Hitachi expects a Ñ70 billion ($695 million) net loss for its fiscal year ending in March as its TV operations continue to deteriorate. The company has now cut over $1 billion off its earnings target in just over a month and is on course for a second straight year of losses. The company said the huge losses stem from a decision to write down deferred tax assets at its parent company, which it feels can no longer be realised due to the worsening performance of its TV business. Hitachi originally had a net profit target of Ñ40 billion (US$397 million). The projected loss is mostly due to its flat-panel TV business, despite large one-off special gains due this year from the sale of shares in subsidiaries. The company is caught in a bind familiar to many in the flat-panel TV industry: competition is driving down retail prices and eroding profits, but increasing capacity to cut per-unit costs is expensive. Deep-pocketed rivals such as Matsushita Electric Industrial and Sharp are pouring funds into building new plants, while smaller TV players such as Hitachi and Pioneer sell off assets and pursue tie-ups. Earlier this month, Pioneer said it would stop manufacturing plasma TV panels.
Pioneer Corporation said it would swing to a loss this fiscal year as it booked charges to pull out of plasma television-panel manufacturing after failing to convince consumers to pay steep prices for its TVs. Pioneer cut its net outlook for this fiscal year through March to a Ñ15 billion ($147 million) loss from the Ñ6 billion profit it previously expected. It blamed expenses for the plasma-panel pullout as well as higher taxes for the second downward revision to its earnings outlook in just over four months. Instead of manufacturing its own panels, Pioneer said it is now in talks with Matsushita Electric Industrial on securing supplies for its TV sets. Pioneer doesn't sell any other kind of televisions, but it has a capital tie-up with Sharp, one of the world's largest makers of liquid-crystal display panels. It said it plans to launch a range of LCD TVs supplied by Sharp in Europe this autumn.
Samsung Electronics' mobile WiMax Equipment has ranked first in an industry assessment by US market researcher ABI Research. Samsung was followed by Motorola and Cisco Systems. ABI Research particularly focused on successful innovation and implementation, number of contracts, global market penetration, market share, number of patents, R&D expenses, market availability period and market leading effect. SamsungÆs strong relationship with carriers, its emerging market-based high-growth strategy, and partnerships with other companies in the WiMax environment also helped the company receive good points.
Media, Entertainment and Gaming
Com2us, a Korean mobile game developer, has launched the open service of its new online combat game, Fatal Code, which is developed by Seedc Korea. Fatal Code introduces various races against a Sci-Fi movie-like background, offering different features from existing combat games focusing on the military operations. The company claims that Fatal Code can run on the older operating system without degrading the graphic quality. It will begin commercial services within the first half of this year.
InnoMax, a Korean single-wafer spin etch system, said that it recently launched its next generation product, ESE-Thin, to meet the emerging thin wafer processing market. InnoMax has filled its first order at one of the major semiconductor manufacturers in Korea. The ESE family provides 1-4 chambers of non-contact process chucks for front- and back-side processing, such as stress relief, polymer removal, oxide/recess etching and solder/gold bump.
Dell is aiming to tap the Korean business-to-business market together with local big name technology companies, according to Michael Dell. He added that approximately $9 billion out of the companyÆs total sales of $61 billion stems from partnerships around the globe. Dell was scheduled to meet with Hwang Chang-kyu, the head of Samsung Electronics' semiconductor division, as well as with heads of Hynix Semiconductor and LG Display to exchange ideas on possible links. Dell said his company expects to improve sales in South Korea not only through direct retail sales but through business-to-business transactions.
Analysts say Baidu.com needs to further diversify from a search-service provider into an integrated internet company. BDA China, an industry consulting firm, forecasts that the rate of annual revenue growth at Baidu may slow to 30% within five years, owing to the company's increased base. Baidu will also be spending more on a wider range of product lines, as it looks to compete in areas dominated by other internet companies such as Tencent Holdings and Alibaba Group. Baidu is launching an instant-messaging service and a customer-to-customer online auction platform. A service letting customers receive search results by phone is also in the works. Baidu has also teamed up with Omniture, a provider of online-business software, to help companies with their marketing in China. However, problems including a vacant chief financial officer's position and lawsuits related to Baidu's music services are weighing on the company.
Tencent Holdings has reported a 47.2% rise in profit on increasing sales from online advertising, online games and virtual identity products. Last year's profit grew to Rmb1.6 billion ($221 million) from Rmb1.1 billion a year earlier. Revenue rose 36.4% to Rmb3.8 billion. Driving earnings were its virtual identity products, such as avatars and virtual pets, which accounted for Rmb1.71 billion of total revenue, up from Rmb1.2 billion a year earlier. Revenues from online games increased to Rmb805 million from Rmb627 million. Online advertising showed the most growth, surging 84.9% to Rmb493 million. According to the company, its portal is the most popular in China for entertainment news and general news, which puts Tencent in direct competition with Sina and Sohu.
