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Drecom revises earnings (downwards of course) April 11, 2007

Posted by fukumimi in Economy & Business, IT, Japan.
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Drecom, which had one of the big IPOs last year (back in February, with the market cap exceeding JPY100B at one point), announced it is revising its full year(closing end of March) sales and earnings figures downwards. Sales down 42% from a projected JPY1.5B ($12.5M) to JPY870M, with ordinary profits down JPY400M to a loss of JPY180M.

Shares were down nearly 10% on the day closing at JPY689,000.

That still values the company at JPY13.7B ($114M).

The interesting thing is that Drecom had released its 3Q earnings just two months ago. Full year guidance was unchanged, even though cumulative sales for the year were just JPY602M for Q1~3 against a target of JPY1.5B.

Two months later, they revise sales forecasts down 42%. Surely some heads should roll. (If I were a betting man, I’d bet against anyone actually taking responsibility though….)

I wonder if the logic was that the Q4 spike last year was going to be repeated this year. It would be interesting to see if they had a pipeline to justify such reasoning, or if it was just wishful thinking. I’d bet on the latter, if I was a betting man.

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Horie gets two and a half years March 16, 2007

Posted by fukumimi in crime, Economy & Business, Internet, IT, Japan.
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So, the Tokyo District court has handed down a sentence of two and a half years to Takafumi Horie, the disgraced ex-CEO of Livedoor.

Horie had been charged with being actively involved in Livedoor’s false accounting and market abuse (manipulation of its share price by disseminating false or misleading information). The court ruled that Horie was guilty on both counts.

Horie is appealing his sentence.

More thoughts to follow…

Sony does Second Life for PS3 March 9, 2007

Posted by fukumimi in Economy & Business, electronics, Internet, IT, Japan, technology.
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A welcome bit of positive publicity for Sony, with their announcement of Playstation Home, the 3D virtual world for the PS3 platform having received a warm response in much of the reporting around this new service.

I’m not the best person to ask about this kind of stuff as I much prefer interacting with other people in a real physical environment (preferably with alcoholic drinks in hand), but I think this idea may have legs.

Second Life has been receiving plenty of media coverage here in Japan over the last few months, but the media response is shifting. To begin with it was all about how amazing and revolutionary the concept was (which is pretty amusing for anyone who has been around for a while in the space), but now we are seeing some articles (like this one in Japanese) beginning to question the concept and its viability especially in Japan. (from pretty much the same people who were cheerleading before, lol)

A big problem the media has apparently just noticed is the language issue, and the miniscule number of Japanese language users populating the site. Now there’s a surprise.

More fundamentally, Second Life pretty much requires a decent desktop PC with decent graphics card. The reality of PC sales in Japan is that laptops are much more popular even with regular users, what with us Japanese all living in rabbit hutches and paper houses. Further, the gaming market has been dominated by games consoles, and PC gaming is a much smaller niche market than in the US, which means that high spec desktop machines are just not as popular. The net result is that many users are unable to access Second Life, and such people aren’t going to buy a high spec machine just to get onto Second Life.

The Playstation Home on PS3 eliminates the hardware barrier to entry (ok, you need to buy a PS3….). Consumers (especially the non technical ones who would run away screaming at the prospect of having to know what CPU/GPU/RAM specs are for their PC to ensure Second Life compatibility) are guaranteed that any PS3 (with a decent broadband connection, something which is pretty much ubiquitous here in Japan) will be able to run Playstation Home. PS3 owners have a minimal barrier to entry to Playstation Home, and this is something which cannot be underestimated. The fact that the Home environment will apparently be localised for local tastes (the Japanese version was created by Bandai Networks and is more touchy-feely/”cute” than Second Life, but the graphics will likely be changed for other locales (and perhaps even demographics?))

The games within Playstation Home apparently include things like bowling and billiards. I know that the Wii would have difficulty rendering a 3D landscape at anywhere near the PS3 level, but Wii Sports in a networked Wii virtual world with on-line buddies would be pretty damn cool, I think.

Lenovo battery recall…. March 2, 2007

Posted by fukumimi in Economy & Business, electronics, IT.
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205,000 batteries this time, manufactured by Sanyo’s Li-ion battery subsidiary. (Yomiuri)

Sanyo claims the batteries were custom manufactured items for Lenovo and does not expect other customers to be affected.

