* * * * * * * * * T E R R I E 'S T A K E * * * * * * *<br>A weekly roundup of news & information from Terrie Lloyd.<br>(<a href="http://www.terrie.com">http://www.terrie.com</a>)<br><br>General Edition Sunday, September 02, 2012, Issue No. 676<br>
<br>+++ INDEX<br><br>- What's New -- Electronics Sector Weakness, Who's Next After Sharp?<br>- News -- Japan Advisory unfairly targeted?<br>- Upcoming Events<br>- Corrections/Feedback<br>- Travel Picks -- Nara ancient buddha & Izu archery<br>
- News Credits<br><br>SUBSCRIBE to, UNSUBSCRIBE from Terrie's Take at:<br><a href="http://mailman.japaninc.com/mailman/listinfo/terrie">http://mailman.japaninc.com/mailman/listinfo/terrie</a><br><br>BACK ISSUES<br><a href="http://www.japaninc.com/terries_take">http://www.japaninc.com/terries_take</a>, or,<br>
<a href="http://mailman.japaninc.com/pipermail/terrie/">http://mailman.japaninc.com/pipermail/terrie/</a><br><br><br>--------- PBXL TOTAL TELEPHONY SOLUTION (TTS) -----------<br><br>PAYING TOO MUCH FOR MONTHLY CALLING CHARGES? PBXL’s Total <br>
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e-mail us at <a href="mailto:info@pbxl.jp">info@pbxl.jp</a> or call us at 03-4550-2557<br><br>----------- PBXL is BUSINESS COMMUNICATIONS --------------<br><br>+++ WHAT'S NEW<br><br>Recently all eyes in the business world are transfixed on <br>
Sharp, a bed-rock company that helped the nation grow <br>prosperous in the last 60 years through its dedication, <br>technical expertise, and quality control. However, with the<br>rise of China and South Korea as low-cost manufacturing <br>
centers, although Panasonic, Canon, and others moved <br>manufacturing off-shore in the 1990's, Sharp vowed to keep <br>producing in Japan. For a while it seemed like they would <br>be able to compete, through technical innovation. <br>
Unfortunately reality caught up with their aspirations last<br>year, and it is now clear that not only is the company just<br>about bankrupt, but that it has probably been this way for <br>the last 3-5 years, with business upticks (such as <br>
high-definition TVs) being nothing more than tantalizing <br>illusions for hopeful investors and banks.<br><br>As a result the company now owes about JPY2.5trn (US$31bn) <br>to the banks and other bond holders, a crushing debt <br>
burden, and its shareholders have seen their holdings <br>evaporate, with shares slipping from around JPY800 this <br>time last year to just JPY198 on Friday. Interestingly, <br>some of the largest shareholders in Sharp are the very same<br>
banks they owe money to (good old-fashioned "Japan Inc" <br>relationships), and any way you look at it everyone <br>involved is about to take a financial bath. Indeed, we <br>suspect that part of the fight Terry Gou of Hon Hai is <br>
having in trying to get Sharp to be reasonable in repricing<br>its shares is probably that Sharp's banks are baulking at <br>the huge losses they are going to have to swallow.<br><br>As a reminder, Hon Hai agreed to a price of US$800m for a <br>
9.8% stake, which would have valued the company at around <br>JPY550/share. Now that those shares are trading at less <br>than 40% of that amount, Mr. Gou must be quite angry. We'd <br>love to see a copy of the purchase agreement, which appears<br>
to be giving Hon Hai the ability to renegotiate...<br><br>[Continued below...]<br><br><br>--- NAGAMINE & MISHIMA - Securing Your Success in Japan ---<br><br>Starting a new company in Japan? Looking to streamline<br>your current operations?<br>
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bottom line results.<br><br>To find out more about our services and how we can help<br>your business in Japan succeed, please visit our website<br><a href="http://www.nagamine-mishima.com">www.nagamine-mishima.com</a> or reach us directly by telephone<br>
at 03-3581-1975 or by email at <a href="mailto:info@nagamine-mishima.com">info@nagamine-mishima.com</a>.<br><br>---------- YOUR BOTTOM LINE IS OUR TOP PRIORITY------------<br><br><br>[...Article continues]<br><br>In the end, and due to an upcoming JPY362bn redemption of <br>
