Search results for: “galapagos”

  • Japan’s Galapagos Effect

    Japan’s Galapagos Effect

    How Japan can capture global value from its innovations – a talk by Gerhard Fasol

    Dr. Gerhard Fasol dissects the history behind Japan’s unique international market separation

    By Hugh Ashton

    Originally published both in the print and online editions of the ACCJ Journal (Journal of the American Chamber of Commerce in Japan) on January 15, 2011 in “Chamber Events” based on a talk given by Dr. Gerhard Fasol to the Members of the American Chamber of Commerce (ACCJ) on July 12, 2010, at the Westin Hotel, Tokyo.

    Background reading: Japan’s telecommunications industry landscape

    (c) 2011 Copyright by The American Chamber of Commerce in Japan (ACCJ).
    Reproduced with kind permission of ACCJ.

    Dr. Gerhard Fasol, the founder and CEO of Eurotechnology Japan KK, spoke to ACCJ members about Japan’s “Galapagos Effect” at the Westin Hotel in Tokyo. The “Galapagos Effect,” for those unfamiliar with the term, is used to describe Japan’s unique culture of technology that has not expanded beyond Japan’s borders, in the same way that the Galapagos Islands exemplify unique evolutionary developments in nature.

    Where Japan Leads

    Investment is a prime reason why such developments as Internet-related mobile communications are so advanced in Japan. As Fasol pointed out, Japan has seven times the number of 3G base stations as the United Kingdom. Many of the related technical developments in mobile handsets that are only just coming onto the market outside Japan have been standard for many years in this country—Fasol gave high-quality camera phones as an example.

    Quoting a Nokia spokesman, he claimed one reason for this leap was that Europe is conservative in regards to standards, which take a long time to develop and ratify in contrast to Japan. He amplified the Galapagos analogy by stating, “Japan is a Galapagos island, and doesn’t have to care about standards.”

    Fasol also claimed that Japan is 10 to 15 years ahead of other nations in its use of electronic money. He contrasted Europe’s fragmented and overly bureaucratic nature with Japan’s, where large decisions—such as
    i-Mode and Suica—can be made by a mere two or three people, which may come as a surprise to those who see Japan as a bureaucratic nightmare.

    The reverse side of the Galapagos effect, however, is that Japanese phones designed for the home market fail to find buyers outside Japan. Electronic money is another area where Japanese technology seems destined to remain within the borders of Japan, despite the fact it is now quite common and accounts for a relatively large proportion of currency in circulation at about two percent. Fasol claimed that the U.S. and Europe are not yet ready for the mass introduction of such a payment system like Japan. In the long term, he believes, non-Japanese global giants will probably win out over the Japanese innovators.

    Shedding Light on Genius

    Another area where Japan has led innovations in the commercialization of technology is the revolution in lighting, which is poised to offer new environmentally-friendly illumination options. Based on the invention of the blue LED by Shuji Nakamura, the new lighting systems are also wallet-friendly in that they offer a 6,000-fold advantage in terms of price for the same amount of light over kerosene-powered lighting, still a staple in many parts of the world.

    However, Nakamura was largely ignored by the Japanese business community; he is not even named on the website of the company that employed him (Nichia), and is now working at a university in California—Tokyo University claimed they wanted more “ordinary professors.” According to Fasol, the “Galapagos effect” means that there is no room or need for geniuses like Nakamura in Japan.

    Economy

    Up to 1995, Japan’s economy was growing, but is now static, a unique situation within the G8. Indeed, extrapolated from present trends, South Korea’s economy could overtake Japan’s in 2022.

    Japan has a huge electronics sector, from giants to smaller specialist makers with a $600 million market about the same as the Netherlands. However, the growth is almost zero compared with that of 10 years ago. The net income of the top 20 companies of the sector is actually less than that of a single U.S. company, GE or of Korean rival, Samsung. This has a disadvantageous effect on pension funds, who are the major shareholders of these companies, but the governance of Japanese corporate affairs by shareholders is much less than, say, in the U.S. Still, Japan enjoys a very large national market (unlike the UK, for example), which can help companies survive. On the other hand, this may have prevented companies from “going global” as their internal market has reached saturation. Fasol mentions rice cookers as an example of a consumer durable that is not purchased frequently, and accordingly has a relatively small and finite market footprint. Even so, every major electrical manufacturer designs and produces a range of rice cookers, with a very low profit margin of well under one percent, which may be part of the legacy of the zaibatsu (the large pre-war conglomerates). This legacy means that most present-day conglomerates feel the need to do everything—for instance, there are three global makers of trains, but ten in Japan.

    The Galapagos Study Group

    Fasol then went on to describe the 26-person interdisciplinary Galapagos Study Group—of which he was the only non-Japanese member—which met monthly for a year and concentrated on the mobile phone industry.

    The results of these meetings were summarized in three sets of recommendations to telecom carriers, electrical manufacturers, and content companies, with the second category receiving the recommendations that Fasol described as most radical.

    He surprised his listeners by saying, “I think it would be best for Japan if in five years or so there were no more Hitachi, or Fujitsu, or Toshiba.” This, of course, was not meant as a direct attack on these specific companies, but as an attack on their conglomerate nature. Instead of the current state, he suggested a move towards smaller companies, focused on profitable businesses, would be preferable and would restart growth.

    On the content side, Fasol claims that Japan is the only country in the world with the intellectual and creative resources to create characters that can stand up to Mickey Mouse and the Disney empire, but has not succeeded in creating global businesses based on Pikachu or Doraemon. Accordingly, the committee made a recommendation that platforms similar to Disney be created in order to create global businesses using such characters.

    Gerhard Fasol
    Gerhard Fasol
    Gerhard Fasol
    Gerhard Fasol

    Coming to Japan from the Outside

    On the subject of breaking into “the Galapagos market,” Fasol pointed out that good foreign companies can succeed in Japan if they know the market. As an example, he cites traffic lights, whose specifications in Japan are controlled by the police. Any company failing to recognize this kind of local quirk, no matter what its global standing, is doomed to failure when it comes to Japan. Examples of dramatic failures he cited were Nokia, Nasdaq, and Vodafone. To paraphrase the traditional real estate tag, Fasol claimed that the three biggest mistakes foreign companies coming to Japan make are “arrogance, arrogance and arrogance.” He claimed that this has nothing to do with Japan’s closed markets, quoting the iPhone’s success as an example.

    He pointed out that there are other reasons for the failure of foreign entrants. Apart from the failure to listen to customers and understand the market, reasons include partnership with the wrong joint venture partners, and the management of Japanese ventures by managers who fail to understand the country.

    However, the Japanese service lifestyle, allied with what he terms a “fashion society,” is a great opportunity for outsiders to break into the Galapagos market, and Fasol claimed that foreign companies can tap Japan’s creativity and use it to their advantage.

    He also claimed that the relative isolation of Japan from global standards and practices in some cases actually enriches the global experience. But at the same time this also introduces life-threatening issues for Japan and this isolation must be addressed through two-way dialog from inside and outside of Japan.

    (c) 2011 Copyright by The American Chamber of Commerce in Japan (ACCJ).
    Reproduced with kind permission of ACCJ.


    Gerhard Fasol’s lecture at Stanford University: “New opportunities vs old mistakes – foreign companies in Japan’s high-tech markets”

    Read more about Japan’s “Galapagos effect” here:

  • Japan Galapagos effect (Galapagos syndrome)

    Japan Galapagos effect (Galapagos syndrome)

    Japan Galapagos effect

    Autor: Gerhard Fasol

    Globalizing Japan

    On the Galapagos islands, Charles Darwin noticed a number of species which were extremely beautiful, had evolved on the Galapagos islands locally, and were not able to live anywhere else.

    Similarly, due to language, culture, comparatively small interchange between Japan’s markets and foreign markets, some technologies and some products evolved in Japan differently than in other markets.

    In part, Japan chose unique Japanese technology standards (e.g. PDC and PHS for mobile phones, 1-seg for mobile TV, FeliCa for RFID contactless and mobile payments) in the hope to achieve global adoption of these Japanese standards, and at the same time to make market penetration of Japan’s markets more difficult for foreign companies in these fields – thus giving an competitive advantage to Japanese companies in their home market Japan.

    Japan Galapagos effect: Telecom industry

    Japan’s telecommunications industry for a long time used wireless communication standards, and mobile data standards, and frequency bands quite different than those used in other parts of the world. This had several effects:

    • Foreign companies hoping to enter Japan’s market, had to invest and develop mobile phone and other equipment specifically for the Japanese market, which could not be marketed anywhere else. Thus competing Japanese mobile phone makers and base station makers had a (temporary) competitive advantage in their home market, Japan. However, because of Japan’s limited market size, this competitive advantage in their home market seduced these Japanese companies to neglect global business development. As R&D costs, and especially software development costs increased, lack of global scale made it more and more difficult for these companies to continue viable business.
    • Because of high investments, and the will of consumers to spend large amounts on mobile communications, and because of Japan’s innovative power and other factors, many mobile technologies and business models were invented in Japan, or came first to market in Japan. These include:
      • camera phones
      • mobile internet (i-Mode)
      • mobile payment
      • commercial 3G mobile broadband services
    • Japanese handset makers and mobile phone base station makers were until recently protected in Japan’s market, Japanese mobile phone operators preferentially purchased Japanese equipment. Japanese mobile phone handset makers and base station equipment makers were not able to compete in the much larger global market.
    • Necessary consolidation did not take place, so Japanese mobile phone handset makers and base station equipment makers did not scale globally.

    As a direct consequence of the Galapagos issues, NEC recently decided to exit the production of smartphones – NEC was the former No. 1 leader in Japan’s mobile phone market.

    Japan Galapagos effect: Galapagos phones (Galake, ガラケ)

    Japan introduced mobile internet in February 1999, much earlier than any other country. “Galapagos phones” (Galake, ガラケ) are mobile phones (“feature phones”) typically based on the legacy Symbian operating system, and including a very rich set of features:

    Galapagos-phones are losing market share against iOS/iPhone and Android smartphones, and we expect Galapagos-keitai (galake) to disappear from the market within a few years to be replaced by iOS, Android, and other smartphones.

    As a consequence of the Galapagos effect, NEC recently decided to exit the field of smartphones, and focus exclusively on “Galake” type feature phones.

    Japan Galapagos effect: Automotive industry

    Kei car, K-car, 軽自動車 (meaning “light automobile”) is an automotive class, which exists only in Japan. Kei-cars enjoy tax advantages, and Japanese automobile manufacturers are creating very innovative and attractive Kei-cars, however this class of automobile is only restricted to Japan at this time, and cannot achieve global scale at this time.

    Positive aspects: Japan Galapagos effect as an opportunity

    Mobile internet, electronic money, camera phones and many other advanced technologies were invented and/or first brought to market in Japan, earlier than in all other countries, because of the positive aspects of the Galapagos effect. Japanese companies could develop and bring these new products to market without being slowed down by global standards. Creativity can run free in Japan because of Japan’s Galapagos effect.

    Japan post-Galapagos effect working group

    The “Post-Galapagos working group” was organized by Takeshi Natsuno (one of the three developers and long-years manager of DoCoMo’s i-Mode mobile internet service) during the years 2008-2009.
    The Post-Galapagos working group consisted of about 15 Committee members (Gerhard Fasol was the only non-Japanese Post-Galapagos working group member), met once a month for about one year, and in mid-2009 prepared an released a set of reports with recommendations for

    • Japan’s telecom operators
    • Japan’s electronics manufacturers
    • Japan’s contents industries

    A Japanese article about the Post-Galapagos working group can be found here:
    超ガラパゴス研究会リポート:海外目線で見る、日本のケータイメーカーの弱点とは
    And an English language article here:
    ACCJ-Journal: The Galapagos Effect

    Japan Galapagos effect – References

    Gerhard Fasol slides at Stanford University: “New opportunities vs old mistakes – foreign companies in Japan’s high-tech markets”

    Copyright (c) 2013 Eurotechnology Japan KK All Rights Reserved

  • Galapagos effect: how can Japan capture global value from Japan’s technologies and new business models?

    Galapagos effect: how can Japan capture global value from Japan’s technologies and new business models?

    Japan develops fantastic technologies and new business models and often fails to capture global value

    by Gerhard Fasol

    Galapagos effect (Galapagos syndrome)

    On the Galapagos islands, Charles Darwin noticed a number of species which were extremely beautiful, had evolved on the Galapagos islands locally, and were not able to live anywhere else.

    Similarly, due to language, culture, comparatively small interchange between Japan’s markets and foreign markets, some technologies and some products evolved in Japan differently than in other markets.

    In part, Japan chose unique Japanese technology standards (e.g. PDC and PHS for mobile phones, 1-seg for mobile TV, FeliCa for RFID contactless and mobile payments) in the hope to achieve global adoption of these Japanese standards, and at the same time to make market penetration of Japan’s markets more difficult for foreign companies in these fields – thus giving an competitive advantage to Japanese companies in their home market Japan.

    Japan Galapagos effect exhibit: Telecom industry

    Japan’s telecommunications industry for a long time used wireless communication standards, and mobile data standards, and frequency bands quite different than those used in other parts of the world. This had several effects:

    • Foreign companies hoping to enter Japan’s market, had to invest and develop mobile phone and other equipment specifically for the Japanese market, which could not be marketed anywhere else. Thus competing Japanese mobile phone makers and base station makers had a (temporary) competitive advantage in their home market, Japan. However, because of Japan’s limited market size, this competitive advantage in their home market seduced these Japanese companies to neglect global business development. As R&D costs, and especially software development costs increased, lack of global scale made it more and more difficult for these companies to continue viable business.
    • Because of high investments, and the will of consumers to spend large amounts on mobile communications, and because of Japan’s innovative power and other factors, many mobile technologies and business models were invented in Japan, or came first to market in Japan. These include:
      • camera phones
      • mobile internet (i-Mode)
      • mobile payment
      • commercial 3G mobile broadband services
    • Japanese handset makers and mobile phone base station makers were until recently protected in Japan’s market, Japanese mobile phone operators preferentially purchased Japanese equipment. Japanese mobile phone handset makers and base station equipment makers were not able to compete in the much larger global market.
    • Necessary consolidation did not take place, so Japanese mobile phone handset makers and base station equipment makers did not scale globally.

    As a direct consequence of the Galapagos issues, NEC recently decided to exit the production of smartphones – NEC was the former No. 1 leader in Japan’s mobile phone market.

    Galapagos phones (Galake, ガラケ)

    Japan introduced mobile internet in February 1999, much earlier than any other country. “Galapagos phones” (Galake, ガラケ) are mobile phones (“feature phones”) typically based on the legacy Symbian operating system, and including a very rich set of features:

    Galapagos-phones are losing market share against iOS/iPhone and Android smartphones, and we expect Galapagos-keitai (galake) to disappear from the market within a few years to be replaced by iOS, Android, and other smartphones.

    As a consequence of the Galapagos effect, NEC recently decided to exit the field of smartphones, and focus exclusively on “Galake” type feature phones.

    Japan Galapagos effect exhibit: mobile payment

    Japan’s mobile operator NTT-Docomo introduced the world’s first fully commercial wallet phone on July 10, 2004, after several months of public testing with a limited number of handsets given to selected members of the public between December 2003 and June 2004, almost exactly 10 years before Apple Pay was introduced. However, Japan’s Galapagos effect – in combination with the domestic Japan focus of NTT Docomo, prevented NTT Docomo from building a global business based on the very successful mobile payments system “saifu-ketai”, which actually is much more than “just” a mobile payment platform (read in detail in our Mobile Payment Report, and in our Wallet-Phone Report).

    Japan Galapagos effect exhibit: Automotive industry

    Kei car, K-car, 軽自動車 (meaning “light automobile”) is an automotive class, which exists only in Japan. Kei-cars enjoy tax advantages, and Japanese automobile manufacturers are creating very innovative and attractive Kei-cars, however this class of automobile is only restricted to Japan at this time, and cannot achieve global scale at this time.

    Positive aspects: Galapagos effect as an opportunity

    Mobile internet, electronic money, camera phones and many other advanced technologies were invented and/or first brought to market in Japan, earlier than in all other countries, because of the positive aspects of the Galapagos effect. Japanese companies could develop and bring these new products to market without being slowed down by global standards. Creativity can run free in Japan because of Japan’s Galapagos effect.

    Post-Galapagos working group

    The “Post-Galapagos working group” was organized by Takeshi Natsuno (one of the three developers and long-years manager of DoCoMo’s i-Mode mobile internet service) during the years 2008-2009.
    The Post-Galapagos working group consisted of about 15 Committee members (Gerhard Fasol was the only non-Japanese Post-Galapagos working group member), met once a month for about one year, and in mid-2009 prepared an released a set of reports with recommendations for

    • Japan’s telecom operators
    • Japan’s electronics manufacturers
    • Japan’s contents industries

    A Japanese article about the Post-Galapagos working group can be found here:
    超ガラパゴス研究会リポート:海外目線で見る、日本のケータイメーカーの弱点とは
    And an English language article here:
    ACCJ-Journal: The Galapagos Effect

    Japan Galapagos effect: References

    Gerhard Fasol’s lecture at Stanford University: “New opportunities vs old mistakes – foreign companies in Japan’s high-tech markets”

    Contact us to start:

      Copyright 2013 Eurotechnology Japan KK All Rights Reserved

    • How to turn Galapagos into a competitive advantage in both directions

      How to turn Galapagos into a competitive advantage in both directions

      Positive and negative aspects of Japan’s Galapagos issues

      European Institute of Japanese Studies Academy Seminars presents

      • Speaker: Dr. Gerhard Fasol, President, Eurotechnology Japan K.K.
      • Wednesday, June 13, 2012, 18:30 – 21:00
      • Embassy of Sweden, Alfred Nobel Auditorium
      • Stockholm School of Economics, European Institute of Japanese Studies

      About the talk:

      In the last 20 years, several global revolutions were created in Japan, including the LED lighting revolution(1), mobile internet(2), electronic money(3). However, in each case Japan failed to capture much of the global value created by these revolutions. Dr. Fasol will talk about what is holding back Japan from capturing more global value from its unique creativity and how Western companies can do better in Japan, and avoid the most well-known traps

      About the speaker:

      For the last 15 years, Gerhard Fasol has worked with more than 100 investment fund managers in Japan, advising them on technology inflections, initiated and managed business development and assisted M&A projects. Dr. Fasol is currently working with several US and European companies in these areas, helping them onto successful paths in Japan. Dr. Fasol has been an Advisory Board member to the Chairman of JETRO and the only foreigner on Japan’s “Post Galapagos working group”.

      Gerhard has an extensive business and academic career, as manager of one of Hitachi’s R&D labs, University Lecturer in Physics at Cambridge University. He also served as Director of Studies at Trinity College Cambridge, Research Scientist at the Max-Planck-Institute for Solid State Science in Stuttgart, and invited Professor at the Ecole Normale Superieure in Paris, was one of the first working on spin-electronics and magnetic memories in Japan, and has won a Sakigake research program from Japan’s Science and Technology Agency while faculty member in Electrical Engineering at the University of Tokyo. Gerhard graduated with a PhD in Solid State physics from Cambridge University and Trinity College, Cambridge, UK.

      Gerhard Fasol lecture at Stanford University: “New opportunities vs old mistakes – foreign companies in Japan’s high-tech markets”

      Copyright (c) 2013 Eurotechnology Japan KK All Rights Reserved

    • Japan’s Galapagos effect on market caps

      Japan’s Galapagos effect on market caps

      Japan’s electronics giants market caps are remarkably low

      General Electric’s market cap is about 13 times higher that of Hitachi

      Some of Japan’s electrical corporations have remarkably low market capitalizations: General Electric has 1.6 x more sales than Hitachi, but has 13.3 x the market capitalization. Philips has 1/3 x Hitachi’s sales, but has 2.2 times higher market cap.

