A week in tech, April 23-29

A roundup of the latest tech news.

Sony's videogame unit delayed for the second time the release of its much-anticipated virtual-community service for the PlayStation 3, showing the extra care it is taking in vetting products as demand for the videogame console is increasing. The 3-D service called Home, which originally was expected to be sold starting last year, is now expected to be available in the fall, the company said. The service will let users create avatar characters, decorate homes and interact with other users in a virtual world. As more people have access to faster Internet connections, online communities like those that allow players to socialise with one another in addition to playing games have grown popular in recent years. They are considered an important part of the game-playing experience.

Fujitsu has launched a series of 320GB 2.5-inch hard disk drives containing automatic hardware-based encryption for securing data against theft and loss. The MHZ2 CJ Series drives provide rotational speed of 7200rpm and a 3.0Gbps serial advanced technology attachment interface. Built-in 256bit AES encrypts the data when storing it on the hard disk drive and decrypts the data when read.

Canon has lowered its profit and sales forecasts as the yen's climb to a 12-year high erodes the value of overseas sales. Net income is expected to climb 2.4% to Y500 billion ($4.8 billion) in 2008, compared with a previous forecast of Y520 billion. Sales is expected to rise 2% to Y4.57 trillion, less than the Y4.72 trillion predicted earlier.

Media, entertainment and gaming
Nintendo reported a 48% increase in its annual net profit as its Wii videogame console and DS portable-game device continued to sell strongly, but it set a conservative forecast for this fiscal year as a stronger Japanese yen reduces the value of overseas sales. Net income for the year ended March 31 rose to Ñ257.3 billion ($2.5 billion), compared with Ñ174.3 billion a year earlier. Sales rose 73% to Ñ1.67 trillion as it sold more Wii and DS devices than it expected. Nintendo has succeeded by attracting non-traditional users like women and seniors with easy-to-play games.

Nintendo also forecasts profit will rise 26% percent to Ñ325 billion ($3.13 billion) in the 12 months to March 31, 2009. Sales are expected to gain 7.6% to Ñ1.8 trillion. The Wii's motion-sensitive controller and cheaper price than the PlayStation 3 or the Xbox 360 may help Kyoto-based Nintendo overtake Sony in worldwide sales of home game consoles this fiscal year. The Wii has outsold Sony's PlayStation 3 since its introduction in November 2006.

Mobile/ wireless
HitachiÆs wholly-owned arm, Hitachi Mobile, will sell its cell phone marketing division to ITC Networks Corporation, a major mobile handset sales company, for Ñ7.5 billion ($72 million) on July 1. Hitachi Mobile will concentrate on marketing a range of machines and equipment relating to automobiles and providing maintenance services for the machines. Hitachi Mobile runs a network of 84 cell phone retail outlets in Japan. ITC Networks is a subsidiary of major trading house Itochu.

Sharp shipped the most mobile phone handsets in Japan during the last fiscal year, commanding 25.1% of the market to remain at the top of the list for a third straight year. Domestic wireless phone shipments increased 2.9% to a record 50.76 million units. Sharp boosted its shipments by 23% percent to 12.76 million handsets, an all-time high for the firm. The company's Aquos phones, which are compatible with land-based digital broadcasts and other handsets, sold well among a wide range of consumers. Panasonic Mobile, a Matsushita Electric Industrial subsidiary, retained the number two spot with a 14.5% share. Fujitsu jumped from fifth to third place with an 11.7% market share.

Elpida Memory will buy a stake in smaller Taiwanese rival ProMOS Technologies through a private placement, say sources close to the deal. The two companies have reached an agreement under which Elpida will buy a single-digit percentage stake, making it ProMOS's third biggest shareholder. ProMOS and its peers in the dynamic random-access memory (DRAM) chip sector are struggling with a year-long downturn and most have posted losses over the past several quarters, hurting their cash positions.

Timesys Corporation and Lineo Solutions have announced a multi-year strategic alliance. The companies will work together to jointly develop and market embedded Linux solutions for the Japan marketplace, based on TimesysÆ LinuxLink.

