newsbriefs
Government & Policy

Report on intellectual
property rights

Eleven electronics and software industry associations -- including the Electronic Industries Association of Japan (EIAJ) and Japan Personal Computer Software Association -- have compiled a report on the protection of intellectual property rights in tomorrow's new "network society," which they note will be marked by extensive Internet usage and the widespread use of digital data. According to the report, caution must be exercised so as to not overly restrict free use of game and other software content yet protect the rights of the copyright holder. The associations are also calling for measures that will prevent unfair competition related to the maintenance of database copyrights. The report was presented to relevant government ministries and motion picture and music copyright organizations in mid-October, and it is expected to have an impact on the work now underway by the Agency for Cultural Affairs on revising Japan's copyright law.

Focus on future
communications policy

In mid-October, the Data Communications Policy Council, a private policy advisory group, released a report calling for a comprehensive approach to data communications sector deregulation -- one that does not necessarily rely on breaking up NTT. The council maintains that computer communication methods, such as the Internet, will eventually replace conventional telephone networks. Rather than focusing on NTT's breakup, says the council, policy should be designed to encourage development of the wireless communications, CATV, and multimedia content sectors.

MPT committee
recommends NTT breakup

A Ministry of Posts and Telecommunications (MPT) advisory committee set up to examine the telecommunications industry in the next century has published a report on the future of the market. The report comes out strongly in favor of breaking up NTT into regional operating units and ending existing divisions between international and domestic services and between communications and broadcasting. Based on the premise that competition is beneficial for the industry, the report identifies NTT's local network monopoly as a bottleneck in opening up the market. The report offers two proposals -- splitting up NTT, or leaving it whole and applying ministerial directives to end its monopoly -- but strongly supports the former in the interests of early competition.

The ministry expects, over the next two-to-three years, to end the division of the market into domestic and international carriers, and to allow mutual market entry by broadcasting and communications service providers. It would end NTT's monopoly on local traffic in a series of moves designed to enhance the international competitiveness of the Japanese telecommunications market. The changes would eventually lead to the entry of long-distance carriers, such as DDI, into international services, either independently or through tie-ups with existing operators such as KDD.

Semiconductor equipment
industry report

The Semiconductor Equipment Association of Japan (SEAJ) has released a report, prepared by nine SEAJ members, on Japan's semiconductor equipment industry. The report addresses the current state and future prospects of the industry, suggesting that it needs to set up an R&D organization with semiconductor and material makers getting financial support from the government, and that emphasis should be placed on training engineers and protecting intellectual properties. With regards to standardization, the report recommends that equipment makers cooperate with chip makers to promote standardization efforts, and that through close monitoring of standardization efforts in other countries, Japan should try to establish its standards as international standards.

Government-supported
digital factories

By March 1996, the Ministry of International Trade and Industry (MITI) will establish eight "digital factories" equipped with video editing and other multimedia facilities throughout Japan. MITI's aims are to stimulate the use of multimedia by smaller companies and to boost regional economies by providing an opportunity for local companies to develop multimedia software and use the facilities for product development and design. MITI secured funds for the project in the second supplementary budget; total expenditure, including contributions from local governments, is expected to reach ¥2 billion.

MPT to evaluate safety
of wireless communication

The MPT has established a private advisory committee to investigate the safety of cellular and wireless communications equipment. The group, which met for the first time in September, will examine injury prevention measures taken in other countries and the potential for introducing similar regulations in Japan. The MPT has been concerned about the possible harmful effects of the radiowaves used by such equipment on the human body; the present move was prompted by level revisions in the US and UK.

MPT amends Telecom Business Law

The MPT has partially amended the Telecommunications Business Law to enable Type 1 carriers to change prices on some services simply by notifying the ministry, rather than having to apply for government approval. The move, a first initiative towards deregulating the price approval system, will apply to 82 types of services (about half the total currently provided by Type 1 carriers); it took effect on October 1. Among the services affected are toll-free numbers and equipment rentals. For carriers, the move means removal of the usual 1-to-2 month waiting period for approval.

