A week in tech, March 12-18

A roundup of the latest tech news.

Brother Group, a developer and manufacturer of printing, communication and digital imaging products for homes, announced that it achieved a 60% drop in carbon emissions in 2007 compared to its CO2 levels in 1990. The Group has also trimmed its total energy consumption of electricity and fuel use by an equivalent of 31 tonnes of CO2 emissions in 2007. These results of the company's environment-focused initiatives are in line with the launch of a trade-specific voluntary action plan in Japan (where it has its global headquarters), which is set to decrease the industry's production of carbon wastes by 28% in 2010 against levels in 1991. Among the environmentally-aware representative organisations that have spearheaded the action plan are Japan Electronics and Information Technology Industries Association, Japan Electrical Manufacturers' Association, Japan Business Machine and Information System Industries Association, and the Communications and Information Network Association of Japan.

Japan is investigating a possible defect in AppleÆs iPod after one gadget allegedly shot out sparks while recharging, a government official said yesterday. The defect is suspected in the lithium-ion battery in the iPod Nano, model number MA099J/A. The problem surfaced in January in Kanagawa Prefecture southwest of Tokyo, and Apple reported the problem to the ministry in March. The ministry has instructed Apple Japan to find out the cause of what it is categorising as a fire and report back to the government. The iPod was assembled in China, but it was still unclear who made the lithium-ion battery, the ministry official said.

SonyÆs PS3 games console was put under renewed pressure by price cuts to MicrosoftÆs Xbox 360 console in Europe, according to industry analysts Strategy Analytics. Microsoft has confirmed that the recommended prices of each of its Xbox 360 console models will be reduced this week. The entry level model, the Arcade, is now the cheapest of the current generation of consoles from Microsoft, Sony or Nintendo. The most expensive, the Elite, is now ú40 pounds ($60) less expensive than SonyÆs PS3. Sony is worried that the PS3's recent sales surge may fizzle out now that the premium Xbox 360 undercuts the PS3. Sony will be scrutinising the daily sales reports, but will probably try to hold out until later in the year before making its next price move.

Net Insight has received an order for a contribution network from a large communications company in Japan. This is a new customer for Net Insight, a Japanese telecommunications company that provides a multitude of services for video contribution and distribution to various operators from terrestrial broadcasters to CATV. Net Insight's Nimbra platform will be deployed and used for a contribution network for video and Ethernet services. The equipment will be delivered during the first quarter 2008. The order has been won in close cooperation with its partner Itochu Cable Systems and with this new customer, the company hopes to continue its market penetration in Asia.

Mobile/ Wireless
Sony Corporation will stop manufacturing cellular phones for NTT DoCoMo by the end of this year to focus on overseas customers amid a saturated domestic market. The 10 or so manufacturers supplying handsets in Japan face an increasingly competitive business environment. Smaller players such as Sanyo Electric and Mitsubishi Electric have already announced plans to withdraw from the domestic handset market. Sony initially considered withdrawing from the Japanese handset market altogether, but has decided for now to continue developing and producing handsets for KDDI Corporation because of their partnership in the music distribution business.


LG Electronics has decided not to acquire Hynix Semiconductor as the chipmaker is unlikely to produce synergy with its existing business. LG Group has made a final decision not to take over Hynix as, according to the company, LG Electronics does not need the semiconductor business to boost its core competence. The company will not invest further in the plasma display panel (PDP) production lines although the display business will likely turn in a profit in the first quarter. Korea Exchange Bank and other local creditors hold a combined 36.03% stake in Hynix. They acquired the stake under a sizable debt-for-equity swap arrangement in 2001.

LG Display of Korea has announced an intellectual property cross-licensing agreement with Eastman Kodak. The license, which is royalty-bearing to Kodak, enables LG Display to use Kodak technology, including yield-improving capabilities for Active Matrix OLED (AMOLED) modules, in a variety of small- to medium-size display applications such as mobile phones, portable media players, picture frames, and small TVs. The agreement also enables LG Display to purchase Kodak's patented OLED materials for use in manufacturing displays. Financial terms of the agreement were not disclosed.

Samsung Electronics will launch a new UI (User Interface) phone called Anycall Haptic phone. The new phone is a premium touch screen phone, based on a variety of haptic functions with innovative UIs applied. It is AnycallÆs strategic model for the first half of this year.

LG Electronics said it plans to buy 32-inch and 52-inch liquid crystal display (LCD) panels from Japan's Sharp Corporation in order to satisfy surging demand for flat screen TVs. The company is said to be buying about 2 million 32-inch panels from Sharp but declined to specify the number of 52-inch panels to be purchased. It also didnÆt disclose the value of the deal.

