A week in tech, May 2-8

A roundup of all the latest tech news.

Media, Entertainment and Gaming
ò According to a survey conducted by Japanese entertainment industry statistics site Oricon, stores in Japan that rent manga to customers are not really experiencing massive sales success. Despite efforts to promote manga rental, 41.4 percent of those polled said that they were not aware of shops offering manga rental, compared to 24 percent who were and 34.6 percent who heard about manga rental, but did not know where and how to rent. The business of manga and comic rental attracted the attention of the industry earlier this year when Tsutaya, one of the countryÆs largest CD and DVD rental chains, said that they would start offering manga rental at some of their stores across Japan. The typical cost for renting manga is 90 yen (US$80) per volume. Tsutaya is currently offering manga rental at a few of their stores as a test project, but plans to expand the service to more stores in August 2008. As for the impact manga rental will have on the market, only 2.6 percent of those surveyed said that manga rental would make them buy more manga, while 23.2 percent said that manga rental would probably make them buy fewer manga. The remaining 74.2 percent expect that manga rental will not affect how much manga they buy.

ò Industry observers note a development in Japan, where some of its latest mobile phones are fitted with motion sensors that let users detect motion or play action games like those on the Nintendo Wii console. An example is the D904i from NTT DoCoMo, Japan's top mobile carrier, which contains a tiny motion sensor that detects shaking and tilting. Instead of punching a keypad, users can move the handset like a tennis racket or fishing pole in easy-to-play games, similar to those on Nintendo's popular Wii. From Sharp and Matsushita, two new phones use their built-in cameras to detect motion. Users can control a hip-hop dancer by wagging a finger in front of the camera, for example, or throw punches in the air for a boxing match. The new phones are expected to hit Japanese stores in May. There are no current plans for overseas sales. In a separate development, Nintendo said it is developing 45 software titles for the Wii console, a device that helped drive profit sevenfold in the past quarter. According to its president, the company is also developing 79 games for the two-year-old DS portable player, with plans to release the next batch of games to the market at the end of summer.

ò Fujitsu revealed plans to buy France's GFI Informatique SA in a deal valued at 419 million euros ($569 million) in a bid to add clients and lessen its dependence on Japan. The takeover plan comes after Fujitsu invested some $280 million in the past eight months buying companies in the US and Germany to expand sales outside Japan. Fujitsu seeks to lift the portion of revenue from overseas to 50 percent from about 36 percent in the year ended March 31. Fujitsu made its offer through Fujitsu Services Ltd. unit, the offer requires that the planned purchase of GFI warrants by Apax Partners Worldwide LLP is withdrawn or rejected by shareholders. GFI builds computer networks and provides consulting services for customers including France Telecom SA, BNP Paribas SA and Telefonica SA. Fujitsu's services include writing software, managing computer systems and setting up networks. London-based Fujitsu Services said it has not reached an agreement with GFI over the buyout. GFI earlier in January said it plans to raise 56 million euros through the sale of equity warrants to Itefin Participation, a financial company 56 percent owned by London-based Apax by 10 days to May 21 to allow investors more time to make a decision on the Apax transaction. GFI posted a 69 percent rise in its net income to 18.9 million euros (US$25.6 million) last year, while sales climbed 16 percent to 633.1 million euros ($860.1 million). Fujitsu reported a 49 percent gain in its net income to 102.4 billion yen ($853.2 million) in the year ended March 31, with its revenue posted a rise of 6.4 percent to 5.1 trillion yen ($42.2 billion).


ò Industry analysts see Google KoreaÆs appointment of individuals to head its local research and development and business units as a sign that the company is finally settling down in the country. Cho Won-gyu was named as engineering director, leading all engineering activities from Google KoreaÆs R&D center. Prior to joining the company, he was the co-founder of several IT companies including Opinity, a VoIP company, as well as Dialpad Communications and Serome Technology. He studied computer science, receiving his masterÆs and doctorate from the Korea Advanced Institute of Science and Technology. Lee Won-jin will be responsible for managing GoogleÆs local business and strategic partnerships in Korea. Lee was formerly managing director of Adobe Systems Korea and Macromedia in Korea. He graduated from Purdue University with a master in electronic engineering.

ò Daum Communications Corp. announced a surge in its first-quarter earnings, with the company ascribing the growth to increased sales from online ads. The countryÆs second-largest Internet portal operator, reported a massive growth of 222.7 percent in its net income to 2.2 billion won ($2.3 million) during the January-March period, compared with 699 million won ($754,000) it posted a year earlier.