Couldn’t have come at a worse time for Sanyo, who are currently busy working to rework financial figures for upto the last 4 years having been accused of false accounting amounting to hundreds of millions of dollars….

Kick them when they’re down…. (Asahi article)

Another news item about Sanyo batteries in mobile phones from Sanyo and Kyocera apparently expand alarmingly due to a power management software problem. Said software was developed by Sanyo and Kyocera.

When it rains, it pours, I guess….

Mixi hits 8 million January 30, 2007

Posted by fukumimi in Internet, IT, Japan.
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Mixi, the #1 Japanese social networking site has announced that it has hit 8 million registered users as of January 28th, and is approaching 10 billion page views per month.

Assuming that the users are registering information truthfully (something which is obviously not a given), the age distribution breaksdown as shown below:

Age ~19 ~29 ~39 ~49 50+
PC 9.0% 59.4% 24.6% 5.4% 1.6%
Mobile 15.2% 65.2% 16.3% 2.8% 0.4%

Apparently this translates to one in three people in their early twenties being a registered user (again, assuming that people aren’t lying about their age, and that multiple accounts are not statistically significant. I wonder how realistic those assumptions are)

The PC vs Mobile usage breakdown by gender shows that people registered as female are slightly more likely to access the site via their phones. M/F breakdown – PC 48.2% vs 51.2%, Mobile phones 43.7% vs 56.3%.

So, the younger and more female(?) you are, the more likely you are to access the site via phone rather than PC.

The statistics relating to geographical distribution seem to be using different methodology this time around, as the mobile users now seem to be based exclusively in Japan. I wonder what caused this discrepancy.

Anyway, overseas users apparently account for 4.2% of registered users for PC users.

On locked vs unlocked phones January 30, 2007

Posted by fukumimi in IT, Japan, Mobile.
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A rebuttal to Michael Parekh‘s analysis

From the CNET article cited in Michael’s piece:

In Asia, about 80 percent of cell phones are sold independently of a carrier. And in Europe, roughly 70 percent of cell phones are sold unlocked. But in the U.S., between 90 percent and 95 percent of cell phones are sold through a mobile service provider.

Michael’s analysis:

This of course has resulted in a market that offers far greater array of wireless software and services in overseas wireless markets as compared to ours.

The problem with the analysis?

Answer: Japan

In Japan, 99%+ of phones are locked to a carrier. (Nokia has started selling an unlocked phone recently)

Yet, Japan’s wireless services are as advanced as any overseas market. Devices, network speed, sites optimised for mobile phones. By any metric, Japan is a top tier cellular wireless market.

Software (apart from maybe games) for wireless devices isn’t a very big market, but that is due to the fact that most phones have closed operating systems.

The thing is, with an ubiquitous high speed network, the goal is towards web services/SaaS, as touted for the PC in the US. I think the Japanese mobile market is pretty much there already. For example, I only have a basic calendar application on my phone, but I never use it because at work we have a web based calendaring app, which also has optimised mobile phone access. Virtually all mobile internet services are accessible from any of the major carriers.

With 3/3.5G networks covering the whole nation, including all underground stations, I can’t think of many places where I would need wireless service but couldn’t get it, apart from vacations on mountains and ininhabited islands where I would actually rather not being a phone call away from work related stress.

One more thing. Japanese phones have moved from SMS to real email years ago. Isn’t it time everyone else did the same? That would be a real killer app.

I don’t mean to support the strategy of locking phones to carriers, rather I just want to point out that services innovation (at least of the kind which is useful to the masses) and locking phones to carriers are not linked in the way that some people think (or would like people to think).

Mobile phone meets Nintendo DS January 24, 2007

Posted by fukumimi in Communications, IT, Japan, Mobile.
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As part of the NTT DoCoMo Spring 2007 line-up (sounds like the fashion industry… and in a way, it is), Mitsubishi Electric announced the D800iDS, a two screen clamshell, the lower screen being a touch panel.

