A week in tech, April 18-24

A roundup of all the latest tech news.

Media, Entertainment and Gaming
ò According to a study conducted by Dentsu Communication Institute, domestic spending on online advertising will more than double by 2011, with the intensifying competition with other advertising media, especially newspapers and TV. The report said spending on internet advertising would grow to 755.8 billion yen ($6.3 billion) in 2011 from 363 billion yen ($3 billion) in 2006. Dentsu forecasts that advertising expenditures are going to post an annual average growth of 15.8 percent during the five years through 2011. According to the forecasts, fixed internet ads, including banner ads, streaming video ads posted on web sites, and ads sent to registered e-mail addresses, will account for 400.9 billion yen ($3.3 billion), which stands for more than half the total online advertising in 2011. Advertising based on search engines are forecast to account for 226.5 billion yen ($2 billion), or nearly 30 percent, of the 755.8 billion yen ($6.3 billion). About 17 percent, or 128.4 billion yen ($1 billion), will be spent on ads for internet services through mobile phones in 2011, more than triple the 39 billion yen ($328.5 million) in 2006.

ò Industry sources are looking to the move to revise the Broadcast Law, paving the way for NHK to provide past TV programmes for a fee through internet broadband telecommunications systems. The new development is expected to ensure a new revenue source for the public broadcaster now facing some financial problems. At present, NHK delivers programs through the internet on a limited scale as a "supplementary broadcasting business." Many of them are educational programmes while others include those on welfare, science and news programs. In addition to the secondary use of programmes, NHK provides program-related information. The broadcaster looks to about 176 such programmes for the current fiscal year to be made all accessible free of charge from NHK's web site.

ò US recording disk and tape maker Imation announced its plan to acquire Tokyo-based TDK Corp.'s brand and sales operations in recording media in a deal valued at $300 million in stock and cash. Under the deal, Imation would gain the TDK brand, the world's No. 2 brand in optical disks in a price-competitive market, while TDK is set to become lead shareholder in Imation through the deal, slated for completion in the July-September quarter. Industry observers also see the deal as helping TDK streamline its recording media business. TDK would sell its shares in six sales units as well as assets at three other units. The deal would affect roughly 400 TDK employees. According to its official, the sale would allow TDK to focus on developing and making audiotapes and optical devices such as Blu-ray discs, which the company would continue to supply to Imation and other companies.


ò Local media reported that the Seoul Central District Court has accepted a request from 19 music labels and entertainment agencies to provisionally seize 5 billion won ($5.3 million) of SoribadaÆs bonds. Soribada countered by arguing that it has agreements with 90 percent of record labels. The company also stated that it is different from Bugs Music, another popular music downloading service that did not have contracts with record labels. Bugs shut down its downloading service after encountering a series of lawsuits. Industry observers note that, despite these problems with music companies, investors have been favorable toward Soribada, boosting share prices by 87 percent the past three months. Analysts are saying the rise may be brought about by rumours circulating that Samsung may eventually acquire Soribada.

ò SK Telecom announced that millions of South Koreans can get access to the Encyclopedia Britannica through their mobile phones. According to a company spokesperson, the new service, which costs users typically around 100-150 won ($0.11-0.16 cents) a minute, is part of the company's efforts to tap the promising cell phone-based search market. Observers see cell phone-based search as becoming a key application of the wireless Internet.

ò KTF, the countryÆs No. 2 mobile carrier, announced an increase in its number of customers for its 3G communications service, causing the figure to go beyond 300,000. Earlier in March, after an eight-month pilot run, KTF launched the high-speed downlink packet access (HSDPA) service nationwide, a move that is seen as a way to preempt the market for 3G mobile communications, which promises faster and more seamless video telephony and data link services.

ò Samsung Electronics Co. and Nokia announced their agreement to work together to achieve interoperability among digital video broadcasting-handheld (DVB-H) enabled mobile devices and the open standards-based Nokia network services system. DVB-H is a technology for deploying broadcast mobile TV among the many digital technologies available to deliver mobile TV services. Even as the technology is mainly used in parts of Europe, the extensive pilots of broadcast mobile TV currently taking place across the globe has led analysts to predict that the market for commercial broadcast services is expected to grow throughout 2007. The deployment of mobile TV services will offer new business opportunities for companies involved in the industry. The availability of interoperable DVB-H enabled devices and services is a key factor in further opening up the market. In parallel to supporting mobile operators launching mobile TV services based on existing technologies in their networks, Samsung and Nokia are both active in ongoing standardization and technology development to optimize the broadcast mobile TV experience.

ò The Korea Consumer Agency announced that it had gotten 31.2 percent more complaints in 2006 about damaged cell phones than it did the year before. The body noted that the market for slimmer designs has led to easier damage to the main boards and LCD, parts of cell phones that are vulnerable to external shocks. The government agency said it has received 443 reports from consumers demanding remedies regarding cell phones last year, compared with 330 cases a year earlier. Poor cell phone quality was blamed in 73 percent of the cases, with power problems, malfunctions of liquid crystal displays, and problems with chargers and embedded digital cameras forming the other complaints. Pantech & Curitel received the most complaints with 167, or 39 percent of all of the cases. Samsung Electronics had the second-highest number, at 13 percent, followed by LG Electronics, Motorola, VK and KTF. The agency said it would encourage cell phone producers to work on its quality control efforts and put in place stricter after-sales service regulations.