bank loans this year and JPY200bn of bondsmaturing in <br>September next year, plus the fact that Sharp's management <br>seems unable to slim down their company without external <br>help, we think the banks will be forced to accept the <br>
situation. Our guess is that Hon Hai will be allowed to <br>come in for JPY250~JPY300/share, a smallish premium, and <br>will wind up owing 20% or so of the company. This will <br>effectively give them control over Sharp and its <br>
technologies -- particularly its components for Apple <br>iPhone products. This will be a spectacular win for Hon Hai<br>and a huge loss of face for the Japanese establishment. <br><br>The only way we can see Sharp avoiding this scenario is to <br>
go ask a local or foreign investment fund to take a major <br>share in them, which could then give the fund enough <br>leverage to start carving up the company and its <br>substantial assets -- an even more ignominious loss of <br>
face. We have no doubt that there are a number of funds, <br>Japanese and foreign, salivating over the possibility of <br>this happening.<br><br>Or, as a long-shot bet, we suppose that Apple might want<br>to step in directly. But given Apple's allergy to doing their<br>
own manufacturing, probably not.<br><br>Watching Sharp wriggle on its skewer of debt, we wonder <br>which company in the electronics sector will be next?<br><br>Perhaps one sign of future trouble can be seen in the ink <br>
jet printer sector, an area dominated by the Japanese <br>thanks to their virtual lock-hold on print head technology <br>patents. Well, a lock-hold with a couple of notable <br>exceptions: HP and Lexmark in the USA. From what we can <br>
tell, the biggest player globally in ink jets is probably <br>HP, which according to a news quote from Gartner has a 45% <br>global market share. Hard on their heels, though, is Seiko <br>Epson (market share unknown), then Canon and other<br>
Japanese firms. <br><br>As was revealed in various legal tiffs over ink cartridge <br>recyclers in the early 2000's, the ink jet business is an <br>important source of profit for these companies. Even today,<br>HP makes about US$12bn in annual sales from ink jet <br>
cartridges, and they account for about 20% of the company's<br>overall profit! The dirty secret is that each little packet<br>of ink carries a profit margin of about 70%.<br><br>These numbers work similarly for Epson and Canon, and thus <br>
are important sources of revenue. The problem is that the <br>ink jet market itself is shrinking globally as more and <br>more consumers keep their data on mobile devices they don't <br>need printed paper. HP this year said that this move away <br>
from home printing was one of the major sources of pain for<br>the company and that they think the ink jet industry <br>declined about 3% this year. Other estimates put the <br>decline at an even higher pace.<br><br>Which ever stats are correct, the fact that all is not well<br>
in the ink jet industry and this has to be of major concern<br>to Seiko Epson, which earns about 50% of its revenues from <br>ink jets. Yes, like the other manufacturers, they have <br>announced a refocusing on the business market as a respite <br>
from the punishment in consumer sales, but nonetheless, its<br>shares have lost more than 50% of their value since March <br>this year. Given the announcement just last week that the <br>Number 5 or 6 global player, Lexmark, is pulling out of the<br>
segment all together, Seiko Epson's shares may blip up <br>temporarily with the loss of a competitor, but in long-term<br>we see them sinking even lower.<br><br>The reason for our saying this is that Lexmark announced <br>
that they will be selling off their IP to anyone interested<br>in buying it. Until now the Japanese and HP/Lexmark have <br>kept Korea's Samsung, China's Ninestar, and other low-cost <br>manufacturers (such as Hon Hai) out of this high-profit <br>
