Internet
ò MoodyÆs Investors Service disclosed its downgrading of its credit rating on Vodafone's Japanese subsidiary after internet conglomerate Softbank struck a $15-billion deal to buy it. The downgrading of the secured unsecured debt rating on Vodafone K.K. went by three notches to "Baa2" from "A2" citing that the Japanese firm will be unable to enjoy financial and other support from its British parent after the sale to Softbank. A "Baa" rating means the borrower has adequate capacity to meet its financial commitments but shows a deterioration in circumstances or the economy is more likely to lead to a weakened ability to repay its borrowings. MoodyÆs is putting Vodafone on review for possible further downgrade as it observes how Softbank will try to reverse a decline in the companyÆs earnings and subscriber numbers.
ò Yahoo Japan Corp. announced that it has entered an agreement to acquire a 69-percent stake in an information service unit of Toshiba Corp. The company said it will acquire the stake in information processing and provider service firm News Watch from Toshiba for 1.3 billion yen (US$11.1 million). The unit reported sales of 1 billion yen (US$8.5 million) for the year ended March 2005.
ò NEC Corp. revealed its plans to spin off its Biglobe Internet service provider business around July and sell a 30 percent stake in the ISP to Sumitomo Corp. and four other firms. With the new companyÆs name and capital still to be finalized, NEC said that once the business is set up, it will issue new shares to other firms. The report said that other than Sumitomo, other shareholders will likely include Daiwa Securities Group Inc.. Sumitomo has already been providing online shopping video content to Biglobe. The move to spin off the ISP is expected to produce original content and also secure a wide range of offerings from its shareholders. It will also consider tying up with third-party developers to offer content. Some of the content will be offered to Biglobe subscribers for a fee. The move is seen as NEC's bid to beef up its content distribution business by tapping other firms' capital and know-how. NEC's Internet access operations generate annual sales of around 62 billion yen ($531.8 million). Biglobe, the fourth-biggest ISP in Japan after Nifty Corp., Softbank BB Corp. and NTT Communications Corp, has some 4.4 million subscribers. According to NEC, there are no plans to have the new ISP firm go public in the near future.
Mobile/Wireless
ò JapanÆs Ministry of Internal Affairs and Communications announced its plans to make next-generation high-speed wireless communications available to home and corporate users so they can send and receive large amounts of data and sharp images at the same speed presently possible through fiber-optic networks. If the programme is achieved, the ministry expects it to improve the communications environment in older condominiums and office buildings that are difficult to link to fiber-optic lines, enabling residents and workers to receive and transmit high-resolution images more easily. The ministry disclosed its program to promote the advanced networking technology û an upgraded version of existing wireless LAN technology û and a UWB (ultra wide band) communications system that can send data and images about five times faster than a fiber-optic network, though the range of data transfer is limited to a single room. The UWB system will be used to connect digital home appliances, personal computers and recording.
Media, Entertainment and Gaming
ò Fuji Television Network Inc. revealed that it would start the distribution of its popular news programme on professional baseball via the internet. The decision follows its agreement on profit sharing with ball clubs, which own the copyrights to related images. The program "Professional Baseball News," which started 30 years ago, has been one of Fuji TV's flagship programmes. It will be delivered online immediately after the end of the 11 p.m. programme on a communications satellite channel. The monthly charge is placed at 1,050 yen (($9). Viewers will have access to news archives dating back one month through the broadcaster's web site offering on-demand services. Fuji TV said it expects more than 10,000 viewers to sign up.
Hardware
ò Toshiba Corp. said it would start selling the world's first HD DVD player in Japan later this month. The product is expected to be priced between 95,000 yen ($810) and 100,000 yen ($850). The next-generation DVD player can also play conventional DVDs. HD DVD software titles are scheduled to become available from mid-April. The company is looking to sales of 4,000-5,000 units in the first month. The company plans to expand its HD DVD product lineup in Japan by releasing an HD DVD recorder with a built-in hard-disk drive around late May. Toshiba initially intended to start selling an HD DVD player in North America ahead of the rest of the world. But it has decided to develop the highly competitive domestic market first to establish a lead over the rival Blu-ray Disc next-generation DVD format. The first Blu-ray Disc player is expected to be released by Sony Corp. in North America in July, selling for around $1,000.
