a-week-in-tech-march-17

A week in tech, March 1-7

A roundup of all the latest tech news.
Japan

Media, Entertainment and Gaming
ò Sony and Immersion reported the settlement of a patent dispute over the vibration technology that shakes video game controllers. The two companies also announced their decision to work together to bring the so-called "rumble" function back to PlayStation products. Litigation threatened to halt the Japanese company's US sales of PlayStation and PlayStation 2 consoles, controllers and games that use Immersion's vibro-tactile technology. The patented technology contributes a sense of realism to videogame play by jolting the player's hands whenever there are gunfire, explosions, crashes or other dramatic on-screen events. Immersion sued Sony Computer Entertainment and Sony Computer Entertainment America in 2002 seeking $299 million in damages. As part of the agreement, Sony will pay US-based Immersion $97.2 million in damages and interest, as stipulated in the original court award that Sony was appealing. Sony will also pay $22.5 million in licensing payments through 2009 plus an unspecified amount of fees and royalties, with Sony shelling out an estimated $150.3 million to settle the litigation.

ò JapanÆs software makers are working on the development of online gaming, with firms looking to online gaming as a new source of revenue in the stagnant game software market. Among domestic software manufacturers, Koei has been identified the first to work on online game software. During fiscal 2007, it will produce software based on its hit product for game consoles based on Sangokushi (Romance of the Three Kingdoms). The company said, currently, online products account for only 20 percent of software sales, but it is aiming to increase that percentage. Capcom Co. is planning not only to develop software but also to set up a game portal site with the online game producer Dwango Co during fiscal 2007. GungHo Online Entertainment Inc., which operates a game portal, is in the process of developing a game based on the popular comic Hokuto no Ken (Fist of the North Star). Most games now offered by the firm are South Korean, but the company is bringing a software production company under its umbrella and thus giving itself a more comprehensive structure for development. Industry observers note that the popularity of portable game console Nintendo DS spurred domestic game software sales, which was previously stagnant. According to Enterbrain, the online game market in Japan will exceed Ñ300 billion ($2.5 billion) in 2010, which would be 2.4 times the size of the market in 2005.

Hardware
ò NEC announced that it has secured an agreement to work with Indian IT services group Sify to push thin-client computing in India. Under the agreement, NEC will build virtual PC centers in India from which Sify can provide thin-client terminals to its 16,000 enterprise and 2 million consumer customers as an outsourced service. The terminals measure 16cm by 10cm by 3cm and are small enough to be mounted on a wall or behind a monitor. They support all main Internet applications including voice-over-IP telephony. The applications themselves run on an NEC server that maintains communications with the terminals. NEC reckons the system works about 34 percent cheaper than using conventional PCs. With the deal, NEC said that it aims to set up 100,000 thin-client terminals and 6,000 server units installed in India in the next three years, with a number of the terminals to be placed in Sify's 3,500 Internet cafes across the nation and will also be used in the company's call centers and office processing centers. NEC is also promoting the thin-client system in other markets. Local subsidiaries in Canada, France, the U.K. and the U.S. began promoting it this quarter and it will be available in China, South East Asia, Oceania and the rest of Europe during the second quarter. NEC said it aims to generate sales of Ñ150 billion yen ($1.3 billion) in its first three years of operation.

Ventures/Investments
ò Market sources said that Sharp has plans to invest Ñ200 billion ($1.7 billion) in a new plant in Japan to produce large flat screens for televisions. The report said Sharp has planned to start building the plant in the western Japanese city of Himeji as early as the middle of this year, with the plant to produce 40-to-60-inch LCD panels. Sharp is reportedly looking to begin operations in 2009. Earlier, in January, Sharp announced plans to boost its output of flat screen televisions with new production lines in Japan and Mexico in response to flourishing demand for LCDs.

ò Industry sources indicated that US investment funds Cerberus Group and Texas Pacific Group have been shortlisted as companies interested in the acquisition of Victor of Japan, a money-losing subsidiary of Matsushita Electric Industrial. The report said the two funds will soon submit their respective buyout plans to Matsushita, which will decide which fund to negotiate with on selling its 52.4 percent stake in the unit widely known as JVC. Earlier audio equipment maker Kenwood Corp. expressed willingness to take over the company but has since dropped out of the competition. Matsushita is expected to decide by the end of this month whether to enter into formal talks with Cerberus or Texas Pacific. Sources said Cerberus is seen as calling for JVC executives to acquire the shares from Matsushita through a management buyout by promising to provide the necessary capital for such a deal.
Korea

Media, Entertainment and Gaming
ò BBC Worldwide announced that it has become one of the first UK distributors to provide entertainment content to an Asian mobile television broadcaster's S-DMB (Satellite Digital Multimedia Broadcasting) service. Under the agreement, customers of South KoreaÆs TU Media will be able to watch 39 hours of BBCÆs Top Gear programming through in-car devices or gadgets such as mobile phones, laptops, and personal digital cameras. According to BBC Worldwide, the deal combines one of South Korea's most important new broadcasting technologies with one of the BBC's most popular titles. An official of TU Media Contents Acquisition noted that the deal is part of the companyÆs aim to offer its customers the best programming available.

