Nokia to get payments in patent deal with RIM

Struggling Finnish mobile phone maker Nokia has settled its patent dispute with BlackBerry maker Research in Motion in return for payments, as it tries to exploit its trove of technology patents to boost its finances.
Terms of the agreement were confidential, but Nokia said on Friday it included a one-time payment to be booked in the fourth quarter, as well as ongoing fees, all to be paid by RIM.
Nokia is one of the industry's top patent holders, having invested 45 billion euros ($60 billion) in mobile research and development over the past two decades.
It has been trying to make use of that legacy to ensure its survival, amid a fall in sales as well as cash. The Finnish firm is battling to recover lost ground in the lucrative smartphone market to the likes of Apple and Samsung.
The agreement with RIM settles all existing patent litigation between the two companies, Nokia said, adding similar disputes with HTC Corp and ViewSonic still stood.
"This agreement demonstrates Nokia's industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market," said Paul Melin, Nokia's chief intellectual property officer.
Nokia has earned around 500 million euros a year from patent royalties in key areas of mobile telephony.
Some analysts have said it could earn hundreds of millions more if it can negotiate with more companies successfully.
Analysts estimated its June 2011 settlement with Apple was worth hundreds of millions of euros.
($1 = 0.7555 euros)
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WhatsApp goes free for iPhone for a limited time

Popular cross-platform texting app WhatsApp reduced its iPhone app from $0.99 to free on Thursday. The app now delivers 10 billion messages per day, which is no surprise considering how consumers are choosing to use app-based messengers instead of paying for texting. WhatsApp is so popular, Facebook (FB) is reportedly interested in acquiring it. While it’s true the Android version of WhatsApp is also available for free, that version requires a yearly  $0.99 fee after the initial year. Still, WhatsApp’s advantage over Apple’s (AAPL) built-in iMessage is that it works across multiple mobile platforms. At zero dollars, WhatsApp is a no-brainer download if you don’t already have it on iPhone.
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HTC brushes off Microsoft’s earlier rejection, will reportedly make Windows RT tablets after all

Microsoft (MSFT) may have barred HTC (2498) from participating in the first wave of Windows RT tablets, but that apparently hasn’t stopped the company from gearing up for the next wave. Unnamed sources have told Bloomberg that HTC “is working on a 12-inch device and a 7-inch version” of a Windows RT tablet “that can also make phone calls.” The planned seven-inch tablet, which will be unveiled alongside the 12-inch tablet some time in 2013, will be the first small Windows RT tablet to hit the market and go head-to-head with other popular small tablets such as the Google (GOOG) Nexus 7 and the iPad mini.
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RIM shares fall at the open after earnings

 Research In Motion Ltd fell in early trading on Friday following the BlackBerry maker's Thursday earnings announcement, when the company outlined plans to change the way it charges for services.
RIM, pushing to revive its fortunes with the launch of its new BlackBerry 10 devices next month, surprised investors when it said it plans to alter its service revenue model, a move that could put the high-margin business under pressure.
Shares fell 16.0 percent to $11.86 in early trading on the Nasdaq. Toronto-listed shares fell 15.8 percent to C$11.74.
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South Korea's president-elect promises 'new era of change'

South Korea’s President-elect Park Geun-hye signaled today the tough policy toward North Korea that she’s likely to pursue when she embarks on her five-year term as president in February.
She began the day after winning the presidential election by visiting the national cemetery, bowing before the grave of her father, Park Chung-hee, the long-ruling dictator who was assassinated by his intelligence chief in 1979.
“I will open up a new era of change and reform,” she scrawled in the visitor’s book, but soon she left no doubt she would mingle calls for inter-Korean dialogue with a firm stance against compromise.
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North Korea’s launch of a long-range rocket last week “showed how grave the security reality really is,” she said at her party headquarters after the visit to the cemetery. Yes, she says she wants to open talks with North Korea – but she also vowed to keep her “promise of a new era of strong national security.” Similarly, while calling for peace and reconciliation in Northeast Asia, she placed priority on dealing with the “security reality.”
