a-week-in-tech-may-2226

A week in tech, May 22-26

A round-up of all the latest tech news.
Japan
Internet
ò KDDI and Google announced their entering an agreement to offer an Internet search engine service that will provide Google's technology to subscribers of KDDI's au cellular phone service. Under the agreement, subscribers of KDDI's EZweb handset-based internet access service can use Google's search engine function. The alliance with KDDI marks GoogleÆs first with a mobile phone operator in Japan. Google has similar deals with cell phone service providers in Europe. The report said KDDI is slated to remain its only partner here for the time being even as Google stated it also wants to work with other cell phone service firms in the future.
ò Four companies of the Nippon Telegraph and Telephone group disclosed its plan to make 7,000 base stations commonly available for their customers for wireless internet connection services by next March. NTT Communications, NTT East, NTT West and NTT DoCoMo have already deployed their respective wireless LAN base stations for internet connection services at railway stations, airports, restaurants and other facilities. In a bid to counter the Softbank group, which has some 3,500 base stations in Japan, the four NTT firms will commission a specialist company to run such base stations that can be commonly used by their respective customers. Mobile/Wireless
ò A report said Merrill Lynch and Morgan Stanley were chosen to arrange the initial public offering of Willcom, a Japanese mobile phone company owned by Carlyle Group Inc. The two US banks join Daiwa Securities SMBC in managing a stock sale that may raise as much as Ñ100 billion ($892.1 million). The report said the sale is expected to take place in the first quarter of next year. Formerly known as DDI Pocket, Willcomm offers wireless phone and internet access services. The IPO is seen as the largest telecommunications offering in Japan since NTT DoCoMo, Japan's largest mobile phone company, sold Ñ950 billion ($8.4 billion) of shares in 2001.
ò Softbank Corp. announced that the name of the mobile phone unit it acquired recently will be changed to Softbank Mobile Corp. The companyÆs top official said that the company has decided to use its group name as the brand for the new mobile services ôbecause it will enable the entire Softbank group to cash in on resultant synergy effects most effectively.ö Softbank also said that it would set up a joint venture with Vodafone Group Plc to develop mobile phone handsets. Softbank, the Japanese company, acquired the unit from the British firm.


Software
ò Sony Corp revealed its plans to unveil new client software that will extend its LocationFree TV platform to Macintosh computers and a wider range of mobile devices. LocationFree TV is a platform that streams a live video and audio signal from a base station to client devices. It allows users to watch TV and video from devices in their living room on a remote computer, so long as there is a broadband connection between the base station and the client. The new client software is a product of two recent licensing agreements. One, with Access Co, covering the development of clients for devices like cell phones and PDAs (personal digital assistants) and secondly, a Mac client, Kaga Electronics.


Semiconductors
ò Toshiba, the world's second-biggest maker of NAND flash memory, announced that it is considering building two more factories, including its first overseas plant, in a bid to compete with rivals in the market. The company said it may shell out some Ñ300 billion ($2.6 billion) in setting up its fifth NAND flash plant in northern Japan, with the sixth being planned for Singapore. The company said it is investing some Ñ622 billion ($5.5 billion) in its semiconductor unit over three years to meet rising demand for the chips used in gadgets that include Apple ComputerÆs iPod nano music players and mobile phones. The company, whose NAND memory market share is half that of Samsung, is expected to meet increasing competition as Intel enters the market valued at $13.8 billion this year. ISuppli said Toshiba holds about 22 percent share of the global flash memory market in 2005, with Samsung, the industry's leader, owning a 53-percent share. In a separate development, Intel, the world's biggest computer-chip maker, and memory-chipmaker Micron Technology disclosed that they would spend $1.2 billion each to enter the growing NAND memory market. ISuppli predicts that all global sales of NAND flash are expected to rise 29 percent this year to $13.8 billion.


