to introduce it within the next year, and another 3.6% replied that they might possibly start using it within the next three years.

***NEW TECHNOLOGIES***

+SYSTEM-ON-GLASS CELL PHONE DISPLAY

NEC has developed a low-temperature TFT LCD which will let it create "system-on-glass" panels for cellular phone handsets. The technology builds driver circuits directly onto a high-luminosity LCD panel, to provide ultra-fine images with a resolution of 230 pixels per inch. The LCD displays 260,000 colors at a resolution of 360x480 pixels, thus rendering a full TV-compatible CIF image (352x288 pixels).