Japan-US Business Report LogoJapan-U.S. Business Report

No. 347, August 1998

Issue Index

Japanese Companies in the US


One of the hottest names in on-line investment services has received a strong endorsement. SOFTBANK CORP. will invest $400 million in ETRADE GROUP, INC., acquiring a 27.2 percent interest in the Palo Alto, California Internet company. The two businesses are no strangers. Japan's biggest software distributor provided early financing for ETRADE before it went public in 1996. The two also recently formed a joint venture in Japan to introduce Internet investing to that market (see Japan-U.S. Business Report No. 346, July 1998, p. 20). ETRADE plans to use part of the new capital to finance acquisitions that complement the company's growth objectives. Some of the money will go into advertising, while other funds will be devoted to accelerating infrastructure development. Analysts suggested that a major attraction of the deal for ETRADE was the opportunity to forge closer ties with Internet-related firms affiliated with acquisition-inclined Softbank. Those include Internet search engine company YAHOO! CORP. (31 percent owned by Softbank), on-line "communities" hoster GEOCITIES CORP. (35 percent) and computer magazine publisher ZIFF-DAVIS INC. (71 percent), the company behind the ZDNet Web site.

SONY MUSIC ENTERTAINMENT, INC. and REALNETWORKS, INC., the leader in transmitting sound and video over the Internet, will create a free Internet video music network for Sony recording artists. At the heart of the project will be the Seattle firm's Synchronized Multimedia Integration Language. As its name indicates, this standards-based streaming technology allows Web authors to create synchronized multimedia presentations using a wide range of elements, including voice, music, visual effects, text and graphics. For Sony Music, the forthcoming network offers a way to harness the distribution power of the Internet while lessening the incentive for bootlegging.

Japan's consumer electronics giants appear to be moving toward a consensus that the Windows CE operating system will be the engine of future digital products. First SONY CORP. and now HITACHI, LTD. and MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. have strengthened their relationships with MICROSOFT CORP. to facilitate the convergence of PCs and consumer electronics products (see Japan-U.S. Business Report No. 344, May 1998, p. 7). The Hitachi-Microsoft alliance has three development objectives. One is Windows CE-based mobile PCs running off of the Japanese company's 32-bit SuperH RISC (reduced instruction-set computing) processor, which already is customized for handheld Windows CE devices. The second joint effort involves a home multimedia station that can manipulate, integrate, store and play digital data from a variety of sources, including television, satellite broadcasts, the Internet, digital cameras and DVDs. In addition, the partners want to bring real-time capabilities to Windows CE. To backstop these efforts, Hitachi will set up an organization dedicated to building new Windows CE-based products. Microsoft will provide broad support to this group.

The joint development efforts planned by MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. and MICROSOFT CORP. are equally varied. They will work on the next generation of PC technology for receiving, decoding, processing and displaying digital TV broadcast signals and associated interactive programs as well as on digital cable TV advanced set-top boxes for public network and retail customers. Another goal is to port Windows CE to selected versions of MEI's AM33 microprocessor family for forthcoming consumer electronics products. In addition, the Japanese company will launch sales of analog terminals for Microsoft subsidiary WEBTV NETWORKS INC.'s Internet access via TV system. To simplify their work in the future, MEI has the option of licensing Windows CE for forthcoming consumer electronics products and PC devices.

CSK VENTURE CAPITAL CO., LTD. has invested in QUADRANT INTERNATIONAL, a Malvern, Pennsylvania provider of software and hardware DVD solutions that address the convergence of PC and consumer electronics technologies. The company's products are designed around an object-oriented modular software architecture that is said to deliver a consistent look and feel across technology platforms. Quadrant will use CSK's money to expand its R&D efforts. The company is working on digital television, high-definition television and satellite broadcast standards- based solutions.

Helping enterprise customers to build and deploy next-generation enterprise network applications on top of legacy computing environments is the objective of an alliance between HITACHI, LTD.'s Santa Clara, California computer products subsidiary and NETDYNAMICS, INC. The Hitachi unit will combine the Menlo Park, California firm's NetDynamics 4 platform with its own legacy application interface, Data Object Manager, its CORBA-based Object Request Broker and its TPBroker object transaction monitor (see Japan-U.S. Business Report No. 342, March 1998, p. 7). In the process, Hitachi will create a platform adapter component to NetDynamics 4 for its DOM and certify TPBroker as interoperable with NetDynamics 4. It also will sell the combined products in North America.

One of the leading suppliers of three-dimensional graphics software for game development and interactive entertainment, NICHIMEN GRAPHICS CORP., has given the Alias|Wavefront subsidiary of SILICON GRAPHICS, INC. the right to distribute its Game Exchange 2.0 to the interactive and game market everywhere outside Japan. GE2 will be marketed with Maya, Alias|Wavefront's flagship 3D software product. The Nichimen Graphics product is an advanced software development tool for programmers working with 3D interactive content. It supports all major 3D file formats and game engines. GE2 for Maya is expected to ship this fall and will be priced in the United States at $4,000.

Hollywood's wealth of experience in computer-generated special effects was instrumental in TOPPAN PRINTING CO., LTD.'s decision to open a computer graphics production center at its nearby Santa Monica, California subsidiary. With this operation as its base, the big printing company hopes to build computer graphics work into a $70.9 million worldwide business in 2000.

With an eye on future diversification, textile manufacturer TEIJIN LTD. plans to open a software development office in San Jose, California. Within two years, the company expects to transfer 10 people from its Yokohama software research center to the new facility. Other employees will be hired locally. A primary focus of the new operation will be application software related to the health-care industry.

An exchange rate of ¥141=$1.00 was used in this report.

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