Apparently DS stands for “Direct & Smooth”. Conveniently it sounds exactly like this. (DS apparently stands for “dual screen” in Nintendo parlance)

Anyway, the D800iDS is out in February. It is pretty light on features, no integrated FeliCa for credit/debit/e-cash in your mobile phone (must admit I’ve never gotten round to using that feature yet), only a 1.3M pixel camera, no push-to-talk, no GPS, no global roaming, no music player, etc.

The touch screen does offer some potential benefits. The 2.2-inch touchscreen allows handwriting entry as well as traditional text entry via the (now virtual) keypad, and another entry method which takes advantage of a virtual keyboard to allow every Japanese hiragana character to be entered using 2 taps. (Yes, some phones do still offer an option of 2 tap entry on a normal physical keyboard, but most of us have probably forgotten the vaguely cryptic codes we used to type at ease when pagers were all the rage. )

[Historical note – pagers were really big in Japan in the pre-mobile phone era, and virtually all of my high school and university friends had one. Looking back, it is interesting to note that the mobile phone market lagged the European (or at least the UK) market in those early days. I had a cellphone in London before most of my Tokyo based friends got around to getting a mobile phone. Just look how the tables have turned (for the most part) now. I know the US press just loves to point to Europe when it wants to remind readers that it lags in mobile and broadband services, but if they did their homework they’d find East Asia is where it’s at. I guess language is a barrier….]

Anyway, this is where it gets interesting. (Yes, long preamble, blah blah blah, if you’re reading this you already know how tediously verbose I am in writing – compare and contrast to the shy retiring wallflower that I am in person)

Mitsubishi have announced a contest for iAppli (DoCoMo’s J2ME “application sandbox” thingy – ok sandbox maybe rather harsh) developers, to develop something interesting using D800iDS’s dual screen/touchscreen interface.

This certainly seems much more inclusive than the policy taken by Apple recently.

(OK, you give Mitsubishi and DoCoMo distribution rights of the submitted project as well as the right to use it in promotions, but you retain all other intellectual property rights which sounds pretty fair)

Applications close on Feb 7th, by which proposals need to be submitted using this form. People who qualify will be notified on Feb 9th, and will have until March 12th to complete development. You need to have a DoCoMo FOMA account so you can install your SIM card in the DS to test your DS iAppli with. (They’ll give you (to keep) a D800iDS if you get past the first paper exam hurdle.

Prizes on offer: 37V LCD TV for 1st prize (not full HD though, as Mitsubishi haven’t got any in the lineup which must be hurting sales and margins), 3 runners-up prizes are HDD/DVD DVRs, and some DoCoMo credits for worthy mentions.

Rakuten opens up January 18, 2007

Posted by fukumimi in Internet, IT, Japan.
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Rakuten, the leading Japanese on-line shopping site, is to open up. (PR in Japanese)

It has launched a beta service of what it calls “Rakuten Web Service”, a set of APIs to access the Rakuten database which currently holds more than 10 million items. To start off, it has made 4 APIs available (shop inventory/auction inventory search API, category search API, product code search API and book inventory search API), and is promising to expand its API offerings to cover its DVD, CD, travel and electrical goods inventory by 2007 according to reports.

Finally, it seems the (mainstream) Japanese internet may be about to embrace a more open model.

The strategy would seem to fit well with Rakuten’s stated plans of going global. It may find it is easier to expand by linking up with local partners who can use the database but may need to provide different logistics and payment mechanisms and the like.

On CES 2007 January 12, 2007

Posted by fukumimi in electronics, IT, Mobile.
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Seeing I wasn’t in Las Vegas for CES this year (I promised myself I will make the trip next year), CES attendance was remotely via internet media coverage.

Whilst that meant I didn’t get to see much of the really interesting stuff going on at the grass roots level, most of the eye candy got sufficient coverage so I could get my tech geek fix.

1) On Apple’s cellphone

Yes, it looks nice. Real nice.

But GSM? Multi-year exclusive contract with Cingular? Not coming to Asia until 2008?

Again, Apple shows it can do the slick consumer product and presentation, but it is very old school when it comes to its business strategy. It seems it is another walled garden approach. I suspect the thing won’t even be a real “smartphone”, and will limit third party development to the sandbox of widgets and/or J2ME applets, not nearly the same kind of freedom as made available on real smartphone devices. I guess the thing is targetted not at business users but at Apple fans.