Telecommunications
ò Telecontinuity, the world's first provider of a survivable, disaster-proof backup telecommunications network, announced it would be opening an office in Kyoto, Japan to deploy its Survivable Communication Network technology in Japan and throughout the Pacific Rim area. The company said it expects to have its Survivable Communication Network operational in Japan in the second half of 2006. In addition to Kyoto, TeleContinuity also expects to open an office in London to service the European market. Through the Kyoto and London offices, TeleContinuity will provide international services to companies and government agencies that need to maintain telephone continuity during any type of disaster, emergency, or evacuation. TeleContinuity is focused on providing telecommunications-assurance services to government and businesses customers worldwide.

Korea
Internet
ò Dacom announced that it has signed an MOU with CJ Cablenet to provide a nationwide, interactive banking service on aTV platform. Dacom is already signed up with CJ Cablenet's competitors, KDMC and BSI, to provide T-banking services. CJ Cablenet is providing T-banking through Woori Bank and Nonghyup. Through its partnership with Dacom, CJ Cablenet is seen as being able to add six more banks.
ò The South Korean government said it is considering rating web sites on how well they protect the personal data of their subscribers. According to a 2007 budget plan of the Korea Information Security Agency (KISA), the state-backed agency seeks to phase in a five-grade rating system. The government source said the ranking of web sites would be from one to five in accordance with its collection of personal data and information revelation so that users can recognize its security level at a glance. The report also stated that KISA seeks to create criteria for assessing web sites through field tests on web site operators and surveys of users. Industry experts are saying that recent problems with Web site security prompted KISA, affiliated with the Ministry of Information and Communication, to come up with the measure.
ò Korea.com, a portal operated by Daesung Group announced its move to enter the global market, showing a multilingual site focusing on foreign users. Korea.com is to open the multilingual site supporting English, Japanese and Chinese, which is designed so that users abroad may be automatically connected to the relevant language page depending on the user's web browser version. At present, portals like Naver and Yahoo have operated independent sites by local corporations, but it is the first case that a portal site offers an automatic multilingual connection service. The multilingual site is expected to provide important common information and news of the country first and special information like Korean culture, tourism, history, geography, investment, and community service. It will be operated focusing on differentiation depending on languages; Japanese site offers tourism contents focused on Korean trends, Chinese site with content focusing on traditional Korean culture and an English site with overall information about Korea.
ò An official disclosed that KT has filed for a patent for INN (Internet News Network) and is expecting to receive it by the end of this year. The company said that once it receives the patent, it plans to set up a joint venture company with equity investment from global broadcasting companies such as NHK, KBS, CNN and BBC to provide a service through the IPTV network. The company, however, said that that its entry into the market will not employ the KT brand but through a partner with a major global broadcasting company.
ò Samsung Electronics announced its partnership with Bell South Corp. for cooperation in the next generation internet protocol (IP), a move that is seen as the companyÆs way of entering the next generation IP convergence market in the US. Under the alliance, Bell South said it plans to begin Triple Play Service (TPS) combining internet, broadcasting, and telephone with the use of the next generation IP terminals 'Soho Master', supplied by Samsung. TPS allows sharing voice, movie, and picture as well as internet broadcasting through IP terminals supplied by Samsung. The two companies said they are aiming to develop the next generation of the IP terminal market and lead the IP convergence market in North America. Bell South is a US-based telephone and high-speed internet provider and has 4.6 million subscribers to telephone and 1.7 million subscribers to digital subscriber line (DSL).
Media, Entertainment and Gaming
ò FIFA Online, an online soccer game developed by Neowiz and EA (Electronic Arts) will start open beta service soon. The company said open beta will continue during the World Cup games and commercial service will start soon after.
ò Observers note that South Korea's two versions of video-on-the-move, called digital multimedia broadcasting (DMB), are seeing intense competition in the domestic market. Korea Broadcasting System (KBS), a broadcaster of terrestrial DMB, said it plans to expand coverage of the go-anywhere TV from the current small service areas in and around Seoul to the whole nation, before the kickoff of the 2006 World Cup in Germany next month. TU Media, which is in charge of satellite DMB, revealed that it is airing adult contents after the country's broadcasting authorities gave the green light to such a plan. The countryÆs Ministry of Information and Communication said it has allowed KBS to broadcast a pair of video channels nationwide through terrestrial DMB terminals. TU Media, an affiliate of the country's top mobile operator SK Telecom, plans to add an adult channel for those over the age of 20 later this month, which will charge an extra monthly fee of W3,000 ($3.1) for them in addition to the overall W13,000 ($13.7) won rate a month.


