A week in Japan tech
Hardware
- Sony plans to realign its global manufacturing bases over the next three years to increase the cost-competitiveness of its lackluster electronics operations according to Nihon Keizai Shimbun, a Japanese newspaper. Sony plans to consolidate the production of core components for its products at some factories, aiming for economies of scale through mass production. The consolidation was prompted by intensifying competition from South Korean and Chinese consumer electronics firms. Sony concluded that it could not be competitive unless it reduced the number of factories the company now runs--30 assembly plants and some 20 factories manufacturing components worldwide. The expected consolidation of factories is the centrepiece of a ¥300 billion ($2.6 billion) structural reform announced in April.
- Major Japanese electronics firms are trying to disperse the risk of heavy capital investment in their flat-panel display operations by teaming up with one another. Realizing the limiting factor in last year’s sales of LCD TVs was access to flat-panel displays but equally wary of over investment into increase production capacity of displays in light of South Korean and other rivals aggressive move to expand capacity, many Japanese electronics firms are trying to partner with one another in flat-panel production in order to spread the investment risk. Toshiba Corp. and Matsushita Electric Industrial Co. set up the first such joint venture in spring last year owned 60% by Toshiba and 40% by Matsushita.
- Toshiba Corp. and Hitachi Ltd. plan to market new types of digital video recorders in the latter half of the year according to Nihon Keizai Shimbun. Toshiba will as soon as October release a DVD recorder compatible with both the DVD-RAM and DVD-RW formats, an industry first. Analysts had speculated that the spread of DVD recorders would be hindered due to the rival formats. Toshiba will outsource production to a Chinese manufacturer, which will produce 50,000 units a month. The recorder will be simultaneously marketed in Japan, the US, the UK and France, among other countries.
- Sanyo Electric will more than triple production capacity of digital cameras in China this year to meet growing demand. Sanyo would raise production capacity at its plant in Guangdong Province in southern China from one million units a year to 3.6 million units according to Nihon Keizai. The company believed China's importance as a production base would remain unchanged in the long term although the nation had been hit by the SARS epidemic. Sanyo would also establish a parts-procuring center in Shenzhen this summer, aiming to boost the local procurement ratio in value from the current 10% to 70% in four to five years.
- Japanese LCD parts/components makers are set to sharply expand their production capacity in response to stepped-up efforts by South Korean and Taiwanese LCD manufacturers to make larger LCDs and further raise output. Asahi Glass Co. is spending ¥12 billion ($101.3 million) to boost production of LCD glass substrates by 70%. Nippon Electric Glass Co. is set to install a ¥10 billion ($84.4 million) kiln for large LCD substrates at a plant in Shiga Prefecture to raise output capacity by 50%. The company also plans to build a ¥3 billion ($25.3 million) glass substrate processing plant in Taiwan that is expected to go on line in about a year. Mitsubishi Rayon Co. is constructing a plant to produce acrylic resins used in LCDs slated to become operational in November; the facility will produce 40,000 tons of resins, increasing the firm's overall capacity by 70%. NEC Electronics Inc. is poised to increase the monthly output of LCD drivers, a device to transmit images to LCDs, to 13,000 units this autumn from the current 11,000.
Mobile / Wireless
- J-Phone Group is scheduled to give up its brand name and become Vodafone in October. Prior to that, the company has turned some of its shops into Vodafone outlets on a trial basis. Both J-Phone and Japan Telecom Co. are subsidiaries of Japan Telecom Holdings Co., in which Vodafone holds a majority stake. After Japan Telecom is sold off to Ripplewood, that will leave the holding company and J-Phone in the group. If the holding company becomes the surviving entity, the merged firm's stock will remain listed on the stock exchange, paving the way for more fund raising through public share offerings and other means. The fund needs at J-Phone, which plans to invest about ¥300 billion in its third-generation (3G) phone service in the current business year, remain as great as ever.
Telecommunications
- Japan Telecom Holdings Co. said it swung to profitability on the back of new subscribers for its J-Phone mobile unit and cost-cutting efforts. The company posted a group net profit of ¥79.5 billion ($680.4 million) for the year ended March 31st, a recovery from a loss of ¥66 billion ($555.8 million) for the prior fiscal year. Japan Telecom had previously given a profit outlook for ¥65 billion ($547.5 million). Group revenue rose 5.5% to ¥1.8 trillion ($15.2 billion) from ¥1.7 trillion ($14.3 billion) in the prior fiscal year. The company was able to attract new subscribers for its J-Phone mobile unit and cut sales-promotion costs, offsetting negative impact from its falling monthly average revenue per user.