ò With creditors reaching a settlement on how to approach investorsÆ losses arising from the debt resolution process, rescue activities for Pantech & Curitel and its affiliate Pantech Co. are now underway. Under the debt rescheduling, main creditor Korea Development Bank and others have deferred repayment of outstanding debt until 2011, and will issue 120 billion won ($129.1 million) in fresh loans for the beleaguered companies. The deal will also see creditors swapping 455.8 billion won ($49.3 million) of the companiesÆ debt for new equity. Pantech & Curitel will then cancel 29 out of every 30 outstanding shares, slashing its capital by 97 percent. Pantech will remove 19 out of every 20 outstanding shares. The reduction process could finish by May 10. A company official said the sale of the companiesÆ new headquarters in western Seoul, is expected to raise some 160 billion won ($172.4 million), from which 80 billion won ($86.2 million) is expected to come from the sale, which could be used to operate the companies, while the rest will be returned to the bank. The official disclosed that once the turnaround takes place, the creditors will seek mergers and acquisitions to further stabilise the companiesÆ operations. The start of the debt rescheduling had been delayed for several weeks, as Korea Development Bank and other creditors had been at odds over managing the Pantech companiesÆ short-term corporate bonds.

ò As early as the second half of this year, customers will be able to use mobile phone numbers instead of credit card numbers to buy products. The countryÆs three mobile service providers, SK Telecom, KTF and LG Telecom, announced signing of a memorandum of agreement to begin ômobile safe payment services.ö Under this offering, customers will be able to use mobile phone numbers instead of credit cards when they purchase products. Up to the present, consumers have to tell the operator the details of their credit card. In the new scenario where the mobile service is activated, consumers will only have to reveal their cell phone numbers. They will then receive a text message and connect to the credit card companyÆs authorization system. This service is currently available with SK Telecom at a few test stores.

ò According to its major creditor, Hana Bank, SK Networks, the trading arm of SK Group, has already graduated from a debt-restructuring programme, a development that is about eight months early. Over 96 percent of its creditors, including the bank, agreed to end their joint supervision of the company in recognition of its faster-than-expected normalisation process. The creditors also attributed to SK Group Chairman Chey Tae-wonÆs decision last week to donate his 40.7 percent stake in the Walkerhill Hotel in Seoul to the company. The completion of the workout scheme had been projected for the end of the year. SK Networks earned a record-high profit of 388 billion won ($418 million) last year, gradually increasing the amount from 192 billion won ($207 million) in 2003, when the bailout started. The company, formerly SK Global, was placed on the verge of bankruptcy because of a liquidity crisis after being found to have been involved in a 1.5 trillion won ($1.6 billion) accounting fraud in early 2003. Hana Bank and other creditors own a combined 55.8 percent stake in SK Networks and are scheduled to sell their stake in the company in a phased manner.

ò LG Electronics Inc. reported its biggest quarterly loss in four years, with the company ascribing the results to increasing competition and a glut of television screens, which pushed the company to slash its prices. LG reported a first-quarter net loss of 122.6 billion won ($132 million), compared with a profit of 151 billion won ($162.7 million) a year earlier. It reported a 4 percent rise in its sales to 6 trillion won ($6.4 billion). The loss was the largest since the fourth quarter of 2004 and is seen as putting pressure on its top official to consider reorganising or selling part of the unprofitable display division. LG also predicted continued losses in its plasma business for this quarter. LGÆs display division, which sells plasma displays and flat-screen TVs, posted a record loss of 194 billion won ($209.1 million), from a profit of 30 billion won ($32.2 million) a year earlier. Its mobile-phone division, which remains LGÆs biggest business by revenue, reported a profit of 141 billion won ($152 million) in the first quarter, compared with a loss of 31 billion won ($33.4 million) a year earlier.

Information Technology
òò Tele Atlas, the world's leading provider of digital maps and location-based solutions, announced that it has opened an office in South Korea in a bid to expand into the Asia-Pacific navigation device market. Headquartered in the Netherlands, Tele Atlas is one of the world's largest digital map providers. It provides map solutions to companies such as BMW, Nokia and Google.

Media, Entertainment and Gaming
ò Prague-based ITonis, a developer of Video on Demand and IPTV solutions, and China's iOcean announced forming a joint venture to develop and operate an IPTV service in Shandong. ITonis said it has developed a video over IP solution for video content owners and video content distributors that would enable the viewer to see favorite national or local TV programs from anywhere in the world through a set-top box connected to a TV or through a computer. Under the partnership, ITonis will bring its software and technical know-how, with iOcean providing its local knowledge and expertise on the Chinese market. No details about ownership structure of the joint venture were disclosed.