Alibaba Group is seeking investors for YahooÆs 39% stake in the internet company, outlining a plan that could stop Microsoft from getting its hands on the Alibaba stock. Alibaba thinks MicrosoftÆs $42.4 billion bid to buy Yahoo is likely to prevail, in which case the Chinese company would prefer increased independence. Alibaba believes a 2005 agreement with Yahoo gives it a "right of first offer" to buy Yahoo's stake, which would be invoked if Microsoft buys Yahoo. Chief executive Jerry Yang, president Susan Decker and chief financial officer Blake Jorgensen, have begun a roadshow to seek support from key institutional investors in the US and prove the Microsoft offer is too low. Yahoo declined to comment on the Alibaba talks and Microsoft was not immediately available for comment.
Shares of Alibaba.com plunged to a record low even though the company reported a fourfold increase in profit. Net income grew 340% to Rmb967.8 million ($137 million) last year, up from Rmb219.94 million in 2006. It partially benefitted from Rmb350.5 million in interest income from oversubscriptions of its public offering in November last year. Excluding interest income, the net profit would have been Rmb678.5 million, a 208.5% increase over a year earlier. Revenue rose 58.6% to Rmb2.16 billion, driven by more paying members and an increase in average spending. The results beat the estimate of six analysts polled by Thomson Financial, which anticipated a net profit of Rmb897.6 million. Nevertheless, the stock fell 21% to HK$12.20, below the initial public offering price of HK$13.50.
Alibaba.com plans to expand overseas in 2008 starting with Taiwan. Among the global markets, Taiwan, Hong Kong and Japan will be the first countries it expects to enter. Alibaba.com is expected to set up a partnership with TaiwanÆs Hon Hai Precision Industry, which bought a 0.35% stake in Hong Kong-listed Alibaba.com through a subsidiary last year in connection with Alibaba.comÆs IPO. In Japan, it plans to set up a joint venture with Softbank Corporation, the nation's second largest internet access provider. It has also set up a customer service centre in Hong Kong, a regional headquarters for Europe and the first European customer service centre in Switzerland.
Lehman Brothers is forecasting that China United Telecommunications will reap Rmb40 billion ($5.7 billion) from the sale of its code division multiple access (CDMA) user base and pay Rmb96 billion for equity in China Netcom Group Corporation (Hong Kong). There will be two possible ways for the merger between China Unicom and China Netcom, according to Lehman Brothers. Either China Unicom acquires China Netcom with cash plus bonds or new shares, or China Unicom will be combined with China Netcom on an equal basis..
Credit Suisse (CS) expects Unicom to benefit the most from the restructuring plan as the wireless phone company will likely sell its CDMA assets at a premium and ensure its future profitability as it swaps assets with China Netcom. According to CS, Unicom will have better bargaining power and its minority shareholders should be protected under the Hong Kong listing rules as they will likely be asked to vote on deals relating to the sale of the company's assets. CS has upgraded the stock to an ôoutperformö from a ôneutralö and raised its price target to HK$24.00 from HK$15.50 on the expectation that China will formally announce a restructuring plan this quarter.
China Satcom is likely to be broken up during China's impending telecom industry restructuring and will see its terrestrial business taken over by China Telecom, while its satellite business will be merged with China Direct Broadcast Satellite. Guo Hao, vice president of China Satcom, will become China Telecom's vice president. Earlier rumours about China's telecom industry reshuffle have suggested that China Telecom will acquire China Unicom's CDMA business, China Unicom's GSM business will merge with China Netcom and China Mobile will merge with China Tietong. These rumours have not mentioned China Satcom.
China Mobile aims to sign up more than 80 million new customers this year to maintain its strong growth before the start of an expected industry restructuring. The company said its net profit totalled Rmb87 billion ($12.3 billion) in 2007, up 31.9% from 2006, while revenues rose 20.9% to Rmb356.9 billion. China Mobile will distribute a final dividend of HK$1.16 per share and a special dividend of 1.6 HK cents, taking its dividend for last year to HK$2.098 per share. China Mobile said will pay out only 43% of its net profit as dividends this year as it needs cash in case investment opportunities arise.
