Simplified telecom licensing The Ministry of Posts and Telecommunications (MPT) is taking steps to simplify its communications carrier license application procedures in FY1998. There currently are seven types of licenses for telecommunications services: telephone, telegraph, leased line, data communications, digital data communications, paging, and "other." The ministry intends to reclassify these into only three or four categories to better enable carriers to provide flexible communications services. Fiber-optic project timing advanced The Japanese government and the ruling Liberal Democratic Party (LDP) have decided to move forward by five years a fiber-optic network development project initially scheduled for completion by 2010. The MPT estimates that the project will eventually cost \33 trillion. The fiber-optic network covered an area reaching 16% of Japan's population as of the end of FY1996, with original plans calling for coverage to reach 20%, 60%, and 100% of the population by 2000, 2005, and 2010, respectively. Cognizant of the fact that Japan is behind the US and other industrialized nations in use of fiber-optic networks, however, the government has made a decision to complete this future telecommunications infrastructure earlier. The MPT and LDP have also reached agreement with NTT that the carrier will set up Internet access points in entire city areas by the end of FY1998, so that users nationwide can access the Internet for a fixed fee of \10 per three minutes. Virtual real estate sales The Ministry of Finance, National Land Agency, and four other government agencies and ministries will create an electronic real estate market on the Internet this year in an attempt to spur liquidity in the market. The project will provide information on the location, price, and other details of properties for sale in Tokyo and Osaka, making it available through terminals placed in banks and other locations. The properties to be showcased will include idle plots owned by private companies, and collateralized properties owned by financial institutions and housing lenders. A commission was formed in December to work out the details of the project. Open deliberations urged A growing number of communications industry firms are demanding that the MPT disclose its discussions on access charge rules. By late last year seven companies, including new common carriers and CATV operators, had requested that the ministry make clear how rules are determined within its councils and telecommunications groups. The MPT, however, continues to insist that "there is no need to publicize discussions since the councils and groups are not decision-making instruments."
Hitachi has set up three support centers to bolster its client/server systems business in cooperation with Microsoft. Opened in Tokyo, Osaka, and Nagoya in December, the new BackOffice Support Centers provide technical support to Hitachi group companies and distributors involved in building client/server systems based on Windows NT and other Microsoft enterprise software. The centers are staffed by dedicated engineers. EMC has high hopes for Japan Massachusetts-based hard disk drive array maker EMC is stepping up its Japan strategy. The company this year will form a partnership with one of three Japanese mainframe computer manufacturers, and will start full-fledged sales of its hard disk drive arrays in Japan. EMC will supply the new partner with its mainstay line of Symmetrix drives. EMC boasts an overwhelming share of the market for drive arrays for IBM mainframes, but in Japan Fujitsu, Hitachi, and NEC hold a large portion of the overall market. EMC believes it needs to partner with one of the big three Japanese makers in order to expand its share. The company foresees FY1997 sales of \19 billion through its Japan subsidiary. Citrix peels into Japan Citrix Systems of Florida will enter the Japanese software market in April 1998. The company is establishing a Tokyo-based subsidiary that will initially employ a staff of 10 to 15. The company intends to boost sales of WinFrame, which is Windows NT management software for connecting MacOS, OS/2, and other non-Windows machines to NT networks in Japan (which accounts for about 30% of global demand for NT servers). Citrix, which had 1997 worldwide sales of approximately $120 million, hopes that its sales in Japan will account for 20% of its global sales within three years. Help with system management CSK has launched a comprehensive system management service whereby it will help corporate users purchase hardware and software and manage their system assets. The Asset Outsourcing Service includes a rental service, which enables users to have a two-year rental of PCs and servers. The hardware line will be expanded to include Unix servers and network equipment in the future. CSK is hoping for \2 billion worth of orders in the next year. NEC embraces JIT concept NEC will adopt a just-in-time procurement system for its PC components. In a move aimed at boosting procurement efficiency and shrinking lead times, the company has signed just-in-time procurement contracts with 40 key suppliers in Japan and overseas. NEC says it will reduce its parts forecasting/ordering cycle from one month to one week. Suppliers will be obligated to maintain inventory on their own premises, and deliver upon one week notice. NEC says the new system will reduce order lead time from one week to two days, and cut delivery lead time from over two months to slightly over one month.