Tandem expands indirect
sales channels

In an attempt to expand sales of its Himalaya Series of massively parallel (maspar) servers, Tandem Computers Japan intends to step up indirect sales. The company will increase the number of its partners, such as software vendors and systems integrators, from about 80 to over 100 in 1996, and hopes to raise the ratio of indirect sales from the current less-than-40% to 50% by late 1997. The company already has opened a home page on the World Wide Web (which only partners can access) and established an around-the-clock support center for partners and customers.

ASCII to produce MS KK manuals

While the costs of packaging software have been falling, the costs of producing and distributing manuals have not. In a bid to reduce packaging and distribution costs, therefore, Microsoft KK will forego producing manuals for its software products, starting with the Japanese version of Windows 95. Instead, Microsoft will subcontract the production and sale of its manuals to ASCII, while at the same time increasing the amount of online help available within each application. Japanese Windows 95, for example, will include only a simple installation guide in addition to the software itself.

Fujitsu moves into printer market

Fujitsu will expand its alliance with Lexmark International (of Connecticut) in the printer business. Fujitsu has been OEM-procuring color ink-jet printers from the major US printer maker, but now will start selling ink-jet printers under a joint brand name and develop network printer software and network printers. Fujitsu, which began shipping its color ink-jet printer in August, is aiming to ship 250,000 units annually.

Game maker targets PCs

TOMY, a major toy company, was to set up a computer software subsidiary in November. TOMY Interactive will develop and market game and "edutainment" software for PCs, and also develop a lineup of software for Windows 95. The move is aimed at spurring a diversification of its businesses into the multimedia arena.

Corporate materials on CD-ROM

Kyodo Printing and Yomiuri Advertising have cooperatively developed a low-cost system for producing CD-ROM versions of company brochures. In October, they started a production service dubbed "Digital Company," which will enable clients to incorporate sound, images, and search functions into promotional materials that traditionally have been printed on paper. The two firms will eventually create text and image databases of their printed materials, and will undertake other businesses using the Internet and other new media.

NTT-Lotus alliance
for datacom management

NTT has formed an alliance with Lotus Development to offer data communications management services for corporate users. NTT will provide computer space for data storage and retrieval in various locations via a distributed network, using Lotus technologies. By accessing NTT's server facilities from PC terminals, companies can avoid high initial investments. For Lotus, the alliance represents a chance to expand sales of its Notes networking software.

Joint NEC-IBM C/S system order

NEC and IBM Japan have jointly received a client/server system order from Sumitomo Bank. The system consists of about 400 Express 5800 servers and 3,000 PC98 workstations, and will run the OS/2 operating system. Hardware installation began in October, with full-fledged operations scheduled to start within one year. This client/server system will become the base of Sumitomo's fourth online information system and will support branch office credit management operations.

NTT plans network service

NTT has announced plans for a 1997 launch of its Open Computer Network service. Network use will be priced at a consistent level nationwide, regardless of distance or length of call. NTT will target the service at PC users connecting to the Internet and other computer communications services. The network will give NTT the potential to launch its own information provider service and create a powerful position for itself in the PC communications market. Details of pricing have not been released, but NTT claims that usage rates will be comparable to those in the US.

Software megastore planned
for Akihabara

Yamagiwa was to open Japan's largest software shop, in Tokyo's Akihabara district, in November. The dedicated eight-story building, Yamagiwa Soft Shop, will have 1,500 square meters of floor space and carry mainly entertainment software. The store is expected to stock about 8,000 CD-ROM titles, more than twice the selection of other Akihabara shops, and nearly 2/3 of the CD-ROM titles marketed in Japan. Yamagiwa will also install Internet access terminals and start providing information on new software and music on its own home page.

