Internet
ò Yahoo Japan posted a 22.1 percent growth in net profit to Ñ13.6 billion ($114.4 million) for the three months to September on revenues, which rose 24.5 percent from a year earlier to Ñ51.2 billion ($435.3 million). The firm said its operating profits went up by 31.5 percent to Ñ25 billion ($212.5 million). Yahoo Japan Corp is 41.1 percent owned by internet conglomerate Softbank Corp and 33.4 percent by Yahoo Inc. of the U.S. Its advertising sales rose 35.9 percent from a year earlier, which was a slight 0.3 percent rise from the first quarter to June.
Mobile/Wireless
ò After claiming that intense competition in JapanÆs mobile phone market would have a strong impact on its profits, NTT DoCoMo posted a 19.6 percent decline in its net profit to Ñ309.8 billion ($2.6 billion) in the six months to September compared with a year earlier. The company said its operating profit went down by 7.4 percent to Ñ516.8 billion ($4.3 billion) as revenues posted a 0.4 percent growth to Ñ2.3 trillion ($19.5 billion), the latter ascribed to the introduction of new handsets with credit card functions and built-in music players. DoCoMo said it looks to a full-year net profit of Ñ488 billion ($4.1 billion), down 20.1 percent from a year earlier, on revenues of about Ñ4.8 trillion ($40.8 billion), up 0.7 percent. In a separate development, Softbank Corp announced an aggressive discount package, a move that analysts see as its attempt to catch up with larger rivals NTT DoCoMo and KDDI.
Media, Entertainment and Gaming
ò TBS Radio & Communications announced plans to create a new radio channel concentrated on classic music broadcasts next spring using digital technology enabling high-quality sound transmission. A top company official expressed that the new service will be aimed at ôadults living in the urban areaö as its main listener base, while using the digital radio broadcasting technology it is testing in Tokyo. At present, Japan Broadcasting Corp., known as NHK, Tokyo FM Broadcasting Co., known as FM Tokyo, and other broadcasters are testing the high-sound quality digital radio technology in Tokyo and Osaka. FM Tokyo earlier said it is preparing to create its own digital radio channel next spring. The would-be broadcasters of digital programs are planning to triple the output power of radio transmitters shortly. Multiple electronics manufacturers are to release receivers compatible with the digital technology shortly.
ò Apple disclosed that it has reached an agreement with BMG Japan, which allows the latterÆs catalog of leading Japanese and international artists to be made available by way of iTunes Japan. Industry observers note that the move follows several months of tension between Apple and some Japanese labels, and indicates a great change in the atmosphere in Japan's digital music market. iTunes Store Japan currently offers over two million songs, 3,500 music videos, Disney and Pixar short films, 65,000 podcasts and 16,000 audiobooks.
ò The survey conducted by the Development Bank of Japan revealed that the total net profit of major Japanese cable TV broadcasters for fiscal 2005 went up by Ñ5.2 billion ($44.2 million) from the previous year to Ñ26.5 billion ($225.3 million), a record high since the survey started in fiscal 2000. The broadcasters' total net earnings showed a profit for the fourth straight year and total operating revenues also hit an all-time high of Ñ456.7 billion ($3.8 billion), up Ñ51.4 billion. The bank surveyed 182 client CATV firms out of about 300 such firms nationwide. The bank attributed the good showings to increased revenues for the telecommunications business including broadband net access via TV cables. Business observers stated that cable TV stations in Japan, many of which are community-based and small-to-medium sized, had experienced from deficits incurred by equipment investment. The survey, according to analysts, shows that their profits have stabilized with the penetration of high-speed networks.