Though Ms. Park is not as hardline as outgoing President Lee Myung-bak, in the view of analysts, she is still not going to revert to the Sunshine policy of reconciliation espoused by two Korean presidents before Mr. Lee’s election five years ago.
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“At the very least, South Korea will not funnel funds to support weapons programs with which North Korea will threaten the country that defends South Korea,” says Lee Sung-yoon, professor at the Fletcher School of Law and Diplomacy at Tufts University, in Boston, Mass.
That’s a reference to the hundreds of thousands of tons of food and fertilizer that South Korea shipped annually to North Korea during the era of the Sunshine policy. Moon Jae-in, Park’s liberal foe in Wednesday’s election, had promised to resume the shipments.
“She is under no illusions about Pyongyang,” says Nicholas Eberstadt at the American Enterprise Institute in Washington. If she “can expound and implement a coherent policy for reducing the North Korean threat” while advancing the cause of Korean unification, “that would be a great service to her countrymen and to the world.”
Firmness under North Korean threats is seen as essential. “In principle she will be tough on North Korea,” says Cho Gab-je, a conservative editor who often comments on policy issues. “She will have some flexibility on policy,” he says,” but she will not follow the line of the Sunshine policy.”
THE NORTH KOREA CHALLENGE
At the same time, North Korea is expected to challenge her, militarily and rhetorically. “They usually try to test a new president,” says Choi Jin-wook, a senior official at the Korea Institute of National Unification. “They might make provocations before or after her inauguration.”
Many observers, including Mr. Choi, believe that North Korea fired its long-range missile last week as a deliberate attempt to intimidate voters into supporting Moon Jae-in as a candiate less likely to provoke a war. “People when they vote always think about North Korea,” he says.
But, instead of hurting Park, says Mr. Choi, North Korea accomplished “just the opposite, they helped Park.” The logic here is that voters, particularly the conservative older generation, cast their ballots for her as the most likely candidate to defend South Korea in a crisis.
Then too, Park is assumed to have quite a sophisticated understanding of North Korea. She is one of the few top-ranked conservative politicians who has been to Pyongyang.
“She is the first South Korean president who has already been to North Korea and met with Kim Jong-il ,” observes Victor Cha, a Georgetown University professor who directed Asia affairs at the National Security Council during the presidency of George W. Bush. “She will have a more rational view on inter-Korean relations.”
In that spirit, says Mr. Cha, she will not be “blindly obsessed with a summit” as were the two liberal presidents from 1998 to 2008. Both President Kim Dae-jung and President Roh Moo-hyun went to Pyongyang for summits with Kim Jong-il that produced promising statements but did not end confrontation.
OTHER MAJOR ISSUES FOR SOUTH KOREA
While problems with North Korea dominate concerns here, however, Park has more to worry about when it comes to the stagnating economy, the rising gap between rich and poor Koreans, and the anger of young people unable to find jobs.
Park also faces a regional problem – the hostility of the Cholla region of southwestern Korea. Moon Jae-in won 90 percent of the votes there.
“She has talked about unifying the country so it would not surprise me if she pulled Cholla people into her cabinet – a sort of team of rivals,” says Cha.
Indeed, many analysts say that Park’s first priority will not be North Korea but reforming an economy in which the conglomerates increased their grip over Korean life substantially under President Lee.
“In terms of economic growth his policies have failed,” says Jang Ha-sung, a business professor at Korea University who has often criticized the conglomerates, known as chaebol. “He represented the so-called trickle down effect. He depended on the old model that was heavily dependent on the chaebol.”
The historical irony is that Korea’s conglomerates owe their success in large measure to the policies of Park’s father, Park Chung-hee, often credited with fostering Korea’s booming growth during his 18 years and 5 months as president.
Park, however, has promised “economic democratization” – with more opportunity for individual entrepreneurs and enterprises.
