a-week-in-tech-july-17

A week in tech, July 1-7

A roundup of all the latest tech news.
Japan

Media, Entertainment and Gaming
ò Microsoft Corp announced its plan to launch the advanced version of its Xbox 360 game console, Xbox 360 Elite, this October in Japan. The device, which is popular in the US, has slow sales in Japan, where it trails behind Nintendo and Sony. The Elite's 120-gigabyte hard drive is six times bigger than the regular Xbox 360's hard drive and twice as big as that of Sony's PlayStation 3 console. It can store thousands of songs as well as a library of high-definition TV shows, movies and arcade games. Microsoft said it will sell the Xbox 360 Elite for 47,800 yen ($390), compared with 29,800 yen for the most basic version of the Xbox 360.

ò Enterbrain, a gaming magazine, reported that the combined sales of video game consoles and software in Japan posted a climb of 25.8 percent in the first half of 2007 from a year before to a record 318.9 billion yen ($2.5 billion). The magazine ascribed the surge to a strong demand for new machines. Of the total, sales of game consoles went up 67.7 percent to 153.7 billion yen ($1.2 billion), with software sales registering a growth of 2.1 percent to 165.2 billion yen (US$1.3 billion). In the January-June period, Nintendo Co. reported sales of about 1,775,000 units of its Wii console, compared with 504,000 units of Sony's PlayStation 3. Nintendo also disclosed that it has sold some 3,714,000 units of its DS hand-held console. Sales of Microsoft's Xbox 360 were placed at 123,000 units. Enterbrain said it looks forward to brisk sales of game consoles and software as new games are launched.

Hardware
ò Toshiba disclosed filing a lawsuit against German DVD duplicator EDD Bizz GmbH and its director over alleged patent infringement. The Japanese company said it has filed the case with the Duesseldorf Regional Court. According to Toshiba, EDD had manufactured and sold DVD videodiscs in Germany without concluding a licensing agreement with Toshiba concerning the patents. The agreements are needed to satisfy DVD format specifications.

Ventures/Investments
ò Casio Computer and NTT DoCoMo announced their decision to set up a joint venture to provide digital payment services. The joint venture will have a capitalisation of 750 million yen ($6.1 million), and will be called CXD Next. Under the agreement, Casio will own 60 percent of the entity, with NTT DoCoMo owning the rest. The two companies said CXD Next will begin providing services mainly for DoCoMo's iD mobile credit-card platform in September.
Korea

Internet
ò SK Telecom announced that the Korean-language content of Wikipedia will now be accessible on cellular phones for more than 22 million handset users. The nation's biggest wireless operator disclosed that with the offering its customers can look up anything on Wikipedia via its mobile internet services. SK Telecom said that it is looking to making available other applications, including the ability to edit data with mobile phones. Those who want to use the handset-based Wikipedia services need to log on to the wireless internet that charges users in accordance with delivered data packets. Observers even see Wikipedia, the web-enabled encyclopedia that can be written or edited by anybody, as a serious competitor of the Encyclopedia Britannica.

Mobile/Wireless
ò Media sources said South Korea's cell phone makers are preparing to compete against Apple's iPhone. The countryÆs biggest cell phone maker Samsung Electronics announced that it will unveil its Ultra Smart F700, with a large touch screen displaying rows of icons similar to those of the iPhone, by the end of the year. LG Electronics, South KoreaÆs No. 2 handset maker, said it has already started selling a smartphone in Italy that can display full-size web pages. Pantech, which sells most of its phones in the US under carriers' brand names, will unveil its first touch-screen smartphone this fall. In a separate development, Sony Ericsson and Nokia announced the release of their models to compete with the iPhone.

ò LG Electronics announced that it will provide free insurance coverage to 60,000 customers who own the company's high-end Prada phone. Under the offering, Prada phone users will be given up to 200,000 won ($218) if their phone breaks. The free insurance is different from the existing product warranty. The model was developed by LG Electronics in cooperation with Italian fashion house Prada and released in May. The phone has sold 25,000 units in Korea, with each unit costing 880,000 won ($957).