Surging domestic demand is spurring ChinaCache, a content-delivery network (CDN) service provider claiming a 75% market share, to double its current 500 megabytes production capacity by year-end. ChinaCache has been doubling capacity every year for the last two years to meet rising demand. An industry analyst pointed out that the relatively high fees of CDN providers had hindered wider user adoption. But competition is heating up. Besides ChinaCache, a number of telecommunications carriers and data centre operators have started to offer CDN services on the mainland.

Movius Interactive Corporation, a provider of messaging, collaboration and mobile media services, expects rising mainland sales to boost its Asia-Pacific revenue to about 30% of total sales within two years from the current 10%. The company sees great market demand for mobile instant messaging and video messaging services in China. Sales in the Americas accounted for about 55% of the company's total sales last year, while sales in Europe, the Middle East and Africa represented 35% of total sales. Revenue from traditional voice-mail and short-messaging solutions accounted for about 70% of the companyÆs sales while new applications accounted for the rest. Movius recently launched an interactive mobile advertising service that supports multi-channel video mixing. According to researcher Frost & Sullivan, Movius held about 10% of the global market for voicemail and messaging services last year.

European internet firm Babelgum, which operates a free-to-view global Web television network, plans to start broadcasting in the mainland next year with programs tailored to domestic requirements. According to the company, China is a very important market because of its massive internet penetration rate and itÆs aiming to enter this market next year. Babelgum will consider speaking with companies on possible strategic alliances to facilitate the Babelgum China platform.

China may have surpassed the US last month to become the world's largest internet user base. According to official estimates by government research group China Internet Network Information Center (CINIC) that are released every six months, the number of internet users grew at an average of 6.1 million users per month in 2007. According to CINIC, the country's total internet population grew 53% to reach 210 million last year from 137 million in 2006. Internet usage in rural areas grew particularly fast, contributing 40% of the 73 million new internet users last year. BDA China, a Beijing-based technology consulting firm, estimates that China has as many as 228.5 million internet users, compared with 217.1 million in the US.

BDA also estimates that China's online advertising market reached $1.3 billion in revenue in 2007, while US internet ad spending was expected to reach $21.4 billion in the same period, according to research company eMarketer. Though the two numbers aren't directly comparable, analysts agree the disparity of ratios of user numbers to advertising dollars is vast. BDA says the internet makes up only about 5% of advertising spending in China compared with 10% in the US. But if China's economy continues to grow and China's young internet users increasingly choose the internet over traditional forms of entertainment, China is bound to catch up. BDA adds that advertising increases with the growth of the economy and media. In the next five years, the technology consulting firm estimates that the number of internet users in China will grow at a compounded annual rate of 18.5%, while the US will grow at only 2.2%. That would give China 590 million internet users by 2012.

In 2007, China mobile phone output reached approximately 594.4 million units, among which, 548 million units were legal products from official mobile phone producers and 46.4 million units were illegal products. Sales volume reached 180.7 million units, amounting to 16% of the world total. The global mobile phone output reached 1.1 billion units last year, of which 52% were from China û the first time its share of the global market has exceeded 50%.

Nokia, the world's biggest maker of mobile phones, will sell handsets valued at about $2 billion to China Postel Mobile Communications Equipment this year, which is 20% less than in 2007. The order is part of a partnership with China Postel, Finland-based Nokia said in a release on its Website. China Postel, a subsidiary of China P&T Appliances, is the country's biggest distributor of mobile phones. Last year, it agreed to buy $2.5 billion worth of Nokia devices.

ZTE Corporation has inked a contract to arrange a buyer's credit program for MobilKom. This is the first telecom financing program by a Czech company in China. It is also the first time for ZTE to deploy a CDMA2000 1xEV-DO Rev.A network in Europe and the contact will play a significant role in ZTE's expansion in the European market. China Development Bank will be responsible for financing a total of Ç19 million ($9.5 million) for MobilKom, in line with a contract it signed with the Czech mobile phone operator at the end of 2007.

Media, Entertainment and Gaming
Indian media company UTV Software Communications is eyeing fresh opportunities in the mainland's gaming and entertainment sectors, months after acquiring Tom Online's former mobile and online games unit. In December, UTV completed its earlier announced acquisition of a 59% controlling stake in Indiagames for an undisclosed sum from Beijing-based Tom Online, the wireless internet unit of Tom Group. UTV earlier acquired a controlling stake in British gaming company Ignition. The company said it wanted to follow the path that other Indian IT services firms, such as Tata Consultancy Services and Infosys Technologies, have taken in China.

