JIN-222 -- Finding Ways to Sell to DoCoMo

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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. 222
Wednesday, April 9, 2003
Tokyo

CONTENTS

++ Viewpoint: Finding Ways to Sell to DoCoMo
++ Noteworthy News
- Nintendo Slips to No. 3 Video-Game Maker Worldwide
- Tokyo Landlords Offer Six Months Rent Free to Lure Office Tenants
- IBM Japan, HP Japan Lead Way in Unix Server Price War

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++ Viewpoint: Finding Ways to Sell to DoCoMo

How do you sell to the mobile giant, NTT DoCoMo? It's a question that
plagues any small player in the mobile arena in Japan, but if you're a
foreign company, that question mark may be followed by an exclamation
point. DoCoMo can be a hard nut to crack, but every once in awhile, a
foreign company comes along that's just too good to resist.

F5 Networks of Seattle is one of those companies. It has 450
employees, including a 15-person operation in Japan, and pulled in
$108.3 million in revenue in fiscal 2002. About 20 percent of that
revenue comes from F5's tiny Japan office, said Jeff Pancottine,
senior vice president of marketing and business development at F5
Networks. Pancottine was explaining his company's Japan strategy at an
event in Seattle today sponsored by Jetro and the Japan America
Society of Washington.

F5 Networks specializes in application traffic management. In laymen's
terms, it makes software to control Internet traffic, content and
security; it helps limit bandwidth congestion and speed up servers.
The company was founded in 1996, but didn't go to Japan until 1999.
"We were late to the market," Pancottine told the crowd of almost 100.

So what's the secret to doing business with DoCoMo, or any other
Japanese client, for that matter? "You have to have a unique solution
and get designed in," he said. "It's a very technical audience that
you are selling to. They love technology and want to understand it and
internalize it."

In Japan, F5 "started out in the wireless space and moved out from
there," said Pancottine, adding that "in the US, it's the other way
around." The benefits of that strategy have been many, he says, since
Japan is the world leader in mobile Internet usage. "We are now
leveraging everything we've done in Japan in other markets."

F5, which won a Best New Product award at Wireless Japan 2002, also
works closely with Tokyo Electron. Pancottine says the key to success
in Japan's wireless sector is partner selection ("it's important to
have a good partner who understands how American high-tech companies
do business"), having an easy-to-understand channel program, giving
the local subsidiary some autonomy, and, perhaps more than anything
else, quality. "They don't like problems," he said of his Japanese
partners. "Obviously, everyone has problems. It's a matter of how
quickly you fix them and how many you have."

And one more thing: DoCoMo officials say that F5 has some of the best
drinkers in the business.

-- Bruce Rutledge

Links:
F5 Networks Web site
http://www.f5.com/

F5 Networks KK Web site
http://www.f5networks.co.jp/

================================EVENT===================================
The ICA - Tokyo's Top Business & IT Forum - April 17 Event

TOPIC: A Guidance for Building Robust Business -
How Leading Company Ensure Their Business Continuity
SPEAKER:Steven D. Fitz, President, EMC Japan K.K.. and Managing
Director, Asia Pacific, EMC Corporation

Date: Thursday April 17, 2003
Time: 6:30 Doors open
Place: Yurakucho Denki Building, Foreign Correspondents' Club
Map: http://www.fccj.or.jp/static/aboutus/map.php
Cost: 3,000 (yen) members, 5,500 (yen) non-members
Sit down dinner and open bar included
RSVP Please RSVP on our sign up page at
http://www.icajapan.jp/signup.html
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++ NOTEWORTHY NEWS
(Long URLs may break across two lines, so copy to your browser.)

** Nintendo Slips to No. 3 Video-Game Maker Worldwide

In Brief: Nintendo reported disappointing fiscal 2002 figures this
week, allowing Xbox to claim the title of the world's No. 2 video-game
maker. Kyoto-based Nintendo reported a year-on-year drop in profit of
38 percent and weak sales of its GameCube video console. The company
said it sold about 5.6 million consoles during the fiscal year, 44
percent shy of its goal of 10 million units. Xbox is on target to sell
9 million of its consoles in the year through June. Meanwhile, Sony's
PlayStation 2 is comfortably in the No. 1 position with popular
software titles like "Grand Theft Auto" selling well.

Commentary: Nintendo remains No. 2 at home, but in Europe and North
America, Xbox is on the rise. The question is whether three large
video-game makers can compete worldwide over the long term. If not,
Nintendo may go the way of Sega, concentrating on software sales and
abandoning hardware, analysts say. But one bad year is not enough to
count Nintendo out. Let's see how the folks in Kyoto respond to this
bad news.

Source:
The Guardian
http://www.guardian.co.uk/business/story/0,3604,932047,00.html

Link:
"Microsoft to Sony: This War Ain't Over Yet" from August 2002
http://www.japaninc.net/article.php?articleID=857

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** Tokyo Landlords Offer Six Months Rent Free to Lure Office Tenants

In Brief: The office space glut has pushed Tokyo landlords to offer as
much as a half year of free rent to lure businesses to vacant office
space, Bloomberg reports. Another 2 million square meters of office
space is coming onto the Tokyo market this year, forcing rents down
and prodding landlords to get creative. But rents are still double
those of New York, the article notes, and one source quoted in the
story says he thinks land prices have yet to bottom out.

Commentary: Prices probably haven't bottomed out. As real estate
expert Stefan Whitwell wrote in our February issue, those who want to
invest in land in Japan's large urban centers should be prepared to
add value to that land in order to turn a profit.

Source:
From Bloomberg
http://quote.bloomberg.com/apps/news?pid=10000101&sid=aedns31voK4Y&ref
er=japan

Link:
"Searching for the Bottom" from our February issue (subscription
required)
http://www.japaninc.net/inc/login.html?articleID=1028

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** IBM Japan, HP Japan Lead Way in Unix Server Price War

In Brief: The Japan arms of foreign giants IBM and Hewlett Packard are
planning to slash prices of Unix servers this month in a move that is
almost certainly going to pressure NEC, Fujitsu and other domestic
server makers to follow suit, the Nihon Keizai Shimbun reported this
week. IBM Japan is cutting the prices of its p630 and p650 servers by
as much as half, and HP Japan is cutting prices on servers like its
rp4705 midsize server by as much as 20 percent. HP Japan had been
cutting prices before this month, making its overall discounts similar
to IBM's.

Commentary: The price cuts are liable to prompt Japan's big makers and
Sun Microsystem to respond, and eventually some of the less agile
competitors are likely to be forced out of the market. After all, the
overall market for servers has been shrinking, the Nikkei reports, yet
foreign shipments to Japan have jumped this year as much as 30
percent.

Source:
From the Nikkei Net (subscription required)
http://www.nni.nikkei.co.jp/AC/TNKS/Nni20030408D08JFF02.htm

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STAFF
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