“Public opinion calls for some reform of the chaebol,” says Cho Gap-je. ”In a crisis, he observes, “creating jobs is the first priority.”
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In India, a Hindu nationalist rebuilds image with Muslim votes

The Hindu nationalist leader of the western state of Gujarat, known for his alleged role in the 2002 riots in which 1,000 Muslims were killed, won his fourth consecutive term as chief minister in a landslide on Thursday. The victory puts the controversial figure on track to be a strong contender for prime minister of India in 2014.
Despite the controversy surrounding Chief Minister Narendra Modi, he played a critical role in putting Gujarat on a path of consistent economic growth. His win also marks a major defeat for the Congress party, which came in a distant second with 61 seats in the general assembly, compared with his Bharatiya Janta Party(BJP)'s 118.
Mr. Modi stands out for many as a viable leader because of his recent record of good governance, development, and economic growth, coupled with the Indian Congress’s failure to effectively manage the country.
“It’s the vacuum of leadership that has India desiring a really strong leader who can take action and take this country forward,” says pollster Yahswant Deshmukh. “That’s why even a polarizing figure like Modi is being talked about and looked upon to give that kind of leadership.”
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The BJP's victory is "a message to everyone that development and good governance triumph over divide and rule politics," Modi posted on his Twitter feed.
Modi’s image is still marred by the bloody Gujarat riots, which put the city on edge and raised minority tensions in the Hindu majority state. Many politicians within his own party refuse to work with him, fearing he will taint their image. In 2005, the US State Department even denied him a visa.
But for a growing number of the more than 60 million people living in Gujarat, Modi’s record during his decade as chief minster has created a number of believers in his vision for the state – including Muslims.
Roughly 25 percent who cast their ballots for the BJP this election were Muslim, says Mr. Deshmukh, who polled more than 78,000 voters, including 7,000 Muslims as they exited voting booths across the state. That’s up from just 3 percent in 2007. While the majority of Muslims still vote for the Congress party, a growing number of young educated Muslims are opting for the BJP, says Deshmukh. They believe Modi is the most viable option for sustained growth and career opportunities in the state.
What’s not clear is how Modi’s success in Gujarat will translate to the rest of the country. Another question is whether he will be able to snag other minority voters, usually picked up by the Congress party.
Given Muslims' low literacy rates, low rate of employment in government jobs, and lagging per capita income across India, Sufi Saint Mehbubali Baba Saheb says life for the minority religious group is much better under Modi’s rule. A volunteer with the BJP, he points out that since the Gujarat riots, there has been no communal violence in the state. Some 10 percent of Muslims have government jobs and their per capita income is the highest in the country.
But not everyone is convinced.
Despite Gujarat having the third-highest growth rate in the country, 40 percent of children are still malnourished, and hundreds of thousands of Muslims live in slums because they can’t find affordable housing.
“Modi has very little to offer to India’s villages, to its agriculture sector and to the very large constituencies that make up Indian politics,” says political analyst Ashish Nandy, adding that Modi’s constituency is the middle class. “While the middle class may make up a significant portion of the country, over two-thirds of the Indian population does not fall in that category. I think that will be more his undoing than being [known as] a master of inciting a blood bath.”
While Modi may have a long road ahead in his bid to be the next prime minister, Milan Vaishnav of the Carnegie Endowment for International Peace says his success in these elections is a springboard into national politics and may force the US to rethink how it handles its official relationship with him.
“It would certainly be seen as awkward if US politicians were not at least cordial to Modi,” says Mr. Vaishnav. “You might not see a major change right away, but behind close doors, it’s very likely the US will start making steps to warm relations.”
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Estela de Carlotto hunts for Argentina's grandchildren 'stolen' decades ago

Estela de Carlotto isn't like most grandmothers. Instead of easing herself into retirement and enjoying the slower pace of life it affords, she remains a dogged workaholic.
Every weekday she rises early without fail in order to make the 70-mile round trip from her hometown of La Plata to an office in the Argentine capital, Buenos Aires.
