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Japanese Tech Stock Weekly Summary (4/21-27)
IRG
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The following is excerpted from IRG's weekly stock report:
Hardware
- Sony Corp.'s (SNE) videogame unit delayed for the second time the release of its much-anticipated virtual-community service for the PlayStation 3, showing the extra care it is taking in vetting products as demand for the videogame console is increasing. The 3-D service called Home, which originally was expected to be sold starting last year, now is expected to be available in the fall, the company said. The service will let users create avatar characters, decorate homes and interact with other users in a virtual world. As more people have access to faster Internet connections, online communities like those that allow players to socialize with one another in addition to playing games have grown popular in recent years. They are considered an important part of the game-playing experience.
- Fujitsu (FJTSY.PK) has launched a series of 320GB 2.5-inch hard disk drives containing automatic hardware-based encryption for securing data against theft and loss. The MHZ2 CJ Series drives provide rotational speed of 7200rpm and a 3.0Gbps serial advanced technology attachment interface. Built-in 256bit AES encrypts the data when storing it on the hard disk drive and decrypts the data when read.
- Canon Inc. (CAJ) lowered its profit and sales forecasts as the yen's climb to a 12-year high erodes the value of overseas sales. Net income is expected to climb 2.4 percent to 500 billion yen (US$4.8 billion) in 2008, compared with a previous forecast of 520 billion yen (US$5 billion). Sales is expected to rise 2 percent to 4.57 trillion yen (US$43.8 billion), less than the 4.72 trillion yen (US$45.2 billion) predicted earlier.
Media, Entertainment and Gaming
- Nintendo Co. (NTDOY.PK) reported a 48 percent increase in its annual net profit as its Wii videogame console and DS portable-game device continued to sell strongly, but it set a conservative forecast for this fiscal year as a stronger Japanese yen reduces the value of overseas sales. Net income for the year ended March 31 rose to 257.3 billion yen (US$2.5 billion), compared with 174.3 billion yen (US$1.7 billion) a year earlier. Sales rose 73 percent to 1.67 trillion yen (US$16 billion) as it sold more Wii and DS devices than it expected. Nintendo has succeeded by attracting nontraditional users like women and seniors with easy-to-play games.
- Nintendo forecast profit will rise 26 percent this year as its Wii console outsells rival machines. Net income is expected to reach 325 billion yen (US$3.13 billion) in the 12 months to March 31, 2009, from 257.3 billion yen (US$2.5 billion) a year earlier. Sales is expected to gain 7.6 percent to 1.8 trillion yen (US$17.2 billion). The Wii's motion-sensitive controller and a cheaper price than the PlayStation 3 or the Xbox 360 may help Kyoto-based Nintendo overtake Sony Corp. in worldwide sales of home game consoles this fiscal year. The Wii has outsold Sony's PlayStation 3 since its introduction in November 2006.
Mobile/ Wireless
- Hitachi Ltd. (HIT) said its wholly owned arm Hitachi Mobile Co. will sell its cellphone marketing division to ITC Networks Corp., a major mobile handset sales company, for 7.5 billion yen (US$72 million) on July 1. Hitachi Mobile will concentrate on marketing a range of machines and equipment relating to automobiles and providing maintenance services for the machines. Hitachi Mobile runs a network of 84 cellphone retail outlets in Japan. ITC Networks is a subsidiary of major trading house Itochu Corp.
- Sharp Corp. (SHCAY.PK) shipped the most mobile phone handsets in Japan last fiscal year, commanding 25.1 percent of the market to remain at the top of the list for a third straight year. Domestic wireless phone shipments increased 2.9 percent to a record 50.76 million units. Sharp boosted its shipments by 23 percent to 12.76 million handsets, an all-time high for the firm. The company's Aquos phones compatible with land-based digital broadcasts and other handsets sold well among a wide range of consumers. Panasonic Mobile, a Matsushita Electric Industrial Co. subsidiary, retained the No. 2 spot with a 14.5 percent share. Fujitsu Ltd. jumped from fifth to third place with an 11.7 percent share.
Semiconductor
- Elpida Memory will buy a stake in smaller Taiwanese rival ProMOS Technologies through a private placement, sources close to the deal. The two companies have reached an agreement under which Elpida will buy a single-digit percentage stake, making it ProMOS's third biggest shareholder. ProMOS and its peers in the dynamic random-access memory [DRAM] chip sector are struggling with a year-long downturn and most have posted losses over the past several quarters, hurting their cash positions.
Information Technology
- Hitachi Data Systems has introduced an eco-friendly and power-efficient data centre designed to achieve a 1.6 PUE (Power Usage Effectiveness) rating by The Green Grid claimed to be the lowest power usage index of any data center in its class. Located in Yokohama, Japan, the new state-of-the-art data centre brings together the collective product innovations of the Hitachi Information & Technology Systems Group [ITSG] companies including storage systems, server and networking equipment.
Software
- Timesys Corp. and Lineo Solutions, Inc announced a multi-year strategic alliance. The companies will work together to jointly develop and market embedded Linux solutions for the Japan marketplace based on Timesys’ LinuxLink.
Telecommunications
- NTT DoCoMo (DCM) would develop Linux-based software for mobile phones with software maker Access Co. Ltd. in a move which could help open up Japan's wireless market. DoCoMo and Access plan to develop new middleware and other software compatible with that used overseas. The move would make it easier for Japanese handset makers to venture abroad and lower costs for overseas makers tackling Japan's market. DoCoMo's handset suppliers such as NEC, Matsushita Electric Industrial, and Fujitsu now bear the high cost of developing software specifically for DoCoMo's unique operating system. Handset makers have blamed such costs for restricting their ability to take risk abroad, handing global leadership to overseas giants such as Nokia and Samsung Electronics.
- KDDI Corp. (KDDIF.PK) said profit and sales will rise this fiscal year as it continues to add mobile phones subscribers. Net income is expected to rise 15 percent to 250 billion yen (US$2.4 billion) in the year started April 1, as sales gain 2.9 percent to 3.7 trillion yen (US$35.4 billion). That compares with 266 billion yen (US$2.5 billion) profit in the median forecast of 11 analyst estimates compiled by Bloomberg. Sales are projected at 3.61 trillion yen (US$34.6 billion) in the median. KDDI expects profit to climb to a record this year as it promotes new chips and software that will help slash handset development costs. The operator aims to narrow Softbank Corp.'s lead in user gains with a new phone lineup and plans that offer free calls for family and corporate clients.
- Softbank (SFTBF.PK) and NTT DoCoMo Inc. are increasing prices of mobile phones and allowing users to pay for them through installment plans. Softbank had a record net addition of 543,900 mobile- phone users in March, taking its total to 18.6 million, while DoCoMo added 173,700 for a total of 53.4 million. The planned dividend payout for the second half of fiscal 2007 will be increased to 5,500 yen (US$52.70) from 5,000 yen (US$47.90).
- NTT Communications and TransTeleCom of Moscow have reportedly begun using a 570 km optical fibre cable to respond to rising demand for fast data transmission between Japan and Europe, including Russia.
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