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

November 2003 - Volume VI, 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

+JAPAN = 50% OF THE US ECONOMY PACKED INTO HAIFA TO REHOVOTH

Hello, everyone. Well, the elections in Japan are over - Israel does not have a monopoly on weak coalitions it seems. Things are beginning to pick up in Japan: unemployment is down, growth is up, and so is enterprise confidence (Tankan Survey). Banks are cleaning up their balance loan portfolios. Corporations have restructured and are becoming profitable. (More true for large companies, not true for SME's). The Tokyo Stock Exchange has become a star.

Personally, I think China is next in the barrel for serious economic problems. How long can you sustain lack of economic transparency, intellectual property crimes, suppression of free speech, an artificially undervalued currency, BOOMING non-performing loans (much higher than Japan's I have read), rampant bribery, child labor exploitation, and so on?

In comparison, Japan seems tame, benign, benevolent.

And look at this - Japan is about half of the US economy, but how do you do business in the US? You fly to NY, have 3 meetings, fly to the West Coast for 2 days, come back to Austin or Minneapolis, and then stop on Boston on your way home. HOW MUCH WOULD YOU PAY TO PACK ALL THOSE MEETINGS INTO 3 DAYS WITH NO AIRPORTS?

In Japan, you land in Tokyo, check into and remain in one hotel, and take a train to all your meetings. Within a 1.5 hour train ride, you can meet with all your major customers! 50% of the US economy in a 1.5 hour radius. No lost luggage. No hotel changes. No delayed flights. No airport checks. No rental cars. And you can get a great hotel for $150 a night, all included. DOING BUSINESS IN JAPAN CAN BE CHEAP, WHEN YOU CONSIDER TCO!

Some tidbits from Triangle's police blotter...

From our calendar - Life Sciences opportunities are really picking up in Japan - we are close to closing a large life sciences investment, and have started two new projects in Japan - Notal Vision and Chiasma. On January 8, we are holding a seminar in Boston on "Life Sciences Opportunities in Japan".

Good luck

Dan

***TRIANGLE TECHNOLOGIES NEWS***

+HITACHI GROUP CO’S TO DISTRIBUTE VOLTAIRE’S INFINIBAND SOLUTIONS IN JAPAN

Voltaire, a leading provider of high performance InfiniBand solutions, has signed an agreement with two group companies of Hitachi, a leading global electronics company. According to the agreement, Hitachi High-Technologies Corporation (Hitachi-HT) and Hitachi Information Technology Co. Ltd. (Hitachi-IT) will distribute Voltaire's high performance InfiniBand switches, routers, and related products in Japan. The demand for Voltaire's solutions in Japan is growing as InfiniBand interconnect technology continues to gain traction in market segments such as high performance computing and enterprise data centers. Triangle Technologies, which is responsible for Voltaire's marketing activities in Japan, negotiated the agreement.
Hitachi-HT intends to sell Voltaire's entire product family through various marketing partners, such as leading system integrators, HPC vendors, storage vendors, and database systems vendors, and expects to achieve annual sales of $14 million within two years. Hitachi IT intends to sell Voltaire products both independently, and together with Hitachi-HT, while providing technical support and maintenance services, which are some of their unique strengths.

+VOLTAIRE'S INFINIBAND SOLUTIONS INSTALLED AT MATSUOKA GRID LABORATORY

Voltaire, a leading provider of high performance InfiniBand solutions, announced that the company has signed an agreement with Professor Matsuoka's GRID computing laboratory at the Tokyo Institute of Technology for continued cooperation in the evaluation and deployment of Voltaire's advanced InfiniBand technology and products. Since April 2003, a network of users has been successfully running standard applications and benchmark tests on the 12-node cluster, which is connected by Voltaire's ISR 6000 InfiniBand switch router. Tokyo Institute of Technology operates Japan's largest campus-based GRID cluster.

+XMPIE GAINS BROAD POPULARITY AT IGAS 2003

XMPie, a leading provider of software solutions for creating highly effective one-to-one and cross-media marketing campaigns, announced its recognition by the Asian market evidenced by their popularly at the International Graphic Arts Show (IGAS) in late September. XMPie has demonstrated its flagship product PersonalEffect™, with four of the leading suppliers to the to the Japanese graphic arts market who were exhibiting at IGAS - Sakata Inx, master distributor of PersonalEffect and distributor of Xeikon and Oc? products, Heidelberg Japan, Hewlett-Packard/Indigo, and Fuji Film. Triangle Technologies was instrumental in developing the company’s initial relationship with Sakata Inx, and has been a key contributor in developing ongoing relationships with many of the other exhibitors noted above.

***BUSINESS NEWS***

+TOKYO ELECTRIC POWER TO DOUBLE OPTICAL FIBER NETWORK

Tokyo Electric Power Co., the world's largest private electric power company, reported it plans to spend up to around $650 million to double the size of its optic fiber network. The company aims to challenge industry leader NTT East by aggressively investing in telecommunications. Tokyo Electric, known as Tepco, currently extends its network to 4 million households in central Tokyo and adjacent cities, and plans to cover 8 million households by 2008.