ò Sharp Corp. and the Japanese unit of Teco Electric & Machinery Co. disclosed that they will bring their court battle over the Taiwanese firm's alleged patent violation to an amicable settlement. Sharp sued Sankyo Corp. in June 2004, seeking to suspend the importation and sale of Teco 20-inch televisions using LCD panels produced by AU Optronics Corp., also of Taiwan. Sharp had claimed that AUO's products infringed on Sharp's panel-manufacturing technology, which Sankyo denied. Upon settling, Sharp plans to sign a cross-licensing agreement with AUO in LCD-related technology. Sharp already has a similar pact with Chi Mei Optoelectronics Corp., a major Taiwanese LCD manufacturer. Sharp is now focusing its management resources on the production of large LCD panels. Its cross-licensing agreement with AUO is seen as a step to a future deal on panel procurement.
Semiconductors
ò According to the Tokyo Stock Exchange, Noda Screen Co., a maker of print circuit boards used for mobile phone handsets, will list on its second section. The company currently trades on the Osaka Securities Exchange's Hercules Market. The firm, according to TSE, has no plans to offer shares to the public prior to the share listing.
ò Toshiba disclosed that it won a patent lawsuit against South Korean rival Hynix Semiconductor in a Tokyo court. The suit involved patents for computer chips widely used in mobile phones, digital cameras and portable music players. The decision favoring Toshiba said Hynix Semiconductor had infringed on Toshiba's patents related to NAND flash memory. The court ordered that sales of Hynix products found to be in violation be halted in Japan and ordered Hynix pay Toshiba 7.8 million yen ($66,000) in damages. In Seoul, Hynix said it would take all possible legal action against the Tokyo court's ruling, with the company planning an appeal.
Telecommunications
ò NTT DoCoMo Inc. announced that it would acquire two telecommunications firms in Guam for a combined $71.8 million, with the aim to offer wireless network services to Japanese tourists visiting the island. NTT DoCoMo said it would set up a holding company to acquire a 100 percent stake in Guam Cellular & Paging Inc. The process will then be followed by the acquisition of the business of Guam Wireless Telephone Company LLC through Guam Cellular and the merger of the two firms. NTT DoCoMo said it will provide up to $6.5 million to boost the newly merged entity's facilities and infrastructure. The firm said it aims at deploying a WCDMA network for 3G services as it is seen as providing faster and larger data transmission operations by utilizing Guam Cellular's frequency band in the future.
Korea
Mobile/Wireless
ò KTF Technologies, a mid-tier Korean cell phone maker, announced the unveiling of a 7.9-millimeter-thick handset, which the company claims is the world's thinnest model. KTF Technologies, an affiliate of South KoreaÆs No. 2 wireless carrier KTF, plans to market the bar-type EV-K100, codenamed ôNo. 7,ö via its parent firm at just below 400,000 won ($410). Previously, the 8.8-millimeter phone made by KTF Technologies' local rival VK was recognized as the world's slimmest mobile phone since its debut, when it pointed to 8.8 millimeters as a downward limitation given the present technologies. However, KTF Technologies overcame such a conventional barrier by slashing the thickness of the embedded antenna in a unique way. The firm refused to reveal the precise antenna size. Wafer-thin phones have become the rage across the world with the clamshell-type 14.5-millimeter-thick RAZR phone of Motorola, the second-largest cell maker in the globe, having swept the market over the past few years. KTF presently has no plan to export the phone based on the code division multiple access (CDMA) but brisk local sales might prompt the firm to go global with the model.