ò Nintendo Co. posted a 72 percent growth in fiscal second-quarter profit on sales of the portable DS and the latest ôSuper Marioö software title. The firm said its net income went up to Ñ38.8 billion ($327 million) in the three months ended Sept. 30 from a year earlier, in line with the preliminary earnings statement released on Oct. 3. Nintendo also raised its shipment forecast for the touch-screen DS player and game titles this fiscal year. The popularity of the device, which can be used to play Nintendogs, an interactive pet game, and brainteasers, helped the company fend off competition from Sony Corp.'s PlayStation Portable. Nintendo said its sales registered a 59 percent rise to Ñ167.9 billion ($1.4 billion) in the quarter, with its operating profits more than doubled to Ñ38.3 billion ($325.6 million). Regarding its DS Shipments, Nintendo said it is looking to ship 20 million DS players this fiscal year, up from its previous projection of 17 million.
Korea
Internet
ò Industry observers are looking at the countryÆs internet business following SK CommunicationsÆ acquisition of the mid-tier search engine Empas. Market analysts are projecting telecom giants KT and SK Telecom will follow up with large-sized takeovers or mergers. SK Telecom is the parent company of SK Communications, while KT subsidiary KTH currently runs Paran, the web portal described as trying to make its presence felt in the local market. SK spent W37.2 billion ($39.3 million) last week, buying a 24.4 percent share in Empas from the firm's top executives. In addition, the Seoul-based outfit agreed to purchase W45 billion ($47.5 million) of convertible bonds that will be issued by Empas later. This will raise SK's share to 43 percent. Still the Empas platform is perceived as too weak to challenge the dominance of NHN. There are rumors circulating that SK will try to take over G-Market, an open-marketplace firm for C2C trading, or Interpark, an online shopping mall for B2C transactions. NHN is Korea's foremost Internet company operating Naver, the search portal that accounts for roughly three-fourths of the market, and game portal Hangame.
Media, Entertainment and Gaming
ò Developments point to the Ministry of Information and Communication (MIC) and the Korea Broadcasting Commission (KBC) forming a single government body following a proposal from the Broadcasting and Telecommunications Convergence Committee merging the two regulatory bodies. Under the proposed deal, the Korea Broadcasting Advertising Corporation (Kobaco) and the Korea Broadcasting Institute (KBI) are likely to be incorporated into this new converged entity as well. Currently the two government bodies are under the umbrella of the Ministry of Culture & Tourism (MCT).
ò The South Korean government plans to make a strong investment to film content for new media such as digital cinemas, Wi-Bro and digital multimedia broadcasting. Reports said it has decided to inject W61 billion ($64.5 million) in the setting up of digital cinema systems and production of new media content, as a part of a total W640.3 billion ($677.1 million) it will spend on the domestic film industry though 2011. Related to this, the Ministry of Culture and Tourism and the Korean Film Development Special Committee announced a mid and long-term plan to develop the movie industry on Mo, which includes policy tasks aimed at developing the domestic film industry in the mid and long term. The government said it aims to expand the domestic market worth W1.4 trillion ($1.5 billion) into W3 trillion ($3.1 billion) and become one of the world's top five film powerhouses by increasing its share of the market from 1.6 percent to 3 percent and exports from W76 billion ($80.3 million) to W300 billion ($317.2 million). Industry sources said it plans to inject W50 billion ($52.8 million) over the next five years into building digital cinema infrastructure, W30.4 billion ($32.1 million) on technology infrastructure, W14.6 billion ($15.4 million) on distribution of digital content and W5 billion ($5.2 million) on training a skilled workforce.
ò TU Media disclosed that it will test the satellite-based Digital Multimedia Broadcasting (DMB) data broadcasting system to provide Traffic and Travel Information (TTI) services, for the first time in the world. Major services planned by the TTI service system include: Congestion & Travel Time (CTT) information, simple maps with the shortest-route navigation, Safety Driving Information (SDI) that alerts speeding drivers and a Broadcasting Network Download Service (BNDS). TU Media asserted that it will come up with an upgraded broadcasting network download service, which will allow a driver to download traffic and travel information and a variety of multimedia data, including notices of promotional events provided by the firm, within the year. The TTI service is planned to be formally launched the end of December, while handsets will be used for the upcoming test broadcasting are model products manufactured by HyOn Corp and Digital Cube Inc.