      Low market values do not help big recent public share offerings:
      Hitachi raising YEN 250.7 Billion (US$ 2.8 Billion),
      Toshiba raising YEN 298.7 Billion (US$ 3.3 Billion), and
      NEC raising YEN 115.5 Billion (US$ 1.3 Billion).

      Low valuations increase the pressure for change in Japan’s electrical sector, and the SANYO-Panasonic merger is an indication of changes to come.

      In the “post-Galapagos committee” we are working with some of Japan’s brightest leaders on understanding the reasons and on how to drive this change.

      Benchmarking Japan’s electrical companies – Philips= 1/3 x Hitachi’s sales and 2.2 x Hitachi’s market cap:

      GE= 1.6 x Hitachi’s sales and 13.3 x Hitachi’s market cap

      More in our report on Japan’s electrical industries.

      Japan electronics industries – mono zukuri

      Copyright (c) 2013 Eurotechnology Japan KK All Rights Reserved

    • Post-Galapagos Japan? – globalizing Japan’s fantastic technologies…

      Post-Galapagos Japan? – globalizing Japan’s fantastic technologies…

      Japan Galapagos effect: “Why do Japanese companies make so beautiful mobile phones with fantastic functions, and have almost no global market share?”

      I asked this question back in 2003 to NTT-DoCoMo’s CEO Dr. Tachikawa (see my article “Leadership questions of the week” in Wallstreet Journal of June 12, 2006, page 31), and offered several proposals to Dr. Tachikawa, of which he accepted one.

      A related question is: “why can Samsung, LG and Apple beat Japan’s initially far more advanced mobile phone makers, and why have Japan’s phone makers taken no effective action to build global business in order to avoid extinction?”

      Now six years after my initial presentation to DoCoMo’s CEO, I have been invited as the only non-Japanese to work on Japan’s “Post-Galapagos Committee”. For most of this year our small group of industry CEOs, academics, government officials and other leaders have been working on understanding the reasons for Japan’s “Galapagos effect” and how to overcome it.

      Read about this work here in the New York Times, about my (Japanese language) presentation to the committee on the IT-Media website here (in Japanese)

      The “Galapagos effect” has not been created by a single factor. Instead a collection of choices by the management teams of Japan’s electrical conglomerates have prevented leverage of their domestic success stories into global success stories. These choices can be overcome. In our “Post-Galapagos committee” we have worked all-year on how to overcome these choices.

      Unfortunately the “Galapagos effect” is only one symptom of the crisis of Japan’s electrical giants: most have shown little or no growth in sales over the last 10 years, while at the same time margins tend to be small or negative. Over the same period, General Electric has increased sales by a factor of about three, while at the same time earning healthy margins.

      Overcoming this crisis will create many opportunities. If at least some of the conclusions of our “Post Galapagos Committee” can be realized, then our committee’s hard and totally voluntary work during most of this year and many late nights will not be wasted.

      For an analysis of Japan’s electrical industry sector see our

      Copyright (c) 2013 Eurotechnology Japan KK All Rights Reserved

    • Mobile internet coming of age: i-Mode’s 18th birthday

      Mobile internet coming of age: i-Mode’s 18th birthday

      The global mobile internet was born today 18 years ago, on February 22, 1999

      by Gerhard Fasol

      NTT Docomo announced the start of i-Mode on February 22, 1999 at a press conference in Tokyo

      Today, 18 years ago, on February 22, 1999, Mari Matsunaga, Takeshi Natsuno, and Keiichi Enoki announced the start of the world’s first successful mobile internet service to a small number of people who made it to NTT Docomo’s press conference in Tokyo.

      For many years, Japan was the global hotspot for mobile internet, mobile broadband, fixed net broadband (FTTH), there is a very long list of inventions, innovation, new services and products which were successfully brought to market in Japan, and in some cases it took 10 years or longer for these same services to succeed elsewhere in the world.

      Examples of services and products which saw their invention, or first successful global mass market introduction in Japan include:

      Inventing the mobile internet vs capturing global value

      Undoubtedly the biggest success story emerging from Japan’s pioneering mobile internet days is SoftBank

      After Vodafone acquired a controlling stake in Japan Telecom, it took Vodafone at least one year to realize that instead of a far east backwater waiting for Vodafone, Japan’s mobile market was actually years ahead of Europe at that time. By the time Vodafone realized that instead of sailing into an easy market, they had actually entered the world’s most ferociously competitive market, it was too late, Vodafone sold its Japan operations to SoftBank, which turned out the failing Vodafone-Japan within a few months of intense efforts. SoftBank’s acquisition of Vodafone-Japan and the successful turn-round became the basis for SoftBank to implement Masayoshi Son’s plan to create one of the world’s most important companies.

      Other Japanese success stories resulting from pioneering the mobile internet

      Japan has created one of the most vibrant smart phone games eco-system, with a large number of smart phone game companies growing, many listed on the Tokyo Stock Exchange.

      Beyond games, Japan has created a vibrant sector of internet and mobile ventures, founded in the wave of Japan’s mobile internet and FTTH broadband adoption. However, because of Japan’s well known Galapagos syndrome, few have made it into global success stories yet. However, its not too late.

      eMoji made it into MoMa, and the iPhone.

      QR codes are all over China, however not monetized by Denso Wave, the Toyota family company which invented QR codes for automotive parts management.

      Read up on Japan’s mobile and telecom sector

      Copyright (c) 2017 Eurotechnology Japan KK All Rights Reserved

    • Pokemon Go – everybody loves Pikachu…

      Pokemon Go – everybody loves Pikachu…

      Pokemon Go is great – but will it bring another Nintendo boom as in 2009? or even exceed 2009?

      Google spin-out Niantic Labs’ augmented reality smartphone game booms to the top of charts

      Niantic Labs is specialized on augmented reality games. In a previous game, Ingress, players selected about 15 million memorable locations globally. Niantic picked about 5 million of these crowd source generated locations, placed characters out of 740 Pokémon characters at such Pokéstops. Using smartphones, GPS, cameras and their avatars, players hunt Pokémon characters placed at Pokéstops, bring them to arenas/gyms and let their Pokémon characters fight for arenas/gyms. Thats just the beginning, and we can imagine many ways to expand this basic game structure, for example Pokéstops and Gyms sponsored by stores or corporations.

      Overcoming Galapagos

      Pokémon Go’s success is also significant, because the fundamentally Japanese Nintendo and The Pokémon Company are overcoming the Japan-Only Galapagos Syndrome by cooperating with Google and San Francisco based Google spin-out Niantic.

      At the same time, Pokémon Go is also an indication of the power Nintendo can achieve in the smart phone sector. Will Nintendo dethrone current smart phone game kings Mixi and Gung-Ho in Japan?

      Everybody loves Pikachu… No. 25 of currently 740 Pokémon characters

      For the open day at my older son’s high school, kids made posters introducing their country: the highest mountain, the most characteristic flower, and the most famous person.

      One Japanese student writes: “The Prime Minister is the most famous person in Japan, because he decides everything”.

      Another Japanese student writes: “Pikachu is Japan’s most famous person, because everybody loves Pikachu”. Which of the two Japanese students knows more about his own country?

      Pikachu is No. 25 of currently 740 Pokémon characters, and represents electricity with his zig-zag lightening bolt tail, and bright yellow color.

      Pokémon character developer The Pokémon Company estimates the global market for Pokémon characters to be US$ 48 billion.

      Nintendo market cap increases from US$ 20.3 billion to US$ 31.5 billion from 6 to 13 July, 2016

      Nintendo shares rise from ¥14,055 in the morning of July 6, 2016 to ¥21,830 at close on July 13, 2016

      Nintendo market cap rises from ¥ 2.56 trillion (US$ 20.3 billion) in the morning of July 6, 2016 to ¥ 3.09 trillion (US$ 31.5 billion) at close on July 13, 2016

      Nintendo boomed around 2009 by disrupting the game world with motion sensing Wii and two-screen handheld DS game consoles. Smartphone disruption reduced Nintendo to pre-2006 size in sales, and profits did not yet recover to pre-boom levels.

      Nintendo revenues peaked in 2009, and are now back to where they were before 2006
      Nintendo revenues peaked in 2009, and are now back to where they were before 2006
      Nintendo income peaked in 2009, and just recently recovered from losses - has not yet reached pre-2006 levels
      Nintendo income peaked in 2009, and just recently recovered from losses – has not yet reached pre-2006 levels

      Unexpected consequences- The Bank of Kyoto booms, and Bank of Kyoto’s 4.5% holding in Nintendo is worth more than 1/2 of Bank of Kyotos market cap

      The Bank of Kyoto owns 4.5% of Nintendo, at close on July 13, 2016, this holding is worth YEN 139 billion (US$ 1.4 billion).

      The Bank of Kyoto (TSE Code 8369) at the close on July 13, 2016 has a market cap of YEN 274 billion (US$ 2.64 biliion)

      Thus Bank of Kyoto’s holding in Nintendo corresponds to more than one half of its value. This also means that Nintendo is worth about 10 times as much as the Bank of Kyoto.

      The Pokémon Company – global market size estimate for Pokémon characters estimate: US$ 48 billion

      The Pokémon Company manages and develops the currently 740 Pokémon characters.

      The Pokémon Company is a private company owned in equal 1/3 parts by Nintendo KK, KK Game Freek and KK Creatures. KK Game Freek and KK Creatures are both privately held game development companies

      More details and analysis in our Report on Japan’s game markets and makers.

      Niantic Labs

      Niantic Labs, focused on augmented reality games, is a Google spin-out founded in 2010, headed by John Hanke, one of the founders of Keyhole, which is at the basis of Google Earth.

      Niantic Labs had staged initial funding of US$ 90 million equally from Google (1/3), Nintendo (1/3) and The Pokémon Company (1/3), and since then an additional Series A round in February 2016, plus we assume that Founder John Hanke, maybe Google at spin-out, other founders likely also own equity. So its not clear to us how much exactly Nintendo owns of Niantec, either directly or via its holding in the Pokémon Company.

      There was a augmented reality company in Japan, Tonchi-Dot 頓智ドット株式会社(トンチドット) which created a augmented reality app called Sekai-Camera during i-Mode and Galake-Phones, but it ended all services on January 22nd, 2014.

      Japan game market disruption market report:

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    • Sir Stephen Gomersall: Globalization and the art of tea

      Sir Stephen Gomersall: Globalization and the art of tea

      by Hitachi Chief Executive for Europe and subsequently Hitachi Board Director (2004-2014)

      Sir Stephen Gomersall: Princess Chichibu Memorial Lecture to the Japan British Society at Ueno Gakuen, Tokyo, 5 March 2015

      Sir Stephen Gomersall: It is a great honour to be giving this lecture this evening.

      HIH Princess Chichibu was a charming and broad-minded Patron of this Society and of the many charities to which she devoted her later life. I remember her as a frequent visitor to the Embassy in the 70s, in her dusky blue or apple green kimonos, and occasionally turning up to watch when a British University Rugby team came to Japan.

      She also personified the affinity between Japan and the United Kingdom which has its origin in our historical ties and in the nature of our peoples. I felt this throughout my years of living in Japan, and my job as Ambassador was made incomparably easier by the goodwill and respect of many segments of Japanese Government and society towards Britain. But we can’t assume that things will always continue in the same way: images can lag behind reality, and relationships have to be nurtured and given concrete meaning.

      Our friendship, differences and challenges

      So I’ve chosen to talk about why two countries which are so geographically remote and different from each other have a strong affinity and interest in developing our cooperation; and some of the joint challenges we face, and the contrast in the way our two countries have adapted to the huge changes of the last decades.

      Three changes

      The biggest change to affect the whole world over this period is what is loosely called globalisation.

      Globalisation can be defined as the results, in economic, social and cultural terms, of the mobility of capital, production and people in a free global economy, and of the consequent international division of labour.

      This has coincided with a second and more destabilising set of changes in the global structure of power, and the weakening, if you like, of any over-arching system, legal or military, of world governance. This began with the dissolution of the Soviet Union, has continued with the shift from the old G7 to the newer G20, the rise of China in particular, and consequent changes in the position of the United States. New threats of terrorism originating in failed states, and in Japan’s case, the threat from North Korea, are part of this troubling mix.

      One can add a third change – the internet, digital and media revolutions – which to the positive have empowered people outside government, helped development in poor countries and created massive consumer convenience; have made political protest easier, as in Egypt and Ukraine; but on the negative have opened new possibilities for cyber warfare and terrorist recruitment, and arguably in the West at least, accentuated the short-termism and sensationalism of contemporary politics.

      So I would like to talk, not from an academic standpoint, but from my experience about how I perceive Japan and the UK have been impacted and coped with these in our foreign policy, politics, economy and industry.

      The Tea Ceremony as metaphor

      But let me first explain how the Art of Tea came into the title.

      A very small act of globalisation took place when my friend and fellow Embassy language-student, Robert Cooper and I decided that the study of Tea might be a good route to immersion in a part of Japanese culture and presented ourselves for induction to the Master of the Tea Ceremony at Tokeiji in Kamakura. This is a very famous temple, and its lightly constructed, almost translucent tea house had a special and very tiny door, hardly the size of a dog kennel, through which new initiates had to prostrate themselves on first entry. This had not been built for gaijin, but Robert, who went first in his jeans, an American shirt and dazzling white tennis socks which he thought sufficiently close to tabi, and I crawled through it into the presence of a shocked but stoical Sensei within.

      This wizened figure, with a loosely wrapped kimono and upright hair, then intoned to us in courteous but almost impenetrable Japanese some of the history of the Temple, the relationship between Tea and Zen, the necessity of subordination of self, and the rewards which might be ours through striving for perfection in the art of making tea and the service of others. Thereafter we attended almost every week for a year, and slowly learned to be less clumsy in the complex handling of cloths and utensils and better to master the numbing effects of sitting for four hours on our ankles.

      After some months, what had been a pain yielded to appreciation of the surroundings, the shadows of leaves on the sunlit walls of the teahouse, and even the beautiful kimono of the younger female class members who usually started the afternoon round. Our teacher was the Sensei’s daughter, a wan lady who kept a steely eye on our sequence of movements, and admonished us and the other students kindly if our foot strayed onto the border of the tatami or our fukusa slipped out of our trouser belts. Thus a whole afternoon could pass in eight rounds of tea, and hardly a word would be said beyond the ritual appreciation of the received cup. By contrast, the mizuba, with its utilitarian sink and stone floor where the cups were washed would be a hive of chatter among the arriving and departing housewives or men students arriving after Saturday work. And when it was all over, we would walk with painful knees down the temple steps to re-join the noise and fumes of the motorcars and the ding dong of the railway crossing by Enkakuji, heading for the bar.

      We were constantly encouraged to improve our Art, and always made welcome. We got used to the silence, and began to appreciate that mastering of the physical act of making tea could be a gateway to a sense of harmony, appreciation of nature and the seasons, and communion with a group of people united in performing this simple act of service as beautifully and selflessly as possible.

      Being drawn into this world was genuinely precious and even cleansing, and in my mind became a metaphor for many aspects of Japanese life and organisation which are built on a preference for the group, harmony, equality, service, perfection and self-discipline.

      But at the end there was always a real world outside.

      Now of course I don’t suggest for a moment that traditional Japanese art and culture seeks only to create or perpetuate a perfect illusion, but there is a sense in which the British tradition has been to venture out and throw oneself wide open for better or for worse, while the Japanese is more comfortable with consensus, even silence, its own familiar peer groups and known relationships. Japan makes internal pacts and compromises, which for the purposes of this lecture go under the guise of the Art of Tea.

      Foreign Policy and standing in the world.

      Britain and Japan have very different philosophical traditions, part of which originates from the 250 years during which Britain went through maritime Empire and industrial revolution, while Japan remained cloistered under the Bakufu. Post-war Britain has remained confident of its place at the international top table, its close relationship with the United States, and its continuing network of international connections. Apart from a moment of hubris in the Suez invasion, it has justified or demonstrated this through its active role in the UN Security council, the retention of its nuclear deterrent and military participation, at a higher level at any rate than our other European allies, in international actions in Iraq and Afghanistan.

      Japan too has been at its strongest when it has been open and looking outward. The isolation of the Bakufu was ultimately self-defeating, while Japan surged forward after the importation of Chinese scholarship in the eighth century, and became a successful modern state after the Meiji revolution. The post-war Constitution enabled Japan to re-establish itself internationally, and enjoy a period of high growth through access to foreign technology, domestic capital and world markets. It is distressing sometimes to hear the Constitution described as “anti-Japanese”.

      Today’s Japan has established itself as a country with a peaceful foreign policy, an economic power house making an important contribution to international economic cooperation; opinion polls show Japan internationally much admired except in China and Korea. Japan has significant soft power based on its culture.

      The baseline for the modern UK-Japan relationship can be set in the eighties and nineties, when Japan was the pre-eminent nation in Asia, and the UK still the leading pro-American voice in the EU. During this time a core UK-Japan agenda was developed, based on the very similar views of what kind of world we wanted to see after the collapse of the Soviet Union.

      The elements of this agenda are built around free trade, the rule of law, peaceful conflict resolution and support for the United Nations. The UK and Japan were co-architects of the Kyoto Protocol on Climate Change in 1997. Britain enjoyed support at the UN from Japan on action on Iraq and Libya; the UK supported Japan’s first deployments of self-defence forces to the Gulf and Afghanistan.

      This political relationship continued during the Blair-Koizumi period, predicated on strong support for our mutual ally, the United States.

      Relations with the United States

      The United States is a huge friend and guarantor for both Japan and Europe, but cannot be expected to defend us if we don’t defend ourselves. Noticeably it was the United States which flew sorties in the East China Sea not long ago after a particular Chinese threat to the Senkakus, just as it was the United States which did the same when the Russians recently made menacing noises towards the Baltic States. But with a Congress no longer so clearly internationalist or prepared to step into every security breach and rightly demanding more burden-sharing from its allies, Japan and Europe need to have the capabilities, and relationship with America, to fulfil our side of the bargain.

      What I have described is, and should be, the base state of a UK-Japan relationship founded on cooperation between two closely aligned countries. As global number three and number six economies we each have an important voice – if we can use it effectively – and this in turn depends upon our economy, defence, and international friendships and alliances.

      But since 2008, a number of clouds have passed across the European and Japanese skies. One is disillusionment with the consequences of the invasion of Iraq and the troubles in the Middle East; another big one the global financial crisis of 2008, which had huge consequences in the EU; and a third the rise, part opportunity, part threat, of China, together with heightened tension in East Asia as a whole. Viewed from Japan, an increased UK/European focus on China came at exactly the point that Japan-China relations began to deteriorate. These are among the factors which have caused both sides to become more preoccupied with issues close to home. Perhaps changes in the Japanese Government didn’t help either, but they are reasons why both sides may have questioned whether the relationship was really as important to the other as we traditionally maintained. The outstanding UK response, public and private, to the Great Tohoku Earthquake was a big affirmative, but even so these questions remain in the air.

      Two nations in retreat?

      Compared with our past, some people will ask whether in fact we are now looking at two nations in retreat.

      The reaction in Britain to UK deployments to Iraq and Afghanistan, at the popular level, has been quite deep. Although both missions were partially achieved and people were very proud of our troops, these nonetheless exposed the difficulty for our relatively lightly armed forces in dealing with unorthodox warfare. Increasing resources had to be committed with diminishing political returns. Since the end of the Cold War, successions of defence reviews have eaten away at the numbers of personnel and front-line units in our forces. And our spending – though better than most Europeans, is perilously close to the minimum 2% of GNP level expected by NATO.