Japan's domestic PC server shipments grew by 65% year-on-year, to 74,700 units, during the first half of FY1997. According to Multimedia Research Institute (MRI), NEC ranked first with a 28% share, up by 2% year-on-year, while Fujitsu emerged as the no. 2 vendor. Fujitsu boosted its shipments by 56%, although its market share declined slightly to 17%. No. 3 Compaq Japan boosted shipments by 44%, but its share also dropped, to 16%. IBM Japan expanded shipments by 57%, for a 14% market share. Hitachi, meanwhile, nearly tripled its shipments to achieve an 11% share. MRI predicts that PC server shipments for the entire 1997 fiscal year will expand by 44%, to 167,700 units. Midrange computer shipments during the first half of FY1997, meanwhile, were up 19% year-on-year, to 65,579 units, although revenues grew by only 4%. According to the Japan Electronics Industry Development Association, Unix server shipments rose 21% in volume, while workstation shipments declined by 3%. PDA market grows PDA (personal digital assistant) shipments were likely to double to 800,000 units in FY1997, according to Nikkei BP. Sharp, which shipped 330,000 Zaurus units in FY1996, was expected to expand shipments by 30%, to 430,000 units, in FY1997, while NEC, which manufactures the Mobile Gear Windows CE handheld computer, was expected to increase shipments from 50,000 units in FY1996 to 146,000 units in FY1997. Patents on the Net The Internet's impact on the patent information business in Japan has been substantial, say industry watchers. Japanese firms have become more sensitive to patent issues as a result of lawsuits in the US, and many industry analysts predict that all patent applications will be submitted online by 2000. As a result, more venture firms are working to provide patent information services using Internet technology. Think tank Nomura Research Institute has teamed up with patent venture firm Green Net of Tokyo to start offering an Internet-based patent search service. Fujitsu, meanwhile, is working to make its patent information service offerings intranet-ready, focusing on its existing base of corporate customers. Standardizing business objects A total of 28 companies, including Microsoft, NEC, Fujitsu, Hitachi, Softbank, and Nihon Sun Microsystems, have organized a council to establish a system for developing standard software objects. Set up in December, the task of the Business Object Development Council is to identify about 100 basic objects (called "atom objects"), standardize them, and create a series of "collective view objects" -- application objects that will comprise the atom objects and be further customized. The council's member firms will be able to use the atom objects free of charge, but will have to pay to use collective view objects. The council hopes to recruit about 100 firms, mainly software houses, as members by March 1998. Computer shipments to grow by 7% The Japan Electronic Industry Development Association (JEIDA) forecasts that domestic computer and allied product shipments will rise 7% year-on-year, from an estimated \7.04 trillion in FY1997 to \7.51 trillion in FY1998. Mainframe shipments will likely slip 3%, to \907 billion, while midrange computer shipments will grow by 13%, reaching \855 billion. Workstation shipments will be up 3%, to \355 billion, and PC shipments will grow 8%, to \2.0 trillion. JEIDA predicts that with the release of Windows 98 (now slated for summer), PC shipments will expand 13%, to 8.5 million units. Oracle localizes ERP Oracle Japan, in cooperation with Information Services International Dentsu (ISID), will develop and sell an enterprise resource planning (ERP) software package based on Japanese accounting principles -- one that takes into account business customs unique to Japan. Packaged ERP solutions developed overseas have had mixed success in Japan since a large number of Japanese firms have developed their own unique production, sales, and accounting management systems. By developing a truly localized ERP solution, Oracle hopes to overcome these limitations and secure a larger share of the market. The company has also teamed up with Tsubasa Systems of Tokyo to release a solution that integrates an Oracle ERP system with Tsubasa's accounting software. Gateway 2000 eyes corporate users Gateway 2000 Japan will market PC servers and NetPCs starting as early as spring 1998 in an attempt to penetrate the enterprise market. PC sales to individual consumers account for nearly 50% of Gateway 2000's sales in Japan, making the company highly dependent on the consumer market. Competitor Dell Computer Japan, meanwhile, generates nearly 80% of its sales from the corporate sector. Gateway 2000 has begun discussions with several consulting and solution service providers in order to introduce its systems to corporate users.