Mobile/Wireless
ò Samsung Electronics disclosed that it is currently in talks with the U.S government to provide its Wibro technology to the 1.4 million US soldiers located worldwide. A company official said that the US government has chosen Wibro as a next generation mobile technology for its troops and added that the company is currently in talks with the US side to decide on the actual order amount and timeframe.
ò SK Telecom Co. revealed plans to spend W240 billion ($250 million) this year to upgrade its newest wireless network. The company said it will install equipment that will provide nationwide coverage of so-called high-speed downlink packet access, or HSDPA, mobile phone services. SK Telecom last month increased this year's spending budget for its HSDPA network by 42 percent to W810 billion ($856.6 million) to offer faster download services to its mobile-phone customers. The company is focusing on new services to revive profit growth as competition intensifies in a saturated market where about eight out of 10 people already own a cell phone. South Korean companies are required to disclose investment plans that exceed W100 billion ($105.7 million).
Telecommunications
ò SK Telecom, South Korea's top mobile carrier, announced a 20 percent decline in its third-quarter earnings from a year earlier on increased marketing expenses. The company said its net income reached W456.8 billion ($479.2 million) during the three months ended on Sept. 30. Despite the decline, sales went up by 4.5 percent to W2.7 trillion ($2.8 billion), with its operating profit posting a 13 percent growth to 758.1 billion won ($801.7 million). Analysts predicted sales and operating profits of W2.6 trillion ($2.7 billion) and W694.8 billion ($734.7 million), respectively. The company attributed the year-on-year decline in earnings to an increase in marketing costs following the reintroduction of handset subsidies by the government earlier this year. The company said it spent W512.7 billion ($542.2 million) on marketing efforts, including subsidizing its customers during the three-month period, up 13.2 percent from a year earlier. In the first nine months of this year, the company posted cumulative sales of W7.9 trillion ($8.3 billion), up from W5.2 trillion ($5.4 billion) a year ago. SK Telecom holds more than 50 percent of the nation's 38 million mobile phone users. KTF and LG Telecom rank second and third by subscriptions.
ò LG Telecom reported its third- quarter profit to have more than doubled because of a tax gain. The stock fell after the company lowered its profitability forecast. The company said its net income rose to W223.5 billion ($233 million) from W83.8 billion ($88.6 million) a year earlier, the company said in a regulatory filing. Excluding the W125.5 billion ($132.7 million) tax gain, operating profits were down 2.8 percent to W98.6 billion ($104.2 million). The company forecasted it will have 7 million subscribers this year, higher than a previous projection for 6.9 million. The median estimate of 12 analysts surveyed by Bloomberg called for LG to post net income of W86.5 billion ($91.4 million), operating profit of W97.7 billion ($103.3 million) and sales of W956.2 billion ($1 billion). In a separate development, SK Telecom Co., South Korea's largest wireless operator, will charge more for the use of its networks this year, while LG Telecom and KT Freetel Co., the nation's second-largest mobile phone operator, had to lower their fees, according to the Ministry of Information and Communication.
China
Internet
ò Sohu.com reported a decline in its net earnings to $6.6 million, from $8.0 million a year ago. Sohu said its total revenues for the quarter totaled $35.4 million, compared to revenues of $34.1 million for second quarter ended June 30, 2006, and $27.4 million for third quarter ended September 30, 2005. The company said its net income for the third quarter was US$6.6 million. Sohu posted 27 percent growth year on year and 5 percent rise quarter on quarter in its advertising revenues to $23.9 million. Advertising revenues, consisting of US$21.0 million in brand advertising and $2.9 million in sponsored search, contributed some 67 percent of total revenues in the third quarter of 2006. As of September 30, 2006, Sohu's cash, cash equivalents and investments in marketable debt securities balance was $120.0 million, compared to $132.9 million as of June 30, 2006 and $133.1 million as of December 31, 2005.