Media, Entertainment and Gaming
ò OnNet, a pioneer in the field of internet entertainment, said the company would launch an online golf game, 'Shot-online' in the North American market signing an agreement of package version sales of 'Shot-online'. In the US it will employ Cynet as distributor. 'Shot-online' is getting highly popular as it records the maximum downloading in the golf sector of 'download.com', the biggest downloading site in US and ranking 1st in the sports game position of 'mmorpg.com'. Under the plan to drive offline sales on the base of the popularity of the online game, the company plans to supply 'Shot-online' to on- and off-line shops such as Amazon.com, WalMart and Best Buy. Onnet said it is trying to find various distribution and service types suitable for customers in US
Software
ò Competition between multinational computing firms and local software companies is heating up in the online security market. Symantec, the leading security software software firm, said it has teamed up with Internet service providers targeting the online security market. It has formed alliance with Hanaro Telecom. The company said it is ready for the next-generation security service code-named "Genesys" for Vista and Windows XP users, which is designed to protect data from new breeds of Internet threats such as spyware, phishing and fraudulent web sites by providing secure online backup. Trendmicro is launching "House Call" service providing virus detection, care and recovery in conjunction with portals and ISPs. Microsoft also plans to unveil "MS Windows Live Safety Center," which provides detection and care of malicious codes for free, in the first half of this year. The company said it is also set to launch "Windows Onecare Live" in the second half, providing Windows patching and PC optimization, as well as curing viruses, worms and spyware. Facing aggressive moves by multinational computing firms, the countryÆs No. 1 security vendor Anhlan is reportedly ready to defend its established position by leveraging its individual customer base reaching some 5 million. The company disclosed its plans to introduce new web-based virus and spyware prevention service for enterprise customers next month.
China
Internet
ò Tencent Holdings, a leading provider of internet and mobile and telecom value-added services (VAS) in China, announced that its revenue for 2005 totaled Rmb1.4 billion ($174.3 million), a figure that represents a 24.7 percent growth from the previous year. Tencent said its net profit for 2005 went up by 10 percent year-on-year to Rmb485.4 million ($60.4 million). TencentÆs businesses, which are composed of Internet VAS, mobile and telecom VAS, and online advertising, contributed 99.3 percent of Tencent Æs revenue.
ò IVY Worldwide, Inc. and IVY Luxe, a San Francisco-based luxury company, announced the entry of its WineSpring brand into China. The product was first launched in December 2005 under WineSpring.org as a showcase for premium California wines for the affluent Chinese marketplace, WineSpring said it will expand its focus to build an exclusive online platform for consumers of luxury lifestyle goods, services and experiences, as well as for its global network of partner companies that cater to the needs of affluent consumers. At present, WineSpring and parent company IVY Luxe are expecting to be in 30 Chinese cities, where they hope to set up their profiles and luxury partner network for the top hotels in China, including the finest restaurants and luxury travel and experience provider partners, both on the West Coast of the U.S. and in China. The new WineSpring luxury platform is expected to be out in May 2006.
ò NetEase.com, Inc., one of China's leading Internet and online game services providers, announced that it would be changing its current American depositary receipt (ADR) ratio, with the firm claiming that its ADR price has increased significantly over the last several years. NetEase said the ratio would change from the current one ADR for every 100 ordinary shares to one ADR for every 25 ordinary shares. There will be no change to NetEase's underlying ordinary shares. In addition, existing ADRs will continue to be valid and will not have to be exchanged for new ADRs.
ò CCID Consulting predicted ChinaÆs online gaming market to hit Rmb22.7 billion ($2.8 billion). The report said that the value of ChinaÆs online gaming market surpassed Rmb4 billion ($498.2 million) in 2005, registering a 50.6 percent increase over the previous year. Online gaming revenue accounted for more than 30 percent of ChinaÆs total Internet revenue and was higher than the revenue from search, instant messaging, e-mail, online advertising and e-commerce platforms.