The strong momentum of ChinaÆs online gaming sector is continuing, with most industry leaders posting better-than-expected profits in the final months of last year. Of the top five online gaming companies, Netease, Shanda, The9 and Perfect World beat analysts' revenue and profit forecasts for the fourth quarter. The9 reported the best results, after launching Burning Crusade, a highly anticipated upgrade to its hit game World of Warcraft, in September. Sales growth of 34% quarter-on-quarter and 50% year-on-year made The9 the mainland's third-largest online gaming company. Revenue amounted to $61.3 million in the fourth quarter, beating Giant Interactive's $59.6 million. The9Æs profit soared 125% to $11.8 million from the previous quarter, but was still 18% lower than a year earlier. Citigroup noted that The9 may struggle to keep up the pace since the launch of Burning Crusade had been delayed from last summer and the anticipation drove up sales substantially in the fourth quarter.

CDC Games has licensed ôDigimon RPGö and ôDigimon RPG2,ö the massively-multiplayer online role playing games (MMORPG) based on a Japanese television animated series, for distribution in North America and China from SK Telecom. The two games are developed by Digitalic and are also jointly planned by Digitalic and Bandai Korea. CDC Games intends to launch Digimon RPG in North America later this year. Digimon RPG2 is currently under development and is expected to be launched to the Korean market later this year. Digimon RPG and Digimon RPG2 are the latest in several new games licensed in North America and China by CDC Games International (CGI). CGI already has launched games outside of China, including Minna de Battle in Japan and Lunia in North America.

China Digital TV Holding, a provider of conditional access (CA) systems to China's rapidly growing digital television market, has announced a collaboration with Intel Corporation for the joint development of advanced digital television products. Under the terms of the agreement, China Digital TV and Intel will cooperate to enable China Digital TV's CA solution to use the Intel CE 2110 Media Processor. The relationship is said to fit with the Chinese company's strategy of expanding into value-added services that will require more advanced processing capabilities as it prepares for increased digital television penetration in China. China Digital TV will modify its CA software to run optimally on the Intel CE 2110 Media Processor, a complete system-on-a-chip that features an advanced processing unit supporting MPEG-2 and H.264 hardware video decoders, DDR2 memory interface and 2D/3D graphics accelerators. The cooperation will allow China Digital TV to package its CA software with the Intel CE 2110 Media Processor to sell to China's set top box manufacturers. The integrated solution will enhance the system's ability to encrypt and decrypt signals for digital television systems.

China Media Group (CMG) is in advanced discussions with the board and major shareholders of Guangzhou Waho Culture & Media (GWCM) to acquire a majority interest in GWCM, which is engaged in online advertising, managing information portal websites, print media and valued added services. GWCM holds the operational rights to the print and online edition to Guangdong Tietong Yellow Pages. Guangdong Tietong is the provincial arm of China Tietong Telecommunications, one of the six licensed telecom carriers in China. CMG currently owns approximately 18% of GWCM and wants to increase this stake to become the controlling equity owner. Online advertising revenue in China is expected to grow to $2.2 billion in 2010 from $621 million in 2006, an annualised growth rate of 37%.

Giant Interactive Group plans to begin open beta testing for Giant Online on March 28, 2008. Giant Online is the company's second self-developed game. It is a free-to-play 2.5D massively-multiplayer online role playing game (''MMORPG'') featuring a modern military theme. Players may choose their characters in one of fourteen different roles, such as engineers or spies. Giant Online will provide players with a wide selection of modern weapons and equipment, such as guns and airplanes, and allow players' characters to engage in friendship and even romance. To further enhance the level of interactivity, Giant Online will utilise Giant InteractiveÆs server technology that allows for single-shard play by 1 million concurrent users. Giant Online is said to be doing well during the closed beta testing process with positive feedback from its testers.

Microsoft China plans to set up an IT training centre in Wuxi to turn out skilled professionals to work in the city's emerging IT industry. Microsoft China and the Wuxi government has signed a deal to establish the training program. Wuxi New District will provide infrastructure for the training centre, while Microsoft will bring the technical platform and program. The centre is expected to offer professional IT training to 10,000 students a year. Wuxi plans to have 100 companies provide international outsourcing services and exporting software by 2010. Each company will employ at least 2,000 staff and will have an export volume of $30 million.

The PC shipment of Personal System Group (PSG) under China Hewlett-Packard (CHP) jumped 84.5% in the fourth quarter from the same period the previous year. In the 2007 full year, the company's shipment of commercial PCs surged 84.4%, while shipment of consumer PCs grew 153.4%. In detail, shipment of commercial desktops gained 29%, commercial notebooks 80%, consumer desktops 98% and consumer notebooks 273%. China's third- to sixth-tier cities contributed 40% of PSG's current total operating revenue. The company said it will focus on small- and medium-sized company markets in 2008.