Media, Entertainment and Gaming
ò NCsoft and ArenaNet announced that Guild Wars: Eye of the North, the first ever expansion to the subscription-free Guild Wars franchise of fantasy online role-playing games, will be released to the public in August this year. The companies disclosed that Guild Wars: Eye of the North expansion will be available from retailers in North America and Europe, as well as through the NCsoft store at PlayNC.com and in the Guild Wars in-game store. The game is expected to be offered under the no-subscription fee model pioneered by ArenaNet. Industry sources indicated that since the release of the original Guild Wars in 2005, the Guild Wars franchise has sold more than 3.5 million units, making it one of the most popular online role-playing games of all time.

ò Korea Telecom announced the launching of its Mega TV service, which has been described as an improved version of its Megapass TV Internet television service. The move is seen as initiating intense competition with Hanaro Telecom in signing up subscribers. KT is starting Mega TV in the Seoul, Gwacheon and Dongtan areas and will expand the service area to all major cities across the country by the end of this year, with an offering that includes movies, soap operas and educational programmes from South Korea and abroad by way of video on demand (VOD). Internet TV is a next-gen broadcasting service that allows users to watch movies, dramas, sports and other programmes over a high-speed Internet connection.

Hardware
ò According to the countryÆs Commerce, Industry and Energy Ministry, exports of Korean-made digital electronic goods went up 3.1 percent in May from a year earlier, a growth that is attributed by the government to strong demand for printers, monitors and electronic parts. The report said shipments of digital electronics reached $9.5 billion last month, which is a growth of $300 million from a year earlier.

ò Samsung Electronics announced that is working jointly with MusicNet in launching a music service designed for its digital media players in Europe. The move is seen as SamsungÆs strategic response to the market-leading Apple iPod. Under the agreement, the MusicNet service will be accessible through the Samsung Media Studio, the proprietary media player that ships with the company's K3, K9, and T9 model media players. Previous versions of the studio will get MusicNet support through an automatic software update. The service also works with Samsung PlaysForSure devices, such as the Z5, which are based on Microsoft's digital rights management software. The new service can be accessed through portable music subscriptions for unlimited downloads for a flat monthly fee or by buying individual tracks or albums.

Telecommunications
ò Alcatel-Lucent announced its entering into an agreement to provide an optical network solution to South Korean broadband services provider Hanaro Telecom. Alcatel said it will complete the deployment of the solution in the third quarter of 2007. Hanaro Telecom is Korea's second largest broadband service provider, with 3.6 million broadband subscribers, 1.8 million voice subscribers and 54,000 TV portal subscribers. Financial details of the agreement were not disclosed.

ò According to industry sources, the AIG-Newbridge consortium, the largest foreign shareholder of South Korea's Hanaro Telecom, is in talks with some 10 foreign entities, including telecom operators and private equity funds, for the possible sale of its stake in the nation's second largest broadband service provider. The report identified Singapore Telecommunications, AT&T and NTT DoCoMo as potential candidates to take over control of Hanaro. The sources said the consortium, which had a 39.3 percent interest in Hanaro at end-2006, is not in talks with local companies, including SK Telecom and LG Dacom, on the sale. Other sources, however, indicated that analysts have named the two as strong contenders to take over Hanaro. In 2003, the consortium acquired the stake for $500 million.

Semiconductors
ò STMicroelectronics, the world's largest supplier of silicon chips for set-top boxes (STBs), announced Korea Telecom's (KT) launch of its new IPTV service using high-definition (HDTV) set-top boxes based on ST's family of highly integrated HDTV decoder chips. Following its final trial in May this year, KT declared the successful testing of the commercialisation of South KoreaÆs IPTV service. The service provides over 1,200 on-demand videos with hardware-assisted security and 27 interactive services, ranging from education to finance to instant messaging. An electronic programme guide and user-created content are also available. Other KT IPTV services include: digital photos and personalised stock; plus weather and sports information.