"I had other ideas about what I'd be doing with my life, such as being with my children," she says, smiling. "I'm an elderly person who has had four children, and I now have 13 grandchildren and one great-grandchild. So I thought I'd be spending time with them. But life gave me another direction."
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Since 1989 that direction has involved being a "professional" grandmother: As president of Abuelas de Plaza de Mayo (Grandmothers of Plaza de Mayo), she is the most visible face of one of South America's largest human rights organizations.
Nominated for the Nobel Peace Prize five times, the Abuelas group has members whose lives read like the pages of a horror novel. Born out of the atrocities committed during the country's last military dictatorship (1976-83) – which was backed by the United States – the group comprises mothers whose daughters and daughters-in-law were abducted and killed by the military regime for their leftist views.
But the armed forces had a perverse rationale. Women who were pregnant were kept alive until they gave birth. Their newly born children were then forcibly adopted by other families and given false identities: The military's aim was to ensure that they didn't grow up with the same political orientation as their murdered mothers.
The Abuelas are still searching for some 500 "stolen babies" – their grandchildren – who have grown up unaware of who they are (so far, 107 children, now adults, have been "returned" to their biological families thanks to DNA testing).
Of all the South American nations that lived through a dictatorship, Argentina is the only country that had a systematic plan involving the abduction of babies.
Ms. Carlotto's own daughter Laura was kidnapped in 1977 and killed in 1978 after she'd given birth to a son in captivity named Guido, after his grandfather. The body of Carlotto's daughter was returned to her by the armed forces, one of the few bodies returned to parents.
Despite more than 30 years of searching, Carlotto has never found her grandson. So what stops her from admitting defeat and making herself comfortable in her favorite armchair?
"Strength is love, you see," Carlotto answers. "They [the military] killed my daughter. I won't forget her, and I want truth and justice. I'm looking for a grandchild, too, which is also motivated by love, so there's no way I can stop doing what I'm doing."
The Abuelas president meets me at the group's central Buenos Aires headquarters. She enters the interview room with slow, considered steps. But when she sits down and fixes her gaze, her sharpness and determination are undeniable.
Carlotto, who used to be headmistress at a school, says she feels comfortable in her role and all that it entails, from having to deal with the emotional fallout of a nieto (grandchild) who has come to the Abuelas with doubts about his or her identity to meeting heads of states or being invited to functions by human rights groups around the world.
She also recognizes that what she does isn't for everyone. Other grandmothers have either found their grandchildren or want to take a back seat role. Or they simply don't have the energy that Carlotto continues to show. (Mariela Belski, executive director of Amnesty International Argentina, calls her a "tireless, committed, and persistent fighter for human rights, and the struggle's most emblematic voice.")
"There aren't any more grandmothers that want to do the work that I do because I dedicate 24 hours a day to it," she says. "There were grandmothers that didn't want to become president or couldn't because of work commitments. I was able to retire because of my husband's work. So I had the time but also the character – I have a leadership personality."
Carlotto's teaching career has clearly helped in her work. Both she and the rest of the Abuelas have had to help nurture and then rebuild a polarized Argentine society licking its wounds from years of horrific crimes after the return to democracy in 1983.
The Abuelas president admits that "we've done a lot of teaching" over the years. Her organization tirelessly campaigned against laws from the 1980s and '90s that pardoned most of the dictatorship's henchmen (the laws were repealed in 2003). It also set up a DNA bank (the world's first) in 1987 to help find missing grandchildren, and it continues to take an active role in ongoing human rights trials against former military officials.
Carlotto talks with utter poise. Wearing her trademark pearl earrings, she comes across as an eloquent and elegant señora, forced by her circumstances to relive a terrible past.
"Estela has an utterly sweet character," says Guillermo Perez Roisinblit, one of the 107 grandchildren (now an adult) who have discovered their real identities through Abuelas. "And all this despite the troubles she's had to deal with in her life, including the kidnap and murder of her daughter Laura and the nearly 34-year search for her grandson Guido.
