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GOVERNMENT & INDUSTRY
Standard EC rules proposed
The Electronic Commerce Promotion Council of Japan (ECOM), a group consisting of the Ministry of International Trade and Industry (MITI) and a number of private firms, has disclosed its proposal for standard rules regarding the use of electronic cash. The proposed rules include setting an upper limit of 38,000 on the amount of credit that can be written into an IC card, prohibiting the exchange of IC card credits for cash, and granting permission for users to transfer their cards to other parties, as with ordinary currency. The proposed rules will be the basis for electronic cash feasibility trials led by MITI, with a finalized set of proposed rules ready by April 1998.
EC restrictions to be eased
The Ministry of Finance has proposed changes in the current Prepaid Card Law that would pave the way for Internet-based transaction settlements, the establishment of so-called "Type 2" banks, and the widespread use of electronic money. The Ministry of Justice and MITI also plan to draft electronic commerce-related laws, provisionally called the Electronic Signature Law and the Personal Information Protection Law, respectively, with the aim of passing both in FY1999. Together, the three new laws would make it possible for corporations to conduct electronic commerce, giving a significant boost to the fledgling Internet-based industry.
Asian EC experiments planned
The Japanese government plans in April 1998 to launch a Next-Generation Electronic Commerce Experimental Project in cooperation with the governments of Malaysia, Singapore, and Korea. The experiment will involve links between virtual malls in each nation, and verification system experiments to determine the effectiveness of international online transactions. In Japan, the Telecom Services Association, a group of Type II communications carriers, started operating an experimental system in November. The group claims this effort represents the first international verification system field trials ever attempted.
Information infrastructure experiments launched
The governments of Japan and Korea have agreed to conduct a series of Asia/Pacific Information Infrastructure (APII) experiments. Test projects were scheduled to be launched in January 1998; these included an asynchronous transfer mode (ATM) network experiment using fiber-optic cable and satellite connections, a remote medical diagnosis experiment, distributed virtual conferencing, and next-generation Internet technology development. The intent is to commercialize these technologies sometime in the early 21st century. The Communications Research Laboratory of the Ministry of Posts and Telecommunications as well as NTT, KDD, Seoul University, and Korea Telecom, among others, will participate in the experiments.
BUSINESS BRIEFS
Fujitsu licenses JavaOS
Fujitsu has purchased a JavaOS license from Sun Microsystems and will support Sun's SPARClite series of embedded 32-bit RISC (reduced instruction set computing) processors. Fujitsu plans to incorporate the JavaOS into a wide range of devices that can be implemented into networks, such as Network Computers (NCs), personal digital assistants (PDAs), and multimedia-enabled consumer devices. The first such products are due for a first-quarter 1998 release. Fujitsu is adopting Java as the core technology for its network computing initiative, and reportedly plans to deploy Java companywide across all platforms.
US telecom firm sets up in Japan
Mississippi-based Worldcom intends to become the first US telephone firm to offer services in Japan using its own fiber-optic cable. The fourth-largest long-distance service provider in the US, Worldcom plans to lay its cable throughout Tokyo's sewer system and will offer a variety of telephone, leased line, and Internet services in the Tokyo metropolitan area. Previously, telephone operators within Japan owning their own circuits were limited to a maximum of one-third foreign ownership of their outstanding shares, but two recent deregulatory measures make Worldcom's Japan market entry possible. From January 1998, direct foreign entry into Japan's Type 1 carrier market is permitted, and the city of Tokyo in September 1997 eased former restrictions on the placement of fiber-optic cable in the city sewer systems.
A Japan IBM-Microsoft tie-up
IBM Japan and Microsoft Japan have formed a partnership in the corporate information systems sector. Microsoft is providing IBM Japan with the same certification credential it gives to its system development and support partner firms, and the two companies are seeking to cooperatively boost sales of corporate information system products and software by sharing customer information and leading-edge technical data. The new partnership may extend to the US parents of both firms, and it could become the impetus for a global reconciliation between IBM and Microsoft. After the new partnership, which focuses primarily on system development and services based on PC servers, was announced, IBM Japan quickly revised its FY1997 PC server shipment projection upwards from a twofold increase to a 2.5-times increase.
Mitsubishi merger
In October, four Mitsubishi Electric wholly owned software development subsidiaries were merged into a new corporation called Mitsubishi Electric Systemware. The four companies, previously serving different geographical areas, were Tobu Computer Systems, Mitsubishi Chubu Computer Systems, Mitsubishi Kansai Computer Systems, and Mitsubishi Electric Kyushu Computer Systems. Mitsubishi's intent is to combine management resources and technological capabilities and grow its software development business on a nationwide level. The new firm, headquartered in Tokyo, is capitalized at 1.6 billion. The FY1998 sales target is 30 billion.
