Internet
ò Industry observers in Japan note how social networking web services are shifting their focus to cellphones, with Mixi Inc. leading the market for personal computers. Already, Gree Inc. formed an alliance with KDDI Corp. to launch the EZ Gree community service as part of the EZweb Internet services for KDDI's au cellphone subscribers. The company aims to increase subscribers, offering a function that enables them to use the Wikipedia free encyclopedia service easily. Both Gree and Mixi started social networking web services in February 2004. While Mixi has grown into the nation's largest service, with more than 8 million subscribers, Gree's customer base is limited to about 700,000. Yahoo Japan Corp. in November allowed all subscribers to Softbank Mobile Corp.'s Yahoo! Keitai Web service to join its Yahoo! Days community service. Softbank subscribers are able to use almost all the PC-based functions, such as writing diaries and posting photos. DeNA Co. has attracted more than 3 million subscribers to its cellphone-based online videogame site since its launch in February 2006. The Mobage-town site offers a social networking service where subscribers can compete with each other for higher game scores and exchange messages. According to the survey made by the countryÆs communications ministry, more than 20 percent of the nation's 85.2 million Internet users accessed online services solely through cellphones or personal handy-phone systems as of the end of 2005.
ò Softbank Corp. reported a 66 percent decline in its third quarter, to 7.5 billion yen (US$62 million) in the three months ended Dec. 31, from 22 billion yen (US$179.6 million) a year earlier. The company said its sales almost doubled to 702.2 billion yen (US$5.7 billion), as the company added revenue from the Vodafone Group Plc Japan unit it acquired in April. Softbank reported its operating profit surging to 84.7 billion yen (US$691.5 million) in the third quarter from 23.5 billion yen (US$191.8 million) a year earlier. The company said its third-quarter revenue posted a 7 percent gain, which it ascribed to the combined Softbank and Vodafone Japan sales from a year earlier.
Media, Entertainment and Gaming
ò Catalyst Mobile and Warner Music Japan announced the launching of the Warner Music Group Rhino Mobile service, a music portal for NTT DoCoMo subscribers in Japan. This mobile data service features a flash-based user experience delivering a variety of content from Warner Music Group's Rhino catalog. Unlike existing download services, the Rhino Mobile service, which is powered by Catalyst Mobile, engages users in a graphically rich and a visually entertaining experience. The Rhino Mobile service provides advanced search, recommendation, preview, and downloading of individual assets. The Rhino Mobile service is available to NTT DoCoMo subscribers with FOMA series phones. The service is subscription based, with prices starting at 315 yen per month.
ò According to Enterbrain, Nintendo Co. Ltd.'s Wii game console outsold Sony Corp.'s PlayStation 3 (PS3) by nearly three to one in January. Japan's largest video game magazine publisher said Nintendo sold about 405,000 Wii units last month, compared with 148,000 PS3 units. Wii and PS3 went on sale late last year and had to contend with Microsoft Corp.'s Xbox 360 in a market valued at US$30 billion. Enterbain said a wider range of software titles for the Wii is attracting more users, while the PS3's higher price tag is affecting its sales growth. The basic model of the PS3 sells for 49,980 yen (US$416) in Japan, double the price for the Wii. In a separate development, reports show that Sony's 7-year-old PlayStation 2 video game console has outsold its brand new PlayStation 3 console in Japan for the week of Jan. 22-28, according to research company Media Create. Analysts see this development as posing a big problem for Sony as it has invested a lot in the development of the PS3 console.
ò A ministry official reported that the Internal Affairs and Communications Ministry has decided to allow domestic newspaper publishers or business corporations to hold more than 20 percent of the voting rights in a broadcast holding company. In addition, the ministry is considering setting the maximum investment in a government-authorized broadcast holding company at 50 percent of the voting rights, with the permissible range of investment ratios to be stipulated in a ministry ordinance. The official said that to implement the planned system for certified broadcast holding companies from fiscal 2008, the ministry plans to submit a bill to revise the Broadcast Law to the current Diet session. The envisioned broadcast holding company will be allowed to have key and regional stations under its umbrella to achieve efficient management.