Ventures/Investments
ò SK Telecom and US internet service provider EarthLink announced their plan to infuse additional funds of up to $100 million each in their lossmaking US mobile venture. SK and Earthlink have invested a combined $440 million for the 50-50 joint venture Helio, which was set up in 2005 and launched in 2006 to target the highly competitive US market, with young consumers as its target. According to SK, losses from Helio were the main reason behind EarthLink's poor performance in recent quarters. Helio expects to post a net loss of $330 million-$360 million in 2007, compared with a $192 million loss it posted in 2006. Analysts expect HelioÆs situation to improve, citing stronger mobile phone lineup and growing customer base. SK said it expects Helio to become profitable in 2009.
China

Internet
ò Baidu.com and independent Chinese language record label Rock Music announced that they will jointly provide an advertising-supported online music streaming service. Under the agreement, a selection of Chinese language music from RMG's repertoire will be made legally available for streaming and at no charge to Baidu users. Internet advertising will be displayed while users listen to music licensed under the agreement. Under the partnership, the two companies will share revenues generated from the advertising. Baidu has signed such agreements with major music companies in the past. Its partnership with EMI Group PLC on a free music streaming service in China is similar to the deal recently reached with the Taiwanese group. Baidu operates the most popular search engine in China. Rock Music has offices around Asia, including Taipei, Hong Kong, Beijing, Singapore and Tokyo to seek new talent and produce records.

ò The board of directors of Netease.com announced their approval of a new share repurchase programme, an agreement which involves up to $120 million of the company's outstanding American Depositary Shares for a period not to exceed 12 months. The new authorisation follows Netease's completion of a share buyback program in which about 5.3 million of the company's issued and outstanding ADSs were purchased for an aggregate purchase consideration of $95.7 million. Under the terms of the approved program, Netease may repurchase its issued and outstanding ADSs in open-market transactions on the NASDAQ Global Select Market.

Media, Entertainment and Gaming
ò Shanda Interactive Entertainment, a leader in online gaming in China, announced that it will operate hit Japanese video game "Dead or Alive" (DOA) in China's huge gaming market. Under the deal, Shanda said it will develop a PC version of the game for release in China, Hong Kong and Macao. ShandaÆs deal is seen as the latest in a series of international agreements tapping ChinaÆs market of about 32 million, mostly young and male, gamers who play online at least once a month. Shanda said DOA will be played under the "come-stay-play" revenue model. In this model, gamers are allowed to play for a fee, with revenues made by selling them added powers for online avatars. No subscription fee is charged under this model. Shanda said it expects to earn more than $250 million in 2007, an amount based on the most recent quarter's earnings of $60 million.

ò Xinhua Finance Media (XFMedia) announced its acquisition of a 100 percent interest in Convey Advertising Company (Convey), a major outdoor advertising operator in Hong Kong and across southern China. The acquisition is seen as expanding XFMedia's outdoor advertising network to seven additional cities and includes significant high traffic and key transit routes linking mainland China with Hong Kong and Macau. Founded in 1986 in Hong Kong, Convey has advertising rights to over 3,000 outdoor media assets, 2,000 of which are exclusive. These outdoor media assets include traditional outdoor billboards, LED and LCD boards and others in Dongguan, Shenzhen, Guangzhou and Foshan in Guangdong province, Hong Kong and Macau in the south and Tianjin in the north. The transaction was closed on July 2nd, 2007. Under the agreement, XFMedia acquired control of Convey through the purchase of 100 percent of the shares of its holding company Good Speed Holdings Limited. Under the deal, XFMedia has made initial cash payment of US$33 million, and may make further payments in cash and Class A common shares of XFMedia depending on Convey's financial performance in 2007 and 2008. Xinhua Finance Media is China's leading diversified financial and entertainment media company, which reaches its target audience via TV, radio, newspapers, magazines and other distribution channels.