Enhanced phone cards planned
NTT plans to incorporate a telephone directory function into IC cards for new public telephone units that it plans to start installing from January 1999. When such a card is inserted into the phone, it eliminates the need to dial by displaying a list of registered names and phone numbers. The caller simply touches the name of the desired party on the phones touch-screen panel. Although the new IC cards will be available in 1,000, 2,000, and 3,000 denominations, reportedly only the 3,000 card will have the directory function. Users will be able to have their own lists of names and phone numbers written into the cards. NTT plans to develop other value-added functions based on the special capabilities of IC cards.
Bringing Excite-ment to Japan
Itochu and Dai Nippon Printing (DNP), in cooperation with Excite of California, have established a search engine joint venture in Japan. To be capitalized at 728 million in March 1998, Excite Japan is owned 50% by the US company, 22.5% by Itochu, 17.5% by Itochu Techno-Science, 5% by CTC Creative (an Itochu PR agency subsidiary), and 5% by DNP. The joint venture opened a homepage, http://www.excite.co.jp/, in November that offers comprehensive information and e-mail services. Revenues will come from online advertisements.
Working against a deadline
Intec plans by April 1998 to put into place all the organizational resources necessary to start working on solutions for the Year 2000 (Y2K) Problem on behalf of its clients. The company has set up a dedicated organization that will provide a single interface for providing customers with technical data and consulting services. The focus will be on the small and midsize firms that have been slow to address the Y2K issue.
Marubeni joins with Sofmap
Leading trading company Marubeni will purchase a 20% stake in Tokyo-based Sofmap, the nation's largest PC retailer. Marubeni was to pay 1.5 billion for 250,000 newly issued shares of Sofmap stock in a private placement. Marubeni sold approximately 300 billion worth of PCs, software, and peripherals in 1996, but plans to boost this figure to 500 billion by 2000 with Sofmap's help. The two firms will also cooperate in selling receivers and content for digital broadcast services to be offered this year by JSkyB, a company in which Marubeni is a shareholder.
MARKET NEWS
PC shipments to level off
PC shipments in Japan are likely to plateau at slightly over 10 million units in FY2000, according to Yano Research Institute. The company predicts that PC shipments (including exports) will grow by 14.7% year-on-year in FY1997 to 9.1 million units, by 6.1% in FY1998 to 9.7 million units, and by 3.7% in FY1999 to 10.1 million units. Shipments are expected to decline by 1.0% in FY2000. DOS/V PCs will eventually account for 70% of the Japanese market, up from 56% in FY1996, says Yano.
Multimedia Research Institute (MRI), meanwhile, reports that domestic PC shipments for the first half of FY1997 (April through September) were up just 0.9% in volume year-on-year, to 3.3 million units, and up 3.0% in value to 809 billion. According to MRI, notebook PC shipments grew 29%, while desktop PC shipments declined 13%. This boosted the notebook PC share from 33% in the same period of the previous year to 42%. By maker, NEC's share declined 6%, to 35%, while Fujitsu expanded its share by 3%, to 22%. IBM Japan ranked third with a 13% share, up 0.5%, but Apple Computer Japan's share slipped 1.5%, to 8%. Toshiba increased its share to 7%. MRI predicts that Japan's domestic PC market will grow 6% year-on-year, to 7.8 million units, in FY1997.
Warehousing market grows
Japan's data warehouse market will expand 61% year-on-year in 1997, to 76.1 billion, according to IDC Japan. The market soared 131%, to 47.2 billion, in 1996, of which the hardware sector accounted for 31.5 billion (up 100%), while the software sector was 9.5 billion (a 280% increase) and the consulting sector 6.2 billion (a 160% increase). NCR Japan was the leader in hardware sales with a 30% market share, followed by Tandem Computers Japan with a 16% share and IBM Japan with 11%.
Targeting TCO
CSK, Nihon Cisco Systems, Nihon DEC, and others have established the TCO (Total Cost of Ownership) Consortium, an open organization for studying measures to reduce costs associated with operating enterprise information systems. The consortium will work with high-tech research company Gartner Group Japan to develop TCO measurement and evaluation techniques.
Patent info online
The Japan Patent Information Organization (JAPIO) has started making its patent information available via the Internet. For a fee, users can visit http://www.japio.or.jp/ and access approximately 80 million patent applications, utility models, and other patent-related information (in Japanese only). The site also provides a gateway to patent information databases of 62 nations and four international organizations.
Virus infections rise
The number of computer virus infections
reported to the Information-technology
Promotion Agency, Japan, reached 273 in September 1997, over six times the level of September 1996. This brought the total number of infections for the first nine months of 1997 to 1,786, over three times the level in the same period in the previous year. Microsoft Word and Excel Macro viruses accounted for 73% of all cases reported in September.