"Yet despite all this, she still wants to help other grandmothers with the same spiritedness as ever, and without succumbing to hatred, resentment, or a desire for revenge."
Being a public figure isn't always easy, Carlotto says, but the warmth that people show her in the street helps her keep going. Sometimes people want to have their photo taken with her, she adds, as if she were a film star (in fact, her life was made into a movie last year, "Verdades verdaderas," or "Real Truths," directed by Nicolás Gil Lavedra).
Despite the affection that a large part of Argentine society feels toward her and the Abuelas, there are still people who want to silence her bold voice, especially those with links to the dictatorship. On Sept. 20, 2002, in the early hours of the morning, Carlotto was home alone in her house in La Plata when it was peppered with gunshots fired from a speeding car. She was unharmed, but the attempted murder now means she has a policeman at her door 24 hours a day, and she travels with bodyguards.
"Look, I'm not afraid," Carlotto says defiantly, "firstly because the worst has already happened to me: My daughter was killed. And secondly because the bullets they tried to fire at me are the same that killed my daughter. The same people didn't fire them but they showed the same murderous mind-set."
Times are changing, however. The nature of the Abuelas organization is different now, she says. A father and a grandchild are now involved in the day-to-day running of it. It's the latter and his fellow "brothers and sisters," as she refers to them, who will continue the search until all 500 are found, she says.
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In October, Abuelas de Plaza de Mayo celebrated its 35th anniversary with speeches, laughter, and music at a Buenos Aires theater. The group has come a long way since those perilous first few years when its members were unsure of what they were doing and where it would lead – and when showing any sort of defiance of military rule was a highly dangerous activity.
"Sadness is something we'll have buried deep within us forever," Carlotto says, "but we're able to appreciate our achievements. Every grandchild that we find is giving freedom to someone who was living as a slave, so that they can recover their rights, their identity, their history, and their family.
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Syria fires more Scud missiles as refugee projections climb

• A daily summary of global reports on security issues.
The head of NATO condemned the Syrian government's return to firing Scud-type missiles yesterday, saying they were "acts of a desperate regime approaching collapse."
NATO chief Anders Fogh Rasmussen said that surveillance captured evidence of the firing of fresh rounds of missiles yesterday morning, Reuters reports, while American officials confirmed independently to The New York Times that the Scud missiles had resumed after an apparent lull from their initial use last week.
Syrian Foreign Minister Walid al-Moallem denied the reports as "untrue rumors," according to the Times.
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CBS reports that a half-dozen Scuds were fired overnight from an Army base near Damascus toward a nearby rebel base.
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Gen. Rasmussen's comments were echoed in the worries of Syrian rebel chief Salim Idris, who told CBS News that he is "very afraid" President Bashar al-Assad will resort to firing chemical weapons using Scuds. He said his contacts still with the regime said that the Syrian Army is preparing to use the missiles in the rebel-controlled northwest.
There is not much additional concrete information about the use of Scud missiles in Syria, CBS notes, because they are "mobile" and it is "hard to pinpoint from where they were fired." They are also not very accurate.
CNN reports that analysts believe that the Assad regime has as many as 400 Scud missiles on hand.
Rasmussen cited the past 24 hours' events today as he defended the NATO deployment of Patriot antimissile systems along the Syrian-Turkish border.
"The fact that such missiles are used in Syria emphasizes the need for effective defense protection of our ally Turkey," he told reporters today, according to Reuters. "The recent launch of missiles has not hit Turkish territory but of course there is a potential threat and this is exactly the reason why NATO allies decided to deploy Patriot missiles in Turkey, for a defensive purpose only."
In a move heavily criticized by Syria, Iran, and Russia, NATO recently approved the placement of an American, Dutch, and German Patriot antimissile system along the border of NATO member Turkey. The deployment of the battery requires troops to operate the missiles, as well – the US is sending 400 to the area, according to The New York Times.
Meanwhile, the United Nations revised its refugee projection numbers again – at least the fourth time it has done so – bringing the estimate up to 1 million in the next six months, according to a separate New York Times report.