Cellular phone market
growth skyrockets

According to the Nihon Keizai Shimbun, Japan's cellular phone market grew by 2.3 million new subscribers in the first half of the current fiscal year (April through September). This surpasses the 2.2 million new subscribers recorded in the whole of the previous fiscal year, and brings the total market to almost 6.7 million units. NTT Docomo added about 1.1 million subscribers, bringing its total to 3.3 million. The DDI Cellular Phone Group, meanwhile, added over 430,000 for a total of 1.4 million, while IDO gained 240,000 new subscribers (total 875,000), the Digital Phone Group added over 300,000 (total 585,000), and the Tu-ka Group added 290,000 (totaling almost 550,000). Analysts expect the cellular phone market to reach 8 million subscribers by March 1996.

Competition in international
communications services

Leading US satellite communications carrier PamAmSat is slated to move into Japan's international communications service market. The company was expected to obtain an international communications service provider license from the Ministry of Posts and Telecommunications by the end of October, and planned to transmit to the US footage of November's APEC conference held in Osaka. Thereafter, it will quickly expand its operations in Japan. Observers suggest that this market entry may signal the start of true competition in Japan's international communications service arena.

Restrictions on the
bundling of office apps

Microsoft KK is asking Japanese PC makers not to bundle Windows 95 versions of business applications with their PCs. Microsoft hopes to limit sales of these applications to the normal software retail channel, where the profit margins are much higher. In the face of resistance to its initial request that no Microsoft applications be bundled with PCs, the company now seeks to halt only the bundling of 32-bit business software applications. Microsoft reportedly hopes to maintain this freeze on software bundling until early in 1996.

Per-call charges in the offing?

NTT has reportedly decided to charge CATV companies that will access its local telephone network on a per-call basis. This differs from the time-based fee that NTT currently charges the long-distance new common carriers (NCCs), ¥12.6 per 3-minute unit. NTT has reached a basic agreement with CATV company Jupiter Telecom regarding local network access, but access charges and format are still being negotiated. Some analysts suggest that this per-call charge to service providers could eventually lead to a new form of billing for end users of NTT's telephone service.

NEC revises sales figures upward

NEC has revised its FY1995 PC shipment projection from 2.8 million units to 3 million units. NEC shipped 1.56 million units (1.3 million in Japan, 260,000 overseas) in the first half of the fiscal year 1995. While this is a 68% year-on-year increase in shipments, revenue rose just 22% (to ¥305 billion) -- a reflection of increasing domestic competition from low-priced DOS/V computers by companies such as Fujitsu, Compaq, and Dell. If NEC's 1995 projections prove accurate, it will once again hold an approximately 50% share of PC shipments in Japan.

Use of PC communications
services grows

A New Media Development Association report puts the total number of people using PC communications services in Japan at about 3.7 million, an increase of over 1 million in the past year. This compares with approximately 7.9 million users in the US. According to the report, 5.5% of PC networks offer Internet connections, and use of the Internet among PC owners is expanding rapidly. The two leading public networks, Fujitsu-affiliated NIFTY-Serve and NEC-affiliated PC VAN, have a combined membership of 2.2 million.

Windows displaces Warp
on IBM's Aptiva

IBM Japan announced that it will not include its proprietary OS/2 Warp operating system with its Aptiva series of PCs. Although OS/2 was initially intended to compete with Microsoft Windows, the decision signals that IBM has abandoned attempts to promote OS2/ Warp among the individual users at whom the Aptiva series is targeted. Instead, IBM Japan will bow to market realities by supplying PCs pre-installed with Microsoft's Windows 95.

Apple Japan consolidates
software sales organization

Apple Computer Japan will consolidate its domestic application software sales organization by entrusting sales of packages such as HyperCard and At Ease to its independent but wholly-owned subsidiary Claris Japan. Apple itself will focus on new product research and development and strategic marketing of its KanjiTalk Macintosh operating system. With its broader responsibility for Apple application software sales, Claris hopes to expand its business and grow its share of the market.

MOD market surpasses expectations

The Japanese market for 3.5-inch magneto-optical disks (MODs) is expected to reach 6.77 million units in fiscal 1995, higher than the 3.95 million units previously projected by the Magnetic Media Industry Association of Japan. Worldwide demand, meanwhile, is likely to approach 10 million units. Over 1 million 3.5-inch MOD drives had shipped as of the end of March 1995, and another 1 million units are expected to be shipped in fiscal 1995.