China Mobile has budgeted Rmb127 billion ($18 billion) for capital expenditures, up from Rmb105.1 billion, with about 55% going towards the expansion of core networks in an effort to maintain fast subscriber growth. Along with the companyÆs target to gain 80 million subscribers this year, it expects voice traffic to continue to grow by about 45% this year. China Mobile added more than seven million subscribers last month, which is a record. The company vowed to maintain this pace of new customer growth, noting that the penetration rate in rural areas is still low at only 19%, compared with almost 40% in the cities.
China Telecom and Sprint are collaborating to complement Sprint's Global MPLS capabilities for customers in China by interconnecting the IP VPN networks of the two companies. This strategy includes establishing multiple, redundant network-to-network interconnection (NNI) agreements between Sprint and China Telecom in the Asia-Pacific region so customers can experience the same congestion-free connectivity within China and the security, redundancy and quality of service they have come to expect on the Sprint Global MPLS network.Significance. This relationship allows Sprint to extend its existing capabilities and footprint in China by giving Sprint customers access to the full range of capabilities inherent in China Telecom's Next Convergence Network (CN2) with coverage in more than 200 cities and 600 routers across the country, at a time when more and more businesses look to expand operations to and within China.
Media, Entertainment and Gaming
Focus Media has been accused of sending millions of junk messages to mobile users every day. China Central Television (CCTV) said Focus Media has personal information on about half of the country's five million mobile-phone users. A computer connected to a messaging machine is able to send out about 600 short messages per hour. Focus Media, using several such machines, is sending about 200 million short messages to mobile users each day, according to the CCTV report. It added that several mobile advertising firms collected mobile users' personal information, including gender, age and income, from banks illegally. The government said it would keep a close eye on the situation and forbid any illegal transfer of personal information and spreading of deceitful advertisements to mobile users.
A Chinese music website has been ordered by a local court to pay Rmb150,000 ($21,117) to the Taiwan branch of the EMI Group Hongkong for broadcasting 165 unauthorised songs. Hangzhou Xuancai Culture and Art Design, the owner of www.5sing.com, was ordered to pay compensation and apologise to the website within 30 days for copyright and authorship violations. Aside from the unauthorised broadcasting, EMI also alleged Xuancai had misrepresented the authors of 29 songs on its website between September 2006 and February 2007. It later filed a suit and asked the company to apologise on its website and pay compensation of Rmb500,000 as well as legal costs.
Acer, the Taiwanese computer maker, said it aims to take laptop users as close as they can get to the high-definition home theatre experience. The top model of its new ôGemstone blueö line of laptops has a screen with the same resolution as a top-of-the-line HDTV at 1,920 pixels by 1,080 pixels and will have six speakers, including a subwoofer, for so-called 5.1 surround sound. The computer will go sale next month in the US for $1,999. A model with three speakers and a smaller screen (but still HD resolution) will cost $1,699. Both will have built-in Blu-ray disc drives. Acer said the laptops would be the first with 1,920-by-1,080 screens and the top model is the first laptop with six speakers. The top model has an 18.4-inch screen, placing it in the ôdesktop replacementö category of heavy laptops that are not meant for more than occasional travel.
Quanta Computer has confirmed a media report that it is teaming up with Germany's Kontron to manufacture industrial computers at the Taiwanese company's plant in Shanghai. The alliance conforms to Quanta's strategy of diversifying its product lines and forming partnerships. Kontron will consign contracts for industrial computers to Quanta Computer from the second quarter, following its earlier disclosure that the Taiwanese firm is to acquire a 21% stake in its unit Kontron Asia.
Mediatek plans to pay a 0.1% stock dividend and a cash dividend of NT$19 ($0.62) per share based on its 2007 earnings. The proposed dividends come after TSMC and UMC, the world's top two contract chip makers, announced their dividend plans recently. Mediatek's plan is subject to shareholdersÆ approval at a meeting scheduled for June 13, 2008.
Palm has released the Centro, a budget smartphone designed for traditional mobile phone users who are looking for a better and more affordable way to manage online personal data. The quad-band Centro runs the Palm operating system and supports Edge cellular networks, enabling users to handle wireless e-mail accounts such as Gmail, visit social-networking sites like Facebook, receive online news, track contacts and schedules, and find directions via Google Maps. The device measures 107.2mm by 53.5mm by 18.6mm and weighs 124 grams, which makes it lighter and more compact than Palm's flagship Treo smartphone. The Centro, which has a 1.3-megapixel camera, an MP3 player and a color touch-screen costs HK$2,880 ($370).
PCCW will shy away from making an aggressive overseas push despite winning a full license in Saudi Arabia. PCCW and Saudi conglomerate Mawarid won a license to provide full telecommunications services including fixed line, broadband and wireless broadband in the Middle Eastern country. PCCW will export skills to overseas markets like Saudi Arabia but it will take a long time to make the overseas investments substantial. The consortium was working on the budget for the business plan, and would seek an initial public offering to meet the license requirement. The company asserts that it is long way from its headquarters and it is still internally focused on Hong Kong.