ò People are interpreting the 4 percent decline in the shares of Baidu.com, China's most popular Internet search engine, as attributable to the departure of its chief technology officer, Jerry Liu. Even if Liu is not seen as forming a rival firm, industry analysts still see the move of the official as significant to the company. Liu helped Baidu grow from a start-up to its current position as holder of more than 60 percent of China's online search market, which is in competition with Google and others. The impact on the share price was described as short term. Earlier this year, Baidu settled a lawsuit with music companies EMI, Sony-BMG, Universal and Warner Brothers over copyright infringement and complaints that it directed Internet users to sites operating unlicensed music downloads.
Mobile/Wireless
ò ZTE Corp reported a 50 percent decline in its third-quarter profits, to 76.9 million yuan ($9.7 million), compared with 154.8 million yuan ($19.6 million). The company attributed the fall to declining sales of higher-margin products to mainland customers such as China Mobile and China Unicom. ZTE said its sales went up by 15 percent to Rmb5.4 billion ($684.4 million) for the three months. In July, the company said its domestic sales accounted for 62.2 percent of total sales in the first half, compared with 69.5 percent a year earlier. ZTE said profits for the first nine months dropped 47 percent to Rmb450.4 million ($57 million) from a year earlier. The company said it aims to continue investing in production lines for 3G equipment in a bid to gain a bigger market share before the 3G market is opened. The company said in July, the increase in its accounts receivable this year was mainly from emerging markets, such as Pakistan, Egypt and Nigeria. Last month, ZTE said its subsidiary won a contract to provide 3G wireless technologies to Alaskan mobile-phone operator Copper Valley Wireless.
ò A deal between SK Telecom and China Unicom will allow clients using mobile phone services by China Unicom to send and receive messages in Korean. This is the first time subscribers to a foreign service will be able to send text in Korean. Though overseas text services have been available for some time, the Roman alphabet was the only one available. SK Telecom subscribers with global roaming were always able to text in Korean. SK Telecom said it has plans to extend Korean short message services to include China Mobile users as well. China Mobile is currently the largest mobile phone service provider in China.
Hardware
ò Dell announced plans to initiate recycling services and provide them to business customers in mainland China and Hong Kong, with the firm vowing not to charge customers for the services. Dell's Asset Recovery Service assists business and institutional customers by removing and refurbishing or recycling old hardware consistent with environmental guidelines. There are two programmes being offered by the company. One is Dell's Value Recovery Services, which will arrange the packing, shipping and testing of surplus computer equipment for an organisation. If it meets functional and cosmetic requirements, it is resold with value from the sale returned to the customer. Dell's Recycling Services will dispose of equipment that has no resale value by collecting and delivering it to Dell's recycling partners. The equipment is responsibly recycled following Dell standards. Earlier in June, Dell announced consumer recycling as part of its program for China. It has also issued a new chemical-use policy outlining the company's precautionary approach to identify and eliminate substances of concern from its products. Dell says it is presently meeting the requirements of the European Union's Restriction on the use of Hazardous Substances (RoHS) directive for products sold in the EU and will implement these requirements on its global product lines.
Ventures/Investments
ò Tencent revealed its programme to set up an internet research institute, with the plan of making an investment worth Rmb100 million ($12.6 million) for the structure. The research institute will basically work on forecasting future technology and market development trends, making development and research plans, studying and developing core technology. The aim of the program is to improve Tencent's technical strength and innovation capacity so as to better serve the users. To be called the Tencent Research Institute, the structure is said to be the first of its kind in China.
