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No. 361, October 1999

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Japanese Companies in the US


TELECOMMUNICATIONS

In a twist on the expected, SONY CORP. is moving into the U.S. market for cable television digital set-top boxes on its own rather than through its alliance with GENERAL INSTRUMENT CORP. — to date the dominant supplier of these products (see Japan-U.S. Business Report No. 352, January 1999, p. 8). The consumer electronics giant won an order valued around $1 billion from CABLEVISION SYSTEMS CORP. to provide a minimum of 3 million next-generation set-top boxes to the cable operator, which serves some 3.4 million homes in the greater New York City area. The new partners plan to develop a platform that will enable Cablevision to deliver enhanced digital services to its subscribers, including video on demand and interactive video gaming as well as high-speed Internet access. The set-top boxes will incorporate Sony's IEEE 1394-compliant, high-speed iLINK interface for connecting PCs and various other digital devices.

NIPPON INVESTMENT & FINANCE CO., LTD., the venture capital arm of DAIWA SECURITIES CO., LTD., and SUMITOMO ELECTRIC INDUSTRIES, LTD. were part of an international group of venture investors that raised $21 million in equity financing for WAVESPLITTER TECHNOLOGIES, INC. The Fremont, California manufacturer has developed a DWDM (dense wavelength-division multiplexing) architecture that addresses bandwidth bottlenecks in the metropolitan access market rather than in the long-haul market, the original target of DWDM technology. WaveSplitter's modular, all-fiber-optic, cost-effective line of DWDM products consists of the Wave-Xpander, the WaveSplitter and the WavePump.

The company that pioneered the development of Internet-based messaging servers for reliable, secure and cost-effective electronic mail services has won the financial endorsement of NISSHO ELECTRONICS CORP. The distributor joined a group of existing and new investors in providing $21 million in third-round funding for MIRAPOINT, INC. of Cupertino, California. The company, which launched its first Internet e-mail server appliance last December and now has three product lines on the market, will use the money in part to support its product development initiatives. Mirapoint also has earmarked money for worldwide sales programs. One is directed at Japan, where Nissho Electronics will market the full complement of Mirapoint's dedicated messaging appliances. A system for 300 users will list for $20,400, while one for an unlimited number of business customers will go for $58,300.

A high-flying NTT MOBILE COMMUNICATIONS NETWORK, INC. is strengthening its research capabilities to ensure that it remains at the forefront of the cellular mobile communications business. In early November, it will establish a U.S. holding company in Palo Alto, California. Under NTT DOCOMO USA, INC. will be DOCOMO COMMUNICATIONS LABORATORIES USA, INC. Its mission is to identify existing know-how that can be adapted for Internet-capable mobile phones, such as the iMode phones currently available from NTT DoCoMo, as it is known in Japan, and the forthcoming third generation of wireless devices (IMT-2000) and to explore new mobile Internet and other advanced software technologies. In time, DoCoMo Labs USA could employ as many as 50 people. The holding company also will have under it wing DCM INVESTMENT, INC. NTT DoCoMo set up this Boston-based firm in March 1996 to invest in communications-related companies in the United States and venture funds.

In a deal valued at $140 million, SANYO FISHER (U.S.A.) CORP. of Chatsworth, California is supplying Internet-capable CDMA (code-division multiple access) cellular phones make by parent SANYO ELECTRIC CO., LTD. to the Sprint PCS unit of SPRINT CORP. The Sanyo SCP-4000 is equipped with a microbrowser that gives users Internet access via the handset's display. The phone went on sale October 1 at Sprint PCS and Radio Shack stores across the United States.

By next spring, subscribers to NIPPON IDOU TSUSHIN CORP.'s cdmaOne digital mobile phone service should be able to use their phones in North America. IDO's handsets feature Japan's first international roaming capability, which makes them work overseas using the same numbers as in Japan. The company will have to tie up with U.S. cellular phone operators to implement the new benefit.

Two Internet services providers have announced plans to expand their transpacific Internet backbones in just the latest attempt to accommodate surging traffic. KDD CORP. will upgrade its Japan-U.S. backbone to 555 megabits per second from 400 Mbps. INTERNATIONAL DIGITAL COMMUNICATIONS, INC. has the more ambitious goal of quintupling the capacity of its Japan- U.S. backbone to 1 gigabit per second within 2000.

Three more American TV broadcasting facilities have installed SONY CORP.'s NewsBase nonlinear, server-based news production system, including DNE-1000 digital news-editing workstations with Sony's ClipEdit software. San Antonio-based Texas News Channel, Texas Cable News of Dallas and KHON-TV in Honolulu join 12 other broadcasters that have been sold on the significant time savings for newsroom operations that the Sony equipment provides.

The restructuring plan that SONY CORP. announced last spring has claimed a second casualty among the multinational's American operations. This past summer, the company announced that it was exiting the North American wireless phone handset market (see Japan-U.S. Business Report No. 359, August 1999, p. 11). Now, a SONY ELECTRONICS, INC. broadcasting equipment plant in Boca Raton, Florida is being closed in a cost-saving move. Sony had produced professional audio-visual equipment in Florida since 1982. Most recently, the Boca Raton factory made digital studio cameras for TV networks and commercial stations as well as editing equipment. Production of these products will be shifted to other Sony factories, primarily in the United Kingdom and Japan. The closure cost the jobs of 200 people.

An exchange rate of ¥108=$1.00 was used in this report.

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