segment through their rock solid patents. But by buying up <br>Lexmark's IP, any of these companies will be able to open <br>the door to a huge share of the global market -- so long <br>as they stay true to their price-leader strategy in regards <br>
to their ink cartridges. This scenario would wreak havoc on<br>the existing players, particularly HP and Seiko Epson. <br><br>So we'd be shorting Seiko Epson shares for the next few <br>months, especially if Lexmark goes ahead and sells to the <br>
Chinese.<br><br><br>...The information janitors/<br><br>***------------------------****-------------------------***<br><br>-------------------- Delta Air Lines ----------------------<br><br>TRAVEL FREELY AT <a href="http://DELTA.COM">DELTA.COM</a><br>
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baggage<br>4. Drop your baggage at the nearest Delta counter<br><br>Please visit <a href="http://delta.com">delta.com</a> for more information.<br>-----------------------------------------------------------<br><br>+++ NEWS<br>
<br>- Sharp deal with Hon Hai gets big setback<br>- Samsung found not guilty in Tokyo<br>- Nomura instituting heavy cost cuts<br>- Daikin buys 2nd biggest competitor<br>- Japan Advisory unfairly targeted?<br><br><br><br>=> Sharp deal with Hon Hai gets big setback<br>
<br>With the CEO of Taiwan's Hon Hai leaving Japan suddenly, <br>the pending investment of JPY700bn into Sharp Corp. now <br>hangs in the balance. Without the investment, Sharp is <br>under extreme pressure to put off various bank and creditor<br>
payments and to simply stay in business. S&P as a result <br>has cut Sharp's credit rating to "junk" status, the worst <br>rating the company has ever received. The core of the <br>problem with Hon Hai is Sharp's dramatically falling share <br>
price, caused by the fact that the company lost JPY138bn in<br>Q1 of this fiscal year, and unfortunately it expects more <br>such red ink this quarter. (Source: TT commentary from <br><a href="http://japantimes.co.jp">japantimes.co.jp</a>, Sep 1, 2012)<br>
<br><a href="http://www.japantimes.co.jp/text/nb20120901a1.html">http://www.japantimes.co.jp/text/nb20120901a1.html</a><br><br>=> Samsung found not guilty in Tokyo<br><br>While Samsung lost its court case against Apple in the USA <br>
over copyright infringement of the look and feel of Apple's<br>mobile devices, here in Japan a judgment went the other <br>way, and the Tokyo District Court found that Samsung is not <br>guilty of infringing an Apple claim about music and video <br>
synchronization over the web. ***Ed: Had Apple sued for <br>design infringements as they did in the States, experts <br>here are saying they would have lost. There are some other <br>suits pending here in Tokyo, including a Samsung <br>
counter-suit, so the drama will continue.** (Source: TT <br>commentary from <a href="http://nytimes.com">nytimes.com</a>, Aug 31, 2012)<br><br><a href="http://nyti.ms/Q9DjVi">http://nyti.ms/Q9DjVi</a><br><br>=> Nomura instituting heavy cost cuts<br>
<br>The new Nomura Holdings CEO, Koji Nagai, is clearly trying <br>to leave his mark by introducing a high level of cost <br>cutting to turn the bank around. He announced a second <br>target of reducing costs by US$1bn over the next two years,<br>
which will mostly affect the investment banking, equities, <br>and fixed income divisions operating in Europe. In late <br>2011 Nagai announced a US$1.2bn round of restructuring, and<br>that was intended to slash about 1,000 jobs, so we expect <br>
that the latest round will increase that number to nearly <br>2,000 jobs. (Source: TT commentary from <a href="http://reuters.com">reuters.com</a>, Aug <br>31, 2012)<br><br><a href="http://reut.rs/ObhC4J">http://reut.rs/ObhC4J</a><br>
<br>=> Daikin buys 2nd biggest competitor<br><br>We wonder if Daikin's move to buy up its second biggest <br>competitor in air conditioning in the USA, Goodman Global, <br>will invite attention from the anti-trust authorities? <br>
