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

October 2005 - Volume VIII, Issue X

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

Dan's Desk

From Triangle's CEO

It is an interesting exercise to be away from Japan for almost an entire year, which exercise I have just finished. I am now on the plane returning from Kobe and Tokyo. The changes stick out, and so do the differences between Japan and other normal places..... Here are some thoughts:

1. There is definitely an uplift in the economic atmosphere. People have bounce in their strides, talk about opportunities, the restaurants are full.
Newspapers write, perhaps optimistically, about renewed consumer spending.

2. I have been predicting an entrepreneurial renaissance in Japan since the late 1990's. It is happening. (a) Significant personal wealth is being created by entrepreneurs who have listed their shares in Japan. (b) Among the leading corporations are some companies that were miniscule or curiosities 5 years ago. Upstart Rakuten is taking over Tokyo Broadcasting (and bought a baseball team), Softbank is now a major telecom operator having bought J.T’s wireline business. Foreign led private equity groups are buying and restructuring major service and retail companies, as well as financial institutions. Japan's 14 biotech listings are worth about $4 billion, and most of these ventures are entrepreneurial.

3. Japan's biotech ventures are interesting in other ways - a Morgan Stanley report compared Japan's biotech index with the US's, and found the two indices to be fully correlated until January 2003, from which time the US index has remained flat, and Japan's appreciated by about 200% over the subsequent 18 months. The biotech IPO pipeline in Japan is full, according to the report.

4. Problems - delving into the micro here - I still see many foreign companies who do not understand how to do business in Japan. Maybe that is a good thing, because it keeps us in business. But here are some recent problems I have encountered:
- a company shipping to an OEM partner evaluation units that were not thoroughly checked, and a result did not meet its own spec (marginally)
- companies "EAGER" for sales that takes 1 month to send answers to questions, even though they know the customer is interested and competitors are at the gate.
- US and European companies that manage their Japan sales and marketing from Hong Kong, despite the fact that the attention to detail, amount of management attention available, the business culture - all are radically different. Japanese activities must be managed from HQ or from a Japanese subsidiary.
- foreigners who still look for the "decision-maker" rather than understanding that decisions are bottoms-up and sides-out in Japan.
- US companies that still provide superficial evaluation data, or none. In a recent evaluation the OEM customer commented that a Japanese start up supplying evaluation units would also supply its own test data, to be compared with those later gather by the OEM partner.

Well that is all for now - I will keep you posted.

Good luck,

Dan

***TRIANGLE TECHNOLOGIES NEWS***

Triangle is proud to announce Triangle a major OEM deal between Paieon and Toshiba Medical. www.Paieon.com, an Israeli medical imaging company recently closed a major OEM agreement with Toshiba Medical Systems of Japan. Toshiba, one of the leading global manufacturers of cathlab equipment, will integrate Paieon's 3D system into their in-the-cathlab echocardiography machine, thus providing Toshiba's customers with enhanced real time procedure capabilities in both diagnosis and treatment.

ISRAEL-JAPAN NEWS

(Source - Haaretz) – Fujitsu established a fund of US$40mm to invest in Israel. The structure is as a subsidiary which will manage the corporate fund. Harel-Hertz will represent it in Israel. First investment is finalised at the Israeli company Asoc.

***BUSINESS NEWS***

+SOCIAL INSURANCE CRACKDOWN CONTINUES

(nikkei.co.jp, Oct 7) - From October forwards, the Social Insurance Agency intends to start forcing both companies and individuals to start participating in its pension and other social programs. The Agency found after research last year that 193,400 companies had not been paying their pension obligations. This number has since dropped dramatically, but there are still 2,191 hold-outs -- Thus, they are exercising their right to enter a company and access and impound records at will. The national pension program is only compulsory for companies with 5 or more employees. Less than that and the employees are supposed to participate in an alternative national program for the self-employed.

+GOVERNMENT DEBT AT RECORD HIGH

(www.nwsource.com, Sep 23) - The Finance Ministry has just confirmed that the Japanese government debt is still rising. Already the highest in the industrialized world, our debt rose 1.7% to JPY795.8trn ($7.1trn) at the end of June. This is about JPY6.24m ($55,900) for every man, woman, and child in the country and represents 160% of the nation's GDP.

***TECHNOLOGY NEWS***

+A NEW CHILD SEAT EFFECTIVE AGAINST SIDE COLLISIONS

(JCN, Oct 22) - Takata, a manufacturer of automobile safety devices, will market a new child seat based on data collected from the collaborative research to establish safety standards against side collisions with the US and Canadian governments, Takata has incorporated features into the seat to ensure safety, including side guides for head, shoulder and back parts. Passing the tests conducted by the German automotive association, The Technical University of Berlin and Japan's Ministry of Land, Infrastructure, and Transport, the new Takata seat is the first product that has complied with both European and Japanese safety standards.

+FUJITA DEVELOPED TSUNAMI-CAUSED INUNDATION RISK ANALYSIS SYSTEM

(JCN) - Fujita, in collaboration with construction R&D company Kokankyo Engineering, has developed a system to analyze the risk of tsunami-caused inundations in metropolitan areas. The system computes the tsunami wave flow rate and the depth of inundation for each area that will be affected if hit by tsunami waves. The system is expected to contribute to minimizing damage from tsunami-caused inundations in coastal areas.

+ HIGH-RESOLUTION MICROSCOPE DIGITAL CAMERA SYSTEM

(JCN, Oct 20) - Olympus will launch the DP20, its latest digital camera system for microscopy, on December 5. The DP20 can seamlessly display high-resolution images; specifically, it can provide UXGA images at 15 frames per second. With its improved colour reproducibility, the system can observe and record subtle colour differences of samples. Olympus expects that the new product will serve wide ranging applications including pathological examination as well as inspections of electronic parts and industrial materials.

+METHANOL-POWERED CELL PHONE

(www.telecomweb.com) - KDDI, working with Toshiba and Hitachi, says that it has developed a working fuel-cell powered cell phone – with a battery that delivers 2.5 times the capacity of regular phones running on just a squirt of high-concentration methanol also known as methyl alcohol. The companies don’t say what the standby time is – only that it’s a “long time,” after which the phone is recharged with another squirt or two. One imagines they’re talking about a month or so of standby time.
The KDDI team’s unveiling of a working fuel-cell powered phone comes on the heels of a Fujitsu/DoCoMo demonstration, in July, of fuel cells for mobile phone use. Fujitsu, though, wasn’t showing a working phone, but rather a fuel-cell powered cell phone re-charger.

***LIFE SCIENCES AND ENVIRONMENT NEWS***

+HEALTH FOOD FOR INHIBITING RISE IN BLOOD SUGAR LEVEL

(JCN, Oct 26) - Taisho Pharmaceutical has begun marketing Glucocare Powder Stick, a new product for the company's food for specified health use (FOSHU) series Livita, across Japan. The new product, which contains resistant dextrin, helps moderate sugar absorption after meal and inhibits a sharp rise in the blood sugar level. The company expects to achieve 200 million yen ($1.7 mil) in sales in the first year.

+JUNK FOOD REDUCES ALLERGIES IN BREAST-FED KIDS

(Mainichi Shimbun, Oct 22) - Children whose mothers consume milk and eggs while breast-feeding them are less likely to suffer allergies to such foods, researchers said. Moreover, the National Research Institute for Child Health and Development has found the more oily food mothers eat, the more resistant their children become to atopic dermatitis. The research team surveyed 9,975 people who have children in second grade. Of them, the researchers examined the health conditions of about 3,600 children who were fed only their mothers' milk during infancy.