Hutchison Telecommunications International (HTIL) has announced strong net profit growth for 2007 as operating losses were offset by a one-time gain made on the disposal of the company's Indian operations. HTIL's 2007 earnings grew to HK$66.9 billion ($8.6 billion) from HK$201.0 million in 2006. Gains booked from the sale of its stake in the Indian operations under Hutchison Essar to Vodafone last year amounted to HK$69.3 billion, while operating income from the discontinued business was HK$1.2 billion. Turnover increased by 13.8% to HK$20.4 billion, but the company still recorded an operating loss of HK$2.8 billion against profit of HK$1.4 billion in 2006, because of a HK$3.8 billion (US$488.4 million) impairment charge in its Thailand business. The company has decided to limit its activities in Thailand in the absence of a nationwide network there and has written off its investments in that country. HTIL's Thai operations make up around 4.8% of its turnover and just about 1% of its total assets. In Israel, the company reported solid earnings growth of 25.3% to HK$2.2 billion, boosted by favourable currency movements, growth in the subscriber base and an increase of content and data revenue. The company's Vietnam business booked an operating loss of HK$279 million in its first full year of operations. HTIL is in the process of converting its Vietnam operations to GSM technology from CDMA, in a bid to attract more subscribers. Its relatively new Indonesian business recorded an operating loss of HK$626 million compared with a loss of HK$124 million the year before. In a separate announcement, HTIL said it is planning to sell certain telecommunication assets in Indonesia in a deal worth $500 million.
Harmonic has announced that PCCW has deployed Harmonic's DiviCom Electra 7000 high definition (HD) MPEG-4 AVC (H.264) encoders to power its HD channel service in Hong Kong. PCCW utilises Harmonic's standard definition (SD) encoders to deliver its full lineup of more than 150 broadcast channels, as well as Harmonic's video-on-demand (VOD) servers and software. Harmonic stated that, in selecting a compression solution, PCCW looked for an encoder that could offer HD video quality at bit-rates under 6 megabits per second in order to reach the vast majority of subscribers on the DSL network. The Electra 7000 offers outstanding performance, reliability, power and space efficiency with its compact, multi-channel design. Top tier satellite, telecom, and cable operators in North America, Europe and Asia use the Electra 7000 to deliver more than 1,500 HD H.264 video channels.
Dubai-based i-mate has made a foray into Singapore by tying up with StarHub and M1 for the sale of two of its high-end mobile devices, the Ultimate 8502 and Ultimate 9502. While relatively unknown in Singapore, i-mate's offerings have made significant headway in Europe, the Middle East and Australia. The firm's portfolio of smart phones are all powered by Microsoft's Windows Mobile operating system and pack in all the features that are available for such devices. The device is chock full of other functions, like satellite navigation and direct video out, to allow users to connect it to a digital projector or a TV for presentations. The Ultimate 9502 and features a three-megapixel camera, making it one of the most advanced phones in M1's arsenal.
A search engine now being developed by SPH Search will give users relevant international results through a new tie-up with Web giant Yahoo. SPH Search is a joint venture formed by Singapore Press Holdings (SPH) and Norwegian media company Schibsted to create a new portal that will allow users to search for information about Singapore with pinpoint accuracy. To complement its localised search prowess, SPH Search announced a partnership with Yahoo to power the international search capabilities on its new site. The tie-up means users will be able to find local as well as non-Singapore related information through a single search engine, with the latter driven by Yahoo's search technology.
eTelecare Global Solutions, a Philippines provider of complex business process outsourcing (BPO) solutions, announced that ContactCenterWorld has awarded the company two Top Outsourcer rankings for 2007 among BPO providers with more than 1,000 agents. The company was awarded a first for percentage growth of seats and Web chat volume, both for inbound services. ContactCenterWorld also cited eTelecare in fifteen other categories within blended and outbound services as well as inbound services, representing a twofold increase in the number of categories eTelecare was cited in from 2006.
Indian IT services company Tata Consultancy Services (TCS) has set up a centre of excellence for financial services in Singapore. The centre will supplement the company's near-shore financial services delivery capability in Jurong. The delivery centre, which is up and running already, employs more than 50 people. Singapore is one of TCS' major markets and serves as the company's regional headquarters for Asia-Pacific and Japan and specifically for the Asean region. The company added that Singapore is a lucrative market by itself and saw 50% growth in the fiscal third quarter which ended on December 31. The company's focus this year is to continue to strengthen Singapore's role as a high-end outsourcing hub. Apart from Singapore, Japan and Australia are huge growth markets for TCS.