ò Tom Group announced that its net profit for 2005 went down by 66 percent to HK$259 million ($33.3 million), while its revenue climbed 20 percent to HK$3.1 billion ($399.5 million) over the previous year. The company attributed the fall in net profit to the lack of one-off gains. Tom Group revealed that its spin-off of Tom Online contributed HK$730 million ($94 million) to its net profit in 2004. The group said its earnings for the Mainland internet business as well as its publishing businesses in Taiwan and the Mainland posted a 39 percent and 14 percent growth, respectively, in 2005.
Mobile/Wireless
ò China Unicom, ChinaÆs second largest wireless carrier, announced that the number of its global system for mobile (GSM) subscribers increased to 96.9 million at the end of February from 96 million registered in January. China Unicom said its CDMA subscribers reached 33.3 million, compared with 33 million at the end of January.
ò Baidu.com Inc. announced entering into an agreement with Nokia Corp. to offer a mobile search service on several high-end Nokia cell phone models. The application will be available on the Nokia N70, Nokia N90 and other select Nokia devices. It will include news search, image search and the Baidu Post Bar, an online community developed by Baidu. The pilot application is currently downloadable for certain devices in Mainland China. Baidu stated that it considers Nokia as one of its most important collaborators in mobile search.
ò Through its Motorola Ventures, Motorola announced that it has invested in three technology companies based in China. The companies are Shanghai NewMargin Venture Capital Enterprise, Shenzhen Shenxun Information Technology Development, and Legend Silicon. Motorola said China continues to be of strategic importance to the company as it disclosed that other than boosting its strength in mobile devices and network infrastructure, the company is going into new businesses aimed at providing seamless mobility solutions to its customers in China. With the deal, Motorola has become one of the largest investors of Shanghai NewMargin Venture Capital Enterprise, originally established with a US$35-million private equity fund. Motorola said the venture company said it will continue to focus on high-tech companies, high-growth or high-potential companies in China. Details of the investments were not reported.
Media, Entertainment and Gaming
ò Navstar Media Holdings, Inc., a leading provider of television content in China, announced its acquisition of a 70-percent ownership of Beijing Broadcasting and Television Media (Beijing Media), a leading content and production company in China. Under the deal, Navstar will issue 2.4 million shares of its common stock to the existing shareholders of Beijing Media, including 1.5 million shares to complete the acquisition and 900,000 shares to secure a pre-Olympics 2008 Beijing Games sports mini-series featuring top Chinese athletes. The 900,000 shares will be returned to Navstar if the show cannot be secured. Together with this, Navstar said it will consolidate its television content production capabilities under the umbrella of Beijing Media to streamline and more effectively manage its operations. Aside from a record 10,000 hours of television programming, including TV series, movies and specials in the past five years, Beijing Media currently produces approximately 500 hours of programming per year for CCTV, the major broadcast television network in Mainland China.
ò CDC Games announced that it will acquire a total of 52 percent of 17game, in the form of 27 percent cash and 73 percent restricted shares of China.com. The deal is valued at $18 million. Under the agreement, the founders of 17game will remain with the company and will continue to work with China.com's management team to expand the online game business and create synergy between 17game and China.com's other operating units. 17game is a leading MMORPG provider with a robust track record in launching and distributing successful online games for the China market. Its latest online game, Yulgang, was one of the fastest-growing MMORPGs in China in 2005. The game was noted by 17173.com as the second most popular MMORPG among over 50 new online games launched in China in 2005 and also named by China e-Game Industry Association as the most innovative game of 2005. Yulgang pioneered the "free-to-play and pay-for-virtual merchandise" business model for MMORPGs in China and set the trend for the move to this business model by other leading online games companies in China. Since its commercial launch in July 2005, Yulgang's subscribers have increased to approximately 15 million as at the end of Q4 2005. The increase of China.com's ownership in 17game to 100 percent is seen as an indication of a successful partnership the two companies have forged to deliver the best online gaming experience to their customers. The acquisition is expected to facilitate China.com's integration of its online game business with the existing portal and MVAS units, and solidify China.com's position as one of the leading MMORPG operators in China.
