JIN-184 -- The Lonely Launch of the eMac

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J@pan Inc Magazine Presents:
T H E J @ P A N I N C N E W S L E T T E R
Commentary on the Week's Business and Technology News
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Issue No. 184
Wednesday, June 12, 2002
Tokyo

CONTENTS

++ Viewpoint: The Lonely Launch of the eMac

++ Noteworthy News
- Japan Trails Asia in Restoring Financial Health: Standard & Poor's
- MS Ain't a Quitter: The Xbox War Continues
- FSA Won't Allow Buyout Funds To Become Major Shareholders of
Financial Institutions: Nikkei

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++ VIEWPOINT: The Lonely Launch of the eMac

The eMac is out and nobody cares. But don't feel bad if you haven't
heard about the eMac because you're not alone. Computer shoppers in
Akihabara and Shinjuku certainly didn't seem to know or even look the
least bit interested in Apple's new machine, which quietly snuck onto
shelves in Japan last Saturday. But who can blame them? In one
Macintosh retailer in Akihabara, the only indication of the eMac's
arrival was an 8x10in piece of paper. No posters. No banners.
Certainly nothing on the scale of advertisements for the iMacs when
they were released.

Consumers seem to be confused, remarked one Akihabara Macintosh
salesman. Shoppers in his store this weekend looked at the eMac and
iMac, stopped for a moment to consider, then bought the iMac, he said.
Which brings to mind the question, just what is this computer doing
here?

Snuggled on shelves between the old iMac and the Flatpanel iMacs, the
stark white eMac inconspicuously holds a G4 processor, 17" flat CRT,
CDRW drive and 32MB video card. The system was originally released in
late March of this year, but it was available only within the walls
of academia. This explains why the eMac lacks any 'non-educational'
frills, such as a DVD drive. However, in keeping things basic, Apple
is able to provide the computer at a (fairly) reasonable 139,800 yen.

The eMac is arguably neither as cute as the original iMacs, nor as
hip as the flatpanel. It's something of a hybrid, straddling the
area where the two iMacs overlap and coming out looking like a
retro-styled original. Its lines are deliberate and clean and
functional, making the eMac seem more comfortable in a modern art
gallery than in the lap of an affectionate computer user (also, with
the 17in screen, it would probably crush them -- this thing is
heavy!).

To put Apple's situation in perspective: Apple's new OS, OSX, loves
G4 processors and is being loaded as the default operating system on
all new Macs. The previous default OS, OS9, was recently given a
funeral, eulogy and all, at the recent World Wide Developers
Conference. To take full advantage of the next big OSX update, a
video card with at least 32MB of RAM will be required.

With development for the G4-loving OSX kicking into high gear, OS9
moving into early stages of rigor mortis and a hardware sensitive OS
update coming, we can begin to see how the eMac fits into Apple's
plans. Rumor has it that original iMac distribution channels are
thinning. It seems that the eMac is going to become Apple's low-end
consumer model. If that happens, then all models -- the eMac,
flatpanel iMac and PowerMac -- will have G4 processors and video
cards capable of handling OSX and, when it comes out, the update with
ease.

So while there is nothing particularly special or flashy about the
eMac, it is very functional and nicely rounds out the bottom of
Apple's product line. It also puts a fairly powerful computer in the
reach of consumers at a price point about 40,000 yen lower than both
Sony and Fujitsu's low-end consumer models. But with all that said,
the levels of interest this past weekend indicate that those eMacs may
have to sit patiently on store shelves for awhile.

-- Craig Mod

Apple: http://www.apple.com/emac

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++ NOTEWORTHY NEWS
(Long URLs may break across two lines, so copy to your browser.)

** Japan Trails Asia in Restoring Financial Health: Standard & Poor's

Extract: US private rating agency Standard & Poor's again points
out the ineffectiveness of Japanese government policies in resolving
the entrenched problems in the banking sector. The company published
a report Tuesday saying that Japan is behind Korea and Malaysia in
terms of progress in restructuring.

Korea spent more public funds -- 29 percent of its GDP -- than Japan
which spent only 5 percent. But, while Korean government "has been
striving to maximize the effectiveness of its capital infusions" by
applying "strict conditions" to banks receiving capital injections,
the provision of capital was not effective in Japan.
Unlike other countries, the Japanese government did not require
shareholders or management to take responsibility for the financial
performance of the banks, the report says.

The report also points out that corporate debts in Japan are
decreasing, albeit slowly, although the problem has worsened in
some sectors.

Source:
"Japan Trails Asian Pack in Restoring Health to Financial System," by
Standard and Poor's (June 10, 2002)
http://www.standardandpoors.com

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** MS Ain't a Quitter: The Xbox War Continues

Extract: Microsoft Japan is denouncing Sony's victory celebrations,
saying the company ain't a quitter. Sony's PlayStation 2 has
acquired a stable position in the global game market, but Microsoft
is trying to catch up with its Xbox popularity.

In the Xbox Conference 2002 Summer held Tuesday in Tokyo, Hirohisa
Ohura, head of Japan's Xbox project team, said "Microsoft has this
corporate culture of being stubborn. This is our philosophy, too. We
will not quit until we win. We will continue to be a challenger."

Last month, Kazuo Hirai, president of Sony Computer Entertainment
America, commented that "the game war is over," referring to the fact
that its PS2 has already sold 30 million globally since its launch in
2000. Microsoft has sold 3.5 to 4 million Xbox consoles since its
launch last year, while Nintendo has sold 4 million Gamecubes.

Microsoft Japan argues that its broadband gaming service Xbox Live,
scheduled to be launched in early fall simultaneously in the US,
Europe and Japan, will be cheaper than the PS2 equivalent. In Japan,
the company will sell its connectivity software for 6,800 yen, a
year's connection fee included, while the PS2 broadband service cost
about 1,000 yen a month.

Source:
zdnet (in Japanese)
http://www.zdnet.co.jp/gamespot/gsnews/0206/11/news13.html

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** FSA Won't Allow Buyout Funds To Become Major Shareholders of
Financial Institutions: Nikkei

Extract: Leading financial daily the Nihon Keizai Newspaper (Nikkei)
reported on Tuesday that Japan's Financial Services Agency (FSA) will
not allow buyout funds to become major shareholders in financial
institutions. According to the report, the FSA will limit major
shareholders (those who own more than 20 percent of shares) to
financial institutions that are committed to long-term management.

The report came amid talk that Softbank is planning to sell a
major portion of its shares in Aozora Bank (former Nihon Credit
Trust Bank). After the bank was nationalized Softbank bought about 50
percent from the government. US buyout fund Cerberus already has
shares in the bank and is thought to be one of major candidates for
possible buyers.

Meanwhile, the Minister of Financial Services Hakuo Yanagisawa
commented Wednesday that the possible sales would harm the personal
reputation of Softbank's CEO Masayoshi Son. Son was called to a lower
house committee and admitted that while he is considering the sale, he
has yet to decide.

Source:
Reuters (June 12, 2002)
http://headlines.yahoo.co.jp/hl?a=20020612-00000019-reu-bus_all
http://headlines.yahoo.co.jp/hl?a=20020612-00000025-reu-bus_all

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STAFF
Written by:
Sumie Kawakami(sumie@japaninc.com)and Craig Mod (craig@japaninc.com)
Edited by: J@pan Inc editors (editors@japaninc.com)

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