Anyway, technologically, there is really nothing new here. It shows again that UI is what really defines Apple. Full points there, at least as far as the screen GUI is concerned.

However. It doesn’t appear that a tactile feedback mechanism is incorporated into the screen, which will probably slow things down. Audible feedback? Not an option, if one expects to use one in public. I will grab any “iPhone” whose user dares to use one in my vicinity with some lame beeping audible feedback mechanism engaged, and throw it on the ground and stamp on it until the screen breaks. I’d do the same for any user who has a similarly annoying beep beep emanating from their conventional phone. I guess they could keep their headphones on at all times… In any case I just can’t see how the touchscreen can be made as easy to use to type text as even a physical tenkey (which permits blind touch typing) let alone a physical QWERTY thumb keyboard.

Apple going ahead with using “iPhone” although they knew Cisco owned and markets a telephony device of that name? Shows balls, but I have one word for Apple. Hypocrites. They get the lawyers go after anyone within a country mile of any of their trademarks, and then they pull this. Perhaps they think that the voice of their adoring fans will sway the courts. Think again. Cisco isn’t about to be bullied into submission. Cisco is twice as big as Apple.

Steve Jobs saying that phone calls are mobile’s killer app? Wrong answer. ESPECIALLY for the users right bang in the middle of the user profile for the “iPhone”. I’m sure the cool and trendy teenagers and twentysomethings will get annoyed when they realise that it is much more difficult to type their SMS messages and email. I didn’t see much typing being demonstrated at the demo….. I wonder why…..

Wi-Fi is nice, but don’t expect it to be nearly as ubiquitous as cellphone coverage, so data browsing is going to be a nightmare even on EDGE. So much is made of the ability to access the web. I’m not convinced that zooming and moving around sections of a PC format webpage is anywhere near optimal. We have full PC webpage browsing on mobile phones here (with similar zooming and scanning capability), and I (nor hardly any of my acquaintances) hardly ever use it (even with the high resolution screen on the phone). When it comes down to it, content is about substance, not presentation, especially when you are on the move. Do you think you can read a webpage whilst walking with an “iPhone” more easily than with, say, an optimised cHTML page on i-mode? I doubt it. I think it is unavoidable that for user friendly browsing experience on the move, you’ll need to format customised pages for the phone. Despite the protests of graphic designers, the prettiness of a page (ie the use of rounded corners or pastels or overelaborate use of graphics) does not add informational value. Both service providers and users need to get over their stubborn insistence that the mobile web should be similar to the PC web. The reason the Japanese mobile web community has been thriving is fundamentally intertwined with the fact that no such false expectation existed.

2) What is it with those squat cylinders?

Is that like the new “in” look? Both Microsoft and Sony (VAIO VGX-TP1) had them on show. I guess they had to compete with Apple without ripping off the square with rounded corners look. The circle is the new square?

3) TVs

I wonder how much electricity Sharp’s 108V LCD consumes (and how much it costs). My guess? It is more expensive than Panasonic’s 103V PDP to buy, but runs on maybe 20-30% less electricity. Which would still mean drawing more than a kiloWatt of power, which is not very green at all. I wonder how they managed the backlighting of such a wide panel. I guess edge lighting with CCFLs around the perimeter just won’t hack it at those dimensions. So, that would mean either a wasteful CCFL array on the back plane, or a similarly positioned LED array. Former would mean increased energy consumption, latter, increased cost.

Bring on the next generation of RPTVs. Expect to see a 60 inch RPTV (with a depth of between 4 and 6 inches) at around the $2000 price point in about a year, with electricity consumption slashed to a third of that found in similarly sized FPDs based on competing technology.

4) Audio

Really not much to really get me excited here, lots of wireless networking on show, with “digital active” loudspeakers. Colour me sceptical. A vibrating box isn’t the best place to put sensitive electronics, and you still need to shell out for mains cabling, so it isn’t truly wireless in any case. It is OK for run of the mill stuff, but at the high end? Not convinced. I’m still looking to upgrade my CD front end, the search continues. Toying with the idea of a PC based system as discussed previously. (got a new cartridge for my record player last summer – but that is in storage because of the move)

The Australian’s revisionist history December 22, 2006

Posted by fukumimi in crime, Economy & Business, IT, Japan.
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via JapanProbe

Original article here

Horie is a discredited figure and his attempts to blame his downfall entirely on the system are clearly self-serving. Yet he has a point. Well before he was accused of breaking the law, members of Japan’s business elite had already condemned him as a pariah. In their eyes, his biggest sin was daring to challenge vested interests and the status quo. Doing so was worse than impudent – it threatened the existing order.