Daikin has said that it will pay US$3.7bn for the US firm. <br>Apparently Daikin had a chance to buy Goodman in 2004, but <br>decided to acquire a competing firm, McQuay International, <br>instead. Unfortunately the McQuay deal did little for <br>
North American sales and so Daikin re-approached Goodman <br>several years ago and finally consummated the deal last <br>week. ***Ed: The fund that owned Goodman earned a return of<br>US$1bn in just 4 years, not a bad return on investment. <br>
This would make an interesting case study for business <br>schools, actually.** (Source: TT commentary from <br><a href="http://e.nikkei.com">e.nikkei.com</a>, Aug 30, 2012)<br><br><a href="http://e.nikkei.com/e/ac/tnks/Nni20120831D30HH596.htm">http://e.nikkei.com/e/ac/tnks/Nni20120831D30HH596.htm</a><br>
<br>=> Japan Advisory unfairly targeted?<br><br>Although it's a long-shot, former hedge trading maestro Ed <br>Brogan and his Japan Advisory company have decided to lodge<br>a complaint against the SESC for its actions against the <br>
trading firm, namely the fines levied against it and more <br>importantly its loss of licence. The SESC found earlier <br>this year that Japan Advisory had received an insider tip <br>about Nippon Sheet Glass, and had executed trades based on <br>
that tip. Japan Advisory is arguing that at the time its <br>actions were not illegal and the rules were changed after <br>the event. ***Ed: Considering that Brogan's firm was doing <br>what many others were, suspension of his licence seems <br>
harsh. Still, if the alleged actions had occurred in the <br>USA, he would have had a lot more to worry about. At least <br>here he was able to leave the country and retain his <br>freedom.** (Source: TT commentary from <a href="http://e.nikkei.com">e.nikkei.com</a>, Aug <br>
31, 2012)<br><br><a href="http://e.nikkei.com/e/ac/tnks/Nni20120831D3ZHH724.htm">http://e.nikkei.com/e/ac/tnks/Nni20120831D3ZHH724.htm</a><br><br><br>NOTE: Broken links<br>Many online news sources remove their articles after just a<br>
few days of posting them, thus breaking our links -- we<br>apologize for the inconvenience.<br><br>***------------------------****-------------------------***<br><br>----- ACCJ Journal - Connect to CEOs of MNEs in Japan -----<br>
<br>Looking to reach out to key decision makers in Japan? With <br>our English & Japanese language ACCJ Journals, we have an <br>open line to CxOs of major American & Japanese companies in<br>Japan.<br><br>For the month of July and to celebrate Independence Day, we<br>
are offering companies a 60% discount on any advertising<br>product in the ACCJ Journal if payment is settled by August<br>31st!<br><br>We are eager to support your strategic communications and<br>hope to hear from you soon. For more details, please <br>
contact us in English or Japanese at 03-4550-2926 or email <br><a href="mailto:sales@accjjournal.com">sales@accjjournal.com</a>.<br>-----------------------------------------------------------<br><br>+++ CANDIDATE ROUND UP/VACANCIES<br>
<br>=> BiOS, a Division of the LINC Media group, is actively<br>marketing the following positions for customers setting up<br>or expanding in Japan, as well as other employers of<br>bilinguals.<br><br>** HIGHLIGHTED POSITION<br>
<br>BiOS is urgently looking for Data Center Operators to <br>provide media service support at one of the largest data <br>centers in the Tokyo area. The candidate will be <br>responsible for setting up tape library equipment, updating<br>
the tape library, as well as checking data availability. <br>You will also be responsible for coordinating vendor <br>schedules, reporting to data center leaders, escorting <br>visitors to the data center, and providing ad-hoc support <br>
at the data center.<br><br>This position is suitable for someone with at least one <br>year of hardware support with user support background. In <br>addition, since this role requires direct coordination with<br>both regional and global IT teams, business-level English <br>