ò Shanda Interactive Entertainment announced its acquisition of Chengdu Aurora Technology Development. The MMO developer is the leading 3D MMORPG developer and operator behind the MMOs Feng Yun Online and Legend Online in mainland China. The announcement noted that Feng Yun Online has roughly 1.5 million active accounts as of second quarter 2007. The chairman and CEO of Shanda said they consider the acquisition of Aurora Technology as expanding its user base as well as enriching its content portfolio. Shanda also sees the acquisition as helping it set up a new R&D center in Chengdu to make full use of local talents and technologies for game development.

ò Industry sources announced the formal unveiling and opening of ChinaÆs National Animated Cartoon Industry Property Right Trade Center at the Shanghai United Assets and Equity Exchange (SUAEE). The center was established by China National Cartoon and Games Industry Base and SUAEE to help promote the development of China's animated cartoon industry through information transfers, property rights transfers, acquisitions and evaluation services. SUAEE provides investment and financing services to various investors, and promotes the convergence of state capital with private capital, foreign capital with domestic capital, science with economy, tangible assets with intangible assets, incremental assets with stock assets. Currently, the global animated cartoon industry is estimated to be about $250 billion. The countryÆs animated cartoon industry, which is still developing, is valued at 18 billion yuan ($2.3 billion).

ò Nineyou International Limited, a Chinese online game software developer, will list on the Osaka Securities ExchangesÆ Hercules market on July 12. For its IPO, the company will offer 97,000 shares to the public, with 46,000 being newly issued shares and 51,000 shares currently held in private. The company expects to net 7.3 billion yen ($59.1 million) from the offering. For the current fiscal year December 2007, the company forecasts a consolidated net income of US$40.1 million on sales of $109.50 million. Morgan Stanley acts as the lead underwriter of the offer. Industry observers see the strength of the company in its online games that can be played in a short time. The company also sells advertising space on its game sites.

Mobile/Wireless
ò Guangzhou Global Telecom, a mobile phone handset distributor, announced entering into a distribution agreement with China Unicom's Guangzhou Branch. Under the deal, Global Telecom will distribute CDMA and GSM phone cards and other value added services in Guangzhou. Industry sources place the number of users of GSM and CDMA phones throughout China, as of April 2007, at 110.2 million and 38.2 million, respectively.

ò According to its CEO, RIMÆs BlackBerry is finally coming to China following the certification allowing it to be sold in China during the first quarter of 2007. RIM has been working with China Mobile Communications to launch the "push e-mail" devices in China. Last year, RIM had said it expected to be selling the BlackBerry in China as early as May 2006. Analysts said that with more than 400 million mobile device subscribers, the China market is a very important one for RIM. There are no details yet about the launching but Canadian sources say the device would be available in Chinese shops by month's end. The device would be sold for about CDN$700 ($661).

Telecommunications
ò Media sources said that Huawei Technologies, the countryÆs largest communications network equipment maker, has won a contract to help Vodafone expand its Spanish 3G telecoms network. Huawei announced that the deal will allow it to expand VodafoneÆs high-speed packet access network covering seven major Spanish cities, including Madrid and Barcelona.

Ventures/Investments
ò According to its president, Gome, the biggest home appliance retailer in China, is considering making major acquisitions. The company is reportedly in talks with a number of different companies. Media releases indicate that Gome has a sales revenues target of 19.8 billion yuan ($2.6 billion) for mobile phones, aiming to take 10 percent of the market share in the mobile market in China this year. Gome has already opened up to 20 mobile stores to date and it is looking to open 100 more. Gome said it plans to acquire 200 stores from its parent company as it waits for the go-signal from the countryÆs Ministry of Commerce.
Taiwan

Ventures/Investments
ò Industry sources say that Compal Electronics has announced that it has secured approval from the government of Vietnam to proceed with a $500 million investment project. Under the deal, Compal will initially set up production lines to manufacture notebook computers in Vietnam even as the company is also evaluating whether or not to build assembly lines for LCD TVs. The announcement noted also that the company is expected to ship 20 million notebooks this year, with the shipment volumes seen as surging to 26-28 million units in 2008, with the condition that the company is able to maintain its shipment growth at 30-40 percent a year.