Lotus Notes J reaches milestone

According to Lotus Japan, shipments of the Japanese-language version of its Notes groupware package passed the 100,000 mark in August, two years after the product's launch. Sales have been particularly brisk this year, double those of 1994. When combined with users of cc:Mail, Lotus now has over 500,000 registered users in the Japan, which is about 5% of its worldwide total.

New MO standard to be marketed

Sony is making an assault on the MO market with a proprietary standard 3.5-inch magneto-optical disc and drive. Sony's HS (Hyper Storage) disk, which is not compatible with today's ISO-standard MO drives, can store 650MB of data on a single side. External units incorporating the drive were to be released by two major third-party vendors in November. Sony will release a its own-brand HS disc in November, and Sony and Hitachi will introduce external drive units early in 1996. The HS format has been jointly developed by Sony, Hitachi, and 3M of the US.

Beijing moves to cashless sales

NTT Data Communications and Mitsubishi Corporation have received an order from the Beijing municipal government to install two IC card systems. These systems, to be installed at the headquarters of the Beijing committee of the Chinese Communist Party and the City People's Government central hall, will be the first in the city. They will manage city officials' dining rooms through the use of prepaid cards, allowing a move to cashless transactions. The two Japanese firms will supply 40 reader/writers and 4,400 IC cards. This contract is seen as a precursor to major growth in orders from China.

Seeking to make PHS
an international standard

In October, NTT Docomo formally announced that it will establish PHS International by the end of the year. The new company, to be based in Hong Kong, will be formed in collaboration with NTT, Cable & Wireless, Hong Kong Telecom, and Itochu; the aim is to expand adoption of Japan's PHS (personal handyphone system) format internationally. Cable and Wireless will own 27% of the new company, Hong Kong Telecom and Itochu 23% each, NTT 19%, and NTT Docomo 8%. PHS International's first president will come from C&W, and the company will focus its activities principally on Asia.

Fujitsu to supply telecom
equipment in Russia

Fujitsu has signed a memorandum with the Russian telecommunications ministry covering the supply of switches and transmission systems and the provision of technical assistance. The company has been stepping up its marketing to Russia since January, when it dispatched a Japanese manager to its Russian representative office. Fujitsu estimates that current demand for telephones in Russia is at least 1 million lines, and the company expects sales of $100 million in 1997. Fujitsu's entry into the Russian market puts it in competition with Siemens, Alcatel, and NEC.

Fujitsu sells first supercomputer
to US company

Fujitsu has won an order for a supercomputer from Western Geophysical, a US oil drilling research company. This is the first time that the computer giant, which entered the supercomputer market in 1982, has sold a supercomputer to a US company. Fujitsu will deliver a standard four-CPU model of its VPP300, which reached the market in February 1995. The value of the order is estimated at ¥200 million.

Japan Telecom to establish US office

Japan Telecom will become the first Japanese long-distance new common carrier to establish a base in the US, in the first-half of fiscal 1996. The company is conducting a detailed feasibility study that is expected to lead to the establishment of an office to monitor trends in the US and prepare for offering international services following further deregulation in Japan. The company is considering locations on the West Coast or in Washington, DC. DDI and Teleway Japan are said to be closely monitoring Japan Telecom's moves.

Chinese joint venture for PHS
component manufacturing

Nippon Ceramic has set up a PHS (personal handyphone system) component production joint venture in Shanghai. The new company, Shanghai Nippon Ceramic Electric Components, is being capitalized at $3.9 million; Nippon Ceramic will own 40%, with Shanghai Defu Optoelectronic Technology and state-owned Shanghai Electronic Components each owning 30%. The joint venture will initially employ 150 people and use part of Shanghai Electronic Components' production lines to manufacture capacitors and inductors for use in PHS equipment.

