December 2001 |
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Market
Snapshot - Japan
DSL Services
Each month the Japanalyzer takes you
inside one of Japan's IT industries- showing you who's who and where
the market is heading. This month we focus on DSL service which
has been experiencing phenomenal growth since initiated by Tokyo
Metallic in late 1999. DSL is an industry receiving wide publicity
in Japan due to its link with the recently announced e-Japan strategy-
a government proclamation to bring broadband to most Japanese households
over the coming years.
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Current Market
Size (9/30): 650,796 subscribers |
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Growth Rate: 27%
from 8/30, 22% from 7/31 |
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Market Predictions:
1 million subscribers by end of 2001, 5 million by 2005 |
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Cable Broadband
Subscribers (9/01): 1.5 million |
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ISDN Subscribers:
10 million |
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Dial-up Accounts:
19.23 million |
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Internet enabled
cell phone: 44.94 million |
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# of Households
in Japan: 44 million |
Key
Players:
Nippon
Telephone & Telegraph
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Location: Tokyo,
Japan |
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Website: http://www.ntt.co.jp/index_e.html
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Revenue: $92 billion
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President: Jun-ichiro
Miyazu |
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Market Share:
59% as of 9/30 |
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Comment: As Japan's national
telecommunication provider, NTT has the dominant position in
the market both as a wholesaler (it owns the copper lines to
the home) and retailer though it's subsidiary companies (NTT
East and West primarily). NTT's challenge is to manage it's
own portfolio of broadband services (Dial-up, ISDN, DSL, Fiber
to the home, 3G wireless) while fending off competition from
upstart providers. |
Yahoo
Japan
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Location: Tokyo,
Japan |
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Website: http://www.yahoo.co.jp |
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Revenue: $106
million |
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President: Masahiro
Inoue |
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Market Share:
approx. 20% as of 9/30 |
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Comment: Yahoo BB's ADSL subscriber
base has grown dramatically over recent months, outpacing all
competitors. Part of the boom is related to cut-rate pricing
of under $18.30 per month. Yahoo now generates 43.2 percent
of its revenues from ad sales and 43.2 percent from the ADSL
business. In order to break even, Yahoo Japan is said to need
1 million ADSL subscribers but has already signed that number
up but is waiting on installations. |
eAccess
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Location: Tokyo,
Japan |
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Website: http://www.eaccess.co.jp/en/index.html |
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Revenue: N/A |
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CEO: Sachio Semmoto |
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Market Share:
5-8% as of 9/30 |
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Comment: Founded
in 1999 by ex-telecom analyst Eric Gan and CEO Sachio Semmoto
the company has received $166 million from Goldman, Sachs &
Co., Morgan Stanley Dean Witter and others to date. The company
has strategic relationships in places with Microsoft, Korea
Teleocom, Japan Telecom and several major Japanese ISPs. The
company has been competing aggressively on both pricing and
depth of offerings- the company recently announced 8M ADSL service
starting from approx. $22/month. |
Trends:
 
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The DSL service
market is in the middle of a price war with startup providers
offering massive discounts in order to gain market share. Most
opinions are that this can't last and one company has already
succumbed- Tokyo Metallic recently sold out to Softbank for
roll-up into Yahoo. |
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The government's
e-Japan strategy announced earlier this year calls for the wiring
of 30 million homes for high-speed Internet access by 2005.
Most experts agree this is a stretch goal but NTT (still partly
owned by the government) is squarely behind the strategy. |
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DSL as a technology,
faces the strong competition from other technologies. In particular,
Fiber to the home (FTTH) is on the offering schedule for NTT
and as prices drop, may start to gain the bulk of new broadband
subscriptions |
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Foreign influence
on the Japanese DSL market may be most strong from Korea, which
has the highest per capita usage of DSL in the world. Korea
Telecom has thrown its hat in the ring through a relationship
with eAccess. |
Helpful Links:
@pan
Inc feature on broadband:
"Mission Impossible For Broadband Providers?"
www.japaninc.com/mag/comp/2001/06/
jun01_mission.html
DSL
Prime
Contains limited information on DSL in Japan
www.dslprime.com/
ISP
Planet
Information on worldwide DSL numbers including
Japan
www.isp-planet.com/research/rankings/
dsl_worldwide.html
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This
Month's Bridge Builder
Featuring
the real voice of IT across the Pacific
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December,
2001
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 Leading
the way in Silicon Valley
Mr. Toshiaki
Natsume,
President, Ryosho USA
Japan's trading companies can be considered
US-Japan bridges all unto themselves. Their major role in
developing Japan's postwar economy is widely respected and
they remain a powerful industry today. The best known of trading
companies has typically emerged from within Japanese manufacturing
as a tool for the distribution of products: the Mitsubishi
Group's Ryoden Trading is no exception. Starting as a domestic
distributor of Mitsubishi electronics, today's Ryoden Shoji
(aka:Ryosho) is now an international player in semiconductors
and advanced technologies. Two years ago, Ryosho USA established
an office in Silicon Valley with the intent of exploring new
US technologies for export to the Japanese market. This month's
interview focuses on the head of that effort, Mr. Toshiaki
Natsume- President of Ryosho USA.