INTERNATIONAL NEWS
Japanese makers eye US notebook market
Japanese PC makers are accelerating their drive to export notebook computers to the US. According to the Ministry of Finance, notebook computer exports to the US between January and August 1997 soared 220% year-on-year to 464,000 units, while growing in value by 140% (to 61.4 billion). Mitsubishi Electric is reentering the American market after seven years, with plans to export 50,000 units of its Pedion and Amity mobile computers to the US in the first year. Hitachi, which assembles notebook computers at its California plant, expects to double its US sales to 200,000 units in FY1997, and will step up its drive to increase mother board production in Japan.
Akia enters US
Japanese PC maker Akia has entered the US market. The company, which had previously established Akia Corporation in Austin, Texas, started shipments in October. Capitalized at $2 million, the Akia US subsidiary has rented an assembly facility next to Dell Computer's headquarters plant. It will deliver units directly to end users within two weeks after receipt of an order. In the US, Akia is offering the same basic product line it carries in Japan, and has pegged its prices 20% to 30% lower than competing products.
Oki turns to India
Oki Electric is establishing a software development center within the compound of Indian software company DSQ Software. The Indian software company is initially assigning 50 of its 900 software engineers to communications software development for Oki, and will expand that staff to 100 within a year. Oki anticipates that more than 30% of its communications software development operations will be handled by DSQ.
Hitachi teams with Legend
Hitachi has joined with Legend Group Company of Beijing for PC business in China. The partners will develop a $1,000 LCD-equipped desktop PC by June 1998, launching production in the Guangdong province. The low-priced PCs will be sold in China under the Legend brand name, and in Japan and Southeast Asia under Hitachi's brand name. With the Chinese PC market, where Legend now has a market-leading 10% share, expected to expand from 2.1 million units in 1996 to 10 million units in 2000, the partners are considering expanding their cooperation to include notebook computers and servers.
Asian Internet cooperation
KDD, Dacom (Korea), Hong Kong Telecom, and Telstra (Australia's national telephone carrier) in October established the Asia-Pacific Internet Community (APIC), a consortium formed to develop a number of Internet-related businesses. One of APIC's main goals will be to forge a mesh of high-speed Internet lines that can route traffic between Japan, Korea, China, and Australia without passing through the US. KDD believes that foreign carriers subsidize much of the cost of carrying international Internet traffic through the US, and wants to develop a structure whereby the four founding members of APIC can share the burden of expenses in a fair manner. The group also wants to cooperatively develop intranet, extranet, and other Internet-related services in addition to providing backbone lines.
IN 50 WORDS OR LESS
Domestic long-distance new common carrier Teleway will become a Toyota Motor subsidiary in February 1998 when leading shareholder Toyota invests additional capital to up its previous 38% stake in Teleway to more than 50%.
Eleven companies -including Toshiba, IBM Japan, NEC, and Nihon Sun Microsystems -have agreed to cooperatively develop software technology enabling interconnections between mainframe computers, networked consumer electronic devices, PDAs, and other equipment.
DVD drives, IC cards, and selected digital broadcast receivers are likely to be excluded from restrictions on the export of products that incorporate encryption technology. MITI has reportedly decided that current restrictions will weaken Japan's competitiveness in high-technology sectors.
The MPT intends to launch in FY1998 a five-year project to construct a next-generation data communications network that will link post offices and regional postal bureaus with the ministry, providing Internet connectivity and multimedia support.
NTT has set up an R&D subsidiary in Malaysia, its first in Asia outside Japan, in an attempt to step up research for multimedia technology. NTT MSC hopes to win orders for multimedia software development projects from the Malaysian government.
MITI will provide funding (up to 100 million per project) for 35 multimedia content research and development projects through its affiliated Multimedia Content Promotion council. The ministry's goal is to broaden the areas in which computers are used in Japan, and develop a stronger domestic content industry.
Major German networking equipment maker Krone has established a Japan subsidiary, Krone Japan, aiming to expand its share of the Japanese LAN market from the current 3% to 10%.
Japan's computer software imports were up 0.2% year-on-year in 1996 to 394 billion, while exports grew 44.5% to 5.7 billion. Imports from the US reached 345 billion, accounting for 88% of the total imports.
Denso will enter the US digital cellular phone market through its Califiornia-based Denso Wireless Systems America subsidiary. The company is constructing a production plant that will begin producing 20,000 CDMA (code division multiple access) handset units per month in August 1998.
Fifteen computer trading companies, system integrators, and software firms led by Tokyo-based SE Lab, a TDK subsidiary, have cooperatively established a new company, Lansa Consortium, to develop enterprise resource planning (ERP) software packages for midsize corporate clients.
Yamato System Development, a Yamato Transport subsidiary, has entered the Internet service provider business with a focus on corporate users. The Nekonet Internet service features leased line and dial-up IP services.
Newsbriefs are based on materials
provided to Computing Japan by
Digitized Information.
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