Mobile/Wireless
ò Beceem Communications, a leading provider of chipsets for Mobile WiMAX technology, announced that Samsung Electronics, a leading provider of mobile phones and telecom systems, has selected Beceem as one of its major Mobile WiMAX chipset vendors. Beceem expects that the companyÆs chipset would be in various Samsung WiMAX-enabled devices. The company said SamsungÆs selection of its chipset is a result of the companyÆs close collaboration with SamsungÆs Mobile WiMAX development team.

ò An intense competition looms in the country as South Korea's two dominant mobile phone operators are gearing to face each other for a market share in video-based third-generation (3G) telephony service. Analysts are saying that, after months of preparations for the new service since its limited launch last year, top mobile operator SK Telecom and runner-up KTF are now fully prepared to expand the service nationwide. The new service, which is based on improved wideband code division multiple access (WCDMA), is designed to allow users to enjoy video telephony and other diverse multimedia features through faster and more seamless connectivity. With its enhanced data download and upload speed, the new communications service, 3G high-speed downlink packet access (HSDPA) is touted by experts as likely to make the current voice-centered telephony service virtually obsolete. KTF is set to launch its nationwide service earlier than SK Telecom. KTF has reported that it spent W1.1 trillion ($1.1 billion) last year on marketing activities, up 20.8 percent from a year earlier, which compared with SK Telecom's W2.9 trillion ($3 billion), up 25 percent from the previous year. KTF said it aims to attract 2.7 million subscribers to its expanded 3G mobile communications service by the end of this year.

Semiconductors
ò Samsung Electronics announced that it has started mass-producing the industryÆs first 1Gigabit DDR2 DRAM (dynamic random access memory) using 60-nanometer class technology. The new process technology increases production efficiency by 40 percent over the 80nm process technology deployed in DRAM fabrication in 2006. It also provides twice the productivity of 90nm general process technology. The 60nm 1Gb DDR2 DRAM was first developed by Samsung in 2005 and is the latest in the companyÆs nano-scale DRAM development. The 60nm process is expected to become the mainstream circuit technology for DRAM in 2008. In the first year of market availability, 60nm DRAM revenues are expected to reach $2.3 billion worldwide and increase to $32 billion by 2009.

Information Technology
ò Samsung Card, South Korea's third- largest credit card issuer posted its first annual profit in four years. The results, according to the company, prepare it for the decision to pursue an IPO this year. The company reported net income of W271.9 billion ($289 million) last year, compared with a loss of 1.3 trillion won ($1.3 billion) it posted a year earlier. Samsung card said it plans to sell about 10 percent of itself in an IPO this year with the aim to improve its finances and will submit an application to the Korea Exchange next month.
China

Internet
ò Beijing ISM Internet Technology Development Co., the Chinese company behind the Gmail.cn e-mail service, declined to comment on a report that Google has renewed its attempts to acquire the Gmail.cn domain name. From ISM's Beijing headquarters came the statement that the company was aware of the report, but was not clear about where the news was coming from. The company said it is not also sure whether Google had made an offer to buy the Gmail.cn domain name and disclosed that they will release a statement once things are clarified. In 2004, Google had already expressed interest on having the rights to the Gmail.cn domain, first approaching ISM about the domain name and its use of the Gmail name in August 2004. Nothing came out of the negotiation. Observers note that Google has invigorated its efforts to acquire sole rights to the Gmail name in web domains since opening up the free e-mail service to any user who wants an account.

ò Match.com, an online dating service, said it plans to announce the finalisation of its acquisitions of two foreign internet services: the online dating site Netclub in France and the eDodo social networking site in China. According to comScore Media Metrix, Match.com, with its current 15 million users, is already the world's largest online dating and personals service. The addition of eDodo and Netclub would bring the company more than 4 million subscribers. The company looks to the deal with eDodo as promising as it will allow the company access to China for the first time. According to the market research firm iResearch.com, there are more than 64 million online singles in China, and the market is predicted to experience a 105 percent massive growth between 2004 and next year. Financial terms of the deal were not disclosed.