Mobile/Wireless
ò KTF announced that it has signed a $400,000 network-consulting contract with Indonesian CDMA operator, Mobile-8. Since Mobile-8 started Indonesia's first CDMA mobile telecom service in 2003, KTF said it has been providing them with an integrated consulting service for the last three years, worth $13 million. The network consulting contract that was signed is an extension of the original contract signed in 2003.


Telecommunications
ò SK Telecom announced that it has started a global roaming service in Germany ahead of the 2006 World Cup soccer finals. The roaming service, which allows handsets to work on mobile phone networks in both South Korea and Germany, was jointly offered by O2 Plc, a British wireless company, and E-Plus, a German wireless unit of Dutch telephone company Royal KPN NV. This marks the companyÆs third global roaming service in Europe after Italy and France.
China
Internet
ò NetEase.com Inc. announced that its first-quarter profit went up by 91 percent to $36.6 million from $19.2 million a year ago. The company ascribed its good performance to the double-digit growth registered by its game, Fantasy Westward Journey. The company reported that its total revenue went up by 8.7 percent to $66 million. Its online game revenues for the quarter posted a 12.4-percent rise quarter on quarter to reach $56.2 million. The company said that its games, Fantasy Westward Journey and Westward Journey Online II, reported peak concurrent user numbers of approximately 1.2 million and 580,000 respectively, for the first quarter. It disclosed that it is making progress on its next-generation games, Datang and Tianxia. The company expects to begin early testing on Datang soon, while early testing for Tianxia should start in the second half of 2006. NetEase.com is China's second-biggest online game operator.
ò The 2006 C2C Online Online Shopping Research Report revealed that the number of consumer-to-consumer (C2C) shoppers in Beijing, Shanghai and Guangzhou reached 2 million by the end of March this year. The figure pushes the ratio of online shoppers to Internet users to 16.2 percent. Of the three cities, Shanghai featured a higher ratio than the other two cities, reaching as high as 18.5 percent while the ratios for Beijing and Guangzhou were 17.5 percent and 11.5 percent, respectively. The study noted that female buyers exhibited a higher willingness to purchase items online. In terms of user numbers, Taobao.com is at the top of the C2C market with a 67.3 percent share while eBay, EachNet, paipai.com and yipai.com registered 29.1 percent, 2.2 percent and 1.4 percent shares, respectively. Chinese IT research firm China Internet Network Information Center (CNNIC) issued the report.
ò China Telecom Group, ChinaÆs largest fixed-line operator and PCCW Global announced the launching of the first private ethernet broadband connection between Hong Kong and China. The service is called International Ethernet Private Line (IEPL) and is an end-to-end managed bandwidth solution. The two companies said the offering provides customers with dedicated point-to-point cross border connectivity over a reliable platform at a high speed and with scalable upgrades. In its soft launch in 2005, the service was aimed at the banking and finance sector, as well as the IT industry. It presently serves the high bandwidth requirements of businesses in the trade and manufacturing sector. The two companies disclosed also that they have secured contracts for IEPL from U.S.-based enterprises for this service.
ò Shanda Interactive Entertainment reported a 95-percent decline in its first-quarter profit to Rmb11.8 million ($1.4 million) from Rmb220 million ($27.4 million). The company ascribed the results to the drop in subscriptions sales. The company said sales registered a 31-percent drop to $42.5 million. Earlier, the company offered free games and also deployed software to download music and movies in an effort to counter its declining game subscription sales.
ò China Mobile (Hong Kong) revealed that it was discussing with Google the launching of an internet search engine for mobile services in China. Industry observers see this move of China Mobile as a way to counter the drop in its traditional voice services revenue. The countryÆs largest mobile carrier by subscription disclosed its average revue per user (arpu) as going down to Rmb86 ($10.7) from Rmb92 in the fourth quarter of 2005. No details about the two companiesÆ partnership were revealed.
ò Online travel agent Ctrip.com announced a 22-percent year-on-year rise in its net income to Rmb48 million ($6 milion) in the first quarter ending March this year. The company said its net revenues posted a 60-percent rise to Rmb156 million ($19.4 million) over the same period the previous year. Its hotel reservation went up by 36 percent year on year to hit Rmb96 million ($12 million), with the result ascribed to increased volume and commission per room per night.
ò Toodou.com announced the completion of a $8.5 million, Series B financing round, co-led by Granite Global Ventures, (GGV) and JAFCO Asia (JAFCO), with IDG Technology Venture, the Series A round investor, also joining in the round. Toodou.com is a multimedia podcasting web site that allows average internet users to share original audio and video clips. The company has a reputation as the leading video sharing company in China. Granite Global Ventures is an expansion-stage venture. Its China investments include Alibaba, Hurray Solutions, and AAC Acoustics. JAFCO Asia currently manages several long-term funds with aggregate capital under management of approximately $850 million. It invests in promising young technology enterprises with high growth potential in the Asia Pacific region. Its China investments include 3721 (acquired by Yahoo China), China Wireless and China Grentech. IDG Technology Venture is one of the earliest American venture companies to enter the China market. It is managing more than $500M funds with investment focus on the Internet, information services, software, telecommunications, networking technology and life sciences. IDGVC has invested more than 100 companies, including Sohu, Ctrip, Baidu and JRJ.