      A second is the dominance of domestic issues in politics, and sudden concern about the future of Britain as a United Kingdom. We are now facing a general election. The battle-ground is likely to be the economy, where the two large parties – Conservative and Labour – in reality have not a lot dividing them on economic philosophy, and not a lot of room in any case for manoeuvre in trying to reduce the national deficit, but still appeal to the electorate daily in terms of what benefits they can deliver to their traditional followers – what Labour refers to as “ordinary people”, and the English middle class and better-off voters for the Conservatives. New promises over the health service, welfare provisions, taxation, university tuition and the like burst daily on the airwaves and then fizzle. This is a rather narrow-band form of politics over how to divide resources within the society to the benefit of one group or another, with very little search for consensus on these difficult issues. Since party membership has fallen dramatically, it is not certain how much core loyalty exists to these parties within the electorate. In the meanwhile an anti-European, anti-immigration party has been taking support from both major parties; and the Scottish National Party, after losing the referendum on independence by 55-45%, has bounced back and will certainly press for further separation should it hold influence in Westminster after 7 May.

      This is not good news for anyone.

      One plausible factor behind this fragmentation of current British politics is that globalisation has created different categories of winners and losers from those familiar in the traditional class divide, and that devolution has actually broken the Westminster system of politics. Regional disparities, particularly between London, the North and Scotland, are now accentuated by rhetorical politics. Another element is that across the country there are groups of people, mainly white, older or unemployed, with lower skills or shrunken pensions who feel threatened by immigration and the cutting back of the welfare state. Concepts of community and identity have become confused. While the Mayor of London can revel in the vigour of London’s “melting pot” society, in other regions the disparity of wealth and opportunity can create an anti-metropolitan, anti-traditional party backlash, resulting in a large increase in disaffected or floating voters.

      The third is the UK’s relationship with Europe, and here again there is a parallel with Japan.

      The founding purpose of the EU was to achieve peace in Europe after the Second World War through economic integration. It achieved this spectacularly well between France and Germany, together with rising living standards for the poorer agricultural regions of Europe. The same logic applied in the eighties and nineties, when enlargement was extended to Greece, Spain and Portugal who made the transition from dictatorship to democracies. Mrs Thatcher recognized this and argued not only that the Single Market should be accelerated, but that Europe should act together in international affairs whenever it could achieve more by speaking with a single voice in the world. She vehemently opposed the idea of one government for Europe, but in reality the major countries have never wanted that, and the threat disappeared when the EU was enlarged to 26 countries in 2004. Game set and match to Britain, you would have thought.

      However, instead of celebrating the victory of Mrs Thatcher’s vision of Europe as a voluntary Union of sovereign member states, parts of the media and Conservative party have continued to brand the European Union as a conspiracy to take British money, to over-regulate our life, and limit the UK’s national sovereignty, and this drip, drip, drip of anti-EU argument from within his own party led Mr Cameron to open the Pandora’s Box of a referendum on our continuing membership in the next parliament, if he is re-elected.

      The current bone of contention with the EU is on the impact of the free movement of people, a basic principle of the Union, which is blamed for excessive immigration, even though the UK economy has desperately needed foreign labour to function. The Government says it needs “reforms” to recommend a yes vote, but is not yet specifying what those reforms need to be.

      We know what Japan thinks about this, because it has openly said that Japanese investment in UK is for the EU.

      And the Americans have equally said they hope the UK will remain a strong voice in Europe.

      Former Prime Minister John Major has argued, most cogently from the Tory side, that if outside the EU, the UK would be “much diminished” internationally, and would still have to conform to EU regulations while having no part in deciding them.

      That is why I am not so pessimistic about the eventual result, but it is an issue we could do without when the Middle East is in tatters and the Russians are in the Ukraine.

      Japan’s position in Asia

      This invites comparisons with Japan’s position in Asia.

      The rise of China gives China a weight very like that of Germany within the EU, in terms of regional balance, but unlike the EU, there is no regional framework to moderate tensions between Japan, China and Korea or build a collective Asian Economic Community.

      A recent Gaimusho briefing I attended on Japan’s security environment gave great detail on the number of China’s incursions around the Senkaku Islands and unilateral moves in the South China Sea; but was designed to show Japan as the sinned-against party, and Japan’s self-restraint, with no discussion of possibilities for improving relations.

      Maintaining balance with China requires patience and steel. Economically Japan cannot re-surpass China, nor can it take the support of South East Asian countries for granted should it come to a stand-off.

      Given the speed of increase in China’s defence spending, a posture of increased preparedness on Japan’s part, and ability to cooperate more with allies, is certainly justified.

      Even without constitutional change, Japan’s defence doctrine is evolving fast with regard to collective self-defence and military exports, though not the percentage of defence spending in the budget. The UK would I’m sure support Japan’s becoming a “normal” military power, but the manner in which it is done will have a considerable effect on the acceptance of regional countries and allies alike. If based upon deterrence and proportionate response to potential threats, it will be well understood. However Japan does suffer in the view of its allies whenever things are said and done politically which look like poking the adversary in the eye.

      The counterpart of deterrence has to be engagement, and building structures for the long term which will moderate trilateral relations for the better. The economic interdependence between Japan and China is already such that both countries fortunately have a strong interest in keeping tensions within bounds, and this can be further built on. A Kohl/Mitterrand moment, when the two leaders held hands in a French war cemetery, looks a long way off in Asia, but Mr Abe is a strong leader and, though I know it is a much dismissed view here, there are useful lessons to be learned from the political achievements of the European Union. Benefits must also come from encouraging young people to travel between Japan, China and Korea.

      Though I’ve discussed China, I haven’t found much so far to say about TEA!

      The concern most frequently voiced among Japanese friends is lack of interest of young people in foreign study or travel, and the very poor level of attainment in languages among Japanese businessmen, politicians and academics, leading to Japan being discounted in international gatherings, and leaving the floor open to competitors, China particularly, to exploit.

      We are here in a university with high standards in international communication, so I won’t stir that particular pot, but revert to the issue later in the context of business.

      To summarize the story so far, I do think voters respond positively to politicians who have a long-term strategy for strengthening their nation and can articulate to their people where they want their country to stand in the world and what needs to be done.

      Mrs Thatcher’s appeal to many beyond her own party was that she was prepared to confront the reasons for the UK’s economic decline and do something about it. And two very important points underlying her policies were pretty immutable truths of international affairs – the first being that a nation’s influence is in direct proportion to the strength of its economy; and the second, that in a world where threats can come from unexpected quarters, nations need to secure their own defences, through adequate armed forces and strong alliances.

      Though we are geographically distant, it is very important that the UK recognize its interest in East Asian Security, and Japan continue to play its part in Europe. There would be no better way of symbolizing that than the early conclusion of the EU-Japan Free Trade Agreement.

      Economy and Industry

      Let us turn now to the economy. Here we see rather greater contrast.

      Benefits of Globalisation for Britain

      Britain has benefited hugely from globalisation. As I see it, Japan has been slower to adapt but has strength in depth.

      As you know, Britain went through a severe economic decline in the 1950s to 70s when our largely nationalised heavy industries, and many of the people who worked in them, were cut back as a result of global competition, from Japan among others. The Thatcher government finally brought labour market reforms, privatisation of public assets, and encouragement of foreign investment into manufacturing. The liberalisation of financial markets established London as a global centre for financial and other services. Manufacturing has declined in volume, but improved in quality, and the UK remains a world centre for research and innovation in universities.

      This structure continues to form the backbone of the UK economy, with the state sector – government, education, health and public services, accounting for 43 percent of GDP. The relative flexibility of our economy, and the ability of the pound to float against other currencies, account for our outperformance of other Eurozone economies in the last two years, though that is not to say that there are not considerable weaknesses as well, as I will come to.

      I remember being chided by Japanese commentators for the “Wimbledonisation” of the UK economy – acting as host to foreign players but having very few national champions. And I remember a huge joy when for a while Japanese Sumo was dominated by Mongolian and Baltic wrestlers. However, whether you call it Wimbledonisation or having an open economy, it accords with British traditions and basically works for the UK.

      It has continued apace, with the government welcoming Chinese investment in UK infrastructure, Tata buying our steel and automotive companies, Japan investing in UK energy, etc. It is open house.

      And of course we have the advantage of English being the international language of business, the south side of Hyde Park being the recreational space for thousands of French families.

      From an economic standpoint, our two major challenges are still the public finances and education/skills.

      Japan and globalisation

      Japan by contrast has been harder hit, arguably because it has protected its domestic market more.

      In the manufacturing sector, Japan has huge assets at home – very high levels of engineering, a disciplined workforce, and is a global leader in quality. But it now has if anything too much hard productive capacity relative to the size of the domestic market. Twenty five years ago, protectionism in the US or Europe was a reason for Japanese companies to transfer production overseas, but now the reason is demographic contraction and the extreme difficulty of making substantial margins at home. In our own company, though everything has been done to avoid loss of domestic jobs, the ratio of workers in Japan to locals overseas within our workforce has fallen from two-thirds to nearer half.

      Twenty years ago, it was already evident that Japanese companies trading abroad, and therefore exposed to global competition, could be extremely flexible even in the face of the yen moving from 100 to 70 to the dollar. On the other hand, domestic sectors – retail, banking, insurance companies – with only other Japanese firms as competition, were very slow to consolidate and restructure, and as a result suffered in some cases slow deaths by overcrowding and indebtedness.

      In high tech one found not Wimbledon but Galapagos – whereby mobile phone companies for example took their domestic market to very high levels of specification, making it difficult for new entrants from outside to come in, but sacrificed the opportunity to determine the global standards being set in the international market, ceding the leadership in the process to the US and Korea.

      Even now, Japan’s percentage of Foreign Direct Investment to GNP is the lowest for any OECD country, and with most markets matured and fully supplied by domestic incumbents, it is hard to see that changing.

      The common thread behind many of these stratagems has been to avoid disruption to the Japanese market through having foreign competition within, and to maintain employment – in other words the policies of the TEA HOUSE. And yet these have not staunched the hollowing out and increasing disparity of wealth in rural Japan compared with the metropolis. What is far more likely to stimulate new domestic growth is more competition from new players, market reform to liberate new forms of industry – for example in high-volume agriculture – and population growth.

      If the aim is to increase domestic demand, “where is the third arrow?” is still the key question. So far, it seems, quantitative easing has produced a short term benefit for large corporations in stock values and profits from overseas earnings, but these have not yet trickled through to wages and domestic consumption – and could be another example of a policy which produces contrary results by shrinking from reform.

      Immigration is a hot topic

      Given the UK’s shortage of skills, and Japan’s shortage of young people, it’s not surprising that Immigration is a hot potato for both countries.

      Britain has always had open doors to immigration for economic reasons. During our post-war recovery, we accepted migrants from our former colonies to do low-grade jobs.

      This was brought home to me when I acted as a part-time census officer in 1971, and discovered that a single road of terraced houses in inner London was neatly segregated between old white widows, with their cats and milk-bottles, the Mediterranean Italian and Greek migrants, never there to accept the census form because they were presumably out partying, Indian and Pakistani families fearful of the authorities and barely prepared to respond from behind a chained door, the old Caribbeans from Jamaica and Trinidad, unable to write the form themselves, but proud and welcoming to their tidy homes, and other black working class households, only scraping it together economically, and often working all hours.

      Since then the Asian communities have spread to many Midlands and Northern cities and become middle class. They have high aspirations for the education of their children, who look like Asians but behave like their British peers. These communities are now becoming represented in local government, teaching, broadcasting, Parliament and even the Cabinet. They are increasingly the backbone of our medical services.

      Because of the turmoil in the Middle East, there is a portion within the Muslim communities, which is prone to radicalisation by fundamentalist Imams or jihadi social media – and a constant worry to our security services.

      Since the 1980s the Government has severely curtailed further immigration from non-EU countries, so that these communities are now to all intents and purposes indigenous and there is no way or intention to repatriate them.

      A second source of immigration has been the European Union. Freedom of movement is a basic principle, under which many Brits have gone to work or retire in Europe, and many Europeans, primarily from Poland and Eastern Europe, have come to work in the UK. They come under a legal right, but in significant numbers. Net migration into the UK was 298,000 last year.

      A third group are refugees from conflicts in Africa and the Middle East – Somalis, Kurds and North Africans, entering illegally from other parts of the EU. This is a humanitarian issue for the EU, with the burden falling much more heavily on France and Italy.

      It is the inability to limit the second category of able-bodied and work-hungry immigrants from EU countries which arouses the most controversy, especially in the run-up to an election. Go into any British hotel or restaurant, and you will find Spanish or East European receptionists, waiters and cleaners. Look for a builder fix your house, and a Pole will probably be more reliable.

      This shows a key weakness of the British economy, which is a shortage of skills, and also gives rise to complaints among the unskilled population that “foreigners are taking their jobs”. The right-wing UKIP party then lay this all at the door of the EU, claim that migrants are defrauding the social security system, and that our country, saved by our Forefathers from German invasion during the Blitz etc., is is now being taken away from us. Fortunately this is a war of words, rather than on the street, but still a powerful message to some older voters.

      In reality EU residents in the UK, of whom there are 1.4 million, pay much more in taxes on their income than they consume in social benefits. And it is inconceivable that the health service could function, or all the public construction projects planned in the next decade be completed, without a heavy involvement of foreign labour. The government is seeking to provide more welfare to work and apprenticeship opportunities to young British people. But the danger is in the effect this could have in the short term if we are faced with an EU referendum.

      Japan’s situation is completely different, but still has to confront the reality that Japan will inevitably decline unless it can find an answer to its ageing and shrinking population. It is hard to envisage permanent immigration from Asia to Japan of the sort Britain accepted two generations ago, even though the British example on assimilation is quite encouraging. It is equally implausible that artificial intelligence – robots that substitute for human workers – will be able to build roads, sewers, or power stations in the future. Emotion will have to give way to pragmatism. And more work permits for qualified foreign workers will have to be introduced to support industries like construction and transport and increased foreign tourism. When this happens on a significant scale, international marriages are bound to occur, and issues of nationality of husbands and children arise.

      I came across such pragmatism ten years ago in Akita when a number of EU Ambassadors were invited by the Governor to give a seminar on attracting foreign investment into the Prefecture. In the evening he offered a splendid reception with three entertainments; first the local lads demonstrating the Kanto-matsuri with lanterns on poles; second a Japanese lady of advanced years performing an elegant geisha dance, and third a cacophonous bunch of Filipina wives of local farmers performing a bamboo dance.

      So this topic is a slight deviation from the Anglo-Japanese theme but is critical to the future of both countries, and one that touches companies like mine who need to become more globalised.

      Globalisation poses tough challenges for Japanese companies, but is the only way forward.

      Now let me turn to the experience of my own company.

      Hitachi, with its characters for the “rising sun” and its resonant creed of “Harmony, Sincerity and Pioneering Spirit” has often been taken as a proxy for Japan itself, and its production did indeed exceed 1% of Japanese GNP thirty years ago.

      Today it is very good example of a company having to make a profound transition in order to grow within the global economy.

      Hitachi started out as late as 1910 as a motor-winding outfit for the mining industry in Tohoku, but quickly advanced into power generation, electrical control and traction equipment. These elite divisions were the breadwinners and training grounds for generations of Presidents. The company creed was monozukuri – perfection in manufacturing – and ochibo hiroi – wasting nothing and learning from experience. Hitachi also prided itself on its research capability, clustered in leafy campuses on the Ibaragi hillsides. So large was the company in the area, that when the Tohoku Earthquake hit in 2011, it suffered structural damage to 2000 buildings.

      When I joined I was impressed by the Hitachi’s serious ethos, and by the dedication to quality of product. I am a proud employee and would always risk my shirt on the company’s ability to deliver a product. I did however notice that the grand men who ran the company back then seemed very out of touch with the international world, that the organisation was very hierarchical, that a company of 380,000 people worldwide behaved as if it were a universe in itself, and for all its technological excellence, it produced rather modest profits.

      This great company was not just a tea pot, it was a TEA PLANTATION! I say this to emphasize how far things have come since then.

      Much has been written about the contrast between Japanese and UK companies, most notably Ronald Dore’s book “British Factory, Japanese Factory” of 1970 contrasting Hitachi and GEC, and a much more recent book by Inagaki and Whitaker in 2005 called “The New Community Firm” . This also charts the rise and decline of Hitachi as a classic Japanese “community company”, with very little diversity, but in which loyalty was repaid by security. By the late ‘90’s the need to globalise to survive was already being internally articulated, but the authors found that the policies touted to achieve that were implemented with lip-service only. Comparing Hitachi with its American equivalent GE, then under Jack Welch, it concluded that a company dedicated to looking after its core community of Japanese permanent employees would really struggle to introduce the degree of performance management and profit-oriented decision-making of a western enterprise.

      This was the company I joined in 2004 as the first foreigner made responsible for proposing and implementing an overseas regional strategy. This job has given me many excitements, and a ringside seat in understanding the roots of the company and the huge changes and sacrifices which it has had to make to get to today’s position.

      For example, at that time we were making televisions. Rather than have other people assemble them locally to our design, using components taken from the market, our management had invested huge sums in a modern factory in Miyazaki, employing thousands. One by one the shining models came out, each supposedly a winner, but never at a price at which we could make a profit in the European market. The simple fact was that there was global over-supply, and though we could make supremely good products, others could do so for half the price or less.

      This story was repeated in semiconductors, displays and hard disk drives, leading in 2008 to losses at a level never seen by any Japanese company, and was the origin not only of a decision to exit these commodity sectors, but also to bring in a new management which reset the company’s strategy to the provision not of products but of solutions, not in the consumer, but in the global social infrastructure market.

      Slowly this is paying off, but again it requires a shift in organisation and management which challenges every tea-drinking tenet of the so-called community firm.