+DSL SUBSCRIBERS TOP 9 MILLION, BROADBAND TOTAL AT 12M IN SEPTEMBER

According to an announcement made by the Ministry of Public Management, Home Affairs, Posts and Telecommunications in late October, the total number of xDSL subscriptions amounted to 9.23 million in September, up almost 150,000 subscriptions from the figure recorded a month before. The monthly increase has been around 340,000 for the past several months. Softbank BB remained the leader with 3.25 million subscribers at the end of September, representing a market share of 35.2%. The number of subscribers to all broadband Internet access services came to 12.25 million at this time, an increase of 463,000 from a month earlier.

+YAHOO! JAPAN AIMS TO GRAB TOP SPOT IN WEB SHOPPING

Yahoo! Japan has declared that it aims to unseat Rakuten as Japan's largest Web-based shopping mall operator by summer 2004. Yahoo! Japan dominates many other areas such as high-speed Net access, online auctions and Web advertising. According to last quarter’s results, Rakuten’s Internet sales volume, at $272 million, was almost three times that of Yahoo’s. In related news, Yahoo Japan listed its shares on the TSE's first section, switching from the Jasdaq market for start-ups.

+SONY EYES HOLDING-COMPANY STRUCTURE

Sony Corp. has stated it is considering revamping its corporate governance structure by putting three reorganized component firms under a holding company around 2006, in a bid to speed up its decision-making process. The plan calls for the formation of three firms - an electronics hardware maker, content producer and a financial company.

+SONY, SAMSUNG TO ESTABLISH LCD PANEL JOINT VENTURE

Sony Corp. and Samsung Electronics have reached an agreement to establish by March 2004 a manufacturing company for LCD panels. The new joint venture will be headquartered in Korea, with a capital of about $2 billion.

+SUBSCRIBERS TO I-MODE TOP 40M

The number of subscribers to NTT DoCoMo's i-mode mobile phone service topped 40 million at the end of October. The service started on Feb. 22, 1999.

+ KDDI RAISES FY2004 USER TARGET

Japan's 2nd-largest telecom operator, KDDI, has declared it aimed to have 16.6 million users by March 2004 for its "au" mobile phone unit, raising the target from 15.9 million, or by 4.4%.

+ BIOMETRICS MARKET TO REACH $370 MILLION BY 2010

The Japanese market of equipment for biometrics - ID verification technology based on a person's biological features - is expected to jump 6.4-fold to $370 million in fiscal 2010, from $58 million in fiscal 2002, according to Yano Research Institute. The same market is expected to amount to $71 million until March 2004.

***GENERAL TECHNOLOGY NEWS***

+IP MOBILE PHONE SERVICE TO DEBUT IN MARCH

Tokyo-based IP Talk Corp. has announced that from March 2004 it will be starting the world's first IP mobile telephone services in Tokyo. If the new service works properly from a technical perspective, the pricing model maintained by the incumbent cell phone companies at present might be at risk, as was the case in ADSL about two years ago. IP Talk will offer users free calls between members, and rates as low as JPY8 per 3 minutes for fixed-line local calls - 10 times cheaper than current call rates.

+SONY, DOCOMO TO FORM JV FOR CELL PHONE IC CARD SERVICES

Sony Corp. and NTT DoCoMo have declared that they have agreed to form a joint company to develop a new system that will enable cell phone users to enjoy services currently available only with integrated circuit (IC) cards. Sony and NTT DoCoMo plan to establish the new joint venture firm, FeliCa Networks, in January 2004 combining Sony's contactless IC card technology called FeliCa, and NTT DoCoMo's mobile multimedia expertise.

+CATV STATIONS SET FOR DIGITAL LAUNCH

More than 50 cable television stations in the Kanto, Chukyo and Kinki regions are making preparations for the Dec. 1 launch of digital TV broadcasting by terrestrial stations, according to industry sources. The new digital broadcasts will be aired in parts of the regions by NHK and private TV broadcasters. The TV industry predicts that more than 12 million households will be able to see the terrestrial digital broadcasts from the start.

***LIFE SCIENCES AND ENVIRONMENT NEWS***

+WORLD'S 1ST DRUG-DELIVERY NANO-PARTICLE DEVELOPED

A Japanese research team joining scientists from the National Institute of Advanced Industrial Science and Technology in Tsukuba, and Osaka University, has reportedly developed what it calls the world's first nano-particle for effectively delivering anti-inflammatory agents to eyes and other disease-affected body parts. The particle, which is about 100 nanometers in diameter, can be used to develop a drug delivery system for not only regular inflammation treatment but also such diseases as rheumatism and Alzheimer's.

+OLYMPUS DEVELOPS HIGH-RESOLUTION ENDOSCOPE

Olympus Corp. has reported that it had developed a high-resolution endoscope that could allow doctors to detect cancerous tissue within the body without taking samples of it. The endoscope could shorten the time needed to diagnose a patient as having esophageal, stomach or colon cancer as it takes about a week to check tissue samples taken from the body.