Mobile/Wireless
ò Linktone, a China-based provider of wireless interactive entertainment services, disclosed for the first-quarter profit a 28-percent decline in its net profit to $2.3 million, compared to $3.2 million in the year-ago period. Excluding charges for restructuring and stock-based compensation, the company said its adjusted earnings totaled $3.5 million. Linktone said its quarterly revenue posted a 52-percent increase to $21.9 million from $14.4 million during the same period last year, with the company ascribing the figures to higher sales of short messaging, audio-related and 2.5G services, which consist of multimedia messaging services, wireless application protocol services and Java games.


Media, Entertainment and Gaming
ò The State Administration of Radio, Film and Television (SARFT), the main television regulatory board in China, announced its setting up of a timetable for deployment of DTV systems, a move that is seen as enabling the deployment of digital television (DTV) in China before 2008. The deployment of DTV is seen as the signal for the phasing out of analog television by 2015, according to a research report by Research and Markets. SARFT disclosed that to realise this aim, it is also considering asking domestic investors to join in the operation of pay TV channels. In a related development, the countryÆs tax department has promised some tax-reducing or remitting policies on DTV investments. Analysts see this investment environment, combined with the large consumer market, is making DTV an attractive investment area in the next few years even with difficulties, such as lack of standardisation, difficulties in network integration, lack of terminals, the immaturity of the market and deficiency of content.
ò Focus Media Holding Ltd., a leading out-of-home multi-platform lifestyle media company in China, reported a massive 257-percent increase in its first quarter non-GAAP net income of $11.8 million compared to US$3 million in the same period last year. The company said its total revenues for the quarter went up to $33.1 million from $9.6 million in the year-ago quarter. Focus Media said its advertising service revenue from the companyÆs commercial location network posted a 127.7-percent growth year on year to $21.5 million. It forecasts total revenues for the second quarter to hit in the range of $48-50 million.
Software
ò Analysys International, a leading internet based provider of business information about technology, media and telecom (TMT) industries in China, disclosed that China's software outsourcing services market size reached Rmb2.5 billion yuan ($311.7 million) in the first quarter of 2006, representing a 43.9-percent rise over the first quarter of 2005.
Hardware
ò Radio Frequency (RF) coaxial cable maker, Hengxin Technology Ltd. announced the launching of its IPO on the Singapore Stock Exchange (SGX) Main Board. The IPO was approximately 13 times subscribed based on figures released a day before trading. Hengxin currently provides coaxial cables and services for the major State-owned telecom giants in China including China Unicom, China Mobile and China Telcom, as well as equipment manufacturers Huawei Technologies and ZTE Corp. The company said it currently accounts for more than one-third market share in China and looks to a huge boom in growth as the mobile penetration is low at 30.3 percent. Its closest competitor, Andrew Corp. from the US, accounts for a much smaller market share in China although the latter is almost ten times the size of Hengxin. A company official indicated that its customer relations management as a deciding factor for the companyÆs edge over the MNC in the Chinese market. Analysts are saying that with the release of 3G licenses ahead of the 2008 Olympics, greater opportunities are in store for Hengxin as demand is expected to rise. The company said it is also looking to opportunities in developing countries, which do not yet have such factories and facilities for RF coaxial cables and where mobile penetration is only about 6 percent.
ò According to IDC, ChinaÆs PC market will grow at 11.7 percent CAGR (compound annual growth rate) in the next five years. The research firm indicated that sales of Chinese PCs reached 19 million in 2005, a figure that represents a 19.6-percent growth over 2004. Chinese PC sales also accounted for 46.2 percent of the whole Asia Pacific (excluding Japan) market. The report stated that laptops will continue to be the sector with the fastest growth and the CAGR of laptops is expected to reach 23.7 percent. IDC forecasts that Chinese PC sales will reach 32.9 million, making it No. 1 in the Asia Pacific market.