ò Industry sources said Asia Media, a Beijing-based provider of TV programme guides, is going to be the first company from mainland China to launch an IPO in Japan, with the Tokyo Stock Exchange approving the company to list its shares on the Mothers market for emerging companies. Asia Media said it plans to make an IPO of 4.7 million new shares, with the company indicating that it will use proceeds from the listing to expand its operations in China. The company is expected to expand into Japan.

ò Lenovo China and Microsoft China announced signing a memorandum of understanding in Beijing, setting up of an innovation center. Called the Lenovo-Microsoft Joint Innovation Center, it is considered the first of its kind that Microsoft has ever set up with a business partner. Analysts see this as an indicator that Microsoft will be forging closer cooperation with Lenovo in the future. A key official of Lenovo disclosed that the joint innovation center is located inside Lenovo's Beijing research institute, with Lenovo providing about 40 engineers and Microsoft offering its innovation ideas and technology development experience as well as technical training for the center.

ò Lenovo announced plans to eliminate some 1,400 jobs, representing an estimated 5 percent of the company's global workforce. The company said, out of this figure, about 750 positions will be transitioned into emerging markets closer to Lenovo's suppliers and manufacturing operations. With the move, Lenovo said it looks to generating savings of approximately $100 million for the next fiscal year. The company anticipates taking a pre-tax restructuring charge of approximately $50 to $60 million, most of which will be taken in the first fiscal quarter. The company said it arrived at its decision by an analysis of both Lenovo's global operations and current PC market conditions.

Information Technology
ò Intel announced the expansion of its Multi-core University Program to 37 universities in China, with the company enhancing its partnership to include another 32 additional universities in designing multi-core curriculum, research and training programs. The program provides Chinese university students training with multi-core technology and is designed to mold the next generation of multi-core developers for the global IT industry. Industry observers see the development as another milestone in the integration of multi-core technology into Chinese higher education, with the program aiming to boost the teaching and research of Chinese universities in multi-core development. Intel currently has established five multi-core labs with top universities in China, and plans to establish multi-core labs in 32 Chinese universities. By the start of 2008, Intel intends to have Multi-core Curriculum Programs in 235 universities throughout Asia and in over 400 universities worldwide.


Media, Entertainment and Gaming
ò Sony Computer Entertainment (SCE) Asia announced the signing of an agreement with Actainment, a Taiwan-based games developer established six months ago, for the latter's assistance with the development of the PlayStation 3 (PS3) game Railfan Taiwan High-Speed Rail. Sources said this marks the first time SCE has cooperated with Taiwan-based games developers. Railfan is a train-driving simulation game, which enables users to drive trains in environments including stations and scenery based on the real world. Japan-based Ongakukan is the developer of the Railfan series and has developed versions for more than 70 railway systems around the world.

ò According to a filing with the Taiwan Stock Exchange, Chi Mei Optoelectronics (CMO) announced plans to add investments of $35 million and $30 million in its LCD module (LCM) plant in Nanhai (Nanhai Chi Mei Optoelectronics) and Ningbo Ningbo Chi Mei Optoelectronics (Ningbo Chi Mei Optoelectronics), China, respectively. CMO said it will launch the investments once the Investment Commission of Taiwan's Ministry of Economic Affairs (MOEA) approves the plan.

ò Darfon Electronics, an LCD inverter maker and a subsidiary of BenQ, recently announced temporarily suspending a plan to have its stocks listed on the Taiwan Stock Exchange (TSE). A subsidiary of BenQ, Darfon said it will apply for the listing in a proper time in the future, with the company saying the decision will not affect the company's operations. In a different filing, Darfon stated it will issue a total of 25 million new shares to fund its operations and pay off its debts.

ò SPI, ePLDT Inc.Æs wholly-owned business process outsourcing (BPO) subsidiary, announced its acquisition of U.S.-based Springfield Service Corp. (SSC) in a deal valued at $44 million. Springfield is the 10th largest player in the medical billing and revenue cycle management market. It operates in five locations in the US and provides billing and accounts receivable management services for over $1.3 billion of physician charges annually. ePLDT, meanwhile, is 10-percent owned by Philippine Long Distance Telephone Co., the PhilippinesÆs largest company by market value. According to ePLDT official, the SSC acquisition is the largest to date for SPi.

Information Technology
ò Infineon Technologies AG of Europe announced the expansion of its research and development activities in Singapore. The expansion is seen as enabling the company to better serve the growing demand for products in the energy efficiency, connectivity and security areas. Infineon said it will invest approximately 200 million euros ($271.8 million) and add about 150 new positions in R&D in this expansion. With the expansion of the Singapore R&D center, the company will strengthen its development activities in next-generation home-networking technologies, customer premises equipment (CPE), Internet access devices (IAD), mobile phone platforms (ultra-low cost), digital video broadcasting (DVB) for mobile-TV, digital power control for power management, microcontroller for automotive and industrial applications, process technologies for wafer fabrication and packaging, and application specific IC (ASIC) design. The development center in Singapore provides IC and system development solutions in communication, automotive, industrial and security systems within this region.
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