ò LG Electronics announced its plan to release overseas an upgraded version of its best-selling Shine phone with high-speed downlink packet access (HSDPA) technology. The company said it plans to start marketing the Shine 3G phone in Singapore and Australia early this month, followed by a release in other Asia markets and Europe. LG said it looks to the Shine 3G to be at the forefront of the growing global 3G phone market.

ò According to a report from the countryÆs Ministry of Information and Communication, South Korea's three mobile service operators have spent more than 1 trillion won ($1.1 billion) in handset subsidies over the past year in a bid to attract more customers amid intensifying market competition. The report said SK Telecom Co., KTF Co. and LG Telecom Ltd. used the combined 1 trillion won ($1.1 billion) for handset subsidies during the 12 months since the government eased related regulations early last year.

ò LG Telecom reported a decline in its first-quarter earnings, with the company attributing the drop to companyÆs increased spending on marketing. The countryÆs smallest mobile carrier posted a 37.2 percent decline in its net income to 66.2 billion won ($71.1 million) in the January-March period from 105.4 billion won ($113.8 million) a year earlier.

ò Hynix Semiconductor announced growth in its sales in the first quarter, results that contributed to the closing of its market share gap with Samsung Electronics. According to market researcher iSuppli, Hynix posted DRAM revenue of $2.1 billion for the first quarter, up 4.1 percent from the fourth quarter of 2006, and up 126 percent compared to the first quarter of 2006. By comparison, Samsung recorded DRAM sales of $2.5 billion, which is an increase of 40 percent from the first quarter in 2006 but a decrease of 15.9 percent compared to the fourth quarter of 2006. Accordingly, Hynix's market share increased to 22.2 percent, up by 3 percentage points from the fourth quarter 2006, while Samsung's market share diminished by 1.9 percent to 26.1 percent during the same period. Global DRAM sales totaled $9.6 billion in the first quarter, down 9.9 percent compared to last year's fourth quarter.

ò Samsung Electronics, the world's largest memory chip maker, announced that it has begun the mass production of 16 gigabit (Gb) NAND flash memory chips for the first time in the world. Fabricated with an ultra-dense 51 nanometers (nm) process technology, the chips boast the highest capacity available. NAND flash can retain memory even after the power is turned off. Samsung achieved this record after it started the mass production of 8Gb NAND chips using 60nm technology in August. The company said that the new chips can read and write data nearly twice as fast as 60nm chips. Samsung expects to take the lead in the next-generation NAND flash market since its latest product outperforms its rivals, which are made using 55nm or 57nm technology. The new 50nm-level chips are expected to become mainstream products from next year, with global sales through 2010 estimated to reach $21 billion.

ò Following China Mobile's auction for GSM network upgrades, the results were released showing Huawei and ZTE together taking out about 25 percent of the projects, Shanghai Bell-Alcatel with about 20 percent, and Ericsson and Nokia around 50 percent. Industry sources indicate however that the bidding will not be formally completed and the contracts not signed until May. China Mobile said it plans to make a total of RMB35 billion in purchases for its GSM upgrades.

Information Technology
ò According to the China Financial Certification Association, it has established with 16 commercial banks an online banking anti-fraud mechanism with the aim of giving a better online banking environment for consumers. The 16 banks are Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank, Bank of Communications, CITIC Bank, China Everbright Bank, Huaxia Bank, China Minsheng Bank, China Merchants Bank, Guangdong Development Bank, Shenzhen Development Bank, Shanghai Pudong Development Bank, Industrial Bank, Beijing City Commercial Bank, Nanjing Bank, and Tianjin Bank. The agreement will see the group setting up an online banking blacklist to be shared among them and constructing a joint investigation mechanism.


ò According to market sources, High Tech Computer (HTC) reportedly is seeking to cooperate with the Hutchison 3 Group, a division of Hutchison Whampoa, since the UK-based 3G service provider has decided to offer Windows Mobile-based models in addition to Symbian-based handsets. Sources noted Hutchison 3, which now offers 3G services in nine major markets, including Australia, Austria, Denmark, Hong Kong, Ireland, Israel, Italy, Sweden and UK, will soon launch a customized Windows Mobile-based 3.5G phone based on Motorola's MOTO Q9. Industry sources indicated that HTC has increased its contact with Hutchison 3 and is expected to secure orders for a 3.5G handset from the UK-based company with shipments likely to begin in the second half of this year.