      To explain what I mean,

      1. In value creation, the key is no longer production, but innovation: this requires individualism, and the breaking of internal silos. It needs teamwork and people with a combination of disciplines, rather than those who have perfected a single one. Monozukuri still matters, but is no longer a winning ingredient.
      2. Japanese companies are very technology rich; but to take that technology overseas in the form of infrastructure projects requires a whole new range of skills which do not exist within a traditional manufacture and export organisation. Local political knowledge, commercial, project finance and management capability, and usually a local engineering base for customisation of technology; and the development of local supply chains to match global or local prices.
      3. It requires the whole factory-led power structure to be turned inside out, and authority shifted to the front line, where the customer is. This is a complete break with the tradition whereby power resided with the factory side in Japan, to one where more commercial people outside Japan should become the key decision-takers. Sales units which previously handled foreign markets from Japan become redundant. It also means that the system of promoting domestic engineers over a lifetime into the leadership of the big business units will also evolve, marking a huge shift in career expectations.
      4. In total, a gene pool heavily weighted to engineering needs to become multifaceted, and above all, international. This means changing the system whereby operations overseas are managed by expats on two or three year tours; it means promoting non-Japanese into leadership positions; it means measuring performance objectively, and promoting people with leadership potential much earlier in their careers; and recruiting young people with different backgrounds and skills. Implementing such change takes a long time.
      5. One of my annual duties was to lecture the new intake of 800 young Japanese for 30 minutes on what it is to be “global”. My message was simply to travel, absorb, and think for yourself. “Talk to them in English” the Chairman said – “it will be good for them”. Well I tried, but since language was never among the entry criteria, the result was a predictable blank wall. Reverting to Japanese, I then joined the other executives for a walkabout among the new recruits at the drinks which concluded the induction ceremony. I pitched in to a group of young men, who shied away from me as if I had the ebola virus. I persisted in English for a while, but finally said to them in Japanese, “oh well then, what business group are you due to join?” “Ah, we, we’re the baseball group!” came the reply. The community firm lived on. More encouragingly I found two young girls who seemed more anxious to engage me in conversation. Not realising their nationality to begin with I engaged them in Japanese, whereupon they explained that they were foreign graduates, one Korean and one Chinese, from technical universities in the Kansai. “Goma-san”, they said, still in perfect Japanese, and looking around the room of 800 future colleagues. “What should we do to survive in a company like this?” I thought this question was a sign of great promise, and advised them to win respect as professionals, and voice their own opinions, firmly and politely.
      6. Diversity is a weak point in many organisations, not only in Japan, but often proves in practice to be liberating for all concerned. The most enjoyable team I ever worked in was the UK Mission in New York in the 1990s where over half of our front line negotiators and the entire legal team were women. It is part, but only part of creating a healthy atmosphere of camaraderie and internal competition within a team. Unfortunately the role of many good women in the company is still to make TEA.
      7. Governance is another vital topic, in the light of the Olympus and other similar failures. Part of the greatness of the Chairman who rescued the company from its disaster of 2008 was to bring diversity into the Board of Directors. I was quickly followed by three other non-Japanese Board members, two Americans and one Singaporean, all eminent in their fields. The Japanese Directors too were business men and women of deep experience. Simultaneous interpretation was provided, but it soon happened that conversation would flow spontaneously into English as well. More than that, with the introduction of foreigners who thought it was their duty to speak their opinions in Board meetings, the Japanese members also perked up and became much more interested in debate. It was a huge leap forward. By any international standards, the Board was a model. But my conclusion was that it is not the composition of the Board, but its degree of oversight and influence which is the real issue. The key shift is to move from a situation where the Board simply gives legal authority to decisions already made by the Executive, to one where the Board also debates strategy and can examine the management of the company.
      8. In other words, governance should be not TEA, but SPARKLING WATER.

      Huge contribution of Japanese companies to the UK economy.

      Japanese companies have made a huge contribution to the UK economy and to the Government’s aim, still only half achieved, of rebalancing the economy towards manufacturing. It is estimated that they provide 140,000 jobs, and most notably the surplus in automotive exports that the UK now enjoys is in large measure due to Japanese (and now significantly Indian) investment.

      Hitachi’s two largest overseas projects are coincidentally in the UK, and both very visible and vital from the point of view of renewing the country’s rail and power infrastructure. There isn’t time to go into detail, but in September we will open a factory in North East England to build the next generation of intercity and commuter trains; and the second is to plan and hopefully build a privately owned and operated nuclear power plant based on our latest Japanese operating design.

      As a Brit of course, I’m very proud that the company is prepared to commit such huge investment to the British market. But from a company point of view, what is most encouraging are that these are transformational projects in the company’s journey towards becoming globally competitive.

      In the rail case, the decision has been taken to put the global headquarters of the rail business in the UK. Even Japan now comes under this organisation. And that is the consequence of the exceptional foreign leader brought into the business twelve years ago.

      In the nuclear case, it was a courageous decision to take a business which after the Fukushima earthquake had suffered a sudden domestic collapse, and re-orient it towards the global market. It is anything but simple, but a hugely motivating challenge.

      Conclusions

      On Japan-UK relations

      On the UK-Japan relationship, I believe there is a huge reservoir of good will, common interest and complimentary talent. To sustain it we should focus not on sentiment but on what we can do together to address today’s issues – trade, conflict prevention, international development, anti-terrorism, and including now collaboration in defence preparedness.

      With Japan there is a bond of trust, magnified by the contribution Japan continues to make to the UK economy and its support on international issues. This, and our common values, should be reflected in a special quality of political relationship and cooperation. Frequent dialogue and mutual openness, even in addressing our problems, is hugely valuable.

      We must commit to burden-sharing with the United States through having sufficient readiness to look after ourselves in the first instance.

      As far as Britain in Europe and Japan in Asia are concerned, retreat into isolation is an illusion and a dead end. We need to make these relationships work, and business should lead both countries to sensible policies.

      More generally on world affairs.

      With regard to globalisation and management

      Putting the inner community first is a very natural and admirable human instinct, but as a principle of politics or business organisation it does not work.

      Because we live in a globalised and competitive world, we have to be strong and efficient. More good and strength comes through openness and letting talent rise and lead.

      There are many ways of binding an organisation together. The greatest is shared pride in success. Community, charity and compassion is precious but belongs at level of local and personal life.

      Good politicians and business leaders are those who allow creativity and diversity to flourish, but can also articulate a sense of direction and what is right and wrong.

      Finally

      Because of my background I have spoken with the perspectives and beliefs of someone who wants to see Japan and the UK play a role in shaping the world, and companies like my own be Japanese but international at the same time, realising their full potential value in the global market place. I accept that that is not everyone’s view. It is possible to argue that living standards in Japan are good and creativity abundant in many areas; and that somehow, even without disruptive change, Japan can keep its head down and will find ways of dealing with the issues we have talked about. As you gather, my response would be that it is very difficult for companies in particular to maintain a static state in a competitive world – you are either a competitor or not, though you can change from one to the other; and the same goes, as we saw after the Thatcher reforms, for nations too.

      But it is also a slightly regretful belief, for as I love this country and its attachment to personal loyalty and all the things we enjoyed in that first tea experience, I understand why many, perhaps in this audience, might take that view.

      Stephen Gomersall, Tokyo, March 2015

      (Stephen Gomersall was British Ambassador to Japan from 1999-2004, and Hitachi’s Chief Executive for Europe and subsequently Board Director from 2004-2014. He is now Adviser to the CEO, Hitachi Ltd.)

      Copyright (c) 2015 Sir Stephen Gomersall and Eurotechnology Japan KK All Rights Reserved

      Stephen Gomersall was British Ambassador to Japan from 1999-2004, and Hitachi’s Chief Executive for Europe and subsequently Board Director from 2004-2014. He is now Adviser to the CEO, Hitachi Ltd.
      Stephen Gomersall was British Ambassador to Japan from 1999-2004, and Hitachi’s Chief Executive for Europe and subsequently Board Director from 2004-2014. He is now Adviser to the CEO, Hitachi Ltd.

      Report on “Japan electronics industries”

      https://www.eurotechnology.com/store/j_electric/

    • Japanese acquisitions in Europe total € 6 billion in 2015

      Japanese acquisitions in Europe total € 6 billion in 2015

      Overcoming Japan’s “Galapagos syndrome”

      Globalizing Japan’s high-tech industries

      At the Bank of Kyoto’s New Year celebration meeting, Japan’s stagnation and need for globalization were center of discussion – despite focus on globalization, the present author was more or less the only non-Japanese invited and attending(!).

      The Chairman of Japan’s Industry Federation KEIDANREN, Mr Sakakibara (Chairman of Toray (東レ株式会社)), deplored that Japan’s economy is the only major industrial country not growing, and emphasized the need to overcome Japan’s well known Galapagos syndrome.

      In an effort to overcome lack of growth in Japan, Japanese companies over the last years have been extremely active acquiring European technology companies – actually our company advised several Japanese companies’ M&A teams on European acquisition strategies and opportunities.

      Japanese companies are particularly active acquiring European technology companies – this year alone, the EU-Japan investment registry shows Japanese acquisitions in Europe totaling € 6 billion – far more than European acquisitions in Japan this year.

      Japanese acquisitions 2015 in Europe include:

      Post-merger know-how and execution are key

      It is well-known that EU <-> Japan post-merger management requires substantial management know-how. While such management known-how has been built up between US-Japan over many years, EU-Japan investments had only a shorter time to develop, and in many cases companies are not willing to invest sufficiently in such know-how. As a consequence the majority of EU <-> Japan investments has failed unfortunately – poster-children are the failures of Vodafone’s acquisitions in Japan and the failures of Docomo’s investments in EU, and there are many more examples.

      To overcome these problems, several recent Japanese investments are substantial investments but short of 100% where local European management is kept in place – following the Renault-Nissan success story. Indeed, Carlos Ghosn has emphasized that the Renault-Nissan investment would probably have failed, had it been a 100% take-over.

      Copyright 2015 Eurotechnology Japan KK All Rights Reserved·

    • i-Mode was launched February 22, 1999 in Tokyo – birth of mobile internet

      i-Mode was launched February 22, 1999 in Tokyo – birth of mobile internet

      The mobile internet was born 16 years ago in Japan

      Galapagos-Syndrome: NTT Docomo failed to capture global value

      On February 22, 1999, the mobile internet was born when Mari Matsunaga, Takeshi Natsuno and Keiichi Enoki launched Docomo’s i-Mode to a handful of people who had made the effort to the Press Conference introducing Docomo’s new i-Mode service. KDDI soon followed with EZweb, and J-Phone with Jsky (J-Phone was acquired by Vodafone, which was unable to manage J-Phone, Vodafone then sold the company to SoftBank).

      i-Mode’s popularity soon exceeded any expectation: Docomo for some periods had to limit new subscriptions.

      With Steve Jobs’ love for Japan, and Apple’s intense supplier relationships with Japan, its not farfetched to see connections between i-Mode and iPhone, in particular the i-Mode ecosystem and Java-based i-Appli’s are forerunners of today’s apps and apps-ecosystems.

      At that time there was no Wikipedia, and Docomo had no English-language website at all, so our company Eurotechnology Japan KK’s information was more or less the only English language information openly available about i-Mode. We were bombarded by requests from many major semiconductor firms, telecom operators, investment banks, students and world-famous business schools for our i-Mode report and related business development and strategic work.

      Learn about Japan’s telecom markets: read the 65th edition of our report.

      Today 5 of the global top-10 top-grossing Apps are Japanese

      While Docomo never managed to capture global value from inventing and first introducing the mobile internet, the No. 1 top-grossing company globally, and five of the top-10 globally top-grossing Apps for iOS and Google-Play combined are Japanese (source: App-Annie).

      Japan’s app market is the world’s largest in terms of cash revenues

      Its also no coincidence that in terms of cash value, Japan’s is the world’s largest app-market for iOS and Google-Play combined, bigger than the US market and the Chinese market in terms of cash value. (source: App-Annie).

      App-Annie’s data to our knowledge only cover the iOS and Google-Play app-stores, not the i-Mode and other mobile internet businesses, so Japan’s actual mobile app economy is even larger than App-Annie data show.

      Which are the top-grossing apps in Japan?

      i-Mode is still alive and kicking – and a big business for Docomo

      i-Mode is still today the mobile internet system for Docomo’s traditional flip-phones which are still an important part of the market, and recently made headlines since sales for traditional flip-phones were rising, while smartphone sales were (temporarly?) dropping.

      i-Mode (and EZweb for KDDI, and Yahoo-mobile for SoftBank) will still be important business for some time to come in Japan.

      Copyright (c) 2015 Eurotechnology Japan KK All Rights Reserved

    • Japan in 2015 – analysis

      Japan in 2015 – analysis

      Thoughts and analysis for 2015

      Abenomics?!

      The trick of course is the third arrow, the reforms. Read what Professor Takeo Hoshi has to say about Abenomics, Japanese economist, who has worked his way up US Universities, and has now reached the position of Professor of Economics at Stanford University. By the way, here is my talk at Stanford University – some years ago, but much of it still applies today.

      Japan’s energy

      Japanese people’s views on nuclear power are polarized, and its unclear and unpredictable when nuclear power stations will be switched on again in Japan. Read what the Governor of Niigata Prefecture has to say, who hosts the world’s largest nuclear power plant with 7 reactors and 8 GigaWatt capacity.

      According to the Japanese Energy Fundamental Law, the Government has to publish an official Energy Basic Plan at regular intervals. You can read the 4th Energy Basic Plan published on April 11, 2014, and listen to a commentary on it for The Economist here on YouTube. The 4th Energy Basic Plan starts with the assumption that Japan is poor in natural energy resources, which of course is only true if we restrict “natural energy resources” to fossil resources. Japan is actually potentially very very rich in renewable energy sources, as the scenario plans developed by Japan’s Industry and Economy Ministry (METI) and Japan’s Environmental Ministry show.

      Solid state lighting saves energy

      GaN LEDs were invented and commercialized in Japan, and Shuji Nakamura, Isamu Akasaki and Hiroshi Amano won the 2014 Nobel Prize in Physics for this work. Read the summary of Shuji Nakamura’s keynote at the 5th Ludwig Boltzmann Forum.

      Post-Galapagos and globalization of Japan’s technology groups

      To overcome Japan’s Galapagos issues and to acquire technologies and market access, Japanese companies are acquiring overseas: read a list of Japanese acquisitions in Europe here.

      Foreign companies in Japan, and Japanese companies overseas face a dilemma: expensive expatriates with limited local know-how, or local management? Japanese companies seem to have finally reached the conclusion that Japanese managers eg sent to Germany are in most cases not the best choice to lead a German-based multinational company – here are some great recent examples:

      • Docomo acquires a majority stake in net mobile AG, however net mobile AG remains a publicly listed company. Read details here.
      • NTT DATA acquires SAP solution provider itelligence AG, however itelligence AG remains an independently managed company under the founder’s management, and grows aggressively via acquisitions all over the globe. Read details here.
      • NTT Communications acquires a majority of Integralis, Integralis is renamed NTT Com Security AG, however NTT Com Security AG remains traded on the m:access market of the Munich Stock Exchange. Read details here.

      Carlos Ghosn is very well aware of such multi-cultural management issues and how to solve them, however too many EU companies in Japan are not. If they were, EU investments in Japan could be at least 50% higheras you can read here.

      Best wishes, and much success in 2015!

      Copyright 2015 Eurotechnology Japan KK All Rights Reserved

    • Apple Pay vs Japan’s Osaifu-keitai – the precursor to Apple Pay

      Apple Pay vs Japan’s Osaifu-keitai – the precursor to Apple Pay

      What can we learn from 10+ years of mobile payments in Japan?

      Apple Pay vs Japan’s Osaifu-Keitai: watch the interview on CNBC

      https://www.cnbc.com/video/2014/09/16/why-apple-pay-isnt-as-revolutionary-as-it-seems.html?play=1

      Mobile payments Japan, e-money and mobile credit (200 pages, pdf file)

      Japan’s Osaifu keitai mobile payments started on July 10, 2004, after public testing during December 2003 – June 2004

      Two different types of Docomo‘s “Osaifu-Keitai“, manufactured by Panasonic and by SONY, were publicly tested by 5000 customers between December 2003 – June 2004. Docomo’s Oseifu keitai mobile payment system builds on SUICA NFC stored fare cards, which JR-East brought to market in Tokyo on November 18, 2001, after long years of development and public testing, where the author of this newsletter was one of the testers.

      Apple-Pay was developed building on almost 15 years of NFC payments in high volumes in Japan

      Therefore, those who wish to make predictions about how the Apple-Pay market is likely to develop can use the experience gained during 15 years in Japan.

      There are also some open questions, which will probably be answered after we can all check out Apple-Pay after September 19, 2014. One point which is very important is the speed of transactions – especially in transport applications such as the London or Tokyo Subways – read about this in the next section of this newsletter below.

      Read more below, and in our reports on mobile payments and electronic money in Japan:

      The speed of NFC mobile payments – and why does it take 10 years to reinvent the wheel?
      and: what is the speed of Apple-Pay transactions?
      faster than 100 milliSeconds? or 500+ milliSeconds?

      On July 17, 2012 The Wallstreet Journal reported, that as far as Transport for London is concerned, there is no viable mobile payment solution available at this time, because to the knowledge of Transport for London at that time, mobile payment transactions take longer than 500 milli-seconds, which is too slow for Transport for London requirements (e.g at Picadilly station during the rush hour).

      Interestingly, in Japan “mobile SUICA” payments have been used in Tokyo successfully since January 28, 2006 at the world’s busiest railway stations including Shinjuku and Shibuya – arguably more busy than Piccadilly Circus in rush hour, with transaction speeds faster than 100 milli-seconds – according to The Wallstreet Journal, London Transport did not even know about this.

      Read in more detail about this issue in our blog here: “Mobile payments: 10 years to reinvent the wheel?

      Therefore one obvious question we have about Apple-Pay is whether the speed of Apple-Pay transactions is in the 500+ milli-second range – unacceptable for Transport for London, or faster than 100 milli-seconds – as is Tokyo’s state of the art since January 28, 2006…
      I guess we will soon learn the answer to this question.

      Why is it that Japan does not capture the global value which Apple and Apple-Developers will create and capture now?

      Japan developed mobile payments, e-cash, credit cards in mobile phones and at least as much functionality as Apple-Pay and an open API and a mobile payment and e-cash developer ecosystem over the last 10-15 years.

      Why does Japan leave all the global value on the table for Apple and Apple developers?

      Actually, I personally had discussions over the last 15 years will all major players in Japan’s mobile payment and e-cash field, crowned by 1-1 discussions with Docomo’s CEO at that time – Dr. Tachikawa – I wrote about one of these meetings in The Wallstreet Journal, of course without mentioning the details: “Wallstreet Journal leadership question of the week – Japanese leadership“.

      Essentially my conclusion at that time, and today is, that Japanese companies never showed any interest at all in developing global business to capture the global value of mobile payments, e-cash and the related businesses. Japanese companies did not even try, and were not even interested in discussing the globalization of mobile payment and e-cash technologies and business models.

      You can read about Japan’s Galapagos issues here:

      All opportunities are not lost of course for Japanese companies in the mobile payments and e-cash fields, but most if not all of Japan’s early-mover advantage has evaporated with Apple-Pay.

      In business, sometimes the second or third mover can be commercially more successful than the first mover, and it will be very very hard even for a united Japan Inc to stand up to Apple.

      Apple Pay vs Japan’s Osaifu-Keitai: watch the interview on CNBC

      Mobile payments Japan, e-money and mobile credit (200 pages, pdf file):

      Mobile payment Japan, e-money and mobile credit report

      Copyright (c) 2014-2019 Eurotechnology Japan KK All Rights Reserved

    • Nokia No. 1 in Japan! – Panasonic to sell mobile phone base station division to Nokia

      Nokia No. 1 in Japan! – Panasonic to sell mobile phone base station division to Nokia

      Nokia strengthens No. 1 market position in Japan’s mobile phone base station market!

      Japan’s mobile phone base station market

      Japan’s mobile phone base station market is about US$ 2.6 billion/year and for European companies Ericsson and Nokia the most important market globally, although certainly also the most difficult one.

      Nokia is No. 1 with a 26% market share, and Panasonic is No. 5 with 9% market share.

      European investments in Japan

      Nokia acquiring Panasonic’s network division is one of many investments and acquisitions in Japan by European companies. For more details, see the EU-Japan M&A register.

      Panasonic to focus on core business, Nokia to expand market share in Japan

      Panasonic, after years of weak financial performance, is focusing on core business. Nikkei reports that Panasonic is planning to sell the base station division, Panasonic System Networks, to Nokia.

      Succeeding in Japan at the second try, learning from initial failure:

      We see a pattern here: after failing spectacularly trying to build a mobile phone business in Japan for almost 20 years without success, Nokia is now winning the second time round.

      It can be hard for foreign companies to build a business in Japan, and many fail. Interestingly, there is a long list of famous companies that succeed on their second attempt after initial failure, this list includes:

      • IKEA: failed first time in 1974, succeeds now
      • DAIMLER: failed spectacularly first time with Mitsubishi Motors, now successful with Mitsubishi Fuso trucks – read the time line here
      • NOKIA: failed first time after trying for 20 years (1989-2008) to sell mobile phones in Japan, now successful with mobile phone base stations and network infrastructure

      Read a detailed timeline in The EU-Japan Investment Register.