Sumitomo recycles silicon
in the Southwest

Silicon Mesa, New Mexico -- the emerging high-tech corridor in the north Albequerque/Rio Rancho area -- has become home to two Japanese semiconductor plants. In April, Silmax Inc., a wafer recycling facility, joined its sister plant, Sumitomo Sitix Silicon, in the area. The high-quality test wafers used in semiconductor manufacturing processes traditionally have been discarded after use. In a cost- and resource-saving move, the $17 million Silmax plant will use a technology developed by Sumitomo scientists to recycle such test wafers for future use. It is said to be the first in the world to recycle 8-inch wafers. Initial production at the Silmax plant was 6,000 wafers per month, but when full capacity is reached in late 1996, its output will be 45,000 wafers per month.

Planning for the
semiconductor future

Ten leading Japanese chip makers (including NEC, Hitachi, and Fujitsu) will join forces under the auspices of the Ministry of International Trade and Industry to establish a company that will focus on the development of next-generation semiconductor technology. Tentatively dubbed the Semiconductor Technology Experiment Research Center, the new company will be established in February 1996. Capitalized at ¥5 billion, to be shared evenly among the 10 firms, the joint venture will construct its own research labs to test and evaluate semiconductor equipment for 256M-bit DRAM production. In addition, a government-funded research consortium will be launched. The R&D consortium is slated to be established in March 1996 by the chip makers as well as semiconductor equipment makers and will initially focus on development of 1G-bit DRAM production technology.

The Internet schoolroom

Fujitsu Learning Media (FLM), a subsidiary of computer giant Fujitsu, has introduced an Internet-based remote instruction service. Cyber Campus is a World Wide Web-based system that teaches aspects of client/server technology. Students download instructional materials, study, and then submit their homework by e-mail for correction and grading. The service is initially being offered to staff of Fujitsu group companies, but FLM plans to open it to the public in January. About 30 courses are expected to be available for approximately 10,000 users.

Nokia opens Japan R&D center

Nokia Mobile Phone of Finland, the world's second-largest cellular phone handset maker, opened a Tokyo-based R&D center in October. Nokia currently has a 15% share of Japan's digital cellular phone handset market; it intends to

strengthen its local market research and development capabilities in order to better respond to the rapidly growing demand for digital cellular handsets in Japan. The new center starts operations with a staff of 20, and will initially concentrate on market research.

Integrated public/private
network management

KDD has developed an integrated system to manage both public and corporate private communications networks. Such systems have conventionally been difficult to create because the protocols used by private and public networks differ. KDD has overcome the problem by using a translation function between the standard TMN and SNMP protocols. The first systems, consisting of a Sun Microsystems workstation and the translation software, will be available in the spring for ¥4.6 million from a KDD subsidiary.

Research consortium for parallel
and distributed processing

Twenty-one universities (including the Tokyo, Osaka, Nagoya, Kyushu, Keio, and Waseda) and ten corporations (including Hitachi, NEC, Toshiba, IBM Japan, and Texas Instruments Japan) have established a consortium to conduct research on parallel and distributed processing computers. The Parallel and Distributed Processing Research Institute will develop a high-speed parallel computer, with a research focus on a new-concept architecture and a parallel processing operating system and language. The members are expected to invest about ¥1 billion over a period of four-and-a-half years.

MITI to promote companies via the Web

MITI proposes to create a system to support startup software ventures in listing their corporate information on the Internet. The plan is a part of the ministry's efforts to help software companies attract capital by publicizing their activities; active brokering between potential investors and venture businesses are also under consideration as part of the effort. From April 1996, the Information Technology Promotion Agency, Japan (IPA) will begin to identify an initial group of suitable software ventures; their corporate data will be placed on a database server at Keio University's Shonan campus.

Glass-based HDD production planned

LCD glass substrate processor Kuramoto Seisakusho will start to market glass substrates for use in hard disk drives. By applying a precision surface-polishing technology, the company will produce 2.5-inch substrates at a plant in Iwate Prefecture; initial output is will 500,000 units per month. The company plans to expand production to over 1 million units per month in 1996. Aluminum substrates are used for about 95% of hard disk drives today, but the use of glass-based drives, especially suited to notebook computer use because of their thinness, is expected to soon account for 20% or more of the market.ç




(c) Copyright 1996 by Computing Japan magazine