NTT DoCoMo will start to develop Linux-based software for mobile phones with software maker Access in a move which could help open up Japan's wireless market. DoCoMo and Access plan to develop new middleware and other software compatible with that used overseas. The move would make it easier for Japanese handset makers to venture abroad and lower costs for overseas makers tackling Japan's market. DoCoMo's handset suppliers such as NEC, Matsushita Electric Industrial and Fujitsu now bear the high cost of developing software specifically for DoCoMo's unique operating system. Handset makers have blamed such costs for restricting their ability to take risk abroad, handing global leadership to overseas giants such as Nokia and Samsung Electronics.

KDDI said profit and sales will rise this fiscal year as it continues to add mobile phones subscribers. Net income is expected to rise 15% to Ñ250 billion ($2.4 billion) in the year started April 1, as sales gain 2.9% to Ñ3.7 trillion. That compares with the Ñ266 billion median profit forecast by 11 analysts tracked by Bloomberg. KDDI expects profit to climb to a record this year as it promotes new chips and software that will help slash handset development costs. The operator aims to narrow Softbank's lead in user gains with a new phone line-up and plans that offer free calls for family and corporate clients.

NTT Communications and TransTeleCom of Moscow have reportedly begun using a 570km optical fibre cable to respond to rising demand for fast data transmission between Japan and Europe, including Russia.


SK Telecom said its net profit fell 3.4% percent in the first quarter from a year earlier after the company spent heavily on a marketing campaign to attract more users, offset tariff cuts and promote its wireless internet service. The company spent W767 billion ($771.5 million) on subsidies for new clients and commissions to retail outlets, as well as on advertising. The number of subscribers rose 8% to 22.37 million, helping the company maintain its market leadership and a more than 50% market share.

Motorola has released a third-generation (3G) handset in South Korea, competing in the high-speed telecommunication market dominated by local rivals. Motorola Korea, the company's local unit, unveiled its 3G phone at a press conference in Seoul. Named the Z8m, the model has already been released in Europe and North America, and has a download speed of 7.2Mbps. With a built-in MP3 player, 2-megapixel camera and bluetooth connectivity, the Z8m is an exclusive offer for SK Telecom users, and retails at about W488,400 ($489).

SK Telecom is seeking to expand in China and has acquired a controlling stake in Korean fixed-line broadband company Hanaro Telecom to counter slowing growth in Korea's mobile phone market. SK Telecom in September converted $1 billion of bonds in China Unicom, ChinaÆs second-largest mobile phone operator, to a 6.6% stake in the company. And last month it acquired a 39% stake in Hanaro for W1.1 trillion ($1.1 billion), giving it access to a quarter of South Korea's high-speed internet users. The stake will allow SK Telecom to expand into online television broadcasting and offer products that combine fixed-line and wireless services.

At the end of this year, KT Network will begin a pilot mobile internet TV service based on the HSDPA network to broadcast user-created content to portable devices. The pilot service will be broadcast through KTF's 3G network. The device will be equipped with DMB chips so that users can watch T-DMB service at the same time. This is the world's first mobile internet TV. If the pilot service succeeds, Korea will narrow the gap between it and other advanced countries in the media industry, which had widened because of a delay in the introduction of an IPTV service.

LG Electronics swung to a first-quarter profit from a loss a year earlier, citing strong handset sales and gains on its investment in flat-panel maker LG Display. The company also forecast better second-quarter earnings and said it expects high-teens percentage growth in sales of home appliances in the second quarter amid seasonally strong demand. LG posted a first-quarter net profit of W422.2 billion ($425 million), compared with a loss of W122.6 billion a year earlier.

Samsung SDI reduced its net loss by more than half in the first quarter, aided by higher sales of its mainstay products. The company said its net loss narrowed to W30.6 billion ($30.7 million) from a loss of W77.2 billion in the same period a year ago. The company's operating loss narrowed to W65.5 billion from W110.2 billion, but was still higher than the market forecast for a loss of W61 billion.

Samsung Electronics said its first-quarter profit jumped 37% despite little contribution from its semiconductor division. Samsung's cell phone and flat-panel divisions each produced about $1 billion of operating profit. The chip division, slumping like all makers of memory chips due to a cyclical downturn, surpassed analysts' expectations by remaining in the black. The company said the chip business will stay weak for another quarter. It also said that it will invest, together with Sony Corporation, in a new factory that makes flat-panel displays for television sets.