SingaporeÆs call centre industry is expected to grow by a modest 5% this year. Centre managers had predicted 32% growth last year, but in reality the Singapore industry grew by just 8%, with the average number of seats per centre growing from 60 to 83, according to callcenters.net. This year, the average size of contact centres in Singapore is expected to grow to 84 seats. The findings are from the 2008 Asian Contact Center Industry Benchmarking report brought out by callcenters.net. The report adds that the 5% growth means the Singapore industry will grow from 19,000 seats to 20,500 seats. The industry is primarily set up to provide customer service (57%) and technical support (17%). The percentage of sales-focused contact centres is considerably smaller than in other regional markets such as Malaysia (20%), the Philippines (27%), China (40%) and India (50%).
Myanmar will launch a three-day information and communication technology (ICT) exhibition in Yangon in late March to promote the development of advanced technology. The Myanmar ICT Exhibition 2008 will feature a total of 90 local and foreign companies that will showcase computer accessories, new technology for networking, software solutions, computer courses and books at the exhibition where computer related equipment will also be sold. Myanmar has been striving for the development of ICT to contribute its part to the national economic development. In December last year, Myanmar's first ICT park, also known as the Yadanabon Cyber City, was opened in Pyin Oo Lwin. Myanmar has also been implementing an ICT development master plan under the Initiative for ASEAN Integration (IAI) and detailed programs to link international networks are also being carried out in accordance with a master plan drafted by the MCF.
IBM has announced it is setting up of a new software security lab in Singapore. The company said the lab is one of 59 worldwide IBM labs with 20 or more employees dedicated to developing new technologies that secure and simplify access to computing applications.
Samsung Electronics is seeking to build a $2 billion electronic appliance factory in the PhilippinesÆ Clark Freeport economic zone. The Philippine government will expand electricity in the area to support construction. Samsung also has a factory in Laguna, a city 54km south of Manila.
Microsoft and Intel are set to launch the Intel Classmate PC (CMPC) for schoolchildren in Nepal soon. Intel said the laptop will cost between $200 and $300 and will be available in Nepal in a month or two. A part of Intel's World Ahead Program, the CMPC aims to provide one computer per student in emerging markets. The small and light-weight kid-friendly laptop has a carrying handle, is water resistant and has a durable rugged design to handle daily use by children.
Media, Entertainment and Gaming
Interactive software game firm Electronic Arts (EA) is aiming for a bigger slice of the regional video and mobile game market. The company has declared it wants to triple regional sales in three years, and will boost its staffing in Singapore to achieve this. The Singapore workforce will be increased from the current 130 to over 200 in 18 months, said EA's Asia president Jon Niermann, following the announcement of the relocation of the firmÆs headquarters to Singapore. The region has to have a double-digit share of the company's sales in three years' time. Asia Pacific sales of about $200 million represented about 6% of EA's global revenue of $3.1 billion. The company aims to double global revenues to $6 billion in three years, which translates to a revenue target of $600 million for the region by 2010.
FIFA Online 2, a popular online football game that grabbed 5 million online subscribers in Korea, will be released in Singapore, Thailand and Vietnam by the third quarter of 2008, according to Electronic Arts (EA). The game will also be released in seven other Asia-Pacific countries following that. Infocomm Asia Holdings (IAHGames) has been appointed the game operator for EA Sports' FIFA Online 2. The Singapore-based online game operator and distributor has the task of bringing the game to a market of more than 20 million online gamers in Southeast Asia. IAHGames will also provide support services such as marketing, community management, customer and technical support.
Indian telecommunications operators are negotiating with the government on a framework for BlackBerry usage that will allow the Indian market to expand but also meet concerns for national security. India's government isn't comfortable with the way that information transmitted via BlackBerry is encrypted because it is too complex to be monitored, according to one industry official. The fear is that information can't be monitored and that this could be a security risk. These worries had caused some to speculate that India's government might opt to block BlackBerry messages in India. BlackBerry services are offered by four companies in India: Bharti Airtel, Reliance Communications BPL Mobile and a joint venture that includes Vodafone.
Ebitda for Philippine Long Distance Telephone (PLDT) increased by 111% to $525.6 million for the quarter ended December 31, 2007 from last yearÆs $249.1 million. The company has generated 20 consecutive quarters of positive Ebitda with the most recent figure reaching an eight year high. In the fiscal year 2007, Ebitda was $2.0 billion, compared with $1.7 billion last year, representing a 19% increase.