Hardware
ò Dell Inc. announced its decision to expand its design centre in Shanghai in order to be more competitive. The company said it would hire some 200 people for the expanded center, which is an increase of 70 percent of its staff. Set up in 2003, the design center in Shanghai focuses on developing desktop PCs and software. According to industry sources, Dell has been concentrating on competing in the PC market in China, as the country became its third largest market last year. Dell's market share in China in 2005 went up by 0.6 percent to 7.8 percent, even as its competitor Lenovo still dominates the market with a 33.3 percent market share.
ò China is looking to producing 98 million desktop and laptop computers this year, with most of these products made mostly for overseas markets, according to the Ministry of Information Industry (MII). China said it aimed to export 58 million computers, or 59 percent of the total output forecast for this year. The average export price for a desktop in 2005 was placed at $617, down from $644 at the end of 2004. The drop in the prices is ascribed to the massive exports from the country that has forced computer firms to slash down their prices to be competitive. Leading the industryÆs export program is Lenovo, the nationÆs largest computer maker.
ò GOME Electrical Appliances, a Chinese household appliance retailer, announced a slight increase in its 2005 net profit from a year earlier. GOME said its net profit last year was Rmb499 million ($62.1 million), up 2.7 percent from Rmb487 million ($60.6 million) the previous year. GOME had 259 outlets across 69 cities in China as at the end of last year, compared with 116 outlets at the end of 2004. The company said it plans to add 120-150 outlets and three megastores in 2006. GomeÆs online sales account for 1 percent of its total sales.
Telecommunications
ò China Netcom Group (Hong Kong) announced a significant increase in its net profit, a performance that the company ascribed to a robust subscriber growth and stricter cost controls. China Netcom said its net profit went up to Rmb13.9 billion ($1.7 billion) in 2005, compared to the Rmb2.7 billion ($336.3 million) in 2004. The company expects the 3G licensing situation to be resolved this year, with it expecting to receive one of the 3G mobile phone licenses to be awarded. Listed in Hong Kong and New York in 2004, China Netcom Group (Hong Kong) Corp. Ltd. is the Mainland's second largest fixed-line phone operator. In a separate report, China Netcom Group Corp (Hong Kong) said it will focus on generating growth from its broadband business and the quasi-mobile phone service, which is based on the personal handyphone system (PHS), this year before it gets approval as a 3G operator. The company also admitted for the first time that it would be setting up a venture capital fund in the amount of $150 million. The fund targeting mainland broadband businesses would be supported not only by the China Netcom Group but also by PCCW and two prominent individuals û Rupert Murdoch and Jiang Mianheng, a son of the former president.
Hong Kong
Mobile/Wireless
ò Hutchison Whampoa disclosed that its global $22 billion 3G- investment would break even. Observers recall that the company said its 3G businesses in nine international markets would achieve break-even before interest, taxes, depreciation and amortization (EBITDA) by last year, and on earnings before interest and taxes (EBIT) level by this year. Analysts, however remain enthusiastic about the prospects for the 3G business of the company, claiming increasingly stable average revenue per user (ARPU) and a critical mass of 11.9 million for its global 3G customers, which makes the break-even target realistic. The group reported an 11 percent growth in its net profit to HK$14.3 billion ($1.8 billion), a performance that the company ascribed to exceptional gains from asset sales, revaluation of properties and windfalls from buying back assets at a lower price than their original cost.