      Nokia expands No. 1 position in Japan

      Our analysis of Japan’s mobile phone base station market shows, that Nokia became No. 1 in Japan’s base station market with the acquisition of Motorola’s base station division. Acquisition of Panasonic System Networks will expand Nokia’s NSN to expand market leadership in Japan’s mobile phone base station market.

      I believe without success in Japan’s mobile phone base station market, there is a big chance Nokia as a company, or at least Nokia’s NSN division would not exist any more at all today.

      With a market share of 26%, approx. US$ 700 annual sales in Japan, Nokia is No. 1 market leader in Japan followed by Ericsson on 2nd position. With the acquisition of Panasonic’s base station division, Nokia should be able to expand its market share beyond 26%+9% = 35% and expand its leadership, especially via Panasonic’s deep relationship with Docomo.

      Because Docomo with its very deep pockets, is traditionally the first globally to develop and bring to market the most advanced radio technologies, a deeper relationship with Docomo will also help Nokia to develop and bring to market new communication and radio technologies. Thus I believe the impact on Nokia will be far more than an increase of the market share in Japan from 26% to 35%.

      Panasonic System Networks

      Panasonic System Network’s market share is estimated at around 9% of Japan’s mobile phone base station market, while international sales are essentially non-existent. Thus Panasonic System Network’s global market share is negligible, giving Panasonic little possibility for the scale necessary to operate a stable profitable longterm base station business.

      Japan’s mobile phone handset makers and base station makers have for many years focused on serving Japan’s internal market only, and in particular have focused on Japan’s No. 1 mobile phone operators NTT Docomo. This gave Japan’s mobile phone base station makers a temporary home advantage, however with the value shift from hardware to software, they lack scale, and are subsequently uncompetitive globally. More about Japan’s Galapagos effect here.

      Over the last 15 years since 1998, Panasonic has shown no growth in revenues, and average net losses of YEN 85 billion (US$ 0.85 billion) per year, as typical for most of Japan’s top 8 electronics companies and as we analyze in detail in our report on Japan’s Electronics Industries.

      Panasonic is on 5th rank with about 9% market share in Japan’s mobile phone base station markets, and has little chance and not the capital to scale its base station and mobile phone businesses globally. For Panasonic in it’s current very limited financial situation, focus on core business areas is very prudent.

      The context: EU investments in Japan

      While Japanese investments in Europe are booming, recently European investments in Japan have been stagnating after Vodafone’s withdrawal from Japan, and there are very few new European investments in Japan. Could it be that Nokia’s investment in Japan starts a new trend of renewed European investments in Japan?

      Understand Japan’s telecommunications markets

      Report on Japan’s telecommunications industry
      (approx. 270 pages, pdf file)

      Copyright (c) 2014-2019 Eurotechnology Japan KK All Rights Reserved

    • Steve Jobs and SONY: why do Steven Jobs and SONY reach opposite answers to the same question: what to do with history?

      Steve Jobs and SONY: why do Steven Jobs and SONY reach opposite answers to the same question: what to do with history?

      Steve Jobs and SONY: why 180 degrees opposite decisions?

      Steve Jobs donates history to Stanford University in order to focus on the future

      Steve Jobs and SONY – when Steve Jobs when returned to Apple in 1996, and now SONY are faced with the same question: what to do about corporate archives and the corporate history museum? Interestingly Steve Jobs, and SONY reach exactly 180 degrees opposite answers to the same question:

      • Steve Jobs donates Apple corporate archives and company museum to Stanford University
      • SONY sells headquarters building, and keeps SONY corporate archives and company museum

      Why opposite answers to the same question? Could it be good advice for SONY, to learn from Steve Jobs, and donate SONY-Museum and SONY-Archives to a University, and focus much more on the future?

      Apple donates history collection to Stanford University:

      Steve Jobs returned to Apple with the Apple purchase of NeXT on December 10, 1996. One of the first things Steve Jobs did was to orient the Apple into the future by donating the Apple Computer Inc. Museum and historical collections to Stanford University, as documented in Stanford University’s news release dated November 18, 1997. Apple’s archives are now at Stanford University’s Silicon Valley Archives.

      Steve Jobs gave away Apple’s history documents in order to focus on the future.

      SONY sells headquarters buildings but keeps SONY Archives and SONY Corporate History Museum:

      SONY’s actions are almost exactly 180 degrees opposite to Apple’s and Steve Jobs’: according to Wallstreet Journal, The Japan News by Yomiuri, and other news sources, SONY sells the former headquarters buildings, but reports say that SONY will keep the SONY Archives and the SONY Corporate History Museum (ソニー歴史資料館).

      To understand SONY’s financial situation over the last 15 years, read our Report on Japan’s electronics industry.

      Why does Steve Jobs reach the 180 degrees opposite conclusion to SONY management when faced with the same question?

      • Is this a manifestation of Japan’s “Galapagos syndrome”?
      • Could this mean that SONY isn’t as forward looking as Steve Jobs when he returned to Apple in 1996?
      • Could it be good advice for SONY, to donate SONY-Museum and SONY-Archives to a University, and instead focus on the future?

      Japan’s electronics industry sector – research report, including SONY

      Copyright 2014 Eurotechnology Japan KK All Rights Reserved

    • Japanese management – why is it not global? asks Masamoto Yashiro at a Tokyo University brain storming event

      Japanese management – why is it not global? asks Masamoto Yashiro at a Tokyo University brain storming event

      Japanese management – why is it not global? What should we do? Keynote speech by Masamoto Yashiro at brainstorming by President of Tokyo University

      summary of Masamoto Yashiro’s talk written by Gerhard Fasol

      Masamoto Yashiro is a legend in Japan’s banking and energy industry. He built Shinsei Bank from the ashes of the bankrupt Long Term Credit Bank of Japan, and served in leadership positions (Chairman, CEO, Board Member) in Esso, Exxon, Citibank, Shinsei Bank, and the China Construction Bank.

      Tonight a small group of about 60 people were invited to join Masamoto Yashiro and the President of The University of Tokyo, Professor Junichi Hamada, for an evening workshop and brainstorming event about globalization of Japanese corporations at The University of Tokyo. Participating were a selected group of The University of Tokyo graduates, faculty, and selected alumni from several elite Universities associated with The University of Tokyo, and currently working at major Japanese trading companies, Ministry of Finance, financial firms, global consulting firms and other global firms.

      After The University of Tokyo President Junichi Hamada’s introductory words, we heard Masamoto Yashiro’s fantastic overview of how he thinks Japanese companies need to change and why, followed by Q&A, then by a brainstorming session in the format of changing groups of four on about 15 separate tables between the participants, and then followed by buffet and drinks reception.

      Topic of the evening was the globalization issues of Japanese corporations, also discussed in our work about Japan’s Galapagos issues:

      About Masamoto Yashiro (八城政基)

      Wikipedia pages:

      Masamoto Yashiro graduated from Kyoto University (Law Faculty) in 1954 and The University of Tokyo Graduate School in 1958, and entered Standard Vacuum Oil Company. In 1964 he became Director of Esso, and later Special Assistant to the Chairman of Standard Oil New Jersey, and in 1986 President of Esso Sekyu KK.
      In 1989, Masamoto Yashiro moved to become Japan representative of Citibank NA, and Chairman of Citicorp Japan in 1997.
      IN 1999, Masamoto Yashiro became CEO of New LTCB Partners CV, the company emerging from the bankruptcy proceedings of the Long Term Credit Bank of Japan, and was in charge of the revival of LTCB as Chairman and CEO, with investment from Ripplewood Investment Fund, creating today’s Shinsei Bank.
      He resigned as CEO of Shinsei Bank in 2005, but returned as Chairman and CEO in 2008, from which he retired in 2010.
      In 2004, he was appointed Director of the China Construction Bank.

      Masamoto Yashiro (former Chairman of Shinsei Bank, Chairman of Citicorp Japan and President of Esso Japan, Director of China Construction Bank)
      Masamoto Yashiro (former Chairman of Shinsei Bank, Chairman of Citicorp Japan and President of Esso Japan, Director of China Construction Bank)

      Japanese management – why is it not global? What should we do? asks Masamoto Yashiro

      Note: this record was reviewed personally by Masamoto Yashiro, who made some corrections.

      Japanese management – why is it not global? Outline:

      • Some people may argue that Japanese companies need not be global. Why?
      • We must accept that English is an essential tool for international communication.
      • Some impediments that Japanese companies face:
        1. The traditional approach is not effective in developing future leaders.
        2. The Japanese-style board structure is not appropriate to ensure sound corporate governance.
        3. Management structure needs to be changed to suit a global business.
        4. The current limited role of foreign nationals in the management and board structure
      • What should be the most important corporate objective?
      • Concluding remarks
      Masamoto Yashiro (standing at the podium on the right hand side) presenting and President of Tokyo University Junichi Hamada (sitting on the left) listening
      Masamoto Yashiro (standing at the podium on the right hand side) presenting and President of Tokyo University Junichi Hamada (sitting on the left) listening

      Summary of Masamoto Yashiro’s talk:

      Some people may argue that Japanese companies need not be global. Why?

      Some superficial discussions about “Japanese companies” contrast “permanent employment” and excellent pensions in Japanese companies with job-hopping and bad pensions in other countries, however, Masamoto Yashiro points out that during his time at Esso and later Exxon, most employees stayed 20-30 years at Exxon, and received excellent pensions, so “permanent longterm employment” or pension system has nothing to do with globalization, and Japanese leading companies are no different than leading companies in other countries in these respects. We have to search elsewhere for the causes of current problems most Japanese companies are facing.

      Around 1990, about 20 years ago, Japan was extremely self-satisfied by the successful reconstruction after the war and economic growth and success, and Japan felt that Japan does not have anything to learn from others. This time is now over, Japan is in stagnation, and many Japanese companies are not globally competitive, and Japan and Japanese companies must change to become competitive again.

      We must accept that English is an essential tool for international communication.

      Masamoto Yashiro is convinced that Japanese companies must globalize, and must make English a business tool. He feels it is a great disadvantage that Japanese political and corporate leaders, when participating in international conference, such as Davos, mostly need to use interpreters, and this reduces their global impact and exchange of ideas dramatically.

      Some impediments that Japanese companies face:

      1. The traditional approach is not effective in developing future leaders.

      The traditional approach in Japan is to rotate career employees every two years between totally different functions, in order to “develop well-rounded managers”. The result of this process are non-experts, which are not expert in anything.

      As an example, during his leadership at Shinsei Bank, Masamoto Yashiro once requested a meeting with the IT Department leadership. To his great surprise 60 people turned up for the meeting (he had expected 2 or 3). He asked the Department Chief for particular information, and he could not understand the question and could not answer, same result one management lower. Only at the third layer from the top, Masamoto Yashiro could get his question answered – the top two management layers could not answer his questions about the work of the IT Department.
      Quite generally there often far too many people at meetings at Japanese companies.

      When at Exxon in the US as a relatively junior manager, Masamoto Yashiro, was asked about his opinion regarding the termination of a particular joint-venture relationship with a mid-size petroleum refining company in Japan known then as ゼネラル石油精製 who had financial trouble. Exxon had a 50% interest in this company and its relations goes back to very late 1950’s. In late 1985 at the Exxon Management Committee meeting in New York, all other managers favored to terminate the relationship with this joint venture partner in trouble in order to limit financial exposure, while Masamoto Yashiro argued that it was better to support the troubled partner and assist him with Exxon staff and expertise to return to profitability. To his great surprise the Chairman and his superiors at Exxon sided with his recommendation and changed their previous position following his advice. Generally he felt that in the USA his opinion as a Japanese manager was highly valued, because it provided a different view point.

      In his experience in Japan the situation is totally opposite: Japanese senior management generally does not listen to junior employees, and particularly not to foreign nationals in the rare cases that there are any in Japanese companies. In fact, the most frequent question senior management at Japanese banks ask, is not for original ideas or creativity from junior staff, but instead: “What do other banks do?”

      This deplorable Japanese situation even contrasts strongly with the situation in China, where Masamoto Yashiro was a Director of the China Construction Bank: in China leaders moved from Government agencies and Ministries to Banks, and to private industries and back.

      Generally Masamoto Yashiro expressed the view, that the development of leaders is totally inadequate in Japan, and is better in China than in Japan.

      In addition to the inadequate development of leaders in Japanese companies, the number of foreign nationals in management, Board and other leadership positions in Japanese companies is minute, there are no programs to attract and develop foreign nationals in leadership positions. On the contrary, when Shinsei Bank showed losses in the aftermath of the Lehman shock, Japan’s Financial Services Agencies ordered that Shinsei Bank must pay all foreign nationals on exactly the same pay levels as Japanese employees. Since foreign nationals typically have much higher schooling and other costs in Japan than Japanese staff, essentially all non-Japanese staff at Shinsei Bank left soon after.

      Leaders can make a real difference.

      How leaders are selected is of utmost importance.

      At Exxon, senior management devote specially reserved time to identify suitable candidates for future leadership positions, “who can potentially be our CEO in the future”. The selected candidates are given special attention and special opportunities to train and develop their leadership abilities. Masamoto Yashiro has never heard about such special leadership development programs at Japanese companies.

      2. The Japanese-style board structure is not appropriate to ensure sound corporate governance.

      In Japan, Board Members are almost always managing employees of the company, so the question arises who’s interests they represent on the Board. Do they represent the interests of the institution (the company), the employees or the interests of the shareholders.

      In Japan often the CEO of the company after his retirement remains as a Chairman for several years, keeps his office, secretary and company car, and creates large other expenses. Why? Probably because Japanese CEO pay is too low, so that the CEO does not wish to retire gracefully.

      This is totally different in Western companies where retired CEOs leave the company and have no further role in the company in most cases. Masamoto Yashiro mentioned the retired Chairman of Exxon, who after his retirement naturally travelled by taxi. In Japanese it would be unthinkable according to Masamoto Yashiro that the retired Chairman of a major corporation would travel by ordinary taxi cab like ordinary people (Masamoto Yashiro did not mention subway or bus, or driving his own personal car….)

      3. Management structure needs to be changed to suit a global business.

      In non-Japanese companies in almost all cases have a thorough performance evaluation system. When performance is evaluated, the resulting distribution must be similar to a normal distribution, i.e. with considerable part of employees at the high end and substantial numbers at the low end of the performance curve. If this is not done, top performers cannot be sufficiently rewarded and will leave the company, while low performers would hold the whole company back.

      In most Japanese companies on the other hand, if a thorough performance evaluation is done at all, in most cases a huge proportion of employees are just evaluated as average, satisfying performance, without clear distinctions between top and bottom performance.

      Promotion and salary on the other hand in traditional Japanese companies is purely according to age, which leads to many problems, and causes under-performance of the whole company.

      These problems are increased by the fact, that Japanese companies typically do not give the same evaluation or opportunities to non-Japanese nationals.

      4. The current limited role of foreign nationals in management and board structure.

      Even in the rare cases where foreign nationals are employed by Japanese companies in management or leadership positions e.g. in foreign subsidiaries, often junior Japanese employees which much lower rank and local knowledge do not respect and bypass non-Japanese management, and there is typically no fair evaluation system, evaluating Japanese and non-Japanese management according to the same standards of performance.

      The change of this mindset (to keep non-Japanese out of management or leadership positions at Japanese corporations) is extremely important.

      The change of mindset (to keep non-Japanese out of management or leadership positions at Japanese corporations) is not difficult at all and can be done quickly.

      What should be the most important corporate objective?

      When considering corporate governance it is important to develop a view on the objectives. When discussing the interest of shareholders, it is important to ask “which shareholders”? The interests of large shareholders who may own 10% or 20% of the corporation, or the interests of individual smaller shareholders? Other stake holders’ interests also need to be taken into account.

      In general, Masamoto Yashiro expressed the view that both the institution’s (the company’s) and the shareholders interest are best served by stable long-term growth of the company. He mentioned as an example Exxon which showed triple-A rating and annual rate of growth of 15%-17% for over 100 years.

      Concluding remarks.

      Around 1990 Japan was self-satisfied with the economic success, and Japanese people thought that they have nothing to learn from anybody. This time is over now, and Japan and Japanese corporations much change to regain growth and to become competitive again.

      Professor Junichi Hamada, President of The University of Tokyo, listening to Masamoto Yashiro's talk
      Professor Junichi Hamada, President of The University of Tokyo, listening to Masamoto Yashiro’s talk

      Japanese management – Q&A with Masamoto Yashiro (selected questions)

      Q. You want Japanese companies to change. What are the good things you want Japanese companies to keep?

      A. Loyalty. Consideration to stakeholders.

      Q. Your work at Shinsei.

      A. Communication was most important. When Masamoto Yashiro took over at Shinsei, the Bank has just gone through bankruptcy proceedings, so the moral was extremely low. Masamoto Yashiro had to reestablish optimism and moral. To do so, communication is most important. Masamoto Yashiro held weekly telephone conferences and every employee who wanted to could participate: from top management to cleaning staff/janitors. Everyone could come forward with his concerns.

      Another fact was that there were so many traditions which made no sense. For example, female employees with University degrees would wear their own clothes, while female employees without University degrees would need to wear company uniform. There was an issue that lower paid staff had difficulty to afford appropriate clothing for bank work – so Masamoto Yashiro decided to award a clothing allowance to employees so that they could afford appropriate clothing.

      Q. Many Japanese companies cannot hire young employees, because they cannot fire/discharge non-performing older employees.

      A. Firing/discharge of non-performing employees can be done by paying adequate severance compensation. Considering that a non-performing employee who remains on the payroll for several years in addition to salary also creates a lot of secondary costs, it is typically cheaper to pay an appropriate severance package, and most people are happy to leave with an appropriate severance package, and often move to a more suitable position at a different company – this helps everyone. Of course some companies want to save money at all cost, and fire employees without adequate package and that can lead to problems.

      Q. Having worked much of your career at global oil or energy companies, what to you think about Japanese oil companies?

      A. Japanese oil companies are not really oil companies, because they do not invest enough upstream.

      Q. Leadership?

      A. Japanese companies must change. The mindset must change.

      Q. University of Tokyo?

      A. University of Tokyo at the moment I think is ranked on 30th or 40th position globally in most rankings, maybe top in Japan or in Asia, but that does not count, we need to look at the whole world, not just Japan or Asia. I think University of Tokyo should make the changes necessary be at least in the top ten globally. To get into the top ten globally, University of Tokyo needs to hire outstanding Professors where the best students from the whole world want to come and study. To get the best Researchers and Professors University of Tokyo has to pay what is necessary. Does not matter which language, English or Japanese or any other language. No outstanding student from other parts of the world wants to study Japanese first before studying at University of Tokyo. University of Tokyo should make the necessary changes so that the best students from top Universities globally also want to come to University of Tokyo.

      Mr Masamoto Yashiro’s talk and Q&A were followed by a brainstorming session in groups among all participants of four about globalization, and global leadership development.

      Read more about Masamoto Yashiro

      Copyright 2013 Eurotechnology Japan KK All Rights Reserved

    • Docomo postpones Tizen OS mobile handsets for the second time

      Docomo postpones Tizen OS mobile handsets for the second time

      Below are notes for an interview for the French newspaper LesEchos. The full article can be found here.

      On Thursday January 16th, 2014, NTT Docomo announced the postponement of mobile phone handsets based on the TIZEN operating system. This is actually the second time that NTT Docomo has postponed the planned introduction of TIZEN handsets, so it might become doubtful whether NTT Docomo will ever introduce TIZEN handsets.