Panos Moumtzis, the UN regional coordinator for Syrian refugees, said the new forecast was based on the fact that 2,000 to 3,000 Syrians are fleeing across national borders every day. Mr. Moumtzis added that the number of refugees could reach 1.85 million if there were a mass exodus from the country, the Times reports.
Radhouane Nouicer, the UN humanitarian coordinator for Syria, said yesterday that "there are nearly no more safe areas where people can flee and find safety."
The UN is seeking $1 billion for refugees outside Syria and $519 million to boost its aid provisions for 4 million people inside Syria – 20 percent of the country's population.
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US ex-marine to be released from prison after violating Mexico's strict gun laws

The American ex-Marine who has been holed up in a Mexican prison in one of the most dangerous regions along the US-Mexico border is reportedly going to be released today, in time to return home for Christmas.
Jon Hammar's crime: He carried an antique gun across the border from Texas that his family says he was planning to use on a hunting trip in Costa Rica. But en route he passed through Mexico, where despite record levels of violence, such arms are prohibited without permission from the Mexican government.
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Republican lawmakers rallied around Mr. Hammar's case, circulating photos of him chained to his jail bed. Some even called for Americans to boycott travel to Mexico until his release.
Hammar’s case came to light at a sensitive time in the gun-control debate. News broke on his August arrest in the wake of the Newtown tragedy, where an American took the lives of 20 elementary school students ages 6 and 7 last week, as well as six adults at the school and his mother.
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The Newtown shooting has sparked sympathy around the world but generated renewed criticism from south of the border, where politicians point the finger at the US, saying lax gun laws have contributed to Mexican drug violence.
Mexican law professor John Ackerman, writing in The Huffington Post, said this week that among the 60,000-plus death toll in Mexico, there are many innocent victims, including children. Regarding Newtown, he writes, “The National Rifle Association (NRA) should be applauded for its willingness to 'offer meaningful contributions to help make sure this never happens again.' But the discussion should be guided just as much by the plight of Mexican children as by the fears of suburban mothers.”
MEXICAN GUN LAWS
Hammar’s case has highlighted the stark difference between American and Mexican gun laws.
Hammar's mother, Olivia Hammar, told CNN that her 27-year-old son has been behind Mexican bars since August, after he stopped for gas in Matamoros, the notorious border town across from Brownsville, Texas, en route to Central America.
He was driving with a friend in his Winnebago, and the car carried four surf boards, according to Mrs. Hammar. But he also packed an antique shotgun passed down from his great-grandfather, CNN reports.
He has been in jail for four months but his family only took the case public recently.
Hammar reportedly declared the weapon with US border agents and then Mexican officials, and Republican lawmakers lobbying for Hammar’s release have said he was given “bad” information by US officials about the laws in Mexico, where gun laws are, at least on the books, prohibitive.
Guns are as easy to buy on the black market here like any illegal good, but unlike in the US, Mexican citizens who seek to legally own a weapon must apply for one through the country’s department of defense. There are no gun stores; all weapons are purchased through the government, after extensive background checks.
But this case also carries a certain amount of irony.
Over the six years of former President Felipe Calderon's administration, when the "Drug War" hit a fever pitch, drug traffickers have been documented using all manner of weaponry, from grenades, to so-called “matapolicias” or “police killers,” to monster “narco” tanks.
Some of those weapons, ammunition, and defense mechanisms are confiscated and their owners arrested. But with impunity rates at over 90 percent, most of the perpetrators go free.
But the one sitting in Mexican jail for four months was this young American carrying an antique shotgun. And while he did break Mexican law, his plight also highlights the extreme challenges facing the Mexican justice system, as drug traffickers – probably this very second – are employing combat-style weapons with little fear of getting caught, let alone languishing in jail.
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Japanese firms set spending record in buying up foreign assets

In the late 1980s, when Mitsubishi Estate bought Rockefeller Center and Sony snapped up Columbia Pictures, the Western media were full of stories of Japan’s imminent global economic domination. "Japan as No. 1" was a best-seller, and US autoworkers dramatically took sledgehammers to Japanese imports.