Baidu.com has launched a new platform for online games, which could help its partners promote their game products. Baidu will share the business revenues from online games with its partners in exchange for providing them with the promotion channel. BaiduÆs new platform offers six games, including one from Shanda Interactive Entertainment. The other five are from newly established companies as Baidu focuses on mid- and small-size gaming companies. Baidu will not develop games or serve as an agent.

China Mobile said its first-quarter net profit rose 37% from a year earlier to Rmb24.1 billion ($3.45 billion) as it continued to add subscribers. Earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 22% to Rmb49.78 billion from Rmb40.72 billion a year earlier, while its EBITDA margin widened to 53.5% from 52.4%.

SK Telecom has approached China Telecom for a possible joint venture to operate in the mainland's mobile market using code division multiple access (CDMA) technology. As part of a pending restructuring of ChinaÆs telecom industry, China Telecom would acquire China Unicom's CDMA network to help it defend its decreasing market share as landline users switch to the platform offered by China Mobile. SK Telecom, which owns 6.62% of China Unicom, is making plans ahead of an official announcement of the reform. The company would not enter into talks for a strategic investor before the government granted it a full-service operator status.

China TelecomÆs net profit rose up 0.5% in the first quarter to Rmb6.25 billion ($894 million). According to The China Securities News, the company's operating income reached Rmb43.6 billion in the January-March period, up 1.6% year-on-year. EBITDA increased 0.4% to Rmb22.67 billion. The number of fixed line subscribers fell by 3.16 million during the quarter to 217 million users, while the number of broadband subscribers rose by 2.06 million to reach 37.71 million, which is 3.82 million more than at the end of the first quarter 2007.

eServGlobal has won a contract from China's ZTE Corporation to provide prepaid mobile recharge services to Nepal Telecom's subscribers. Nepal Telecom will use eServGlobal's eRetail and eVoucher solutions to provide voucher-based recharge as well as electronic recharge to its clients. The project will start immediately and will conclude by December 2008.

Henan has become the fifth province in China to have more than 50 million telephone users after Guangdong, Jiangsu, Shandong and Zhejiang. All of the province's administrative villages now have access to telephones.

China Satellite Communications Corporation (China Satcom) has decided to contribute frequency bands ranging from 3.4GHz to 3.7GHz for the development of LTE (Long Term Evolution). Nicknamed as 3.9G, LTE is considered a mainstream evolution technology from 3G to 4G. It has 100Mbps data download capacity. China's radio and television authorities consent to providing some 700MHz analogue TV frequency bands for the development of wireless broadband after the completion of the country's analogue-to-digital conversion.

Media, entertainment and gaming
The9 has, through a wholly-owned subsidiary, entered into an agreement with Ndoors, a game developer in South Korea, for a licence to operate 'Atlantica', a 3D massively multiplayer online role-playing game in China. The term of the licence is for three years from the commercial launch date of the game in China.

Sohu.com and SK Telecom have signed an agreement to share original internet content with each other. Under the partnership, Sohu will be entitled to publish original video products owned by SK Telecom. SK Telecom, in return, will be able to share parts of SohuÆs resources via its music website Melon. The two companies will also join hands in the fields of film and television project investment, as well as wireless operation.

Huawei Technologies is planning to produce consumer WiMAX equipment itself as it worries about higher costs of outsourcing the production to Taiwan original equipment manufacturers. Huawei will introduce chip solutions from affiliated HiSilicon Technologies. Its WiMAX equipment will be available in the market in 2009. The decision may disappoint several Taiwan network equipment suppliers that have gotten interoperability test certificates from the Shenzhen-based telecommunications network provider. Currently, 10 Taiwanese companies, including Alpha Networks, Gemtek Technology and Quanta Computer,
handle the entire production of Huawei's WiMAX equipment.

Intel Corporation will invest $500 million in Taiwan over the next five years for the development of WiMax technology and related products. Intel expects WiMax to be commercially deployed in the US market in the second or third quarter this year, and that infrastructure in Asia should be ready by 2009-2010. Japan may be the first to launch the WiMax service in the region and Taiwan and India could follow suit. Taiwan authorities said last year that they plan to spend $664 million in the next few years on the WiMax technology. Wireless and WiMax technology product makers in Taiwan include D-Link, ZyXEL and Gemtek Technology.