TELECOM AND NET NEWS Surfing the rails Toshiba has started offering via the Internet a free service that provides train and subway time schedule information, as well as optimal transfer times for riders who need to change trains. The new Web site contains information on approximately 1,500 train stations in the Tokyo metropolitan area; it covers JR, private railway, and subway routes. Toshiba claims this is the first site of its kind to offer accurate information on where and when to change trains in order to travel to a specific destination. The service, which will contain pages optimized for those accessing via cellular telephones, is available at http://www.ekimae.toshiba.co.jp Connecting NTT users to Route KDD KDD has been awarded a total of 267 local telephone prefixes covering all of Japan's major metropolitan areas. The move means that NTT subscribers will for the first time be able to make direct calls to Route KDD, a service that links KDD switches directly with subscriber PBXs (private branch exchanges). KDD has been offering its Route KDD service since July, but service users could not directly receive calls from NTT subscribers. The new prefixes will become usable sometime after April. Japan's first commercial Internet interexchange Tokyo-based Japan Internet Exchange (JPIX), a consortium of 16 carriers and Internet service providers (including KDD), in November began operating Japan's first commercial Internet interexchange service. The firm is offering 10M-, 100M-. and 200M-bps services at monthly rates of \700,000, \1.2 million, and \1.9 million, respectively. Previously, there were only two network service provider interexchange points in Japan, both operated by the nonprofit WIDE Project, an academic organization. Soaring Internet traffic, however, has produced strong demand for a commercial service. JPIX is aiming for first-year revenues of \100 million. Hatching a URL alternative D&I Systems has teamed up with Recruit and NTT Business Information Service to offer a service for enabling users to access corporate websites by entering the company's phone number. D&I has since August 1996 been promoting a "hatch service," whereby Internet users enter a 10-digit number rather than a URL address to access a website. D&I and NTT Business are modifying the service so that the hatch number will be the same as the phone number of a participating company. The hatch number fee is \1,000 per month. D&I will establish mutual access with Recruit, which has been providing a service similar to the hatch service. Iridium phones to go on sale Iridium Japan has reached agreement on satellite phone handset sales with IDO and eight Cellular Phone and two Tu-Ka Cellular Group carriers. The Iridium Group is scheduled to launch a satellite phone service in late September 1998 using 66 satellites, and Iridium Japan plans to market the handsets (to be made by Kyocera and Motorola) through the cellular phone carriers. The company will initially release a dedicated satellite phone handset as well as a dual-mode handset that will support both Iridium satellite phone and PDC-based cellular services.
INTERNATIONAL NEWS Dentsu invests in ID technology Information Services International Dentsu (ISID) has invested $2 million in California-based Cadix subsidiary Cybersign (CSI), maker of a signature-recognition personal identification system. CSI's system can reportedly distinguish handwritten Japanese kanji using such attributes as pen pressure, writing speed, and personal writing quirks. ISID's purpose in making the investment is to develop the US market for individual identification systems by creating new sales channels for the CSI system and gaining technical support from US software firms. By winning widespread acceptance of the CSI system in the US, ISID and Cadix hope to expand the product's user base both overseas and in Japan. Sharp looks skyward Sharp will participate in an Alcatel satellite communications project, the SkyBridge Plan. The French company and other firms will use 64 LEO (low earth-orbit) satellites and over 200 ground stations to provide high-speed data communications services worldwide, starting in 2001. Sharp is investing an undisclosed amount in SkyBridge Limited Partnership, a company Alcatel established in Delaware in February 1997. Sharp plans to develop and manufacture user terminals, handset devices, satellite-use solar batteries, and multimedia devices for use with the service. Among Japanese companies, Toshiba and Mitsubishi Electric have already invested in the SkyBridge business.
BE Factory of Tokyo has started producing a computer graphics animation program that it plans to release in the US market in September 1998. Matsushita Electric hopes to boost its notebook computer sales by 50% in FY1998, to 300,000 units. Japan Telecom plans to offer calling services to 230 nations by April. This will provide connectivity on a par with KDD, which has services to 233 nations. After its October merger with international carrier ITJ, Japan Telecom offered services to 205 overseas locations. Fujitsu has revamped its FMV Series of PCs by introducing several new models that comply with the PC98 System Design guideline, a next-generation PC architecture standard. From January, IBM has given responsibility for all of its regional PC operations to its Tokyo Asia-Pacific office. Previously, responsibility was divided between Sydney and Tokyo, with each office developing its own strategies. MasterCard International will conduct a full-fledged electronic money experiment in Japan this year. Plans call for working with bank-affiliated card companies to issue smart cards and install dedicated terminals at stores. NTT DoCoMo has reached agreement with Telecom Finland to collaborate on IMT-2000 next-generation cellular phone standardization efforts. PC Card shipments during the first half of FY 1997 declined 11% year-on-year, to 2.41 million units. Communications I/O card shipments rose 14%, but flash memory card shipments declined 16%. Bekkoame, a Tokyo-based leading Internet service provider, in December started a satellite-based Internet service. The company is cooperating with NTT and PanAmSat, a US communications company, to provide Space-B, a service that enables users to receive information from the US via PanAmSat's satellite. Nippon Steel has taken an equity stake in Oracle Japan and will help with the database company's support and training services.
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