ò Firich Enterprises, a Taiwan-based maker of POS (point of sale) equipment/devices, announced the signing of an MOU (memorandum of understanding) with Singapore-listed LottVision, a provider of lottery solutions specializing in the China market. The MOU seeks to establish exchange of ownership of Wu Sheng Technology, Firich's wholly-owned subsidiary maker in Shanghai, China, for a 15-20 percent stake in LottVision. Firich looks to the stock swap as strengthening its competitive status, as it plans to make a foray into the production of casino machines and lottery business operations through the deal. Under the deal, Firich will offer the guarantee that Wu Sheng will attain a minimum net profit of $3.8 million for the period July 2007-June 2008. Other conditions include Firich entering into an agreement that will enable LottVision to manage Wu ShengÆs production on a commission basis. All the conditions for the deal, however, will still be subject to the corporate appraisal of LottVision as well as the approval by LottVision's shareholders and the authority of the Singapore bourse.

Hong Kong
Ventures/Investments
ò Delta Electronics, Inc. (DEI) announced that its subsidiary, Delta Networks Inc. (DNI), has priced its offering on the Stock Exchange of Hong Kong Limited and will go public this week. The Global Offering consists of 313.6 million shares, with the total amount being raised at about HK$1.4 billion ($179 million). DEI is disposing of 28.1 million shares valued at HK$126.6 million ($16.1 million) through Delta Networks Holding Limited (DNHL), a wholly-owned subsidiary of DEI, in this public offering. Goldman Sachs is the underwriter of the offering. The report said that DNI selected Hong Kong for its growing capital markets and in order to facilitate its access to international capital and expansion of its global operations. The company said it aims to use net proceeds from the issue of new shares for the construction of new manufacturing sites, production expansion, future strategic acquisition, working capital and other general corporate purposes. In 2006, annual sales revenues of DNI reached $357 million, with net profit reaching $25.5 million. DNI's businesses include the manufacturing and sales of networking products such as Ethernet switches, broadband and wireless products and various services that include front-end support services, material management services, product design, manufacturing design and test engineering services, assembly and testing services, network planning services and after-sales support services.

Singapore/Malaysia/Philippines/Indonesia

Telecommunications
ò The central government of Indonesia announced the enactment of new rules that put foreign ownership in cellular and fixed-line operators at 65 percent and 49 percent respectively. The government clarified, however, that the new regulation is not retroactive, which means that the regulations will not concern investments that already exist or even those that are currently processed in the country. A government spokesperson indicated that the government will not allow foreign investors to raise their existing stakes in cellular and fixed-line telephone operators if the stakes are already above those limits. Before these rules, limit on the foreign ownership in telecommunication companies was not clear. There are two Indonesian cellular companies whose foreign ownership exceeds 65 percent: PT Exelcomindo Pratama, which is 66.9 percent owned by Telekom Malaysia Bhd.; and PT Natrindo Telepon Selular, which is 95 percent owned by Malaysia's Maxis Communications Bhd.

ò According to its Director and Chairman, First Pacific Co Ltd. revealed its plan to sell a portion of its shareholdings in Philippine Long Distance Telephone to Japan's NTT DoCoMo Inc. The official said the company is in talks with DoCoMo regarding the sale of what he referred to as ôless than 50 percentö of the 25.2 billion pesos ($547.7 million) worth of PLDT shares, which First Pacific bought from the Philippine government early this year. NTT DoCoMo said it might increase its stake in PLDT up to the limit of 21 percent through the acquisition of shares in the open market or by way of negotiated deals. NTT DoCoMo currently owns 14.5 percent of PLDT, the Philippines' largest telecom company.

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