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No. 351, December 1998

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American Companies in Japan


Washington, D.C.-based XM SATELLITE RADIO INC., which plans to launch coast- to-coast, multichannel, satellite-delivered digital radio service in the United States in 2000, has signed agreements with three Japanese companies to make and market XM-capable radios and audio systems for the American market. ALPINE ELECTRONICS, INC. and PIONEER ELECTRONIC CORP. will produce XM radios for the automotive market, while SHARP CORP. will turn out XM audio systems for the home market. All this equipment will be able to receive AM and FM broadcasts in addition to the XM digital programming and will have such add- ons as CD players. A dish-shaped receiver just a few inches wide will be needed to pick up the signal from XM's pair of direct-broadcast satellites. The company is owned by AMERICAN MOBILE SATELLITE CORP. and WORLDSPACE, INC.

A restructuring MOTOROLA INC. exited the personal handyphone system business. The only foreign competitor in this field, its sales, like those of domestic equipment suppliers, were hurt by the shift in the wireless market from this cellular wanna-be to the real thing as cell phone prices and service charges came down. At the time it pulled out of the market, Motorola was supplying PHS terminals to NTT PERSONAL COMMUNICATIONS NETWORK, INC. on an OEM basis as well as selling PHS handsets under its own name.

The Ministry of Posts and Telecommunications has awarded a Type I license to a third foreign communications carrier. PACIFIC GATEWAY EXCHANGE, INC. joins MCI WORLDCOM, INC. and BRITISH TELECOMMUNICATIONS PLC in being able to build, own and operate communications facilities (see Japan-U.S. Business Report No. 348, September 1998, p. 21). The Burlingame, California company, which installed a switch in Japan during the third quarter, already is marketing its global high-bandwidth data and Internet services to carrier customers. It expects to add retail customers in 1999.

In a Japan-only tie-up, UNISYS CORP. and MCI WORLDCOM, INC. are partnering on the computer telephony integration business. Their primary target is American companies operating in the Japanese market, although they also will try to win contracts from local financial institutions, manufacturers and distributors in order to build CTI into a $165.3 million annual business in three years. NIHON UNISYS, LTD. will build and market the systems, while MCI WorldCom's subsidiary will be in charge of consulting.

The Enterprise Interaction Center, an all-in-one Windows NT communications server built by Indianapolis-based INTERACTIVE INTELLIGENCE, will be sold in Japan by ERNST & YOUNG TECHNOLOGIES, INC. to clients of its Tokyo-based affiliate, ERNST & YOUNG CONSULTING JAPAN CO., LTD. EIC eliminates the need for integration among proprietary communications devices like private branch exchanges, voice-mail systems, fax servers, Web servers and CTI gateways. Since it is designed for call centers as well as for any company interested in automating its communications systems, Ernst & Young expects the system to enhance its expertise in the area of customer service strategies.

Roughly one-fourth of global sales of notebook PCs are made in Japan, where portable machines comprise a much higher proportion of PC shipments than in the United States. That reality persuaded XIRCOM, INC., the self-described world leader in connectivity solutions for mobile computing professionals, to open a subsidiary in Tokyo. The new organization, which replaces a branch office (see Japan-U.S. Business Report No. 347, August 1998, p. 26), will double as the Thousand Oaks, California firm's Asian regional headquarters.

The Cisco 12000 gigabit switch router, which CISCO SYSTEMS, INC. calls the primary building block of its optical internetworking strategy, has arrived in Japan a year after its American debut. A number of major U.S. service providers already have deployed the network backbone router. Cisco's subsidiary also hopes to persuade big Japanese service providers to use the GSR 12000 series to build optical internetworking infrastructure that will provide the foundation for the evolving Internet economy. The GSR line of switch routers starts at $16,000.

The latest addition to CANOGA PERKINS CORP.'s line of wavelength division multiplexers gives managers of bandwidth-constrained networks the power to optically multiplex up to eight channels over a single fiber-optic pair. The modular, protocol-independent Access Model WA-8 WDM system supports data transmissions at speeds anywhere from 10 Mbps all the way up to 1.25 Gbps. It can handle a long list of protocols, including 10/100/1000-Mbps Ethernet, token ring, FDDI (fiber-distributed data interface), Fibre Channel and ATM (asynchronous transfer mode) or SONET/SDH (synchronous optical network) at OC- 1, OC-3 or OC-12, over the same fiber backbone. NET ONE SYSTEMS CO., LTD., which already distributes the Chatsworth, California company's Access Model WA-4 (see Japan-U.S. Business Report No. 345, June 1998, p. 22), expects to sell 50 WA-8 modules.

The alliance that MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. and MICROSOFT CORP. formed last summer to propel the convergence of PCs and consumer electronics products (see Japan-U.S. Business Report No. 347, August 1998, p. 7) has produced its first concrete results. The software giant's WEBTV NETWORKS INC. is shipping tuners to MEI on an OEM basis that allow buyers to access the Internet through their TV sets. Matsushita Electric has priced the analog tuner at $455. It is looking for sales of 2,000 units a month. If achieved, that volume would give a boost to WebTV Networks' lagging Japanese operations (see Japan-U.S. Business Report No. 350, November 1998, p. 28).

Extending its line of videoconferencing systems upward, PICTURETEL CORP.'s subsidiary put on the market the Montage 570. Designed for large, reservation- based video networks and multipoint service operations, the scalable and customizable server connects as many as 48 sites in any number of conferences. The Montage 570, which starts at $52,900, can be used with any PictureTel product as well as with any other videoconferencing system that supports the H320 industry standard.

An exchange rate of ¥121=$1.00 was used in this report.

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