Semiconductors
ò Semiconductor Manufacturing International Corp (SMIC) disclosed that it is considering whether to sell shares in its Shanghai business for a listing in the city's A-share market in 2007 or wait until the end of 2008 to list the entire group in the mainland. SMIC said it aims to raise funds in a bid to make more advanced products and compete better with market leaders such as Taiwan Semiconductor Manufacturing Co (TSMC) and Powerchip. The company looks to breaking even this year, with profits for the three months to December offsetting losses in the earlier periods. Industry observers suggest that SMIC could first secure a 2007 mainland listing of its three Shanghai plants, which have already met China Securities Regulatory Commission requirements by being profitable for three years. It could also wait until the end of 2008, when the whole group will have posted profits for three successive years. SMIC counts among its clients, Infineon unit Qimonda and JapanÆs Elpida. The company said it is aiming at increasing to 30 percent the contribution of its DRAM chips to sales from 28 percent.
Taiwan
Telecommunications
ò Chunghwa Telecom announced a 10.5 percent decline in its net profit for the nine months to September from a year earlier on rises in tax payments and operating costs. For the nine-month period, Chunghwa Telecom announced a net profit of NT$34.1 billion ($1 billion), compared with NT$38.1 billion ($1.1 billion) a year earlier. The company said that, in the nine months, it posted NT$44.1 billion ($1.3 billion) in pretax profit, compared with NT$47.4 billion ($1.4 billion) a year earlier, with sales going up to NT$137.4 billion ($4.1 billion) from NT$136.9 billion ($4.1 billion) a year earlier. Chunghwa Telecom is TaiwanÆs leading telecom operator.
Semiconductors
ò United Microelectronics Corp (UMC) reported a 296 percent surge in its net profit in the third quarter to September from the same period last year to NT$8.5 billion ($255.4 million). UMC said sales in the third quarter went up 8.2 percent to NT$27.8 billion ($835.5 million) from the three months to June and 18.1 percent higher year on year. The companyÆs net profits for the nine months to September registered a 576 percent climb to NT$26.9 billion ($808.5 million), with sales growing by 23 percent to NT$78 billion ($2.3 billion). UMC said it was maintaining its capital expenditure plan of $1 billion for this year.
ò Taiwan Semiconductor Manufacturing Co (TSMC) reported a 4.4 percent decline in its net profit in the third quarter from the previous quarter, with the company ascribing it to an inventory correction. The company, however, explained that the net profit of NT$32.4 billion ($973.8 million) it posted for the three months to September reflected a 32.7 percent growth from the same period in 2005. TSMC posted a 0.4 percent growth in its net sales in the third quarter from the previous quarter and 17 percent growth year on year to NT$82.4 billion ($2.4 billion). For the nine months to September, the company's net profit went up by 66 percent to NT$99.1 billion ($3 billion) while net sales were up 29.4 percent to NT$242.4 billion ($7.2 billion) from last year. TSMC said it expected consolidated sales in the fourth quarter to December to drop to NT$74 billion ($2.2 billion) to NT$76 billion ($2.3 billion) from NT$82.4 billion ($2.4 billion) recorded in the third quarter. The company revealed its capital expenditure for the year at $2.6 billion. TSMC remains the world's largest wafer foundry.
Singapore/India
Media, Entertainment and Gaming
ò Anytime, a Singapore-based video-on-demand channel, said it has secured a licensing deal to provide interactive entertainment via the internet to television viewers in India. Under the five-year agreement with broadband provider India On Line (IOL), Anytime will provide a variety of new and classic titles from Fox, Sony, Warner and Universal and reach four million broadband homes in Mumbai and Delhi by March. No exact amount for the deal was revealed although an official of Anytime said it could be worth tens of millions of dollars. The deal is seen as making Anytime the sole source of Hollywood programming for IOL's IPTV offering. In addition to movies, he said Anytime will also provide an interactive games channel as part of the deal. Formed in February last year, Anytime specializes in providing video content to Internet service providers, IPTV firms and cable networks in the Asia-Pacific region. IOL said it would incorporate Indian films, music, news and sports channels. Anytime has also made similar arrangements with Buddy Broadband in Thailand, Chunghwa Telecom in Taiwan and Transact and RIA in Australia.
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