Software
ò Tradelink Electronic Commerce, a software developer, said it is considering bidding for the right to manage the government's loss-making electronic certification service after refining its existing trading software. The company earlier announced a 45 percent gain in its net profits in 2005 to HK$91.3 million ($11.7 million), a figure that went beyond its forecast of HK$80 million ($10.3 million) forecast. Enduring losses of almost HK$90 million ($11.5 million) in losses in the past five years, Hong Kong PostÆs e-cert services will be tendered to the private sector this year. The winning bidder will run the service between 2007 and 2011 with the Hong Kong Post Certification Authority. Reports show that only 10 percent of the 1.2 million people who had their personal e-Certs embedded into their smart ID cards between 2003 and 2004 had used the service. The digital certificates are accepted for about 70 types of e-government services, including tax returns, and about 20 types of e-commerce activities, such as banking and online betting. Tradelink Electronic Commerce said it had made more than HK$10 million ($1.2 million) in investment in 2005 for the further development of its existing software used to facilitate trading. The company said it would begin marketing the Digital Trade and Transportation Network (DTTN), which was developed with the government. Investment in DTTN was HK$150 million ($19.3 million), with Tradelink taking a 51 percent stake.
Media, Entertainment and Gaming
ò Television Broadcasts (TVB), Hong Kong's largest free-to-air television broadcaster expects its advertising revenue this year to post from 3 to 5 percent growth over last year, as it takes note of the intense rivalry competition from other media groups. TVB announced a 64 percent rise in its net profit to HK$1.1 billion ($141.7 million), on a 9.4 percent growth in revenue to HK$4.1 billion ($528.3 million).
ò Sony Computer Entertainment and PCCW announced a partnership that will allow the offering of a wireless video gaming and video entertainment for PlayStation Portable (PSP) users in Hong Kong. The two companies said their alliance will offer films, music, TV programmes, exclusive web dramas, video-game trailers and video-game demos to PSP users at more than 300 Wi-fi hot spots operated by PCCW. The partners are offering the service free until the end of next month. To use the service, PSP users must have their service warranty registered in Hong Kong. Consoles bought in the United States, Europe and Japan will not allow the offering. A network utility disc is needed under this offering aside from the usual signing up requirement.
Singapore/Malaysia/Philippines/Indonesia
Internet
ò The internet arm of Globe Telecom unveiled in the Philippines a new product solution dubbed the GlobeQuest Web Phone, said to be the countryÆs first PC-based VoIP (Voice over Internet Protocol) service that utilizes traditional prepaid cards. To avail of the service, a PC user, preferably with a broadband connection, must go to the GlobeQuest website and click the Web phone icon to launch the service. Only those with a Globe1 prepaid cards can make calls on the Web phone. According to GlobeQuest, the quality may not be that good yet but the service will enable users to save as much as 78 percent in international calls. The offering can also be used to call a landline and mobile anywhere in the country and abroad at a lesser rate. The company underscores one point about the Web phone as unique in the sense that although the underlying technology behind the service is VoIP, the business model employs the use of widely circulated prepaid cards.
ò Yahoo Inc. announced the launching of three new localized home pages for Indonesia, the Philippines and Vietnam as part of a strategy to tap rapid growth in the number of Southeast Asian Internet users. The company said it plans to further increase its investment in regional operations. Currently, Yahoo has localized home pages for five markets in the region. Singapore and Malaysia were the first two countries in the region to get localized Yahoo sites. The company plans to roll out a Yahoo site for Thailand within the next six months. According to Yahoo Southeast Asia, which is headquartered in Singapore, the number of Internet users in Southeast Asia is expected to rise by 83 percent to 100 million by 2008 from 54.7 million current users. Yahoo said the region's Internet penetration rate is projected to rise to about 20 percent over the same period from 11.3 percent, noting that Southeast Asia has become of the fastest-growing markets in the world. Singapore and Malaysia account for more than 50 percent of Yahoo Southeast Asia's revenue, with about 10 percent of Yahoo's 429 million Internet users a month located in Southeast Asia. The company said it aims to use Singapore as a "test bed" for new services for the rest of the region.