ò 51job.com reported an 18.2 percent rise in its total revenues for the fourth quarter of 2006 over the fourth quarter of 2005 to Rmb171.1 million ($22 million). The company said its total revenues for 2006 went up by 17.2 percent to Rmb697.9 million ($90.1 million) from Rmb595.6 million ($77.0 million) in 2005.

ò NetEase.com, the mainland's largest online game operator by revenue, reported a 15.7 percent surge in its profit to Rmb320.2 million ($41.3 million) from Rmb276.7 million ($35.7 million) for the fourth quarter. The company, however, which runs the mainland's most popular online game, Fantasy Westward Journey, reported that gaming revenue has declined from Rmb467.9 million ($60.4 million) in the third quarter to Rmb451.6 million ($58.3 million) in the fourth. Another game, World of Warcraft, the second most popular in the mainland, is developed by smaller rival The9, whose revenue posted a 22 percent growth in the fourth quarter from the third. Analysts maintain that games offered by NetEase and rival Shanda Interactive Entertainment would remain popular in smaller cities because of their brands and low computer capability requirement. Fantasy Westward Journey had peak concurrent users of 1.3 million, while Westward Journey II, the third most popular, had 603,000. To maintain its lead in the market, NetEase revealed its plans to upgrade its Westward Journey II to version III in the second quarter of this year. NetEase said it is looking for growth in Tianxia, a three-dimensional game it spent four years to develop.

Media, Entertainment and Gaming
ò Focus Media confirmed that it is acquiring Allyes Information Technology Company Limited, the largest internet advertising service company in China. The admission follows a long stretch of rumours about the planned acquisition circulating in the market. Under the agreement, which is expected to close by the end of March 2007, Focus Media will acquire a 100 percent equity stake of Allyes for $70 million in cash and $155 million in the form of Focus Media ordinary shares and an additional payment of up to $75 million in Focus Media ordinary shares contingent upon Allyes meeting certain earnings targets during the twelve month period from April 1, 2007 to March 31, 2008. David Zhu said he has signed an employment agreement with Focus Media and will remain as the CEO of Allyes. Allyes is the largest Internet advertising agency and provider of Internet advertising technology in China. According to iResearch, China Internet advertising will reach 9 billion yuan (US$1.1 billion) in 2007.

Mobile/Wireless
ò Industry sources said the new round of public bidding for China Mobile's TD-SCDMA project has started, with the company reportedly calling in TD-SCDMA suppliers for a meeting. Reports indicated that the bidding will be divided into two parts, involving core network and equipment, and each part has 5 suppliers to join the bidding. For the core network, suppliers include Huawei, ZTE, Nokia and Erricsson. The Telecom Institute of the Ministry of Information Industry said that because it is a large-scale network project, the requirements are much stricter than previous telecom rollouts. Five suppliers have also already entered the testing phase, including Datang, Potevio, ZTE, TD Tech and an unnamed Guangdong corporation. Earlier, Potevio and ZTE have reportedly passed the first test in February.

ò Industry sources said that Datang Telecom Technology and Industry Group (Datang Group), a developer of the mainland's homegrown 3G technology TD-SCDMA, is expected to receive about Rmb4 billion ($516.4 million) from the government. The fund is seen as preparing the group for a corporate restructuring. The report also indicated that the State-owned Assets Supervision and Administration Commission would be responsible for the cash injection. The state-owned China Academy Telecommunication Technology holds Datang Group. It has two subsidiaries, including Shanghai-listed Datang Telecom, which focuses on telecommunications solutions and system integration business. Datang Mobile is the privately owned arm that is developing the TD-SCDMA network, technology and other related businesses. Earlier, Datang Telecom disclosed that it was aware of the report about the capital injection but had nothing to disclose. Datang Group licenses TD-SCDMA patent to various telecommunications vendors such as domestic firms ZTE Corp and Huawei Technologies as well as foreign players such as Nokia and Ericsson.

Hardware
ò HASEE Group, a Shenzhen-based computer manufacturer, announced its shipment of 15,000 laptop computers to the United Nations. The company said it won the bid to supply the computers last year, with the UN using this batch of computers for the Nigeria government's election to be held in March 2007. A representative from HASSE says the company won the bidding mainly because of the stable performance and competitive price of its computers, which are important factors for such a meaningful political election. HASSE sells more than 20,000 laptops each month in the international market, accounting for 40 percent of the company's total sales. The company expects its sales in overseas countries to reach 80,000 in the first quarter of this year. The company also owns the HASEE Industrial Park in Shenzhen.