IBM Corporation has opened its first supply-chain research facility to meet the growing demands of companies that are struggling to manage their globally expanding trading networks. The facility is located in Beijing because of China's role in the global supply chain. The company believes that China is a key link as it has moved from being a major procurement centre for sourcing activities to a manufacturing centre and now even an R&D centre. IBM's supply-chain practice includes 7,500 consultants world-wide. Global services, including the supply-chain practice, are a big growth driver for the company and registered a 17% revenue increase in the fourth quarter of 2007 from a year earlier, compared with a 9.9% company-wide revenue increase to $28.9 billion.

Renesas Technology (China) generated more than $500 million in sales income in 2007 in China and Hong Kong. In 2008, the company will expand the semiconductor chip monthly production capacity at its Chinese plant from 60 million units to 100 million units. In the next five years, China will become Renesas Technology's largest semiconductor chip manufacturing base, with the monthly semiconductor chip output of up to 200 million units.

Mobile/ Wireless
Far EasTone Telecommunications posted a consolidated pretax profit of NT$1.1 billion ($35.0 million) in February, up from NT$913 million in January. Consolidated sales fell to NT$5.1 billion ($165 million) last month from NT$5.4 billion a month earlier. For the first two months of the year, pretax profit amounted to NT$2.0 billion on consolidated sales of NT$10.6 billion.

Darfon Corporation, a manufacturer of telecommunication components and precision devices under the local Qisda Group, has released record results for 2007. DarfonÆs 2007 consolidated revenue amounted to NT$24.65 billion ($770.2 million), up 55% from the previous year, while net earnings totalled NT$1.72 billion. The company said it expects to maintain 50%-plus growth in 2008, in line with the past three years. Darfon has won a big-ticket order for illuminated notebook PC keyboards from a major American brand and is scheduled to begin shipments in May. Last year, the Taiwanese company delivered 33 million notebook PC keyboards and the volume is expected to climb further this year, helping Darfon win a global market share of 40%.

Acer has come up with its own small version of a notebook computer, the Acer Aspire. This marks the first time that Acer has released a consumer-focused notebook computer in the 12-inch screen, two kilogram category, promising to give consumers more mobility and convenience.

ProMOS TechnologiesÆ parent-level sales fell to NT$2.5 billion ($81.4 million) in February from NT$5.2 billion in the same month last year. The February sales represent a 9.91% decline from January, which the company attributed to lower spot prices for dynamic random access memory chips and fewer working days due to the Lunar New Year. In the first two months this year, parent sales stood at NT$5.3 billion against NT$12.3 billion a year earlier.

ProMOS Technologies is in talks with South Korea's Hynix Semiconductor about acquiring the Korean firm's 54-nanometer (nm) process technology. The two chipmakers could sign a technology transfer agreement as soon as the Korean government gives its approval. ProMOS's existing 90-nm and 70-nm technologies were also transferred from the Korean firm.

Taiwanese ODM (Original Design Manufacturing)/ EMS (Electronics Manufacturing Services) provider Qisda has landed ODM orders for high-end mobile phones from a first-tier vendor. The unnamed vendor is believed to be Motorola, though no specific details were given. Qisda said shipments are scheduled to start in the fourth quarter of 2008.

Hong Kong

Globe7 HK, a diversified Web 2.0 development company, and Tencent Holdings have announced a strategic partnership for building and marketing a student-oriented social networking platform for China. Called Longhaier, the site will offer online forum, campus information and games, and other interactive Web applications. It will also provide extensive information on study abroad, job placement and scholarship opportunities, the companies said. Tencent has successfully created a large internet community with QQ.com, which has wide popularity, particularly among young internet users.

PCCW's bottom line grew 20% in 2007 to HK$1.5 billion (US$192.6 million), driven by lower costs and improved results at the company's mobile and broadband-television operations. Sales costs fell 19% to HK$10.54 billion and finance expenses dropped 17% percent to HK$1.66 billion. The net profit was slightly above the HK$1.48 billion average forecast by 11 analysts polled by Thomson Financial. PCCW's mobile business broke even on an Ebitda basis in 2007 - a year earlier than targeted. In 2006 the company posted an Ebitda loss of HK$186 million.

Lenovo Group would put more efforts on PC-related businesses, such as printers, to pursue high growth and profit, media quoted Lenovo chairman Yang Yuanqing as saying. Yang added that the company has just launched a new PC brand, which will be marketed as featuring innovation and high quality instead of its current ranges that focuses on low price and quality. Yang said the company did not benefit much financially from the sale of its mobile phone business.