      In the announcement NTT Docomo essentially said that with the current market situation in Japan, it makes no commercial sense for Docomo to introduce a third smartphone operating system to the market.

      The French journal Les Echos interviewed me about Docomo’s repeated postponement of TIZEN OS handsets. Here some notes I wrote up to prepare for the interview:

      1. Both for handset makers like HTC or Samsung and it would be a dream to become independent of OS owners/controllers like Microsoft or Google, and for mobile operators like Orange or Docomo, it would be a dream to have an OS they can control, and where they can introduce their own services like Docomo’s “iconcier” personal digital assistant, which is to some extent competing with Apple’s SIRI and with various Google services. Its a dream but realization is a different story. Its not enough to make and further develop and maintain the full OS stack including UI, create a development environment and SDKs as easy to use and competitive with Apple’s and Google’s, app stores, build a developer community who create lots of apps. Its also necessary to make a critical mass of attractive devices, gain a critical mass of market share, create global scale, and most importantly win over all the most important Apps like Facebook, LINE, etc.
      2. With the dramatically increasing complexity and sheer size of software, it becomes harder to bring mobile services to market without global scaleability, or at least a major part of the world, which usually will need to include China. Docomo does not have this global scale, so it will become harder and harder for Docomo to introduce own software services, such as iMode or iConcier.
      3. Docomo has continuously lost market share and recently even net subscribers, and in December for the first time in recent memory succeeded to gain top position in subscriber gains, surely because of the iPhone. In addition, rumors are that Apple demands very high minimum sales shares of operator partners. So Docomo is under double pressure:
        1. to satisfy contract conditions with Apple
        2. to maintain subscriber gains

        in addition, Docomo still has a substantial part of “iMode-keitai”, also called “galake” (= “Galapagos keitai”). So Docomo already has a large variety of OS and handset styles, and has recently reduced the number of different handset it supports, so going to Tizen would go against this trend.

      4. Its not the end of Tizen. Tizen can in addition to smartphones also go into embedded applications such as cars, elevators, washing mashines etc.

      Copyright 2014 Eurotechnology Japan KK All Rights Reserved

    • Japan Perspectives for 2014: can Abenomics succeed? Can Japan grow again? Can Japan solve the population crisis?

      Japan Perspectives for 2014: can Abenomics succeed? Can Japan grow again? Can Japan solve the population crisis?

      Will Abenomics succeed?

      Stanford Economics Professor Takeo Hoshi thinks that there is a 10% chance that Abenomics will succeed to put Japan on a 2%-3% economic growth path, while the most likely outcome will be 1% economic growth. Read our notes of Professor Hoshi’s talk in detail here.

      Can Japanese companies globalize?

      “Globalization” of course is not an aim in itself. In Europe and USA there are plenty of companies which are very successful and not globalized. However, Japan could capture much more global value from technology and creativity by creating more global companies: the shining example is SoftBank.

      When four experts including myself briefed the President of Germany about Japan, we all agreed on Japan’s extraordinary creativity. At the same time there are many difficulties for Japan to capture global value from this creativity.

      Read legendary Masamoto Yashiro’s viewpoints about globalization at a recent Tokyo University brainstorming event by the President of Tokyo University (Masamoto Yashiro was Chairman of Exxon-Japan, of Citibank-Japan, and Shinsei-Bank, and Board Member of the Construction Bank of China). Masamoto Yashiro says that a change of mind-set is urgently needed.

      Overseas direct investment is one way for Japanese companies to globalize. Japanese companies have been investing strongly in EU, just a few days ago Sompo Insurance/ NKSJ Holdings acquired the UK Canopius Group for about US$ 1 billion.

      Other recent mergers globalizing Japan are, TowerJazz acquiring three Panasonic IC fabs, and the merger of Applied Materials and Tokyo Electron, another is GungHo and SoftBank investing in SuperCell, and GungHo has now been even floating the idea of moving corporate headquarters to Finland!

      Disruption for Japan’s Energy markets

      Until March 11, 2011, Japan’s energy markets were essentially frozen in the structures created in 1952, which again resulted from the war-time nationalization of Japan’s electricity sector (see our Energy Report). Japan’s electricity markets alone are worth about US$ 200 million per year – and this market is now in disruption.

      Recently I was invited to brief the Energy Minister of Canada, Mr Joe Oliver, and Sweden’s Trade Minister Dr. Ewa Björling about Japan’s energy markets. My briefings are based on our analysis, which you can find in our Energy Report, and Renewable Energy Report.

      The liberalization of Japan’s energy markets will create winners and losers – comparing the financial performance of Japan’s electricity companies and gas companies is an indication of things to come. Actually, only Japan’s electricity markets are being liberalized currently, liberalization of Japan’s gas markets is still for the future.

      Disrupting Japan’s game sector

      Japan’s game makers have essentially created the global game market, and are ripe for disruption by smart phones and tablets one would think. Indeed, just three Japanese newcomers Gree + DeNA + GungHo alone (there are many more) create more annual net income than Japan’s top 9 game makers combined! The origin of this disruption by newcomers in Japan however is not created by Western companies, and not by smart phones, but goes back to the creation of i-Mode in February 1999 (and some months later EZweb and Jsky). Recently the world is slowly waking up to the fact, that Japan’s game markets is one of the world’s biggest, if not the biggest… and hard for foreign companies to penetrate, unless done correctly…

      We wish you a very Happy New Year!

      Copyright 2013 Eurotechnology Japan KK All Rights Reserved

    • Supercell wins SoftBank and GungHo investment

      Supercell wins SoftBank and GungHo investment

      Supercell investment by SoftBank and GungHo

      Supercell investment leverages paradigm shift, time shift and market disconnects

      Smartphones and the “freemium” business models are bringing a dual paradigm shift to games and create a new truly global market. To take advantage of this global paradigm shift, its necessary to overcome the cultural disconnects between markets. SoftBank and GungHo‘s investment in the Finnish smartphone/tablet game maker Supercell, announced on Oct. 15, will help to overcome the disconnect between Japan’s and other game markets for both Supercell and GungHo.

      The disconnect between Japan and other countries is often surprising – when BusinessWeek in 2006 commented on rumors that SoftBank might introduce an Apple “iPod-Phone” to Japan, BusinessWeek remarked that “Apple would normally never talk to a small-fry such as SoftBank” …. at that time SoftBank’s annual revenues were about twice Apple’s, and BusinessWeek printed my correction pointing out that SoftBank even at that time was anything but a “small fry”.

      One of SoftBank‘s aspects is it’s “time-shift” investment model, another is SoftBank‘s 30/300 year vision – both are important factors to understand the Supercell investment.

      Comparing Supercell's US$ 3 billion valuation with Japanese game companies (note that the market cap for the full SONY Group is shown here)
      Comparing Supercell’s US$ 3 billion valuation with Japanese game companies (note that the market cap for the full SONY Group is shown here)

      This Figure contrasts the market caps of new mobile and smartphone centric game companies (GungHo, Supercell, DeNA and GREE) with traditional console, video game and arcade game companies.

      SoftBank announced that because of the majority investment, Supercell will become a subsidiary of SoftBank, and GungHo will account for Supercell’s profit/loss under the equity method.

      Comparing Supercell's US$ 3 billion valuation with Japanese game companies (note that the market cap for the full SONY Group is shown here) and SoftBank
      Comparing Supercell’s US$ 3 billion valuation with Japanese game companies (note that the market cap for the full SONY Group is shown here) and SoftBank

      GungHo and Supercell both are top-ranking mobile game companies: GungHo inside Japan with “Puzzle and Dragons”, and Supercell outside Japan with “Hay Day” and “Clash of Clans”. Expect both to leverage each other’s resources.

      Both GungHo and Supercell show explosive growth:
      GungHo’s operating profits increased 4050% (x 40) for Jan-June 2013 compared to the same period one year earlier.
      Supercell’s revenues (mainly in-game purchases) jumped 500x from EURO 151,000 in 2011 to EURO 78 million in 2012.

      Culture can be an issue between Japan and other countries, however, SoftBank has invested in more than 1000 comparable companies, and many of SoftBank’s investments have been outstandingly successful including Alibaba and Yahoo.

      However, investment and management support by SoftBank does not automatically guarantee success in Japan – despite SoftBank’s investment and support, Zynga closed operations in Japan earlier this year. Success in Japan will remain Supercell’s responsibility, despite SoftBank’s and GungHo’s help and investment – as Zynga can tell.

      SoftBank aims for global No. 1 position: Learn more about SoftBank, Masayoshi Son, and his 30/300 year vision for SoftBank

      Report on “SoftBank today and 300 year vision” (approx 120 page, pdf file)

      Copyright (c) 2013 Eurotechnology Japan KK All Rights Reserved

    • Japan game sector disruption

      Japan game sector disruption

      Japan’s iconic game companies (Nintendo, Sony, Sega-Sammy, Bandai-Namco, Konami, Takara-Tomy, Square-Enix, Capcom, Tecmo-Koei) see brutal disruption by smart phone games

      Japan game sector disruption: Three newcomers (GREE, DeNA and GungHo) achieve higher operating income than all top 9 incumbent game companies combined

      Japan’s top 9 iconic game companies, Nintendo, Sony, Sega-Sammy, Bandai-Namco, Konami, Takara-Tomy, Square-Enix, Capcom, Tecmo-Koei created much of the world’s games markets, and many of the world’s most loved game characters.

      They are now seeing brutal disruption.

      Japan game sector disruption

      With the Financial Year ending March 31, 2013, for the first time, just three Japanese newcomers (GREE, DeNA and GungHo) achieved higher operating income than all top 9 Japanese iconic incumbent game makers:

      In FY2012 combined operating income of all 9 incumbent game companies was YEN 67.6 billion (US$ 700 million), combined operating income of the 3 newcomers was YEN 174 billion (US$ 1.8 billion) – even though for GungHo only the first 6 months of 2013 are included in the calculation.

      Operating income of Japan's top 9 games companies declined steadily since 2009 - combined operating income for FY2012 was YEN 67.6 billion (US$ 700 million)
      Operating income of Japan’s top 9 games companies declined steadily since 2009 – combined operating income for FY2012 was YEN 67.6 billion (US$ 700 million)
      In 2013, three newcomers (GREE, DeNA, GungHo) achieved higher operating income than all nine established Japanese game makers. Combined operating income for FY2012 was YEN 174 billion (US$ 1.8 billion) 
      In 2013, three newcomers (GREE, DeNA, GungHo) achieved higher operating income than all nine established Japanese game makers. Combined operating income for FY2012 was YEN 174 billion (US$ 1.8 billion) 

      The incumbents: Nintendo, Sony, Sega-Sammy, Bandai-Namco, Konami, Takara-Tomy, Square-Enix, Capcom, Tecmo-Koei

      Because of its size, Nintendo has the greatest weight in the overall performance of Japan’s traditional game sector. Nintendo has been dramatically affected by the shift from traditional game consoles to smartphones. Still, Nintendo (as all other Japanese iconic game companies) has tremendous resources, tremendous creativity, globally loved characters and brands, and huge cash reserves. I don’t think that Nintendo (and other Japanese game companies) risk as much to follow Nokia and RIM/BlackBerry’s fate, but may be more resilient. However, there has been substantial consolidation in Japan’s games sector of recent years, and the current challenges could lead to more M&A in Japan’s games sector.

      The disruptors

      We have only picked three important new market entrants – there are many more in Japan’s vibrant mobile game venture scene.

      DeNA

      DeNA initially started as a mobile auction group, and sees continuous strong growth and high margins.

      GREE

      Of these three, GREE is currently suffering some set-backs originating from GREE’s business model. GREE started as a SNS and social game platform on Japan’s “galake” (Galapagos Keitai) relying on Japan’s mobile internet services i-Mode, EZweb and Yahoo-Mobile, where operators traditionally take 9% commissions. Initially GREE tried to transfer this “platform on platform” business model to other countries, but this does not seem to work out. So GREE is now pivoting to original games, and has seen setbacks.

      GungHo

      GungHo started as a joint-venture with a US company, the purpose of this JV was Japan market entry for this US company. GungHo then pivoted away from this joint-venture to become a games company, and produced a series of games, which all did well, but not extraordinarily well. That is, until GungHo created “Puzzle and Dragons”, which is growing spectacularly well: Jan-June 2013 operating profits increased 4050.1% (four thousand fifty percent) compared to the same period one year ago, and net profits increased 2507.8% (two thousand seven percent) compared to Jan-June one year ago.

      The disruption

      The shift to smartphones is hitting Japanese traditional iconic game makers from all sides:

      • the shift from TV to tablets and mobile phones
      • the shift from dedicated game consoles to smart phones and tablets
      • the shift from Japan’s “galake” feature phones to smart phones
      • the shift in business model from traditional US$ 40-60 game cassettes-type to free game downloads with in-game purchases and advertising
      • …and more

      Japan’s game sector report

      Learn more: read our report on Japan’s game makers and markets
      (approx. 400 pages, pdf file)

      Copyright (c) 2013 Eurotechnology Japan KK All Rights Reserved

    • Hiroshi Mikitani about the Japan Association of New Economy (JANE)

      Hiroshi Mikitani about the Japan Association of New Economy (JANE)

      Hiroshi Mikitani about how Japan should become more competitive

      Hiroshi Mikitani: presentation of his new book = Competitiveness

      Today Hiroshi Mikitani, Founder and Chairman of Rakuten, gave a talk at the Foreign Correspondents Club about his Japan Association of New Economy (JANE) and about his new book authored with his father entitled Competitiveness. Mikitani is also member of Prime Minister Abe’s Competitiveness Council.

      Overall Mikitani explained some very reasonable sounding suggestions for changes towards overcoming Japan’s current 15 year stagnation. He made clear, that the No. 1 reason for Japan’s stagnation is not lack of technology or lack of innovation, but is due to insufficient quality of top managers/executives of Japanese companies. Therefore most of Mikitani’s suggestions for improvements focus on increasing the quality of top executives at Japanese companies both via education and also via bringing in more non-Japanese competition. Mikitani also emphasized his close relationship with Prime-Minister Abe, he mentioned having had dinner yesterday with Prime-Minister Abe, and expressed is confidence in Prime-Minister Abe’s abilities and his power to execute. One of the questions the audience asked during Q&A was that similar suggestions for improvements have been heard over many years, and asked whether this time these suggestions will be implemented.

      Hiroshi Mikitani
      Hiroshi Mikitani

      Mikitani is Representative Director of the Japan Association of New Economy (JANE).

      Japan Association of New Economy (JANE) has three focus areas:

      1. Innovation
      2. Entrepreneurship
      3. Global standards

      Mikitani emphasizes that the major reason for Japan’s stagnation is not lack of innovation, but top management with low capability and no vision. – Japan’s No. 1 problem are Japan’s executives.

      To increase the competitiveness of Japan:

      • Japan does not lack technology, but global business management capability and business innovation
      • Current system protects top management with low capability and no vision. Top management needs to be renewed.
      • Efficiency of industries must be increased via competition
      • Japan must overcome the present Galapagos-like social environment
      • Japan must select Key Performance Indicators (KPI) and measure improvements in competitiveness against these KPIs. Must set targets, and measure progress.
      • Corporate tax rate in Japan should be lowered, and should target to be the lowest level of developed countries

      Japan must improve global expansion and must improve quality of management:

      • Join TPP
      • Accelerate introduction of International Financial Reporting Standards (IFRS)
      • Increase quality of top business managers and human resources
        • Attract top talent from around the world: reduce tax progression, introduce stock based remuneration
        • Educational reform: improve English education, improve IT education, cultivate strategic thinking
        • Encourage study abroad
      • Increase company’s global expansion capability, eliminate Galapagos regulation
        • Terrestrial digital media broadcasting (“Chi-Degi”, One-Seg)
        • Medical
        • Communication networks, NGN
        • Radio spectrum
      • Open up capital markets, bring market mechanisms into corporate management:
        • Ban extreme anti-takeover measures, ban poison pills etc
        • Reduce cross-shareholding

      Japan needs education reform and needs to cultivate world-class business people:

      • Japan’s education system is ranked on 43rd position (out of 144) by the World Economic Forum (2012).
      • Quality of management schools is ranked on 80th position (out of 144) by the World Economic Forum (2012).

      Hiroshi Mikitani submitted detailed materials to the Industrial Competitiveness Council Meeting on January 23, 2013. These materials can be downloaded here: http://jane.or.jp/img/english/pdf/jane20130129.pdf

      Copyright (c) 2013 Eurotechnology Japan KK All Rights Reserved

    • Japan telecommunications, internet and cloud markets

      Japan telecommunications, internet and cloud markets

      Japan invented the mobile internet, and Japan’s telecommunications markets are among the world’s largest, most profitable, most advanced and also most liberalized

      Japan mobile communications

      Japan’s mobile communications originally started as a division of Japan’s telecom monopoly NTT, which developed into today’s NTT-Docomo. After several steps of liberalization, a considerable number of telecommunications venture companies were founded, some succeeded, and some do not exist anymore today.

      Consolidation led to three major groups today + newcomer Rakuten:

      • NTT-Docomo: Docomo evolved from the mobile communications division of the incumbent NTT group. NTT-Docomo created the world’s first successful mobile internet service “i-Mode”
      • KDDI, with mobile brand AU: evolved from the former overseas telecommunications monopoly KDD, which merged with the venture company DDI. Today’s KDDI developed through a series of M&A transactions and turn-round operations.
      • Softbank: Softbank was started as a venture company by Masayoshi Son, and is growing rapidly. Softbank is linked to YAHOO-Japan, and recently acquired the US telecommunications operator SPRINT.
      • Rakuten: The Rakuten Group is the latest entrant into Japan’s mobile communications market, building out a national radio network since around 2018

      Japan created the first successful mobile internet service, starting on February 22, 1999

      Based on Docomo’s DoPa and 2G nationwide packed switched communication network, Docomo started the world’s first successful mobile internet service i-Mode on February 22, 1999. i-Mode soon became successful far bey0nd expectation. Many of i-Mode’s most successful characteristics can be recognized in today’s iPhones and Android smartphones, including apps, subscription based services, mobile music and much more. Read more about i-Mode:

      https://www.eurotechnology.com/2017/02/22/mobile-internet-imode-18-years

      NTT Docomo started the world’s first successful mobile internet service i-Mode on February 22, 1999

      and in our report on Japan’s telecommunications markets:

      Japan telecommunications regulatory frame work

      Japan’s telecommunications markets are regulated by Japan’s General Affairs Ministry (総務省). Telecommunications operators are required to obtain licenses by the General Affairs Ministry, and radio spectrum for broadcasting and for communications is also licensed by the General Affairs Ministry.

      There are no spectrum auctions in Japan at this time, although from time to time the possibility of spectrum auctions is discussed. Spectrum is assigned by the General Affairs Ministry from time to time, e.g. when spectrum previously used for analog TV broadcasts became available due to the switch to digital TV. Radio spectrum is assigned by the Ministry in an internal administrative process (“Beauty Show”), where expert panels, and sometimes also public input is considered by the Ministry.

      Find detailed explanations of spectrum allocation and base stations licensed and deployed in Japan in our reports on Japan’s telecom sector, and our reports on Japan’s major mobile operators:

      Foreign investment in Japan telecommunications markets

      There is essentially no restriction on foreign investments in Japan’s telecommunications sector. As examples, Vodafone was able to acquire almost 100% of the Japan Telecommunications Group, which at that time owned about 20% of Japan’s telecommunication services markets, could completely restructure Japan Telecommunications, sell the fixed line part of the company to a global private equity fund, take the remaining wireless communications company J-Phone private and incorporate J-Phone as a wholly owned integral part of the global Vodafone Group.