ò Lenovo revealed that it has recalled about 205,000 laptop computer batteries worldwide, warning that they could overheat and cause a fire. The battery recall was the second for the company in the past six months and came as Lenovo, the world's No. 3 computer maker, tries to gain ground on its better-known competitors. The latest recall included about 100,000 batteries in the US and another 105,000 worldwide. The recall involved batteries made by Japan's Sanyo Electric. Lenovo said consumers should stop using the recalled products immediately. It said the batteries can overheat if the laptop is dropped a certain way, striking the battery on a corner edge. The advisory was made with the US Consumer Product Safety Commission. An industry analyst said the recalls are not expected to have a major impact on the company. In a related development, Lenovo announced that a campus worth some $150 million in Morrisville is expected to open this month.

Telecommunications
ò China Netcom Group Corp disclosed that its total number of users registered a 3.4 percent drop in the four months to January. The company said it total users were 115 million by the end of January compared with 119 million users by the end of September last year, with industry observers ascribing the decrease mainly to a one-time cleanup of inactive users by the end of the year in a move to cut costs. China Netcom said it added 173,500 fixed-line users in January and 337,000 broadband users, bringing the total to 15 million. Industry sources said China added 6.3 million mobile-phone subscribers in January, the biggest monthly increase in almost a year, as more people in rural areas signed up for the services. The number of mobile subscribers in China, the world's biggest wireless market by users, went up to 467.4 million at the end of January, with the country gaining more than one million fixed-line telephone subscribers last month for a total of 369 million.

Ventures/Investments
ò Industry sources said eBay, the world's largest online auction company, will invest $105 million for a 33 percent stake in a mainland electronic payment joint venture with Union Mobile Pay in a deal scheduled to be announced in two weeks. Industry analysts said that eBay looks to leveraging on PayPal, its wholly owned global platform for online payment, by linking up with the domestic player, itself a joint venture between China Mobile and bank card provider China Unionpay. eBay launched PayPal in the mainland in 2005, two years after entering the country by acquiring online auction site Eachnet. Union Mobile Pay has a tie-up with Tom Online to provide mobile payment services in the mainland. However, its success has been limited.
Taiwan

Hardware
ò Market sources said that BenQ has announced its withdrawal from the DVD recorder market, with the product pages on its website no longer including DVD recorders and the company having informed retailers that it is no longer selling the products. Following the drop in prices, BenQ said has decided to drop the segment when adjusting its product structure, the maker said that it will determine whether to enter the Blu-ray or HD DVD recorder markets based on market demand. With the exit, Mustek Systems will be the remaining DVD recorder provider from Taiwan while the global DVD recorder market will be dominated by major brands from Japan and South Korea such as Sony, Pioneer, Samsung Electronics and LG Electronics. In a related development, BenQ Mobile indicated that, despite the pending liquidation of BenQ Mobile, its parent company in Taiwan intends to stick it out in the handset market, focusing on smart phones and mobile Internet devices that take advantage of fixed-mobile convergence.

Internet
ò City Network, a company that designs, manufactures, and markets a comprehensive line of broadband and wireless Internet access solutions and consumer electronic products, announced that it has received notice from the American Stock Exchange that it has delisted the company due to a failure to comply with certain Amex continued listing standards and that the plan submitted by the Company intended to bring it into such compliance did not make a reasonable demonstration of the company's ability to do so. The Company was given the opportunity to appeal and state that the Company intended to bring it into such compliance, but it did not make a reasonable demonstration to do so. City Network is a Taipei-based company that specializes in hardware and software, to develop and manufacture products in electronic communication, Home PNA network communication and Ethernet equipment.

Semiconductors
ò Taiwan-based Advanced Semiconductor Engineering (ASE) announced its cancellation of a plan to set up a semiconductor packaging and testing joint venture with NXP Semiconductors in Suzhou, China. The company disclosed that it has decided to go for a 60 percent stake in NXP's existing plant in Suzhou. In February, the packaging and testing provider announced that it and NXP signed a memorandum of understanding (MOU) to form a joint venture in Suzhou to focus on semiconductor testing and packaging, with NXP to hold a 40 percent stake in the venture while ASE would hold the remaining 60 percent. ASE attributed the reason for its decision to cancel the plan due to tax and workforce issues. After discussions with NXP, ASE said it now plans to invest $21.6 million via its subsidiary J&R in a bid to get a 60 percent stake in NXP's Suzhou plant.

