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No. 356, May 1999

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Japanese Companies in the US


The restructuring plan that NEC CORP. devised to return to profitability will lead to some changes in its U.S. operations, although the full extent of the reorganization still is not known. Initially, the impact will be limited to the company's telecommunications equipment business. NEC will prune some low-margin products and concentrate its resources on what have been growth areas for it, headed by private branch exchanges and fiber-optic communications equipment. In addition, NEC AMERICA, INC., which is in charge of the company's U.S. telecommunications business, will move by late 2000 from its longtime headquarters in Melville, New York to Irving, Texas, where NEC's software development unit already is located. What changes, if any, will occur at NEC America's manufacturing facility in Hillsboro, Oregon have not been announced.

In back-to-back announcements, SONY CORP. and INTERNATIONAL BUSINESS MACHINES CORP. said that they would team up on a media asset management system for the broadcast and entertainment industries as well as on Internet music distribution standards. The media asset management system is targeted at companies that want to move their tape libraries to a digital format both to better manage their video libraries and to offer new services. Sony will supply the hardware side of the system, including encoding and decoding devices and transmission servers, while IBM will contribute its digital library software and handle system integration work. The partners already have their first customer, CABLE NEWS NETWORK INC. In a project that could take three years. CNN plans to digitize more than 100,000 hours of footage accumulated over nearly two decades.

SONY CORP. is the world's largest supplier of studio and field broadcast equipment, but it faces strong competition from MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. in digital equipment. To strengthen its position, Sony formed a development alliance with Tewksbury, Massachusetts-based AVID TECHNOLOGIES, INC., the market leader in nonlinear editing systems. For starters, they will focus on making Sony's television cameras and videocassette recorders compatible with Avid's postproduction editing systems. Down the road, the tie-up could involve the development of lower-cost broadcast systems and high-definition TV equipment.

Under a multiyear contract worth more than $5 million, SONY ELECTRONICS, INC. will supply NewsBase newsroom production systems to all TRIBUNE BROADCASTING CO. TV stations, including cable news operations. Two Tribune stations already use the newsroom server, which is said to enable television stations to deliver higher-quality newscasts and to cut the time it takes to get news material on the air. Another big advantage of NewsBase is its ability to scale across a wide range of station sizes. Tribune Broadcasting estimates that as many as 15 systems will be installed in 14 cities by the time the project is finished. Two years ago, the broadcaster selected SONY CORP.'s Betacam as its news acquisition format.

VICTOR CO. OF JAPAN, LTD. is collaborating with HEWLETT-PACKARD CO. and DIVICOM, INC. to deliver a cost-effective HDTV on-air server solution to the broadcasting industry. The system will combine HP MediaStream servers 700 and 1600, which are designed for both HDTV and standard-definition television broadcasting (see Japan-U.S. business Report No. 355, April 1999, p. 34); Milpitas, California-based DiviCom's MediaView MV400 HDTV encoder; and JVC's new DM- D4000 HDTV decoder. A primary selling point of the system is that broadcasters can use the MediaStream servers today for SDTV applications and later upgrade them to HDTV programming.

Another Japanese company is betting that a significant market will develop at home for high-resolution, satellite-captured images of the earth. HITACHI SOFTWARE ENGINEERING CO., LTD. will invest $11 million in EARTHWATCH INC. in exchange for rights to market the images transmitted by a pair of Quick Bird satellites that the Longmont, Colorado company will have launched for it December and a year later. These spacecraft will be able to identify objects as small as 1 square meter. HITACHI, LTD. already has a 12.3 percent stake in EarthWatch, which it acquired for about $14 million in the spring of 1995. However, the failure of EarthWatch's first two satellites has prevented it from moving into the satellite image marketing business. Hitachi Software Engineering will face some stiff competition. NTT DATA CORP. recently signed a marketing deal with ORBITAL IMAGING CORP. (see Japan-U.S. Business Report No. 355, April 1999, p. 33), as did MITSUBISHI CORP. with SPACE IMAGING INC. (see Japan-U.S. Business Report No. 353, February 1999, p. 31).

An exchange rate of ¥120=$1.00 was used in this report. aaaaa

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