GOVERMENT & POLICY

Net security guidelines
The MPT has launched an effort to draft comprehensive security proposals for preventing illegal use of the Internet and the spread of computer viruses. The ministry in June revised its Data Communications Network Security and Reliability Standards guidelines for communications service providers, adding new clauses related to preventing unauthorized network access and other illegitimate activity. According to the MPT, only 30 or so of Japan's more than 1,700 Internet service providers currently meet the new standards. While the new guidelines will not be binding, those who meet the MPT standards will be eligible for low-rate loans and other benefits.

Bypassing NTT
The MPT will push for commercialization of a wireless local loop (WLL) system that could link offices and homes with fiber-optic telephone backbone lines by April 1999. Such a system would mean that the new common carriers could provide local services directly to consumers and businesses without relying on NTT circuits. An MPT subcommittee has recommended that a system (156M bps for businesses and 6M bps for homes) be put into operation as quickly as possible. The subcommittee is currently studying specific frequency allocation and other issues in preparation for recommending technical standards, policies, and field trial outlines by year-end.

INTERNATIONAL NEWS

Meanwhile, Sharp, which leads domestic competition with its popular Zaurus, will market the PDA to SOHO (small office/home office) users in the US. Sharp hopes to ship more than 300,000 Zaurus units in the US in FY1997, up 70% year-on-year. This fall, the company will release a PDA with a built-in GSM digital cellular phone, which it has developed with Alcatel of France. The worldwide demand for PDAs is expected to top 50 million units in FY2000, up over 30 times from the current 1.5 million units.

Localization firm opens shop in Beijing
In early August, Ireland-based software and hardware localization service provider International Translation & Publishing, Ltd. (ITP) announced establishment of a Beijing-based subsidiary. The subsidiary, DCC SerCom Limited Beijing Office, offers software, multimedia, and website localization as well as double-byte enablement engineering work and technical writing.

The opening of a Chinese subsidiary follows soon after ITP's establishment of a Japanese subsidiary, ITP Japan KK, in Tokyo in April of this year. The Japanese office is 70% owned by ITP and 30% owned by local management. ITP anticipates that its Asian language sales will exceed $9.5 million by the end of March 1998.

Indian programmers come to Japan's rescue
The Utsunomiya-based Software Alliance of Tochigi Prefecture will establish a joint venture software development corporation in India within the year. The new joint venture will concentrate primarily on support and solutions for Japan's Year 2000 Problem, which is increasingly becoming a serious concern amid a shortage of qualified programmers. The alliance plans to sign basic contracts with several software developers in India, then solicit joint venture partners in Japan from both within and outside its alliance, thus enabling other Japanese firms to create "virtual" joint ventures with the Indian firms without having to conduct individual negotiations. Most of the actual programming work will be done in India; the Japanese partners will dispatch a number of onsite management staff to India.

Pacifitech joins world's largest localization company
New York-based financial printing company Bowne & Co. has acquired four software localization firms located worldwide to form what is reportedly the world's largest software localization company: Bowne Global Solutions. Yokohama-based software localizer Pacifitech Corp., which has been in the localization business since 1986 and serviced such clients as Microsoft and Claris, becomes Bowne Global Solutions Japan. It will handle the Japanese side of the multi-language localization solutions Bowne Global Solutions plans to offer. The other companies acquired are I&G COM (Paris), GECAP (Munich), and ME&TAA (Madrid). These join IDOC (Los Angeles), acquired by Bowne in November 1996.

NET NEWS

Banking on electronic commerce
IBM Japan will, in October, start implementing electronic commerce experiments in cooperation with Ashikaga Bank and seven other regional banks. The experiments will involve setting up on the Internet a virtual mall consisting of retailers that have accounts with the various banks. Consumers accessing the site will be able to purchase regional specialty products and other merchandise by having funds transferred directly to the merchant accounts using the SET (secure electronic transactions) protocol. IBM Japan says this will be the first large-scale electronic commerce experiment involving regional banks to be implemented in Japan.

New Internet faxing service
Global OnLine Japan (GOL) announced, in late August, the launch of its Global Fax-to-Fax service: international faxes sent via the Internet using ordinary fax machines. The service is transparent, allowing the user to send a fax normally. A small Fax2Net Dialer attached between the fax machine and phone jack routes the transmission over the Internet via GOL's network and GOL/Fax2Net servers. This Internet-based faxing service reportedly can save users as much as 75% off ordinary international fax charges.

The service also offers international and domestic fax broadcasting, fax tracking, and e-mail to fax delivery. For information, call GOL at phone 03-5341-8000.

BUSINESS BRIEFS

Japan's largest intranet launched
NTT began operating in June what it says will eventually become Japan's largest intranet, connecting more than 100,000 PCs at its headquarters, 11 branch offices, and other facilities throughout Japan. The company expects to save ¥1.4 billion annually by operating the massive intranet, which will enable employees to browse company information, submit reports, and even check home mortgage rates online. Currently, the NTT intranet links approximately 20,000 PCs, but plans call for boosting the number of connected computers to over 100,000 within two years.

Dropping out of the game
Matsushita Electric, which entered the 32-bit game player market in spring 1994 under a licensing agreement with 3DO of the US, is abandoning its efforts to develop a next-generation 64-bit home gaming machine and will essentially withdraw from the market. The company has been overwhelmed by competition from Sony Computer Entertainment, Nintendo, and Sega Enterprises, which together have shipped more than 20 million game players. Matsushita plans to dissolve its game subsidiary and convert its proprietary M2 game technology for use in computer and audiovisual equipment.