and business-level Japanese will be required.<br><br>Remuneration is JPY3M– JPY3.6M depending on your experience<br>and skill level.<br><br>** POSITIONS VACANT<br><br>- Data Center Engr, international bank, JPY3.6M – JPY4.8M<br>
- Server Engr, data center provider, JPY4.5M – JPY6M<br>- IMAC Engineer, intnl investment firm, JPY 4M – 4.8M<br>- Electrical Facility Engr, data center co, JPY5M – JPY6.5M<br>- Cabling Engr, data center service co, JPY4.5M – JPY6M<br>
<br>** BiOS Job Mail<br><br>Every 2 weeks BiOS sends out a regular communication to its<br>job seeking candidates, called BiOS Job Mail. Every edition<br>carries a list of BiOS's current and most up-to-date<br>vacancies, with each entry featuring a short job<br>
description and a direct link to the main entry on the BiOS<br>home page. Regardless of whether you are unemployed and<br>searching, thinking about a career change, or just curious<br>to know if there is something out there that might suit you<br>
better, the BiOS Job Mail newsletter is an easy and<br>convenient way for you to stay informed. If you would like<br>to register for the BiOS Job Mail, or to find out more,<br>please email <a href="mailto:jason.kisling@biosjp.com">jason.kisling@biosjp.com</a>.<br>
<br>Interested individuals may e-mail resumes to:<br><a href="mailto:jason.kisling@biosjp.com">jason.kisling@biosjp.com</a> and check out the BiOS web page<br>for other jobs: <a href="http://www.biosjp.com/careers.php">www.biosjp.com/careers.php</a><br>
-----------------------------------------------------------<br><br>***------------------------****-------------------------***<br><br>+++ UPCOMING EVENTS/ANNOUNCEMENTS<br><br>---------------- Start a Company in Japan -----------------<br>
<br>Entrepreneur's Handbook Seminar 29th of September, 2012<br><br>If you have been considering setting up your own company,<br>find out what it takes to make it successful. Terrie Lloyd,<br>founder of over 17 start-up companies in Japan, will be <br>
giving an English-language seminar and Q&A on starting up <br>a company in Japan.<br><br>This is an ideal opportunity to find out what is involved,<br>and to ask specific questions that are not normally <br>answered in business books. All materials are in English <br>
and are Japan-focused.<br><br>For more details:<br><a href="http://www.japaninc.com/entrepreneur_handbook_seminar">http://www.japaninc.com/entrepreneur_handbook_seminar</a><br>-----------------------------------------------------------<br>
***------------------------****-------------------------***<br><br>+++ CORRECTIONS/FEEDBACK<br><br>In this section we run comments and corrections submitted<br>by readers. We encourage you to spot our mistakes and<br>amplify our points, by email, to <a href="mailto:editors@terrie.com">editors@terrie.com</a>.<br>
<br>=> No comments this week.<br><br>***------------------------****-------------------------***<br><br>+++ TRAVEL DESTINATIONS PICKS<br><br>=> Asuka-dera, Nara<br>Home to the oldest extant Buddhist statue in Japan<br>
<br>Asuka-dera (Asuka Temple), also known as Hoko-ji, was a <br>temple complex originally built in 588 by Sogano-Umako (see<br>Ishibutai kofun), powerful leader of the Soga clan. He was <br>instrumental in the spread of Buddhism in its early <br>
history in Japan. Originally, the temple was much larger in<br>size and area, containing three Main Halls. Through the <br>centuries, however, the temple has suffered fires and <br>earthquakes that completely destroyed the building <br>
complexes. The current buildings date to the Edo period <br>[1600-1867]. <br><br>The main object of worship at Asuka-dera is the 2.7-meter <br>high bronze Great Buddha (Shakyamuni), which was built in <br>609, twenty years after the temple’s founding. It was the <br>
first major work of Kuratsukuri-no-Tori [saddle-maker <br>Tori], or Tori Busshi [Buddhist statue-maker Tori], a <br>craftsman with Chinese (some say Korean) historical roots. <br>He is also credited with creating the Shaka triad at <br>
