Toshiba Makes Late Entry Into E-Market With £1.4 Billion Investment

Toshiba, a laggard among Japan's big electronics firms in Internet-related services, announced that it is to invest 250 billion yen (£1.44 billion) in e-commerce and Internet content businesses during the next three years. Toshiba's President, Taizo Nishimuro, said the company would be launching a new business unit, i-Value Creation, on April 1, 2000, to develop a range of Internet-related services. These are to include leisure, finance, travel, music, video distribution and auctions, to be made available through cell phones and other mobile terminals. ""We see the planned launch of next generation mobile phone service as a great opportunity. We will focus our resources to take full advantage of its potential,"" Mr. Nishimuro told a press conference. With next generation mobile phone service to be offered in Japan in the spring of 2001, users will be able to surf the Internet, check and respond to e-mail, conduct video conferences and make various e-commerce transactions. Toshiba, one of the world's biggest manufacturers of notebook computers, has lagged behind rivals such as Fujitsu and NEC in developing a strategy for Internet business. Fujitsu and NEC, both of which own large Internet service providers, are considered two of Japan's leading Internet-related shares. Sony, meanwhile, with its large stock of films, games and other content and a clear network strategy, has become one of the stock market's most popular issues. But Toshiba, while strong in the manufacture of advanced electronics parts, has no such Internet-related assets. News of Toshiba's Internet-based assault helped lift its shares 5.6% to ?924 yesterday, despite a decline in the Tokyo stock market overall. Mr. Nishimuro said Toshiba as a first step will cooperate with Matsui Securities - a pioneer in online share trading in Japan - to provide stock information services to Matsui's customers via cellular phones, portable computers and other mobile devices. It also aims, he said, to reinforce alliances with existing partners such as AOL-Time Warner and Warner-EMI, which recently announced merger deals. Toshiba will also strengthen its systems integration and outsourcing services to tap into the fast-growing market in Internet-based business to business transactions, Mr. Nishimuro said. Toshiba aims to boost annual revenues from such Internet-related services to ?500 billion by 2003 from the current ?100 billion. Toshiba also plans to put all of its procurement systems online by 2001, hoping to cut annual costs by ?200 billion in 2003 compared with 1999 levels. ToshibaYear-end March 1999 Sales: $44.5 billion Year's sales growth : 8.5% Workforce: 200,000 Toshiba is the world's biggest PC company with about 60% of sales from computers and electronic devices such as semiconductors. Nearly 75% of its total sales - including industrial components and consumer appliances - are made in Asia. But it has been sluggish to embrace the Internet and needs catch up.

Source: The Guardian (UK)