But by the end of 2012, Japanese corporations will have bought more foreign companies, spending more in dollar terms, than they did at the height of the '80s bubble economy. No one, however, seems to be taking notice.
The silence speaks to how a country as well-known for cute pop culture as for cutting-edge technology – and which powerful corporations once feared as a foreign predator – is now seen as down on its luck, struggling to recover from disaster. This perception – along with the fact that foreign takeovers are far more frequent, there are more global powerhouses, and Japanese cars are built around the globe – has allowed Japanese firms to go on an unprecedented spending spree overseas without any of the backlash seen decades ago.
“Japan has gone from being the 'exotic' in the 1960s, to a 'threat' in the 1980s, to just being a part of a rich, cosmopolitan human existence,” says Devin Stewart, senior fellow at the Carnegie Council and former director of the Japan Society in New York. “People learn about Japan and its culture nowadays because it is an important part of the world as we know it. It's a place people relate to.”
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In 1990, at the height of the asset bubble in Tokyo, "Japan Inc." made 463 acquisitions of foreign firms. This year, the total is set to top 500 for the first time, with a record total spend of more than 7 trillion yen ($83 billion). IT giant Softbank’s $20 billion takeover of Sprint Nextel Corp., announced in October, will be the biggest foreign takeover ever undertaken by a Japanese company.
The acquisitions this time around are spread across a wide range of industries, rather than the trophy buys of prime real estate that unnerved America during the days of Japan’s roaring bubble economy.
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“There was a slightly indiscriminate hue to Japanese buying in the late '80s, and companies have learned to be more sophisticated, rather than appearing to be carrying around large wads of cash in their back pockets,” says Yuuichiro Nakajima, head of Crimson Phoenix, a cross-border mergers and acquisitions advisory firm with offices in Tokyo and London.
OVERLOOKING A KEY POINT
Japan’s financial institutions, their fingers burned badly by the bursting of the bubble that left them with massive, unrecoverable loans, survived the worldwide crash of 2008 relatively unscathed, having taken a more cautious approach than their Western counterparts. Indeed, it was Japanese investment bank Nomura that bought large chunks of Lehman’s European and Asian businesses after the bankruptcy of the US institution in 2008 that triggered the global financial crisis.
Commentary on Japan often points disparagingly to its shrinking population and domestic market, the challenges of recovering from the March 2011 earthquake and tsunami, and its enormous national debt, which at well over 200 percent of GDP is outranked globally only by Zimbabwe. However, it’s often overlooked that the country’s overseas assets exceed its foreign liabilities by around $3 trillion.
“It seems strange, but Japan is also the world’s biggest creditor nation and has acquired very large overseas assets over the past 30 years. It gets a very good return on these, providing income of 14 to 15 trillion yen ($166.5 to $178.5 billion) a year,” points out Masayuki Kichikawa, chief Japan economist at Bank of America Merrill Lynch (BAML) in Tokyo. “It is this which helps protect Japan from financial crisis, despite the huge government debt.”
And Japan's activity is often overshadowed as the world fixes its eyes on Japan's giant eastern neighbor. “In some ways China has taken the place of the Japan of yesteryear: It has huge firepower and is buying across multiple sectors,” suggests Mr. Nakajima. “And, with China, many of these buyers are state-owned, bringing into question whether the motivation behind acquisitions is strictly profit.”
Yet even China, which almost certainly will displace the US as the world’s economic powerhouse, doesn’t evoke the fear Japan once did.
“But despite the differences between Japan, which was and is a democratic ally, and China, which is not an ally and is nominally communist, the fear about China today seems tame compared with the hysteria about Japan in the 1980s,” says Mr. Stewart of the Carnegie Council. “Back then, Japan was 'taking over the world.' Perhaps people are just more sophisticated about the world and know China faces enormous challenges, as all countries do.”
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