Japanese Tech Stock Weekly Summary

The following is excerpted from IRG's weekly stock report:

Media, Entertainment and Gaming

• Sony Corp (SNE) revealed its plans to deploy a lighter version of its PlayStation 2 game console later this month, in a bid to boost sales of the device during the holiday season. The new model, which has a built-in AC adaptor, weighs 720 grams, down from a combined weight of 850 grams for the previous model and its external AC adaptor. Sony said the device will go on sale in Japan in November for 16,000 yen (US$140), which has remained unchanged from the price of the previous model. The timing for overseas launches has yet to be decided. Industry observers said that maintaining brisk demand for the PS2 is just as important for Sony as working on boosting the sales of its latest game machine, the PlayStation 3. For Sony, the PS2 remains important after having sold more than 120 million units around the world. Another factor that justifies this move of Sony is that for PS2, it has found ways to reduce manufacturing costs.

• NBC Universal Inc. (GE) and Jupiter Telecommunications Co., Ltd. announced that they have signed an agreement for NBC Universal to acquire Jupiter Telecommunications' subsidiary company JSBC2. With the acquisition, NBC will be able to launch Sci Fi Channel on J:COM. Under the agreement, NBC Universal will acquire 100 percent of the equity of Jupiter's subsidiary company JSBC2, which currently holds the broadcasting license for Reality TV on the SkyperfecTV platform in Japan. The deal is expected to close in April 2008. Jupiter is Japan's largest multiple system operator [MSO] and multiple channel operator [MCO]. J:COM provides cable television, high-speed Internet access, telephony, and mobile services to customers through 21 managed franchises.

Internet

• Softbank Corp. (SFBTF.PK) reported a 221.8 percent surge in its net profit in the six months to September of 46.5 million yen (US$405.4 million) from a year earlier. Softbank ascribed its growth mainly to its mobile telephone business. The company said its operating profit went up 49 percent to 167.7 billion yen (US$1.5 billion), on revenue of 1.3 trillion yen (US$11.7 billion), up 21.8 percent from a year earlier. Softbank also owns 39 percent of business-to-business web site Alibaba.com, whose shares surged on their debut on the Hong Kong stockmarket. The company also ascribed its growth to its earnings from broadband Internet services, as Softbank also owns 41 percent of Yahoo Japan, which posted a 20 percent growth in its operating profit in the fiscal second quarter from a year earlier due to the surge in its advertising business. Hardware

• Olympus Corp. announced that it will build a new factory in Vietnam next year to produce digital cameras, with the company targeting construction by late 2008. Company sources indicate that the investment will be about 5 billion yen (US$44 million). At the same time, Olympus spokesman denied media reports that the company has plans to consolidate its two factories in China into one and transfer operations to Vietnam. The company said the plans for an additional base in Vietnam are separate from the projects in China. Information Technology

• The Japanese unit of Microsoft (MSFT) and Sony Corp. announced their setting up of a consortium to study new applications of digital equipment including consumer electronics. The Windows Digital Lifestyle Consortium includes Toshiba Corp. (TOSBF.PK) and Yodobashi Camera Co. as well as 46 other IT-related companies. Telecommunications

• Nippon Telegraph & Telephone Corp. (NTT) reported a 33 percent decline in its group net profit in the fiscal first half ended September, 2007 to 195.1 billion yen (US$1.7 billion) from 291.5 billion yen (US$2.6 billion). NTT attributed the drop to increased marketing costs at its mobile telephone unit and depreciation of fixed-line facilities. To counter the surging costs and the decline in fixed-line income, NTT said it is planning to set up an advanced network based on its highspeed, fiber-optic Internet service. The company posted an 18 percent decline in its group operating profit to 563.9 billion yen (US$5 billion) from 691.5 billion yen (US$6.2 billion), with its revenue dropped 1.2 percent to 5.1 trillion yen (US$46 billion) from 5.2 trillion yen (US$47 billion). The company indicated that its income from its fixed-line telephone business continued to go down even as its broadband service and system integration operations registered strong performance. NTT said it has changed its fiscal year group revenue and net profit outlook to 10.6 trillion yen (US$95.7 billion) from 10.7 trillion yen (US$96.6 billion) and to 530 billion yen (US$4.7 billion) from 460 billion yen (US$4.1billion) respectively. The figures also included an estimated profit from returning a proxy portion of public pension fund assets.

Disclaimer: IRG is not responsible for the accuracy of the news compiled within this article, which is based on publicly available information.