Hong Kong

Mobile/Wireless
ò SmarTone Telecommunications, a Hong Kong-based mobile-telephone subsidiary of property developer Sun Hung Kai Properties, reported a 17 percent growth in its half-year profit to HK$44 million ($5.6 million) from HK$37 million ($4.7 million) it posted a year earlier. The company attributed the growth mainly to increased deposit rate that doubled its finance income. The company said its sales went up by 13 percent to HK$2.1 billion ($268.7 million). The company reported an earning of HK$48 million ($6.1 million) in finance income, up from HK$24 million ($3 million). The company, however, disclosed that market competition pulled down its operating profit by 20 percent to HK$48 million ($6.1 million) for the period from HK$60 million ($7.6 million) a year earlier. The company said it paid more on networks, sales and marketing and amortisation cost on handset subsidies. SmarTone, a partner of Britain's Vodafone, has 1.1 million mobile subscribers, of whom 190,000 are 3G mobile-telephone users after the service was launched in late 2004. The firm said it plans to set aside about HK$400 million ($51.1 million) as capital expenditure for this financial year. Operating profit of its Macau mobile business surged 18 percent to HK$32.6 million ($4.1 million), surpassing the Hong Kong business, becoming the major profit contributor. Industry sources noted that Hong Kong's mobile-telephone operators are spending more on data services such as news and video clips and related networks to boost market share and income. In a separate development, PCCW said it would rebrand Sunday, which it acquired last year under its own brand this month.

ò Hutchison Whampoa's mobile-telephone unit in Australia reported its net loss widening by 39 percent last year, with the company attributing the loss to a one-off expense related to the closure of its CDMA network. Analysts note, however, that the subsidiary has managed to make positive earnings before interest, tax, depreciation and amortization (EBITDA), which could enable Hutchison to concentrate on other more competitive markets such as Britain. Hutchison Telecommunications (Australia) reported a net loss of A$759 million ($594.7 million) last year, compared with A$547.3 million ($428.8 million) in 2005. It booked A$307.9 million (US$241.1 million) loss from the termination of its CDMA facilities. The firm reported A$30.2 million ($23.6 million) in EBITDA and targets to have positive operating cash flow this year. Its 3G mobile subscribers nearly doubled to 1.2 million by the end of last year from 645,000 in 2005, out of which 1.1 million were monthly paid users, with some of the new subscribers coming from its defunct CDMA business. The company said its capital expenditure posted a slight 2 percent rise last year to A$203 million ($159 million). Hutchison Australia said it plans to introduce the high-speed HSDPA technology later this year.
Singapore/Malaysia/Philippines/Indonesia

Internet
ò Google announced plans to open its first Southeast Asia research and development centre in Singapore. Google explained its choice of Singapore by citing its vibrant info-communications and technology environment. Singapore has been setting up efforts to bring in high-tech industries as it moves away from the traditional unskilled manufacturing sector.

Mobile/Wireless
ò According to a market study conducted by HT Telesis, a value-added service provider registered with the countryÆs National Telecommunications Commission (NTC), mobile TV broadcasting is commercially attractive in the Philippines, with the country offering some 39 million potential subscribers. In a submission to the regulator, HT Telesis said it has recently conducted a market study covering Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore and Taiwan. The results showed that there were 240 million people from these markets that could subscribe to a service that will allow them to receive broadcast feeds on their mobile phones. The company said it is targeting those markets for redistributed multimedia broadcasts. The company currently provides e-mail, file transfer, remote log-in, web page hosting and facsimile services, but is seeking NTC permission to build, install and operate direct satellite transmission and redistribute multimedia broadcasting services. The company's study showed that start-up costs for the new services may reach $293,000 in the first year of operations, with potential first-year revenues from basic mobile TV subscriptions alone seen as hitting more than $2 million.

Telecommunications
ò Telekom Malaysia (TM) announced that it has started moves to list its partly owned mobile operator Spice Communications on India's stock exchange. MalaysiaÆs biggest telecommunication firm said it has initiated the process by filing a draft prospectus for an IPO with the Securities and Exchange Board of India. The draft prospectus outlines the intention to raise funds through an initial public offering of 137.9 million shares through a full book building process. The company said proceeds of the IPO will be used to help pay its long-term debt, meet capital expenditure requirements and pay for long distance service and other license fees. Telekom holds a 49 percent stake in Spice through its investment holding company TM International, with the other 51 percent held by Indian company Modi Wellvest Private Limited (MWPL). Telekom said both companies would dilute about 20 percent of their holdings and that after the listing, MWPL's and TM's stakes will be reduced to 40.8 percent and 39.3 percent respectively. Spice has a customer base of some 2.4 million people in the two states, with industry sources noting that the company has initiated an expansion strategy in India.
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