JIN-166 -- Watch What You Leave on Those Used PCs

=====================================================================
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
=====================================================================

Issue No. 166
Wednesday, January 30, 2002
Tokyo

CONTENTS

++ Viewpoint: Watch What You Leave on Those Used PCs
++ Noteworthy News
- Sony, Dentsu to Launch Broadband Communications Business
- UFJ Debiting Gaffe Causes Double Trouble
- With Foreign Minister Tanaka Gone, Will Ogata Get the Nod?
++ Events

************************ADVERTISEMENT*************************
BiOS knows data centers. Why? For years our expert
IT engineers have been servicing clients in almost every
data center in Tokyo. We know them from inside and out.
That is why we have recently created our own. It is the
only 21st Century purpose-built data center in town.
http://www.advanceserv.com or phone +81-3-3499-2499.
Further info from info@AdvanceServ.com
**************************************************************

++ VIEWPOINT: Watch What You Leave on Those Used PCs

Throwing away a computer may be riskier than you think. At least two
cases of serious data leakage from used PCs were reported in the
Japanese press this month. Personal health information from several
health insurance associations was found on a computer in a used PC
shop in Nagoya, and a PC containing data from investigations done by
the Fukuoka Prefectural Police Department was found in a Fukuoka-area
store. The problem stems from people assuming that erased material
cannot be retrieved from a hard disk or from plain negligence.

The two incidents were reported in mid January. Since then, software
companies like Personal Media have been explaining to customers what
they have to do to ensure a hard disk is erased. "We have been
receiving a lot of inquiries mostly from government organizations,"
says Akira Matsui, head of the planning division at Personal Media.
The company says it has sold more than 10,000 copies of its
data-erasing software Disk Shedder in the two weeks since the news
from Nagoya and Fukuoka broke.

It's anybody's guess how many PCs are being thrown out or traded in
in Japan, but some industry watchers say about 8 tons of PCs are
thrown out every year. They say used PC shops probably handle a total
of 100,000 computers a year, or 1 percent of Japan's annual PC production.
These sources say the numbers are on the rise, and that's good news for
a relatively new market: data erasing software and services.

Reformatting a hard disk drive doesn't completely erase data.
Data still resides in the hard disk and can be reproduced with
data-restoring software. Some used PC shops say they confirm whether
data has been erased before they sell a PC, but "it is entirely up to
each shop's conscience to check," says Hisanori Tatae at Japan
Electronics Information Technology Industry Association.
About 50 percent of corporate PCs are owned by leasing companies, and
there's nothing forcing them to erase data, he adds. "That's why you
need to be responsible for erasing your own data."

According to Matsui, Personal Media's Disk Shedder overwrites a hard
disk with random numbers up to five times, preventing anyone from
restoring the data. The company says the software uses a
method recommended by the US National Security Agency. Personal Media
recently launched an English version of the software and is targeting
multinationals.

Some companies, such as Fujitsu Business System and Otsuka
Corp., are providing services to erase the data for you. The charge
is generally about 1,800 yen per PC. These companies also provide
services for recycling corporate PCs.

Used PCs have become more popular in Japan since it revised the
Energy Conservation Law in April 2001. The revised law requires PC
manufacturers to collect and recycle used corporate PCs. For
corporations, the law's requirements are nothing new; they had
been recycling used computers for decades, even before the law was
enforced. But the new law made corporations rethink their strategies.
If they were paying to get rid of their PCs, why not sell them?

Used PC shops make pretty good margins. Industry sources say even in
a competitive market, the shops report profit margins of 20-30 percent
of revenue; that's a lot higher than the margin on new PCs.

The Energy Conservation Law is expected to extend to privately owned
PCs some time in fiscal 2002, which begins in April. That's likely to
fuel more growth in the used PC market and in data erasing services.

-- Sumie Kawakami

**************************ADVERTISEMENT*************************
ADVERTISE NOW in the J@PAN INC BUSINESS DIRECTORY
EXCLUSIVE OFFER from ONLY 6,250 yen per month!
The ULTIMATE business resource you cannot afford to miss.
For more information, please go to
http://www.japaninc.com/directory/ or contact
Fabien at fabien@japaninc.com or 03-3499-2175 ext.1709
Offer ends Feb 15th, 2002
****************************************************************

++ NOTEWORTHY NEWS
(Long URLs may break across two lines.)

** Sony, Dentsu to Launch Broadband Communications Business

Extract: Sony and advertising giant Dentsu announced this afternoon
that they will develop a communications business for "the broadband
era." Dentsu will buy 40 percent of Sony's advertising agency
Intervision on April 1, the companies said at a press conference.

The company, which will be renamed later, will be capitalized at
240 million yen and have sales of 55 billion yen in the year through
March 2003, the companies said. They said the new company will focus
on "creating a new marketing model for the broadband era that fuses
the highly effective customer relations management made possible by
Internet interactive media with corporate and product advertising
approaches, equaling the creative strength employed in traditional
mass media."