ò A senior company official of Sony said China is expected to become the second-largest market for the Japanese companyÆs electronics division, with the figures overtaking sales from the company's home market in Japan. Analysts see this development as stressing the shift in the economic power now happening in Asia. China is currently Sony's third-largest market, behind the US and Japan. Sony considers China as a strategic market, given its size and growth, with the Japanese company trying to build itself as the top brand from the perception of the Chinese. Already, the company has invested heavily in Chinese manufacturing plants and R&D facilities, and the majority of its employees are locals.
ò ChinaÆs printer market in the first quarter this year registered an 8.3-percent decline quarter on quarter to Rmb3 billion ($374 million), according to Analysys International. The research firm said Hewlett-Packard leads the laser printer market in China with a market share of 29.8 percent. Epson leads the stylus and inkjet printer market, with the company gaining about 21.9 percent of the total market. Canon and Lenovo were at No. 3 and 4, respectively. The report noted a slight drop in the price of mainstream laser printers in the first quarter as more industrial users chose laser printer products when purchasing new printers.


Semiconductor
ò Galaxy Semi-Conductor Holdings, a semiconductor producer in mainland China, revealed its plans to raise HK$70 million ($9 million) to HK$100 ($12.8 million) by way of an IPO in the Hong Kong exchange next month. The company said the funds raised from the IPO would be used to extend production lines in order to cope with increasing demand of semiconductors. Galaxy said it plans to spend some 90 percent of the proceeds from the IPO to purchase land in Jiangsu province to build a new factory. The remaining cash will be used as operating capital. Established in 1994, Galaxy currently has an 85-percent share in the mainland semi-conductor market, and serves many manufacturers such as TCL, Hisense and Konka.


Telecommunications
ò China Netcom Group Corp (Hong Kong) said that it is currently in talks to sell its subsidiary Asia Netcom. The companyÆs top official was quoted saying that selling Asia Netcom was one of the options that the company had in order to lower its operating cost. The statement identified as a frontrunner in the acquisition of Asia Netcom, General Enterprise Management Services (GEMS), a group led by the former head of conglomerate Hutchison Whampoa, Simon Murray. GEMS is said to be paying HK$2.7 billion ($348 million) for Asia Netcom. Asia Netcom primarily operates undersea phone cables. China Netcom is one of MainlandÆs fixed-line telephone companies.
Taiwan
Internet
ò Soft-World International, an online game producer and service provider in Taiwan, introduced its first free online game Ghost developed by South Korea-based NNG, for launch in the Taiwan market, with open beta test (OB) expected to begin late next month for 60 days. The company said Ghost would be operated by Game Flier International, Soft-World's wholly owned subsidiary, for the markets in Taiwan, Hong Kong and Macao. The game is expected to attract 100,000 simultaneous players during the 60-day OB in Taiwan. This is the first game for Soft-World to enter the field of item mall online games, that is, free gaming services with revenue coming from sales of virtual items in the game. Soft-World said Game Flier will focus its business operations on free online gamer services this year. Ghost is an RPG (role-playing game


Hardware
ò Toppoly Optoelectronics, the mobile device display unit of Compal Electronics, announced that it has received approval from the Taiwan government to invest $21 million in the Shanghai arm of a subsidiary it recently acquired from Philips Electronics. Under the deal, Toppoly would hold a 100-percent stake after the investment. Toppoly is seen as investing over NT$10 billion ($313.2 million) in high-value-added manufacturing technology in 2007-2009 in Taiwan. Upon completion of the merger, Toppoly is expected to increase its global market share in small panels to 10 percent.