Q. Mr. Natsume, tell us about
yourself and your career with Ryosho?
A. I'm a graduate of Keio University
where I majored in Industrial and Mechanical Engineering.
My first job out of Keio was a brief stint at Nippon Denso
where I focused on effective manufacturing based on Toyota's
method in the manufacturing controls division. After that,
I joined Ryosho where I have been since 1984. I have always
been in Sales and Business Development but during the 90's,
I focused exclusively on developing our domestic Japanese
business. I had the unique task of finding new customers,
partners and promotion related activities in addition to our
existing Mitsubishi relationships. I became interested in
this role because I always had to be aware that customers'
true satisfaction must not be limited to just Mitsubishi products,
but to new solutions that can contribute to rapid business
expansion in the future. When it was decided three years ago
that Ryosho would invest in a US semiconductor company called
Zilog (FAK:Caliber), I was picked to come to the US in order
to manage and protect the relationship with that company,
and further develop our business here.
Q. Please tell us about Ryosho-
its history and main services.
A. Ryosho was actually founded
in 1947 as two separate companies which later merged called
Riko Trading and Daiko Trading. Riko and Daiko were both focused
on electronics and electronic components- mostly of Mitsubishi
family products (both companies sprang from the Mitsubishi
Group). The name was changed in 1958 to Ryoden trading and
today has over1200 employees in Japan, the US, Singapore,
Hong Kong, and Korea. Our core business remains electronics
and semiconductors but now less that 50% of the products we
resell are from Mitsubishi. We are a public company but still
owned 30% by the Mitsubishi Group. Our import and export business
each generate over $100 million/year. In addition to working
with electronics and semiconductors, we also have divisions
for industrial products, graphics and data communications,
and control systems to name a few.
Q. What is the mission of Ryosho
USA and what are your responsibilities?
A. Our current purpose is to research
and develop new technologies from the US for distribution
to the Japanese market. I'm here to identify new solutions
and play an informational role to the company headquarters
in Tokyo. Accomplishing this mission has been even harder
than I was expecting, although some people, who had gone through
this and given up in the end, told me about such difficulty.
However, through all the experiences that I have had here
so far, I've just begun to see the light at the end of the
tunnel. As a matter of fact, next year we plan on being a
profit center, by engaging in reselling in the US market.
So my goal here is not only to make this office function,
but to develop and firmly stabilize it.
Q. You've been here a few years.
How do you like Silicon Valley? What do you find are the challenges
and good points?
A. I like it here and would like
to stay in this region until I can consolidate my perspectives
on the future. I'm not sure how long it's going to take, but
I will keep trying. I particularly enjoy and place a high
value on developing relationships with key people here and
not just for my company. The biggest challenge I have faced
is that our operation here is so new that I have to setup
everything we do here. I'm all by myself in a sense. However,
the nicest thing about doing business here is the open and
free business culture. People here are more direct and aggressive-
this leads to faster decisions and deal making, which I prefer.
Q. Final question: what kind of
new technologies are you looking for to bring to Japan and
why?
A. MPEG4- because it's the next
generation solution and very useful for mobile in Japan IEEE802.11-
because all networks are moving to wireless and Japan is similar
Biotech- because it's hot and my company has not really looked
at this yet Battery Technology- important because of its use
in mobile devices.
I am also interest in finding US companies such as ASPs and/or
ERPs for the information and communications division of Ryosho
but this is not that easy for trading companies to get involved
with as such. This is mostly due to the nature of such companies
preferring to deal directly with the customers. Again, the
significant role of a trading company is to leverage the relationship
of trust; and I believe that this is the ultimate foundation
of business.
Thank you Mr. Natsume. Mr. Toshiaki Natsume
can be reached via e-mail at natsume@ryosho.com
his company's website is http://www.ryoden.com
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 ,
Fiber Optics Expo
January 16-18, Tokyo Big
Sight (Tokyo International Exhibition Center)
Second annual event focusing on optical
communication devices & equipment. 633 companies exhibited last year and
attendance was almost 50,000.
IC
Packaging Technology Expo
January 16-18, 2002 at Tokyo
Big Sight (Tokyo International Exhibition Center), Tokyo
A variety of equipment, components and materials
for IC packaging technology. There are also four other technology related
events/exhibition will be held at the same place, such as Internepcon
Japan, Electrotest Japan, Electronics Components Expo, Printed Wiring
Boards Expo, and Fiber Optics Expo. The scale of this year's exhibition
is about three times bigger than the one last year.
Japan Storage Vision 2002
January
23, 2002 at the Tokyo Conference Center
IDC Japan's seminar on the future of Network
Storage and the Japanese market.
Electronic
Design and Solution Fair 2002
January 24-25, 2002 at
Pacifico Yokohama
This event sponsored in part by the Japan
Electronics and Information Technology Association(JEITA), introduces the
latest updates on IC design andsolutions. The event features a keynote
speech from the President of eAccess on the Broadband revolution.
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