Horyu-ji Temple. <br><br><a href="http://japantourist.jp/view/asuka-02-asuka-dera">http://japantourist.jp/view/asuka-02-asuka-dera</a><br><br>=> Mount Omuro, Izu<br>An extinct volcano in Izu with fine views and archers<br>
<br>The Izu Peninsula is famous for its hot springs, provided <br>with steaming hot water by the region`s volcanic geology. <br>Mount Fuji is the most famous, but it`s not the only <br>volcano in the vicinity: close to Ito on the peninsula`s <br>
east coast is Mount Omuro, an extinct volcano that makes <br>for a pleasant half-day excursion.<br><br>At 580m high, Omuro is the highest peak in the area, and <br>there`s no path: you`re carried to the top in a fun-few <br>
minutes in a rickety-looking (but presumably safe) chair<br>lift. The first things you find when you get there are a <br>lookout point and Sancho-Baiten, a small shop where you can<br>buy snacks and souvenirs. I decided to do my shopping <br>
later, and set off straight away along the circular trail <br>around the crater rim, which gives a striking, complete <br>panorama in every direction. <br><br>During the year there are a handful of special events to <br>attract visitors. On New Year`s Day the chairlift starts <br>
running from 5:40am for the first sunrise of the year, and <br>on the second Sunday of February each year, the dead grass <br>is burnt off the mountainside to allow the new buds of <br>spring to peek out. The arc of fire advancing around the <br>
mountain, leaving smoking burnt grass in its wake, is quite<br>a spectacle.<br><br>It`s also possible to enjoy a couple of sporting activities<br>while you`re there. Down in the crater there`s an archery <br>range where wannabe Robin Hoods can try their hands, while <br>
the more adventurously inclined can try paragliding from <br>the trailside.<br><br><a href="http://japantourist.jp/view/mount-omuro">http://japantourist.jp/view/mount-omuro</a><br><br>***------------------------****-------------------------***<br>
<br>***********************************************************<br>END<br><br>SUBSCRIBERS: 7,889 members as of September 02, 2012<br>(We purge our list regularly.)<br><br>+++ ABOUT US<br><br>STAFF<br>Written by: Terrie Lloyd (<a href="mailto:terrie.lloyd@japaninc.com">terrie.lloyd@japaninc.com</a>)<br>
<br>HELP: E-mail <a href="mailto:Terrie-request@mailman.japaninc.com">Terrie-request@mailman.japaninc.com</a><br>with the word 'help' in the subject or body (don't include<br>the quotes), and you will get back a message with<br>
instructions.<br><br>FEEDBACK<br>Send letters (Feedback, Inquiries & Information) to the<br>editor to <a href="mailto:terrie.lloyd@japaninc.com">terrie.lloyd@japaninc.com</a>.<br><br>ADVERTISING INFORMATION<br>For more information on advertising in this newsletter,<br>
Contact <a href="mailto:ads@japaninc.com">ads@japaninc.com</a>.<br><br>SUBSCRIBE<br>Get Terrie's Take by giving your name and email address at<br><a href="http://www.japaninc.com/newsletters/free_sign_up">http://www.japaninc.com/newsletters/free_sign_up</a>, or go<br>
straight to Mailman at:<br><a href="http://mailman.japaninc.com/mailman/listinfo/terrie">http://mailman.japaninc.com/mailman/listinfo/terrie</a><br><br>BACK ISSUES<br><a href="http://www.japaninc.com/terries_take">http://www.japaninc.com/terries_take</a><br>
or, <a href="http://mailman.japaninc.com/pipermail/terrie/">http://mailman.japaninc.com/pipermail/terrie/</a><br><br>Copyright 2012 Japan Inc. Communications Inc.<br><br>----------------- Japan Inc opens up Japan ----------------<br>
<br>J@pan Inc authoritatively chronicles business trends in <br>Japan. Each posting brings you in-depth analysis of <br>business, people and technology in the world's third <br>largest economy.<br><br>Visit <a href="http://www.japaninc.com">www.japaninc.com</a> for the best business insight on<br>
Japan available.<br>-----------------------------------------------------------<br><br><br>