Acer expects its revenue in the second quarter to June to be slightly lower than that of the first quarter. In the first three months of the year, Acer posted consolidated sales of NT$127.38 billion ($4.2 billion), a 28% increase from a year earlier.

Hon Hai Precision Industry has reported sales of NT$1.2 trillion ($39.6 billion) for 2007, up from the previous yearÆs NT$907.4 billion. Net profit reached NT$77.7 billion ($2.6 billion) up from NT$59.9 billion in 2006.

Huawei Technologies plans a Taiwan launch of digital photo frames in which SIM cards can be inserted. The frames are said to be capable of containing hundreds of photos that can be watched in sequence. The company is in negotiations with several local mobile communications operators and the launch is expected in the third quarter of 2008, according to insiders who note that HuaweiÆs idea was derived from Vodafone Group which has introduced similar products in Europe.

Powerchip Semiconductor Corporation expects to break even in the third quarter and return to profit in the fourth, amid early signs of a sector turnaround. The company made the forecast after Powerchip posted its fourth straight quarterly loss due to falling prices of dynamic random access memory (DRAM) chips for personal computers.

The number of mobile phone subscriptions registered for mobile internet services soared 30% year-on-year in the fourth quarter of 2007 to 11.86 million, but actual usage of the function lagged behind. The increase of 2.71 million mobile internet subscriptions in Taiwan meant that 48.8% of all cell phone users had access to internet service functions.

Mobile handset maker Foxconn said its net profit for 2007 amounted to $721 million, up only 0.4% from $718 million in 2006 due to weak sales growth caused by fierce competition. Revenues increased by 3.4% to $10.73 billion. Like in 2006, the company abstained from paying a dividend. Competition in the mobile phone manufacturing industry will become more aggravated in 2008 and Foxconn said it will continue to expand its manufacturing bases in China and India and expand and develop its client groups to maintain growth. It would also continue to invest in R&D (research and development) and continue to allocate resources to meet client needs.

Hong Kong

Osram Opto Semiconductors has set up its Asia-Pacific headquarters in Hong Kong with plans to boost sales in Greater China. A semiconductor diode that emits incoherent narrow-spectrum light, LEDs are among the most energy-saving solid-state lighting. They can be used as backlights for liquid-crystal displays, as camera flashes, for interior lighting, or on motor vehicles, dashboards, heads-up displays and taillight combinations. The firm, whose customers include decorative lighting maker Neo-Neon International, has set up an application laboratory in Shanghai to meet mainland demand.

Centron Telecom International expects to gain over $10 million in overseas income in 2008, up from the $700,000 in 2007, as it has signed long-term contracts with telecom operators worldwide. The monthly production capacity of Centron Telecom's digital TV coverage system equipment is 2,500 units at present. The company targets to manufacture 5,000 units per month and a total of 60,000 units in 2008. Aside from digital TV equipment, 3G and foreign markets will become the main drivers of income for the company in 2008.

Nokia will become AAC Acoustic TechnologiesÆ largest customer in 2008. Nokia orders accounted for 10% of AAC's total order amount in the fourth quarter of 2007 and are expected to increase to 25% this year. New orders from Nokia could offset the expected drop in Motorola orders to 25% of the total from 37%. Sony is expected to account for an order share of 12% while Apple and PALM may have a total of 15%. Chinese customers like Lenovo and TCL may keep their combined order share of 15%-18%. AAC will adjust its product portfolio and expect its mobile phone accessories operation to account for 15% of its total sales this year.

India/Vietnam/Southeast Asia

Wipro said its fourth-quarter net profit rose 2.8%, with the overall result hurt by a slowdown in the US economy that affected billing rates and a slump in its interest and other non-operational income. The Indian software exporter said net income in the January-March period rose to Rp8.80 billion ($219 million) from Rp8.56 billion a year earlier. The margin shrank by 100 basis points in the quarter as a result of wage increases, but this was partly offset by an increase in margins at company acquisitions and an improvement in the manpower utilisation rates.

Samsung has launched its latest handsets covering every segment of the market with the aim of capturing a 25% share of the market in both Vietnam and Southeast Asia. The South Korean electronics giant on April 16 unveiled 18 models at the Samsung Mobile Roadshow 2008 in Hanoi, entitled "imagine mobile phones for every lifestyle".

¬ Haymarket Media Limited. All rights reserved.
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