      Other examples of major foreign investments in Japan’s telecommunications sector at different points in time are British Telecom (BT), which owned part of the Japan Telecommunications Group, and Cable & Wireless which also owned a major telecommunications enterprise in Japan.

      However, essentially all foreign investments and ownership of Japan’s telecommunications operators were not commercially successful under foreign ownership, and essentially all were directly or indirectly sold to SoftBank.

      Read here why Vodafone failed in Japan.

      SoftBank’s mobile services in Japan are rapidly growing – the acquisition of Vodafone-Japan was a major driver for SoftBank&s growth (Source: Eurotechnology report on Softbank):

      japan telecommunications - SoftBank group exceeds 40 million mobile subscriptions
      SoftBank’s mobile services started with the acquisition of new entrant spectrum license, which SoftBank returned to the Ministry, going for much faster growth by acquiring Vodafone-Japan, today the SoftBank group exceeds 40 million mobile subscriptions in Japan

      Japan broad band markets and Fibre-To-The-Home (FTTH)

      While Japan was initially slow to introduce the internet and broad band access, today Japan’s has more fibre to the home (FTTH) broadband subscribers than all of EU combined (for details, see our blog post here), and is one of the most advanced markets for FTTH broadband local access.

      japan telecommunications - about 30% more FTTH subscriptions in Japan than in all of EU + Switzerland + Norway + Iceland
      about 30% more FTTH subscriptions in Japan than in all of EU + Switzerland + Norway + Iceland

      Japan mobile base stations markets

      Read our Report on Japan’s mobile phone base station market and operator spectrum licensing and allocation.

      Japan mobile communications spectrum licensing

      Radio spectrum is licensed by Japan’s General Affairs Ministry (総務省).
      Read our Report on Japan’s mobile phone base station market and operator spectrum licensing and allocation.
      An overview of Japan’s radio spectrum allocation for mobile communications can also be found in our report on Japan’s telecom markets.

      Japan advanced technologies, globalization and Japan’s “Galapagos” issues

      The global mobile internet essentially started with i-Mode in Japan in February 1999, and many advanced mobile technologies were developed in Japan, or brought first to market in Japan. These Japan-Firsts include:

      However, Japan has not been very successful at capturing global value from these developments and Japan-only success stories. This effect is known as Japan’s “Galapagos effect”. Gerhard Fasol was the only foreigner on Japan’s “Post-Galapagos working group”, and you can read a report here.

      Contact us to start:

        Copyright 2013-2020 Eurotechnology Japan KK All Rights Reserved

      • NEC smartphone termination, discussions with Lenovo failed

        NEC smartphone termination, discussions with Lenovo failed

        NEC smartphone – admits losing against competition from Apple and Samsung

        NEC smartphone – NEC used to be No. 1 in Japan’s “Galapagos keitai” market

        Just a few years ago, NEC was No. 1 in market share of Japanese pre-smart phone “Galake” (Galapagos-keitai, for a review of Japan’s Galapagos effect click here) super-feature phones.

        Recently NEC attempted negotiations with Lenovo, to jointly manage a new NEC-Lenovo smart phone joint-venture company, into which the NEC smartphone division would be merged.

        NEC reported that these negotiations with Lenovo had failed, and NEC now reports that it will terminate NEC smartphone production, but will continue to manufacture “Galake” feature phones. Our expectation is that NEC Galake feature phone production will also be terminated at some point in the not too distant future.

        NEC smartphone failure: What has caused NEC’s fall from No. 1 to an impending exit from the mobile phone sector? Several factors in our view:

        • NEC focused mobile phone production on Japan’s domestic market, especially NTT-docomo, since NEC is one of the NTT-Groups traditional suppliers, NEC thought that NEC will also remain among NTT-docomo’s preferred suppliers.
        • NEC failed to build viable global mobile phone business outside Japan. NEC hoped to ride NTT-docomo’s global introduction of i-Mode, supplying NEC-i-Mode phones via NTT-docomo to the world. However, since i-Mode’s global introduction failed, this strategy fell flat.
        • NTT-docomo recently decided to focus on two core handset suppliers: Samsung and SONY. Since NEC is not included in NTT-docomo’s two core handset suppliers, NEC essentially lost docomo’s sales support.
        • Unlike Google/Motorola and Apple, NEC does not control the OS-software, and therefore always depended on others to supply the OS software, which is of course an achilles’ heel type vulnerability. Still, Samsung is successful without using its own OS, although Samsung is working hard along various paths hoping to create a viable OS and ecosystem, such as Tizen.
        • Patents: NEC does not have a strong mobile phone patent position to stand up to Apple, Google or Samsung in the mobile phone patent wars.
        • Lack of scale: while NEC was a temporary No. 1 in Japan, NEC never had sufficient scale on a global level in mobile phones or smartphones.
        • Lack of focus: NEC is active in a large number of business areas, and smartphones is a small part of total activities of NEC. Thus NEC does not have the focus on smartphones which would be necessary to create global success. Probably NEC considers smartphones and feature phones a secondary business.
        • Neither has NEC sufficient financial strength to build a global smartphone business at this stage.

        Here is an overview of NEC’s financial performance over the last 15 years, the period FY1998 – FY2012

        NEC smartphone: During the 15 years FY1998-FY2012, NEC revenues declined from YEN 5000 Billion to YEN 3000 Billion, while reporting on average annual net losses of YEN 39 Billion/year.
        During the 15 years FY1998-FY2012, NEC revenues declined from YEN 5000 Billion to YEN 3000 Billion, while reporting on average annual net losses of YEN 39 Billion/year. source: https://www.eurotechnology.com/store/j_electric/

        For a detailed analysis of Japan’s electronics industry sector including NEC, see:

        Copyright (C) 2013 Eurotechnology Japan KK All Rights Reserved

      • Japan market intelligence, technology market analysis

        Japan market intelligence, technology market analysis

        Japan market insights – since 1997 we work in Japan’s technology markets, build businesses

        Japan market intelligence: Research, due diligence, analysis, technology licensing and business development

        Japan market intelligence

        For industrial clients

        We work since 1997 in Japan’s technology markets focusing on telecommunications and energy, we have worked with 100s of companies on market entry and expansion to Japan, helped a French pharmaceutical company acquire a Japanese factory, and we have worked with many Japanese companies on business expansion and globalization.

        For financial industry, investment funds and venture funds

        We have worked with more than 100 fund managers, investment banks and venture funds.

        For fund managers and investment banks, we analyze and perform due diligence on companies of interest to our client. We analyze technology inflections and their impact on supply chains and industry sectors, for example the impact of the e-money and mobile payment revolution, or the impact of the solid state lighting revolution.

        Venture funds often refer their portfolio companies to us, to assist the portfolio companies on building partnerships with Japanese corporations, which may include investment, or to build business in Japan.

        We share our knowledge about Japan’s technology markets with you

        Connect with us:

        • FTTH Japan Europe: more FTTH broadband subscriptions in Japan than in all of EU + Norway + Switzerland + Iceland

          FTTH Japan Europe: more FTTH broadband subscriptions in Japan than in all of EU + Norway + Switzerland + Iceland

          by Gerhard Fasol

          Japan has more broadband fixed internet subscriptions than all of the European Union + Switzerland + Norway + Iceland

          FTTH Japan Europe: While Japan initially was late in waking up to the commercial introduction of the Internet – Japan was fast to catch up and overtake

          Japan alone currently has about 30% more FTTH optical fiber broadband subscriptions than all EU countries + Switzerland + Norway + Iceland added together.

          How much broadband (ADSL, xDSL and FTTH) is installed in Japan? Find the answer and detailed statistics and market shares in our report on Japan’s telecom industry.

          Japan was first to roll-out mobile internet with i-Mode in February 1999

          Similarly, Japan was far in advance of other countries in laying the foundations for the mobile internet, with the introduction of the DoPa (DoCoMo Packet) packet switched network on March 28, 1997, several years before packet switched networks were introduced in EU and elsewhere. However, Japan’s electronics and telecoms industries largely failed to capture global value from this pioneering work. Essentially only Softbank with the SPRINT acquisition now has hope to capture such global value.

          A very interesting point is that in EU there are many discussions and uncertainties how broadband fiber investments can be profitable. Japan has solved this problem: FTTH business in Japan is profitable. We see arbitraging opportunities in capturing value from Japan’s know-how, similar to Softbank’s “time shift” investments, arbitraging the time shift of internet roll-out in US vs Japan vs China, as explained in our Softbank-report.

          FTTH Japan Europe: about 30% more FTTH subscriptions in Japan than in all of EU + Switzerland + Norway + Iceland. Source: https://www.eurotechnology.com/store/jcomm/
          FTTH Japan Europe: about 30% more FTTH subscriptions in Japan than in all of EU + Switzerland + Norway + Iceland. Source: https://www.eurotechnology.com/store/jcomm/

          Japan has 30% more FTTH fiber broadband subscriptions than EU + Switzerland + Norway + Iceland…

          Several years ago the EU engaged our company Eurotechnology Japan KK to benchmark EU vs Japan in fixed and wireless broadband. Our summary was that broadband connections are the lifeblood of our information society, and that Japan was far ahead of EU in providing and using both fixed and wireless broadband, and broad band fiber connections were much faster and cheaper in Japan than in EU. Although both have progressed since our benchmarking work for the EU, Japan is still very far ahead of EU in terms of fast fiber broadband penetration.

          Capturing global value – Japan’s Galapagos effect

          However, provision of broadband fiber connections is only one side of the coin. The other side of the coin is capturing value and creating wealth for the society. The really important point is, whether Japan’s electronics, telecoms, content and service industries can capture global value from the advanced deployment of broadband infrastructure. As we discussed in detail in the “Post-Galapagos working group”, Japan is being held back by the “Galapagos effect” – and the trick will be to make the necessary changes to break out from this trap.

          Detailed analysis in our report on Japan’s telecommunications sector:

          Copyright 2013 Eurotechnology Japan KK All Rights Reserved

        • Japan telecommunications industry (66th edition) – Market analysis & tutorial

          Japan telecommunications industry (66th edition) – Market analysis & tutorial

          Market research report – A practical tutorial on Japan’s telecom markets.

          Japans telecommunications industry: current status, M&A transaction and consolidation history. Understand the key players.

          pdf-file, 66th edition, of July 6, 2015
          approx. 272 pages, 90 Figures, 49 Photographs, 30 tables, 4 Mbyte

          Lead author: Gerhard Fasol, works since 1984 with Japan’s telecommunications industry.

          Japan telecommunications industry – Buy and download market research report:

          BUY monthly corporate subscription: US$ 2375/month
          [BUY current edition only corporate license: US$ 4750]

          Japan telecommunications industry report – Summary:

          Masayoshi Son’s and SoftBanks’ acquisition of Sprint and potential acquisition of T-Mobile of USA or other operators, have drawn global attention on SoftBank and on Japan’s telecommunications sector – for many years our JCOMM-Report has been the most trusted and most convenient way to understand Japan’s telecom sector.
          Japan’s telecommunications industry size is on the order of US$ 200 billion for the operators alone, and annually about US$ 20 billion are invested in networks. Japan’s has one of the world’s most advanced cellular networks.
          This report gives a thorough overview of Japan’s telecom market landscape, with a wealth of statistical and financial data in visualized graphical form with analysis and trends.

          Table of Contents: Japan telecommunications industry

          • Executive Summary, List of contents
          • Version overview, revisions
          • Key trends
          • Major recent M&A transactions
          • e-Japan and u-Japan and national policy
            • e-Japan and the IT strategy headquarters
            • e-Japan (Prime Minister’s Office)
            • Japan’s national policies
            • i-Japan 2015, digital infrastructure
            • iPhone as a turning point
          • Japan- the mobile time machine (pre-iPhone)
            • How did Japan’s telecom industry become one of the world’s most competitive?
          • Globalization vs Japan’s “Galapagos effect”
          • Evolution of Japan’s telecom landscape
          • Strategic group maps of Japan’s mobile and fixnet telecom industry and major M&A transaction graphics
            • pre-liberalization, NTT + KDD monopoly
            • Japan’s telecom landscape 2004
            • Japan’s telecom landscape 2008
            • Japan’s telecom landscape 2013
          • The three main players
          • Financial data, overview and analysis for Japan’s major mobile telecom operators
            • annual revenues
            • operating income
            • net income
            • capital investments
            • quarterly results: revenues, operating income, net income
            • operating margins
            • net margins
          • NTT Group
            • group structure
            • revenue structure
            • overview of group companies: NTT Data, NTT Docomo, NTT East, NTT West, NTT Communications, …
            • NTT Docomo
            • for more details read our report on NTT-Docomo
          • KDDI, AU, UQ Communications, Okinawa Cellular
            • group structure
            • revenue structure, income (profit/loss) structure by group sectors
            • historical overview, M&A history
            • history of major services, evolution
            • KDDI Designing studio
            • UQ Communications
            • for more details read our Report on KDDI
          • SoftBank
            • Masayoshi Son
            • group structure
            • business model
            • SoftBank Telecom history and development
            • SoftBank Mobile history and development
            • SoftBank Mobile subscription history, group structure and development and growth
            • Japan Telecom and J-Phone
            • Acquisition of Vodafone-Japan by SoftBank, M&A transaction details and graphics
            • transition from Vodafone Japan to SoftBank
            • eAccess, eMobile
              • Dr Sachio Semmoto
              • group history and development
              • company structure and financial structure
              • eMobile foundation and background
              • KDDI and SoftBank battle and acquisition
              • for more details read our report on eAccess

            • Willcom
              • PHS: outline and history and development
              • PHS: antennas, base stations
              • PHS, Willcom, and Wireless City Planning, M&A transaction structure
              • market share data and evolution
              • Wireless City Planning: outline, creation and history, diagram, market shares

            • for more details read our report on SoftBank
          • Wireless markets, mobile communications
            • spectrum allocation and mobile base stations
              • radio spectrum allocation for mobile communications
              • radio spectrum allocation and number of base stations over frequency and for different operators
              • radio spectrum allocation and number of base stations for 800MHz “Platinum band”
              • radio spectrum allocation and number of base stations for 1.4-2.7GHz band
              • radio spectrum allocation and number of base stations for 2.5-2.7GHz band
              • total band width allocation for each operator
              • mobile phone base station deployment
              • how many base stations are deployed in Japan?
              • how many 3G/LTE base stations are deployed in Japan?
              • how many LTE base stations are deployed in Japan?
              • comparing number of 3G base stations in UK and in Japan
              • total number of base stations for Japan’s major mobile operators over time
              • how big is the market for base stations? how much does the base station market grow per year?
              • how many base stations does each operator install per year?
              • how many repeaters and boosters are installed in Japan for each operator?
              • how many low power repeaters are installed in Japan for each operator?
              • femto-cells
              • how many PHS base stations are installed in Japan?
              • for more details on Japan’s radio spectrum allocation and base station markets, read our report on Japan’s base station market

            • Subscriber numbers and market shares
              • total number of subscribers over time, and growth over time
              • net annual growth
              • annual development of subscription numbers for different radio systems, 2G, PHS, 3G, LTE, CDMA2000, WiMax, etc for all operators
              • number of subscriptions by operator and radio system
              • number of subscriptions by operator and radio system, consolidated in business groups
              • market shares over time
              • market shares over time for mobile business groups, month-to-month battle for subscribers

            • prepaid mobile
            • from birth of mobile internet to legacy: iMode, EZweb, Yahoo-Keitai
            • why was the mobile internet born in Japan?
            • the i-Mode eco-system
            • i-Mode in a nutshell
            • LTE, 4G in Japan: LTE subscriber numbers, spectrum allocation, base station deployment
            • 3G in Japan: LTE subscriber numbers, spectrum allocation, base station deployment
            • from “Galake” to smart-phones
            • cell phone sales, smartphone sales
            • transition to smartphones
            • annual shipment of Japanese mobile phones/smartphones
            • the Au design project IIDA, Infobar, Infobar 2, Concept models: cypress, kaos, vols, Talby by Marc Newson
            • Sweets for teenage and sub-teenage girls
            • Raku-raku phones for the silver market
            • TuKa-S: pioneer for the silver market
          • e-Money and mobile payment
          • Mobile TV, 1seg
          • Fixed line broadband access market
            • FTTH, DSL, CATV broadband access subscriptions over time (starting 2002)
            • FTTH market
            • 3 types of FTTH services
            • market development over time and liberalization events
            • market players
            • mansion type and FTTH market split over time
            • FTTH market players and market shares over time
            • mansion-type FTTH market players and market shares over time
            • FTTH penetration: comparing EU with Japan over time
            • DSL market: development, market statistics over time, subscriber numbers and market shares
            • optical access network
            • schematics of NTT optical access network
            • ONU = optical network unit
            • transition to NGN = next generation networks
            • NTT NGN, NTT-East and NTT-West
            • NTT FTTH business models, business development and strategy, ARPU, and value added services
            • KDDI in the FTTH market
            • KDDI vs NTT
            • KDDI FTTH strategy
          • Japan’s telegram market
          • Summary

          Japan telecommunications industry – Buy and download market research report:

          BUY monthly corporate subscription: US$ 2375/month]
          [BUY current edition only corporate license: US$ 4750]

          Methodology: Japan telecommunications industry

          We produce market research on Japan’s technology markets since 1996. We use the following methods:

          • Desk research: public domain data, internet resources
          • Official data from Government sources, Government white papers, public domain Government data bases, industry associations, and other trade organizations
          • Data from Annual reports and other public disclosures by companies
          • “Gray literature”: materials distributed at trade shows, conferences, workshops
          • Public presentations, lectures, keynote talks, Press conferences
          • Trade shows and events. We regularly visit a large number of trade shows and industry events, mainly in the Tokyo, Osaka areas, but also in US and Europe.
          • Interviews, discussions at trade shows, and other industry events
          • Cross checking and cross validation of data from different sources.
          • Analysis using sophisticated, research grade mathematical and statistical software, and proprietary analysis software developed by Eurotechnology Japan KK.
          • Our proprietary data base of industry data, photographs, and information collected since our company foundation in 1996/1997 mainly covering Japan’s electronics, telecommunications and energy industries.
          • Our research and analysis staff is mainly PhD level and highly trained and experienced.

          Copyright (c) 2014-2019 Eurotechnology Japan KK All Rights Reserved

        • Japan electronics industries: mono zukuri

          Japan electronics industries: mono zukuri

          Japan’s electronics component makers thrive, while Japan’s top-8 electronics groups stagnate

          Financial and business data and analysis of Japan’s top 8 electronics groups and major electronics parts makers

          Report, pdf-file, Version 26 of July 21, 2015
          approx. 237 pages, 100 Figures, 20 Photos, 29 tables, 2.3 Mbyte

          Lead author: Gerhard Fasol, works since 1984 with Japan’s technology industries.

          Buy and download research report: “Japan electronics industries” (pdf file, 25th edition, June 18, 2015)

          [BUY corporate license: US$ 4750]

          From the contents: Japan’s electronics component makers thrive, while Japan’s top-8 electronics groups stagnate

          Japan's electronic component makers thrive
          Japan’s electronic component makers thrive
          Japan's top-8 electronics groups stagnate
          Japan’s top-8 electronics groups stagnat

          Japan electronics industries – Summary

          Japan’s electronics manufacturers combined are about as large as the Netherlands economically and are facing a period of restructuring, while at the same time they acquire companies abroad in an effort to globalize. Japan’s electronic component sector occupies about 30% – 40% of the global electronic devices market, and are generally better positioned than Japan’s electrical conglomerates, although these also face their own challenges. The report reviews and analyses Japan’s top 8 electronics manufacturers, and Japan’s top 7 electronic component makers, as well as several related companies, and an analysis of the industry sectors. Subscribe to receive regular updates.