Semiconductors
ò Taiwan Semiconductor Manufacturing Co (TSMC) announced the revamp it made in its board of directors, which saw the unanimous re-election of Morris Chang to the chairman post. Re-elected, as vice-chairman was FC Tseng. In a separate development, the company said its board has approved the capital allocation of $966.3 million for the expansion of the companyÆs Fab 14 facility. The company said the expansion is expected to boost its capacity for 65 and 90-nanometer production. TSMC said it is setting aside a further $242.1 million in order to expand the capacity of its six- and eight-inch wafer fabs. In a separate report, the company predicted its capital expenditure for this year to be from $2.6 billion to $2.8 billion.
ò ProMOS Technologies announced that it is scheduled to start building a new 12-inch-wafer fabrication plant valued at some $2.5 billion. The company said the construction of the new 12-inch-wafer plant in the countryÆs central science park would be in June or July, with monthly capacity of 40,000 wafers. The plant is the third for the manufacturer of DRAM (dynamic random access memory) he said. ProMOS said it is set to upgrade its eight-inch-wafer fab in northern Taiwan to a 12-inch facility, even as it waits for government approval of its 2004 application to relocate machinery to a yet-to-be-built plant in the mainland.

Hong Kong
Telecommunications
ò Hutchison Telecommunications International (HTIL) announced that its first-quarter net loss narrowed to HK$24 million ($3 million) from some HK$100 million ($12.8 million) a year ago, with the company ascribing the results to the growth its number of subscribers from its two biggest markets, India and Israel. The company explained that the growth more than offset lower per customer spending.


Mobile/Wireless
ò PCCW Mobile, one of the brands under Hong Kong-listed PCCW, announced that it is set to receive a license for mobile TV from telecom vendor Huawei Technologies, with its Cell Multimedia Broadcast (CMB). The new mobile technology is expected to compete with existing standards such as Digital Video Broadcasting Handheld (DVB-H) in the US and Europe. CMB requires only a network upgrade, which means that its CMB technology would cost less to use than DVB-H, which requires a new slice of spectrum. The service is expected to be available for trial in Hong Kong by the end of this month.


Hardware
ò Nam Tai Electronics posted a 9.4-percent decline in its net profits for the first quarter to $12.5 million; compared to the $13.8 million it reported in 2005. The Hong Kong based company said its revenues for the quarter went up by 33 percent to $208.4 million from $157 million year-on-year. Nam Tai said it continued to outperform its industry peers by achieving industry leading gross profit margins of 10.1 percent and operating profit margins of 6.0 percent in the first quarter of 2006. The company attributed its first-quarter results to growth in its high-tech subassemblies of telecom products and the restructuring of its Hong Kong operations in 2005. Nam Tai manufactures electronic parts.

Singapore/Malaysia/Philippines/Indonesia
Telecommunications
ò Telekom Malaysia, the countryÆs largest telecommunications provider, announced a 34-percent rise in its first-quarter profit to M$518.9 million ($143.7 million). The figure includes gains from its Indonesian mobile subsidiary Excelcomindo Pratama, which the company said contributed most of the increases in its mobile segment. The company posted an 11-percent gain in its revenue to M$3.8 billion ($1 billion). Telekom Malaysia holds a 56.9-percent stake in Excelcomindo. Telekom Malaysia said the domestic mobile business would remain still competitive even as it would focus on improving revenue through better product offerings for both voice and data services. The company looks to overseas operations as an important area as it aims to boost its South Asian presence, with presence in Sri Lanka and Bangladesh.
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