Delta NetworksÆ net profit grew 23.1% to $31.4 million for the year ended 31 December 2007. Turnover increased by 17.1% to $418.6 million, while gross profit was up 26.9% to $72.7 million. The final dividend will be 1.03 US cents per share.

CDC Software has agreed to buy a controlling stake in a Hong Kong-based vendor of ERP systems, as part of its strategic expansion in China. CDC Software will have a 51% stake in Integrated Solutions Limited (ISL) upon the completion of the transaction by the end of March. The company declined to reveal the cost of the transaction, citing CDC Software's ongoing preparation for a public listing in the US.


EGG, a technology-based company that specialises in mobile content and digital applications, and NMS Communications Platforms have jointly launched a service called Video Avatar. Video Avatar is the first service in the Philippines that allows users to send and receive video messages featuring either live video or a chosen avatar. The service allows mobile phone users to receive a message delivered by a personalised animated avatar lip-synched with the senderÆs voice. EGG is a leading content and applications provider in the Philippines, one of the largest and most advanced mobile value added services (ôMVASö) markets in the world. The Company specialises in the development, aggregation, marketing and distribution of mobile content and applications across a broad range of technologies, including SMS, MMS, WAP, JAVA, IVRS and 3G. EGG also distributes MVAS internationally in Japan, Singapore, Hong Kong, Malaysia, Dubai, Qatar and the US through its affiliate company EGGstreme.

Smart Communications is aiming to improve its mobile services in the Philippines with the rollout of the popular i-mode service this month. Smart and leading Japanese wireless carrier NTT DoCoMo has an existing mobile services agreement through their respective mother companies. Smart said i-mode will initially be available to its Smart Gold subscribers. Smart Gold subscribers will have access to i-mail, allowing them to send email via their handset for 1 peso per message over the i-mode service, the wireless carrier said. i-mode is a very popular mobile email and internet service first launched in Japan by NTT DoCoMo in 1999. According to Smart, the service is currently used by more than 47.8 million subscribers in Japan, and is also widely used by mobile subscribers in 15 other countries in Asia and Europe.

Sri Lanka's Supreme Court has allowed Japan's Nippon Telegraph and Telephone Corporation to sell its stake in Sri Lanka Telecom after a lengthy legal battle. The court order said NTT is free to sell shares in the open market, to anyone they want to. In June 2007, the Supreme Court blocked NTT from selling a 25.3% stake in Sri Lanka Telecom to a foreign company.

A landmark court challenge by Vodafone against Indian tax authorities, which want it to pay an estimated $2 billion in taxes on its acquisition of Hutchison Essar, has been adjourned for three months. The Bombay High Court delayed the hearing until June 23. It is a case that has potential implications for mergers and acquisitions of Indian assets by foreign companies. The court said it wanted to allow time for changes to tax laws to come into force. The changes were introduced in the latest budget and will come into force in the next few months. Vodafone continues to believe and has been advised that there is no tax payable on the transaction. Vodafone contests the claim that it withheld capital gains tax on its acquisition last year of a controlling stake in Hutchison Essar from Hong Kong conglomerate Hutchison Whampoa.

Media, Entertainment and Gaming
ABS-CBN collaborated with IBM Philippines as it embarks on a platform that will digitise all of its content, resulting to an enhanced media content creation and management that is bound to benefit Filipino media consumers worldwide. The Media Asset Management System (MAMS) is tasked to aid ABS-CBN in its multimedia lifecycle management and workflow productivity enhancements. IBM will provide powerful hardware infrastructure support, including storage capacity that is expected to grow at about 36 percent over the coming years in support of this MAMS project.

Amped, the online gaming arm of broadcast company ABS-CBN, has announced the commercial rollout of Cronous, its latest online game for local players. This final version of Cronous is classified as a massively-multiplayer online role playing game (MMORPG). What makes Cronous unique from other MMORPGs is that it does not require much in terms of computer specifications. Cronous can run smoothly with a Celeron 500 processor, 256 MB Ram and 16 MB 3D graphics card.

eBay has revamped its Philippines site, introducing a new look and a host of enhanced features and tools to promote a better eBay experience for its Pinoy users. According to a June 2006 survey conducted by ACNielsen International Research, there are over 3,000 Filipino sellers who use eBay as their primary or secondary source of income and an additional 6,671 Filipinos who sell on eBay to supplement their incomes. Categories that are popular among Filipinos include cell phones, clothing and accessories, and automotive parts. New seller tools are available to assist sellers in tracking and managing their businesses on eBay.
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