Mobile/Wireless
ò Sony Corp. announced that it will market a wireless audio system that will enable users to enjoy music stored on a personal computer in a different room. The VGF-WA1 can play back mainly audio files copied from CDs onto the computer through software such as Apple Computer Inc.'s iTunes. Sony says most songs purchased from online downloading services cannot be sent to the system due to copyright protections. The wireless system, which covers a range of 50 meters, runs on a built-in, rechargeable battery for a maximum of four hours. It is bundled with a USB adapter that connects the computer to a wireless LAN network. The VGF-WA1 is expected to be out in the market soon for about 35,000 yen (US$286).
Information Technology
ò A court revealed that Sony is the firm, which has acquired US$3.6 million in intellectual property from imaging technology company Ipix. In the bidding, Sony was initially represented by a law firm as an anonymous bidder and won with the highest offer for all of Ipix's patents held both domestically and internationally, as well as any outstanding patent applications or provisional patent applications on new inventions. The sale included more than 35 U.S. patents and patent applications on technology involving immersive still photography, 360-degree digital immersive video and a camera with gigapixel resolution, as well as more than 50 patents and patent applications on the same or similar technology filed in Australia, Austria, Canada, Germany, the European Union and Japan. Sony confirmed the acquisition but did not release any statement about it. Ipix is best known for developing technology that converts two 180-degree digital images into a rotational 360-degree panoramic view. The technology was popular in the real estate industry because it enabled people to view entire rooms remotely via the Internet.
Hardware
ò NEC Corp reported a 47 percent growth in its operating profit to US$289 million in its most recent financial quarter, which stands for a partial turnaround for the company, following cutbacks in some ailing mobile and overseas business divisions. NEC posted more than a 7 percent decline in its quarterly sales year on year as the company cut loss-making lines and sold its Packard Bell European PC business. Despite the cost cutting, NEC recorded only US$21.7 million in net profit, a 77 percent fall from the same quarter a year ago. The company said it looks to generating sales of US$39 billion for the fiscal year ending in March. Industry observers noted that the worsening losses in the mobile phone business, which followed intense price competition, had pushed NEC to reduce exposure in this market towards the end of last year. The company has also been planning to establish its mobile brand internationally, even as its handsets are now facing increasing challenges in Japan.
Ventures/Investments
ò Market sources said Goldman Sachs Group Inc. and Sanyo Electric Co. are expected to sell their shareholdings in Sanyo Electric Credit Co. to General Electric Capital Corp, with the value of the deal placed somewhere at 50 billion yen (US$408.2 million). Sanyo, the midsize leasing company's second-largest shareholder, plans to spend the proceeds on restructuring and also concentrate its management resources on core businesses. Goldman Sachs and Sanyo have been planning to sell their equity stakes in Sanyo Electric Credit since autumn. Goldman Sachs, the top shareholder, owns more than 33 percent, while Sanyo owns 16 percent. Sources said that Shinsei Bank and trading house Mitsui & Co. had also shown interest in Sanyo Electric Credit, but GE Capital, General Electric Co.'s financial arm, apparently offered a higher price. In December 2005, Sanyo sold most of its shares in Sanyo Electric Credit to Goldman Sachs, with the U.S. investment bank raising its stake to more than 33 percent in January 2006, by acquiring new shares for about 10 billion yen (US$81.6 million) through a third-party allocation.
ò Electronics retailers Edion Corp. and Bic Camera Inc. announced a move to form a capital alliance and consider integrating operations in two years, in a bid to catch up with industry leader Yamada Denki Co. Edion and Bic Camera have combined sales of about 1.2 trillion yen (US$9.7 billion). Under the deal, Edion, which ranks second, and Bic Camera, fifth, will purchase 3 percent of each other's outstanding shares. The partners said they will work together in merchandising, product development and distribution. Electronics retailers, led by Edion and Gigas K's Denki Corp., have been realigning to expand operations since Yamada Denki reported more than 1 trillion yen (US$8.1 billion) in consolidated sales in the year ended March 2005.
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