ò Acer announced that it has worked with a design subsidiary of BMW AG on its latest revamp of the Aspire, its mass-market consumer notebook PC. The move is part of the companyÆs effort to win users over to the idea that fashion laptops need not be more expensive. Acer said the new Aspire design will be launched globally in June using Intel Corp.'s latest set of chips, which includes upgrades of its notebook microprocessors and wireless technology. The device is also fitted with multimedia features, including Dolby surround sound, an HDMI slot, and more. The company plans to offer as many as 40 different models for different market segments, and based on customer specifications, including mainstream and value models, with a range of Intel and Advanced Micro Devices Inc. microprocessors and a variety of features including some with built in HD-DVD players and 17-inch screens.

ò Chunghwa Telecom (CHT) said it has budgeted NT$6 billion ($180 million), from its total on-hand cash of NT$80 billion ($2.4 billion), for strategic non-operating investments in Taiwan and abroad. Of the total cash on hand, NT$64 billion ($2 billion) is earmarked for non-operating investments in income-generating financial products, with a large portion of the reserve having been invested and an additional portion planned to be done this year. For overseas strategic non-operating investments, CHT has set up offices in China and Vietnam through its subsidiaries and hopes to invest in telecom carriers or related businesses in Vietnam, Thailand, Cambodia and Indonesia, according to company sources.
Hong Kong

ò Hutchison Telecommunications announced that its $2.8 billion capital raising has been approved by shareholders at the company's annual general meeting. The mobile phone company sought the recapitalisation, through a pro-rata renounceable rights issue, in an effort to reduce debt and speed up its push towards profitability. Hutchison said it looks to slashing its debt to $1.1 billion. The company said by repaying debt, it would save $250 million annually. Under the present capitalisation plan, the company said it will offer shareholders 20 converting preference shares (CPS) for each Hutchison ordinary share.


ò Google announced the opening of an office in Singapore, a move aimed to bring the company closer to its customers and advertisers in Southeast Asia, a market of half a billion people. According to GoogleÆs regional managing director, the online environment in Southeast Asia is growing rapidly, ôwith significant developments in broadband Internet access and e-commerce activities.ö Google declined to reveal the value of its latest investment in the Singapore office. Singapore is considered to be one of Southeast Asia's most technology-friendly economies and one of the most wired countries in Asia. The government is seeking to attract high-tech industries as it moves away from the traditional manufacturing sector.

ò Industry observers said that Maxis Communications Bhd's 39.9 billion ringgit ($11.6 billion) privatization deal is attracting a huge reallocation of funds, thus pushing up stocks in the telecommunications sector. Industry analysts point to two other major mobile communications providers, DiGi.Com Bhd and Telekom Malaysia Bhd (TM), as good choices for funds in-flows.

ò Singapore's Creative Technology Ltd. plans to announce a new lineup of MP3 players soon even as the company is not offering product details yet. This reluctance on the part of its top official to disclose details is seen by industry observes as not typical of Creative. In the past, the company has always divulged details of new products with investors ahead of their launch dates. The products are critical for Creative, which has recently been hit by falling sales of its existing Zen and MuVo MP3 players. According to IDC, Creative is the world's second-largest provider of MP3 players, trailing far behind market leader Apple Inc. during 2006, according to IDC. Creative reported a $23.6 million loss for the third quarter as sales fell short of expectations. The company posted sales of $183.8 million during its fiscal third quarter, compared to what it reported as sales of US$225.7 million during the same period last year. The company ascribed the third-quarter loss on lower-than-expected sales in Asia and the U.S. In addition, the company was dragged lower by falling MP3 shipments and price cuts made necessary by "market conditions." Creative said it is looking to its new products to be introduced during the next two quarters to bring the company back to profitability.

ò Latest reports show that the Philippines has beaten China in securing a $1 billion contract to build a semiconductor test and assembly plant planned by Texas Instruments (TI). The company describes the factory as among the most environmentally friendly in the world. Texas Instruments is the worldÆs third-largest semiconductor maker and the largest supplier of chips for mobile phones. The company said construction of the new plant on an 800,000-square-foot factory floor is slated for the second half of this year, with initial production beginning in the second half of 2008. Industry sources show that some 90 percent of the worldÆs semiconductors are now assembled and tested in Asia. TI maintains similar plants in Japan, Malaysia, Mexico and Taiwan.
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