MARKET NEWS

Discount store PC sales rise
PC sales in Japan's three leading electronics discount store districts - Akihabara (Tokyo), Nipponbashi (Osaka), and Osu (Nagoya) - soared 22.8% year-on-year to ¥203 billion in FY1996, according to Multimedia Research Institute (MRI). Unit sales in these three districts accounted for 12% of national sales, down from 14% in FY1995. The market share of Akihabara, in particular, declined from 8.9% to 7.5% of national sales.

In terms of unit volume, Akihabara PC sales expanded by 10% (to 554,700 units) in FY96, Nipponbashi sales by 8% (to 221,000 units), and Osu sales by 4% (to 75,100 units). By maker, the breakdown of PC unit sales in the three districts was 32.0% NEC (down 2%), 17% Fujitsu (up 2%), 15% Apple Computer Japan (down 4%), 14% IBM Japan (up 1%), 7% Toshiba (up 4%), 4% Sharp (up 3%), and 3% Compaq Japan (down 1%).

Midrange computer shipments grow
Domestic midrange computer shipments expanded 19% year-on-year in value to ¥697 billion in FY1996, reaching almost 127,400 units, according to the Japan Electronics Industry Development Association. Of the total, Unix server shipments reached ¥301 billion, up 51%, while Windows NT server shipments reached ¥78 billion, up 243%. Vendor proprietary server shipments were ¥273 billion, down 8%. Workstation shipments, meanwhile, declined 4% to ¥345 billion (141,650 units).

Digital cable TV standards settled
The Nippon Cable Television Engineering Association has firmed up basic technical standards for cable-based digital broadcasts, which are slated to begin in some parts of Japan within the year. The proposed standards are likely to become the de facto standards for cable-based digital broadcasting in Japan. These standards call for fitting receivers with an IC (integrated circuit) card that can record the content of a subscriber's cable contract as well as fee and other information. The IC card system is identical to the one used by communications satellite broadcaster PerfecTV!. The new standards will enable all cable broadcasters to adopt the same system, thus reducing receiver development costs and lowering the price of set-top boxes and other consumer equipment.

TELECOM NEWS

DDI to offer integrated services
Domestic long-distance carrier DDI is strengthening its partnerships with hardware and systems vendors to offer integrated packages of Internet and intranet services under its new suite of DDI Integrated Open Network (DION) services. Since DDI trails NTT, whose Open Computer Network is focused on low-price appeal, the company has decided to take an integrated hardware/ software/connectivity approach. DDI believes this approach will appeal to small and midsize firms that are strong prospects for connectivity services.

Tu-Ka handset specs standardized
The three cellular carriers in the Tu-Ka Cellular group have agreed to standardize their handset specifications. Unlike its competitors, Tu-Ka's regional carriers have been using different internal protocols, making post-purchase repairs difficult when a subscriber needs service in a different geographic location. The new standardized handsets were released this summer, and Tu-Ka is working to find maintenance solutions for the non-standardized handsets sold to date.

Telecom revenues up over 20%
Japan's Type 1 carrier market expanded 21% in FY1996, the highest year-on-year growth rate ever recorded, to ¥12.1 trillion. There were 126 carriers in service, up from 111 in FY1995; the number of Type 1 carriers is expected to reach 138 in FY1997. Investment by the carriers in FY1996 soared 25% to ¥4.1 trillion. Mobile communications carriers enjoyed a particularly good year, boosting their combined revenues by 71% to over ¥4.0 trillion on investments of ¥1.6 trillion. The MPT predicts that the revenues of Type 1 carriers will increase 10% to ¥13.3 trillion in FY1997, with mobile carrier revenues reaching ¥5.1 trillion.

High-tech restaurant guide
Fujitsu Laboratories has developed a prototype personal handyphone system (PHS)-based navigation system. The prototype, a virtual LAN (local area network) that links PHS handsets with administrator PCs, uses "agent" software to monitor the whereabouts of PHS users, which can then be displayed on the monitor of a PDA connected to a PHS handset. Eventually, the system will be incorporated into a restaurant information service that Fujitsu operates on the Internet, so that PHS users will be able to locate restaurants and bars in their vicinity.

IN 50 WORDS OR LESS

Database software firm Sybase Japan has agreed to allow Toshiba Engineering to sell Sybase products through a newly established, dedicated marketing organization. Sybase hopes to catch market leader Oracle Japan by broadening sales to the financial sector, where Toshiba Engineering has a strong track record.Japan's database market shrank 0.8% year-on-year in FY95 to ¥197 billion, according to the Database Promotion Center's Database White Paper 1997. The world database market reached ¥1.66 trillion, of which the Japanese market accounted for about 12%.

Domestic shipments of ISDN (integrated services digital network) terminal adapters in FY96 jumped 450% year-on-year to a record 541,800 units, according to an MRI survey, driven largely by Internet users seeking faster connections. Shipments in FY97 are expected to rise 50%, to about 850,000 units.

NEC plans, over the next couple of years, to strike agreements with local communications providers in Europe, the US, and Oceania to expand the international roaming capabilities of its Biglobe Internet connectivity service. The service already has several hundred domestic access points.

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