Take the Keidanren, the influential business federation, whose head, Fujio Mitarai, has doggedly fought plans to allow foreign bidders to use their shares to finance takeovers, a step that could put many Japanese companies in play.

It is funny that the article mentions the Keidanren, as  Livedoor was actually admitted to this cozy old guard club. (And then chairman Okuda-san was terribly embarassed when the scandal hit, calling Livedoor’s acceptance into that club an embarassing mistake) If that club isn’t the epitome of the old guard business elite, I don’t know what is. (Well I do, it’s the regular meetings of the keiretsu CEOs that have names like the “Friday Club – Kinyokai – 金曜会”, “2nd Thursday Club – Nimokukai – 二木会”, “Whitewater Club – 白水会 – Hakusuikai” all of which get the big keiretsu CEOs together for regular meet-ups, ostensibly to hold study sessions over lunch or somesuch.)

Livedoor seemed cozy enough with the LDP top brass too, and those PR opportunities don’t happen without serious consideration and consultation.

Without doubt, the established old guard did initially resist, but in characteristic ovine behaviour, they seemed to embrace the new guard (as they did with Rakuten and Softbank before Livedoor) as a pretty coherent unit when some invisible signal (a dog whistle?) was sounded (albeit perhaps begrudgingly).

Clearly Son and Mikitani are more intelligent and/or more well connected than Horie and pals, as Son especially has done (and is doing, though I feel to a lesser extent these days – maybe he has learnt to play by the “rules”) a lot more to ruffle feathers of the old guard and disrupt the old order of things, at least on the surface.

The article continues:

 The key to raising the economy’s anaemic growth rate lies in the services sector. Its backwardness ought to be an opportunity for entrepreneurial innovators ready to have a go. But while Japan does not lack promising start-up companies, few have broken through to become big businesses.

That statement contradicts the facts. If you look at IPOs on MOTHERS and Hercules and JASDAQ, you’ll see a whole host of services companies who have become significant players. Everything from restaurant businesses to outsourced professional services to wedding planning companies to internet advertising firms (a whole bunch of them….), investment funds and debt recovery services have seen IPOs this year. (not all are equally valuable to society in my estimation)

I think the problem isn’t that there aren’t successful companies in the services sector. There are 2 problems.

1. The vast majority of companies in the service sector are (almost 100%) domestically focussed, and as such they are just redistributing the pie, taking share away from the backward businesses the author alludes to. Only by marketing its services overseas and repatriating the profits does the pie really grow. I know it that is simplistic and it is not a zero sum game, but I think that is the big difference between the Japanese service industry and national economies which have successful service industries who are competitive internationally. In the end, if Japan depends solely on the manufacturing sector to be competitive in international trade, the future is bleaker and bleaker as low cost (and increasingly high quality) competitors become more and more competitive. (Not to say that Japanese manufacturers aren’t trying (and suceeding) in being competitive by innovating and pushing the envelope – they are, but the lower value businesses are being decimated by competition from other nations and that means less of the pie for the Japanese)

2. Consumer spending remains weak, and with corporate-world’s recovery having been built in no small part on the backs of redundancies and switching from a predominantly full-time workforce to one that is increasingly dependent on contract, temporary, and part-time employees who are naturally paid a lot less for their time (in terms of both hourly wage and benefits), I’d say the odds of a resurgence in consumer spending (especially to the levels seen in the heady days of the bubble) are bleak. Of course, you wouldn’t think that is the case if you went shopping in Ginza or Omotesando, but that is just a factor of the increasing disparity in disposable income.

I do agree that Abe isn’t going to make things much better. He doesn’t even have the Koizumi talent of making bold but substance-less assertions and making the electorate feel warm and fuzzy inside whilst not actually changing anything material at all.