          Japan electronics industries – Related events and in the press and TV:

          Japan electronics industries – Table of Contents

          • Executive Summary: Japan’s electronics manufacturers
          • “Mono zukuri” (= making things, manufacturing products) as a philosophy and as a business model
            Globalization vs Japan’s Galapagos effect
            The Keiretsu bonds and consequences
            Brand and branding issues
          • Japan’s 8 major electronics manufacturers
            Overview of Japan’s 8 electronics groups
            Market caps in international comparison
            Annual revenues overview of all 8 Japanese electronics groups (FY1998 – FY2014)
            Operating profits (Losses) overview of all 8 Japanese electronics groups (FY1998 – FY2014)
            Net profits (losses) overview of all 8 Japanese electronics groups (FY1998 – FY2014)
            Analysis
          • Company overview and analysis for Japan’s electrical groups
            Hitachi
            Panasonic and Sanyo
            Mitsubishi Electric
            Sharp
            Toshiba
            Fujitsu
            NEC
            SONY
          • Company overview and analysis for Japan’s electronic component manufacturers
            Murata
            Kyocera
            TDK
            ALPS
            NIDEC
            Nitto Denko
            ROHM
          • Company overview and analysis of other related Japanese companies
            Nintendo
            Canon
            Oki Electric
            Citizen
            Tokyo Electron and the merger with Applied Materials
          • Summary

          Buy and download research report: “Japan electronics industries” (pdf file, 25th edition, June 18, 2015)

          [BUY corporate license: US$ 4750]

          Japan electronics industries – Methodology

          We produce market research on Japan’s technology markets since 1996. We use the following methods:

          • Desk research: public domain data, internet resources
          • Official data from Government sources, Government white papers, public domain Government data bases, industry associations, and other trade organizations
          • Data from Annual reports and other public disclosures by companies
          • “Gray literature”: materials distributed at trade shows, conferences, workshops
          • Public presentations, lectures, keynote talks, Press conferences
          • Trade shows and events. We regularly visit a large number of trade shows and industry events, mainly in the Tokyo, Osaka areas, but also in US and Europe.
          • Interviews, discussions at trade shows, and other industry events
          • Cross checking and cross validation of data from different sources.
          • Analysis using sophisticated, research grade mathematical and statistical software, and proprietary analysis software developed by Eurotechnology Japan KK.
          • Our proprietary data base of industry data, photographs, and information collected since our company foundation in 1996/1997 mainly covering Japan’s electronics, telecommunications and energy industries.
          • Our research and analysis staff is mainly PhD level and highly trained and experienced.

          Copyright (c) 2014-2019 Eurotechnology Japan KK All Rights Reserved

        • Events, conferences and speaking engagements

          Events, conferences and speaking engagements

          Ludwig Boltzmann Forum: driving improvements by bringing logic and science to leadership

          information on our Ludwig Boltzmann Forum events

          Presentations and events:

          Japan’s energy – myths versus reality

          Overview of Japan’s Data Center Landscape, Opening Keynote

          Apple-Samsung Patent War and Impact on Japans Industries

          • Gerhard Fasol
          • Tuesday, October 2, 2012, 12:00-13:30
          • Foreign Correspondents Club Japan (FCCJ), Yurakucho
          • “Apple-Samsung Patent War and Impact on Japans Industries”

          In a global war to dominate the smartphone market, Samsung and Apple have been at each other’s throats, playing out the war in courts around the world and accusing each other of patent violations. A California court recently ruled in favour of Apple and ordered Samsung to pay $1 billion, a figure that could rise dramatically when the case is played out. Samsung has won minor battles in the U.K., Japan and Australia, but with new mobile phone models and tablets being introduced by both firms, the war is only going to get bigger and bloodier. In Japan local manufacturers are being marginalized and even fighting for survival.
          Japan-based expert Gerhard Fasol will return to the FCCJ to shed light on the Apple-Samsung dispute and how it impacts the Japan market, Japan operators and Japan manufacturers.

          Gerhard Fasol runs Japan’s Eurotechnology K.K. consultancy (www.eurotechnology.com), has advised the president of Germany, JETRO and number of Japanese companies involved in high-tech industries and has authored Japanese patent applications. Fasol, who has written a number of books, graduated with a PhD in Physics from Cambridge University and was a tenured professor at Cambridge’s Cavendish Laboratory, a research scientist at the Max Planck Institute for Solid States Sciences in Germany, a manager of one of Hitachi’s R&D labs and was Director of Studies at Trinity College, Cambridge.

          “Cash Goes Mobile and Electronic: First to Market in Japan, and Then What?”

          The beauty of Japan’s Galapagos Effect – and how to go beyond

          A Snapshot of the Current Mobile Market and Opportunities in Japan

          • Gerhard Fasol
          • Tokyo, June 17, 2010, 18:30
          • Beacon Communications, Tokyo-Ebisu
          • International Computing Association, Tokyo

          The beauty of Japan’s Galapagos effect – and how to go beyond

          Will cash become obsolete? Next-next generation electronic and mobile payments in Japan

          Understanding Ludwig Boltzmann

          • Gerhard Fasol
          • April 21, 2010
          • National Institute for Standards and Technology NIST, Washington DC

          Next generation Electronic Payments Solutions

          Japan’s media revolution – a European perspective

          • Gerhard Fasol
          • March 1, 2010
          • Embassy of Denmark in Tokyo
          • for a delegation of media company executives, investors, CEOs, from Denmark
          • for details see our Report on Japan’s Media

          Paradigm change of the global mobile phone business and opportunities for Japanese mobile phone makers

          • Gerhard Fasol
          • Friday October 3, 2008, 11:00-12:00
          • International Conference Hall, Makuhari Messe, Meeting Room 302
          • CEATEC Conference, talk NT-13
          • http://www.ceatec.com/2008/en/conference/track/detail.html?lectue_id=30801
          • Paradigm change of the global mobile phone business and opportunities for Japanese mobile phone makers

          The emergence of iPhone, Android, open-sourcing of Symbian, and the growth of mobile data services are changing the paradigm of the global mobile phone business opening new opportunities for Japanese mobile phone makers. Japan’s mobile phone handset makers have missed most opportunities during the first wave of mobile phone opportunities. The developing paradigm change opens new opportunities for Japanese makers. The talk will explain the paradigm shifts and trends of the global mobile phone handset market, and resulting opportunities for Japanese mobile phone makers, and will indicate how these opportunities can actually be realized

          Will The iPhone Trigger A Turning Point In Japan’s Mobile Phone Industry?

          • Press Conference with Tetsuzo Matsumoto, SOFTBANK MOBILE Corp. and Gerhard Fasol
          • Wednesday, August 13, 2008, 12:00-14:00
          • Foreign Correspondents Club in Tokyo FCCJ

          A German perspective on M&A in Japan

          • Speaker: Gerhard Fasol
          • June 24th, 2013
          • German Embassy, Tokyo
          • A German perspective on M&A in Japan

          A European perspective on M&A in Japan

          • Gerhard Fasol
          • Wednesday June 4, 2008
          • Danish Chamber of Commerce in Japan

          Global opportunities for Japan’s telecommunications sector

          Mergers & Acquisitions in Japan – Two Views from Tokyo

          • Speakers:
            • Dr Gerhard Fasol, President, Eurotechnology Japan KK and
            • David Syrad, Managing Director/Managing Director Asia, A.K.I. Japan Limited/Change Masters International Limited
          • Friday, April 18, 2008, Sandwiches 12.30: Seminar 13.00 – 14.30.
          • Daiwa Foundation Japan House, 13/14 Cornwall Terrace, London, NW1 4QP
          • event of the Asia-Pacific Technology Network and
          • Daiwa Anglo Japan Foundation in London
          • for details see:
          • and

          Solid state lighting

          Help – my mobile phone does not work! – Why Japan’s mobile phone sector is so different from Europe’s

          Mobile payment and the future of money

          • Speaker: Gerhard Fasol
          • Friday March 2, 2007
          • Grand Hyatt Hotel Tokyo
          • CLSA Japan Forum 2007
          • “Impact of mobile payment and the future of money”
          • The presentation covers the following agenda:
            • Can e-money and mobile payment replace cash?
            • Example: mobile payment for the world’s busiest train line
            • DoCoMo’s target for mobile payments
            • Japan’s mobile payment and keitai credit landscape
            • Free markets vs regulation
            • Mifare and Felica chips and radio communications (NFC)
            • Who drives mobile payments in Japan vs elsewhere
            • Growth of SUICA (NFC payments for rail fares and e-money)
            • DoCoMo’s mobile payment and keitai credit strategy
            • Edy – electronic cash
            • A major bank’s mobile payment system
            • Impact
            • Where to invest – who to watch
            • Summary
          • More information:
          • “Mobile payment and keitai credit” (download here)

          Mobile Payments (3 hour workshop)

          • Speaker: Gerhard Fasol
          • Monday, January 22, 2007
          • 3 hours
          • Makuhari, near Tokyo
          • organized by MarcusEvans: “Global 3G Evoluation Forum”

          Japan’s Mobile Phone Industry and u-Japan

          • Speaker: Gerhard Fasol
          • Thursday, 12th October 2006, 17:00-19:00
          • Main Conference Room 4F, EU-Japan Centre for Industrial Cooperation, Tokyo
          • organized by EU-Japan Centre for Industrial Cooperation, Tokyo

          Agenda:

          Japan’s mobile phone and broad-band markets are about 3-6 years ahead of Europe: new services are typically invented or first brought to market in Japan, 3-6 years earlier than in Europe. Internet in Japan is generally much faster and much cheaper than in Europe. For this reason and because of it’s size, Japan’s telecom markets are full of opportunities for European companies with the right products and the right strategy, and for investors with the necessary knowledge.

          Japan’s mobile phone industry is notoriously difficult to understand for Europeans because it’s
          market logic is very different from Europe’s, and because the pace of innovation and structural change is much faster, and because of the language barriers.

          This talk will explain the driving forces behind recent dramatic changes in Japan’s mobile telecom sector, and will explain new changes that the “ubiquitous-Japan” (“u-Japan”) policy will bring in the near future.

          Do you need to know what Europe’s mobile phone and internet markets will look like in 2010 or 2015? – Come to this talk and you will get a good look into Europe’s IT future about 5 years ahead, as well as Japan’s telecom markets today.

          Panel discussion for about 200 Japanese CEOs and high level managers about the challenges of international business management

          • Five panelists:
            • James C Abbeglen
            • Allen Miner (CEO of Sunbridge Venture Habitat, and founder of Oracle Japan)
            • Kong Jian (China – Japan Economic Federation)
            • Koshiro Kitazato (Chairman of BT Japan)
            • Gerhard Fasol (CEO Eurotechnology Japan KK)
          • May 30, 2006
          • Evening: 18:00-20:00 followed by dinner reception
          • Industrial Club of Japan, Tokyo Marunouchi

          Why Japan is several years ahead of Europe in Telecommunications, and what Europe can do to catch up? – briefing on Japan’s telecommunications sector

          • Speaker: Gerhard Fasol
          • April 24, 2006, 18:30 – 21:00
          • Investor AB: Group of Controllers (CFOs) of Investor AB’s portfolio companies

          The Swedish controllers (CFOs) had asked for a briefing on Japan’s telecom industry. Some of their companies are considering to start, re-start, or grow faster in Japan, so there were many detailed questions about business in Japan, what can go wrong, personell issues, experience of other multinationals, and of course a lot of questions about IKEA and Vodafone.

          My presentation was similar to the presentation I had given on March 23, 2006 to the Technology Attaches of the Embassies of the 25 European Union countries, which lead the European Union to award our company a project contract about EU vs Japan benchmarking issues in telecoms and key technology areas.

          Why are mobile phones so hot in Japan? How can European companies profit from Keitai?

          • Speaker: Gerhard Fasol
          • March 23, 2006
          • Delegation of the EU to Japan, Tokyo
          • Briefing for the Technology Attaches of the Embassies of the 25 European Union countries in Tokyo

          Why are mobile phones so hot in Japan? How can European companies profit from Keitai?

          • Speaker: Gerhard Fasol
          • February 16, 2006
          • 18:30 – 21:00
          • Embassy of Sweden, Alfred Nobel Auditorium
          • Stockholm School of Economics, European Institute of Japanese Studies

          Wireless Tele-Medicine – Technology Trends

          • Speaker, Panel discussion: Gerhard Fasol
          • Tuesday, May 5, 2004, 15:15 – 21:30
          • Swiss Stock Exchange, Zurich, Switzerland
          • First Tuesday Zuerich

          Creating a Mission Statement for a Top Ranking Japanese Engineering University and Suggestions for its Realization

          Japan’s Mobile Communications Industry

          • Speaker: Gerhard Fasol
          • June 12, 2003, 18:30-20:30
          • Embassy of Germany, Tokyo
          • Residence of HE The Ambassador of Germany to Japan

          E-commerce in Japan

          • Speaker: Gerhard Fasol
          • Wednesday April 10, 2002
          • 8:00-9:30am
          • Chicago O’Hare Airport Conference Center
          • Asia/Pacific – Midwest Business Conference
          • organized by the US Department of Commerce and the Illinois District Export Council

          i-Mode – and business models for mobile communications – full day workshop for telecom executives and investors

          • Speaker: Gerhard Fasol
          • March 21, 2002
          • Full day: 10:00 – 18:00 followed by dinner reception
          • Hotel Metropolitan, Lisboa, Portugal
          • organized by Seminario Internacional Prisma.
          • Attendance: about 50 executives from Portugal’s telecom operators, major consulting firms, and IT professionals

          Physics in industry – perspectives from Japan (Plenary lecture)

          • Speaker: Gerhard Fasol
          • Thursday, September 9th, 1999
          • 11:50-12:30 (Invited plenary talk, 40 mins)
          • London
          • 11th General Conference of the European Physical Society : EPS-11 : Trends in Physics

          Spin-polarized Electrons in Semiconductors and in Mesoscopic Devices (Special Invited Lecture Nr. 2pF5)

          • Speaker: Gerhard Fasol
          • Tuesday 2nd April 1996
          • 15:15-16:05 (50 minutes incl. discussion)
          • Kanazawa-University, Lecture-Room F
          • Spring Meeting of the Japanese Physical Society in Kanazawa

          Cross-Cultural Communication” (In Japanese Language)

          • Speaker: Gerhard Fasol
          • Monday 22 January 1996
          • 18:00-20:00, followed by buffet reception
          • German Chamber of Commerce in Tokyo, (Deutsche Industrie und Handelskammer in Japan DIHKJ)
          • Audience: Japanese Executives of German and Japanese Companies

          Electron Spin Effects in Semiconductors: Spin Relaxation, Spin-Effects on the Bandstructure, Possible Device Applications

          • Speaker: Gerhard Fasol
          • Friday 6 October 1995
          • 13.30
          • Institute of Industrial Science, Univ. Tokyo

          Development of novel electronic, opto-electronic and magneto-electronic devices and research trends in Japan in semiconductors”

          • Entwicklung neuartiger elektronischer, opto-elektronischer und magneto-elektronischer Bauelemente und Forschungstrends in Japan auf dem Gebiet der Halbleiter
          • Speaker: Gerhard Fasol
          • Monday 18 September 1995, 18.00
          • German Embassy Tokyo
          • Technology Seminar Series

          Blue light emitters for displays, data storage, and traffic signals – Recent breakthroughs by Nichia Chemical Industries Ltd., background & implications

          • Speaker: Gerhard Fasol
          • Wednesday 2 August, 1995, 4PM
          • Asian Technology Information Program (ATIP), Tokyo

          Enquiries regarding speaking engagements:

            Copyright 2013-2019 Eurotechnology Japan KK All Rights Reserved

          • Taiwan’s Hon Hai Group invests in SHARP

            Taiwan’s Hon Hai Group invests in SHARP

            Crunch time? – reviving Japan’s huge electrical/electronics sector

            SHARP fighting for survival

            SHARP (6753) last month forecast a record YEN 290 Billion (US$ 3.5 Billion) loss for this financial year – more than 1/2 of SHARP’s market cap, and SHARP’s new Sakai factory is reported to work at 1/2 capacity.

            Taiwan’s Hon Hai Group (which includes Foxconn, which is known to assemble Apple’s iPhones and iPads), and founder Terry Gou invest about YEN 133 Billion (about US$ 1.6 Billion in SHARP:

            1. Hon Hai Group will invest YEN 66.9 Billion in newly issues SHARP-shares corresponding to a 9.9% holding, and will become SHARP’s largest share holder
            2. Hon Hai’s Chairman Terry Gou and related investment companies will buy 46.5% of SHARP Display Products Corporation for YEN 66 Billion reducing SHARP’s holding from 93% to 46.5% (note that SONY preferred not to increase its holding in SHARP Display Products Corporation, which operates the Sakai factory)
              click below to watch video clip (initial plan for the interview was to discuss the ELPIDA bankruptcy, but at the last minute we switched the interview to the Hon Hai investments in SHARP, because of the potentially much bigger impact on Japan)

            There is a wide range of implications

            • Clearly the business models which have sustained Japan’s huge electrical sector for several decades have reached end-of-live, and restructuring as well as much more opening to the outside, non-Japanese world are becoming more and more urgent. Much of our Post-Galapagos Working Group efforts last year were devoted to this urgent need.
            • SHARP’s financial problems may not be solved yet, and further investments by Hon Hai or others might well be on the horizon
            • APPLE – although not directly involved in the transaction – is the center of power. With the investment Hon Hai may hope, that a combination of Hon Hai and SHARP may become a stronger supplier to APPLE than each company alone. SHARP has been reported to use Hon Hai’s investment to increase production of LCD displays for smart phones, and tablets.
            • Comparing market capitalization, it’s clear who the stronger partner is:
              • SHARP = US$ 6.6 Billion market cap
              • Hon Hai = US$ 39 Billion market cap

            For data and detailed analysis download our report on:

            Japan’s electronics industry sector

            Copyright (c) 1997-2013 Eurotechnology Japan KK All Rights Reserved

          • Rebuilding Tohoku’s disaster areas: 1st session of 15-member Rebuilding Council

            Rebuilding Tohoku

            After the Kobe/Hanshin earth quake rebuilding took about 18 months

            Rebuilding Tohoku: After the Kobe/Hanshin earth quake rebuilding took about 18 months – maybe this is a good measure to estimate how long rebuilding will take in Tohoku. In Tohoku communities will certainly be rebuilt in locations which are much better protected against giant Tsunamis. The 15-member Disaster Rebuilding Council had the first constituting session yesterday, Thursday April 14, and includes the President of Keio University Atsushi Seike, architect Tadao Ando, playwright Makiko Uchidate, SONY-VP Ryoji Chubachi, and is chaired by Makoto Iokibe, President of the National Defence Academy. Japan’s resilience in face of almost unbelievable natural disasters is also an expression of Japan’s “Galapagos effect”.

            Japan’s civilisation and society has developed over a very long time in sync with natural disasters of almost unbelievable proportions. People outside the immediate disaster zone continued to work with usual very high intensity, and inside the disaster zone immediately started with reconstruction work. A large part of the high-speed Tohoku Shinkansen train line from Tokyo to Aomori reopened, and is expected to run the full 710km length again from beginning of May. This 710km long high-speed train line rund right through the disaster area and was damaged in 1200 locations according to JR-East.

            Sendai Airport which was struck by the earth quake and the Tsunami has been repaired with the help of US-Forces initially to bring in relief goods, and has now also been reopened for commercial air-traffic. All Japanese commercial airports are open for service again.

            Copyright (c) 2013 Eurotechnology Japan KK All Rights Reserved