- NTT DoCoMo Inc. began field trials of signal transmissions for fourth-generation (4G) wireless communications, which promises cell phones capable of transmitting data at speeds as fast as an optic fiber network. The testing will help verify the essential technologies for 4G wireless cellular phones, standards for which the International Telecommunications Union (ITU) aims to have ready by 2010. Last year NTT DoCoMo conducted successful indoor tests on a system that could send signals downstream at 100 megabits per second and upstream at 20Mbps. The outdoor trials will test the VSF-OFCDM communications protocol for downstream transmissions and the VSF-CDMA protocol for upstream communications.
- NTT DoCoMo Inc. plans to launch a service through which cellular phone users will receive on their Internet-compatible handsets the latest information on stores that they often visit. Cell phone companies are increasingly offering data services because communications fee revenues are hitting a ceiling. DoCoMo aims to boost revenue from its data services, which now account for roughly 20% of total sales. The company will begin a trial service next month and kick it into full gear by the end of the year. When supermarkets, department stores and other retailers issue membership cards, they will ask customers to provide their cell phone e-mail addresses. These registered customers will be able to view via the i-mode Internet-compatible cell phone service information on the store's latest sales and other related topics.
A week in Korea tech
Hardware
- LG Electronics is likely to strengthen its grip on the plasma display panel market by purchasing a stake in LG Micron, according to Goodmorning Shinhan Securities. LG Electronics purchased 1.17 million shares of LG Micron from LG International Corp. and LG Innotek, increasing its share from 17.2% to 37.4%.
- Hynix Semiconductor Inc. said it has launched volume production of its Handy SDRAM, an ultra-low power mobile SDRAM used in next-generation mobile handsets, PDAs, digital still cameras and various other consumer products. Hynix has applied various leading-edge low-power technologies to maximize the efficiency of the product performance. By applying its new power-saving technology geared to control self-refresh and speed within the DRAM cell, Hynix said it has reduced power consumption further while increasing speed.
Internet
- Daum Communications Corp., celebrated the fourth anniversary of its popular online community service known as "Cafe." The leading dot-com venture introduced the online community service, in which like-minded people can chat real-time, post messages in bulletin boards and pursue both online and offline club activities, in 1999. The service, the biggest in Korea, boasts 2.5 million cyber clubs and some 24 million users. Daum said about 10,000 groups are being created and 1.27 million people sign up for the Cafe service on a daily basis.
- Korea's major portal service providers are making their instant messenger programs a key gateway to core services. Instant messaging functions are expanding as portals linking their community, content and commerce services to these programs. Multimedia features have been added to messenger programs so that people can listen to music and play games while chatting. Korea with more than 10 million broadband users, instant messengers are widely used thanks to the "always-on" connectivity bolstered by the high-speed Internet access. MSN Messenger, one of the largest messenger services in Korea, is adding new services like resources for studying English, horoscopes and news channels to its program. MSN said it plans to add games to its next version of its messenger software as part of efforts to channel more Web traffic to its portal service.
Media, Entertainment and Gaming
- Korea's fast-growing game industry has promising potential but is now facing greater risks in rolling out new titles because of the steep increase in development costs, according to Korea Ratings. The research firm said Korea's game industry, which is valued at about W4 trillion ($3.3 billion) annually, is entering a phase in which developers spend more time and money to produce a single title. As cash-strapped Korean game makers are reluctant to opt for high-stakes title development, the top-five players are virtually dominating the PC market, and Japanese software controls about 90% of the arcade game market. Korea Ratings said hundreds of mobile software developers for compact gaming devices are facing stiff competition on price.
- Plenus Entertainment Inc. planned to acquire the remaining 49% stake, which it did not already own, in Netmarble, a sports betting services provider. Plenus provides software-consulting services and had sales of $12.1 million last year. While the take over was friendly, the value of the transaction is not yet released.
Mobile / Wireless
- Samsung Electronics is shifting its business strategy for its flagship Anycall brand in a bid to further strengthen its grip on the fast-evolving handset market in Korea. Samsung has long dominated the domestic handset market with its Anycall brand name, developing a chic and fashionable image among tech-savvy Korean consumers. It continues to bombard TV and print media with Anycall ads, beating out other handset makers, notably LG Electronics, in terms of brand recognition. The move is widely seen as an attempt to cement its market dominance as deepening saturation poses a threat to handset makers.
- Korea's fixed-line carriers are staging a series of field tests of 2.3 GHz mobile Internet technologies, intensifying the competition over the new service that analysts and industry observes said could drastically reshape the broadband industry. A host of foreign firms including Flarion, Arraycomm and Broadstorm are promoting their 2.3 GHz technologies, offering tests to Korean carriers in the hopes that their solution for the new mobile service would be implemented. The leading core technology developers are spearheading standardization for the new technology through the IEEE 820.16 (broadband wireless access) and 820.20 MBWA (mobile broadband wireless access) standards working groups. KT Corp. and Hanaro Telecom Inc. are rushing to grab the lead in implementing 2.3 GHz mobile Internet services.
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