----------------------------ANNOUNCEMENT-------------------------

J@pan Inc magazine produces three other newsletters:

++ Wireless Watch (WW): Mondays -- A weekly digest of news
and commentary focusing on Japan's wireless industry. Stay up to date
on i-mode, 3G phones and everything else wireless with WW.

++ Gadget Watch (GW): Thursdays -- Looks at the latest gadgets
being rolled out in Japan and is the perfect newsletter for gadget
freaks. Note, however, that we're not responsible for any cases of
"Japan gadget envy" that develop -- in many cases the products you'll
read about are available only on these shores.

Subscribe, unsubscribe, and find out more at:
http://www.japaninc.com/subscribe_news.html

** Music Media Watch (MMW); Tuesdays, A brand-new addition to J@pan
Inc's collection of weekly newsletters. MMW provides in-depth news
and commentary on the major developments in Japan's fascinating and
fast-moving music media industry (to subscribe, send mail to
"editors@japaninc.com").

We don't sell our lists to spammers, so breathe easy.
-------------------------------------------------------------------

** UFJ Debiting Gaffe Causes Double Trouble

Extract: It took the new UFJ Bank, formed through the merger of Sanwa
and Tokai banks, just 13 days to make its first gaffe. A computer
glitch caused accounts to be debited twice for single
withdrawals in 180,000 cases last week, the banks said. It could
take several weeks to undo all the errors, a daily newspaper reported.

Commentary: As one of those 180,0000 double debits, I would like to
remind UFJ that they owe me 15,180 yen. Let's see how many days it
takes this megabank to pay me back. The clock's ticking...BR

*****************************ADVERTISEMENT***************************
Ever wonder where cutting edge companies like LINC Media's J@pan Inc
turn for Web and IT Solutions? IBM? EDS? Think again! Try HydraNet,
the fastest growing IT Consulting Firm in Japan. HydraNet specializes
in database development with a focus on streamlining your business.
Our motto is "Twice the Speed... Half the Cost." The Content
Management System we built saves J@pan Inc magazine 40 hours/month!
What can we do for your business? Call us now at 81-3-5456-5314.
Email sales@hydranet.com or visit
*********************************************************************

** With Foreign Minister Tanaka Gone, Will Ogata Get the Nod?

Commentary: The Japanese foreign minister is scheduled to meet Russian
Foreign Minister Igor Ivanov on Saturday. The problem is,
who is the Japanese foreign minister? Now that Prime Minister
Junichiro Koizumi has forced the colorful and controversial Makiko
Tanaka to resign, the person showing up to meet Ivanov on Saturday
-- Koizumi says he will make his choice by then -- will have a very
bright spotlight on them. J@pan Inc usually stays away from the
murky world of Japanese politics, especially when it comes to the
ridiculously complex network of personal relationships that is
working behind the scenes, but we'll cast our vote this time for
Sadako Ogata, the former UN High Commissioner of Refugees. You can
bet that Koizumi's cadre is busily phoning her in New York trying
to work out a deal. It would be nice to have a real diplomat in the
position and not another LDP old boy.

*******************SPECIAL SUBSCRIPTION OFFER************************
Subscribe to J@pan Inc NOW and qualify to win
a night for 2 people at the Hotel Intercontinental Tokyo Bay
http://www.japaninc.net/mag/subs.html
This offer ends February 28th, 2002.
*********************************************************************

=====================================================================
++ EVENTS

Are you responsible for building global brands in Japan?

Economist Conferences presents:
ACCELERATED BRANDING ROUNDTABLE
Japan and international marketing strategy
March 13th 2002, Tokyo

Hear case studies from international success stories and
local marketing dynamites including:
AMAZON.COM, STARBUCKS, MAX FACTOR, VIRGIN ATLANTIC AIRWAYS
and many more.
For details, please visit
http://www2.economistconferences.com/doc/ap/brand02/i.htm

=====================================================================
SUBSCRIBERS: 4,957 as of January 30, 2002

STAFF
Written by Bruce Rutledge (bruce@japaninc.com) and Sumie Kawakami
(sumie@japaninc.com)

GET THE MAGAZINE
Subscribe at: http://www.japaninc.net/mag/subs.html

To UNSUBSCRIBE to this newsletter, click here:
http://www.japaninc.com/unsubscribe_news.html

ADVERTISING INFORMATION
For information on advertising in this newsletter,
contact: ads@japaninc.com

FEEDBACK AND PROBLEMS
Send letters to the editor to editors@japaninc.com.
Please contact us with any problems that arise:
webmaster@japaninc.com.

We have other newsletters -- Subscribe to Wireless Watch
and Gadget Watch at http://www.japaninc.net/subscribe_news.html.

(C) Copyright 2002 Japan Inc Communications KK. All Rights Reserved.

business