a-week-in-tech-may-915

A week in tech, May 9-15

A roundup of all the latest tech news.
Japan

Mobile/Wireless
ò Following Vodafone GroupÆs agreement to acquire a controlling stake in Hutchison Essar, NTT DoCoMo announced that it has revoked a license given to the Indian operator. According to the company, this is the first time it has cancelled an i-mode contract even as it is already considering other options to provide i-mode in India. DoCoMo initiated i-mode in 1999, which enables users to surf the Internet, send e-mail and download games.

Software
ò The Japanese government wants to go open source, as a way to rely less on a single vendor IT software infrastructure. Among the 10 vendors waiting in line to help make this possible are Oracle, NEC, IBM, HP, Hitachi and Dell. Industry sources said these IT equipment and software vendors are forming a consortium to develop and sell Linux-based servers and computers for the Japanese market. The move by the vendors to collaborate on Linux in Japan comes from an announcement from the country's government to make Linux an open source a priority for all IT procurements, starting this July. The central government of Japan says it plans to spend approximately 1.2 trillion yen,(US$10.4 billion) on IT over the next year. The government has said explicitly it wants to decrease its reliance on Microsoft as a server operating system platform. Analysts note the absence of any major Linux operating system distributor as part of the announcement.

Hardware
ò Toshiba is reportedly opening a development centre next month in Hanoi, Vietnam. The Toshiba Software Development (Vietnam) will focus on the development of embedded software for consumer electronics products. The center's low-level software processes will be combined with upper processes from Japan designers to develop the embedded software used in the company's digital consumer electronics products and cell phones. According to Toshiba, the Vietnam center is part of its goal to increase software development work over the medium term while not concentrating resources in any one country. The company also has software development centers in India and China.

ò Funai Electric revealed its decision to leave the PDP (plasma display panel) TV market, a move the company ascribed to sharply falling ASP (average selling price) and rising competition from vendors. Funai offers 42-inch PDP TVs in North America with panels sourcing from LG Electronics (LGE), with the TVs manufactured in Malaysia. The company said its sales volume from its PDP TVs in North America could not go beyond 100,000 units in 2006. In the future, the company said it will focus on LCD TV business and said it is also planning to seek for more LCD TV OEM orders. In a related development, Funai announced that its new LCD TV plant in Poland will commence operation next month with monthly capacity of 200,000 units. The company looks to the new plant as helping the company shorten lead-time, reduce the inventory level of finished goods and lower tariffs. Funai shipped about 600,000 LCD TVs in fiscal year 2005, and it is aiming for LCD TV shipments of 1.8 million units worldwide in fiscal year 2006. It holds a 1.2 percent stake in Chi Mei Optoelectronics (CMO) and about 90 percent of Funai's LCD TVs use panels from CMO. Earlier in March, Royal Philips Electronics announced it has decided to phase out of the PDP TV market and focus on LCD TVs in the future. In 2005, Sony also decided to drop out of the PDP TV sector.

Telecommunications
ò Nippon Telegraph & Telephone Corp., Japan's largest phone company, reported a 4.4 percent drop in its annual net income to 476.9 billion yen ($4 billion), with the company ascribing the decline to its wireless unit NTT DoCoMo Inc. having spent more on mobile phone subsidies. The company said sales posted a 0.2 percent growth to 10.7 trillion yen ($89 billion). DoCoMo, which controls 54 percent of Japan's mobile-phone market, contributes about 45 percent of NTT's revenue. To reduce dependency on its wireless unit, former government monopoly NTT announced that it is building a 3 trillion-yen ($25 billion) fiber-optic network nationwide that is expected to enable movie providers and wireless operators to transfer data such as videos and songs via simpler and cheaper means. Earlier, DoCoMo said payments for handset subsidies went up 4.2 percent to 1.8 trillion yen ($15 billion) in the year ended March 31. NTT's annual operating profit also went down by 7 percent to 1.1 trillion yen ($9.1 billion). The company forecasted net income to drop to 460 billion yen ($3.8 billion) and sales to 10.7 trillion yen ($89 billion) for the 12 months ending March 31, 2008, with operating profit estimated to remain flat at 1.1 trillion yen (US$9.1 billion). NTT revealed plans to pay a dividend of 9,000 yen ($74.8) a share this fiscal year, rising from 8,000 yen ($66.5) a share for the 12 months just ended.


Korea

Internet
ò According to the countryÆs Fair Trade Commission FTC), it has initiated an investigation into major Internet portal operators for alleged price-fixing. The report said FTC has started the inquiry into six operators including NHN Corp, Daum Communications and SK Communications Co. Yahoo! Korea said it was also part of the investigation. A source was quoted saying the move is not merely aimed at a few portal operators but the whole industry. FTC officials declined to comment, saying they will hold a press conference soon. Earlier this year, FTC said it would look into portal operators for their alleged abuse of market dominance and other unfair business activities. Some firms are suspected of fixing prices for advertisements and imposing a ceiling on payments to content providers.

ò Gmarket reported total revenues of $51.3 million for the first quarter of 2007, which stands for a 70 percent increase from total revenues of $30.2 million for the first quarter of 2006. The report indicated that the company's gross merchandise value (GMV), which represents the total value of all items sold on Gmarket's web site, posted a 54 percent rise to $771.6 million for the first quarter of 2007 compared to $500.8 million for the same period in 2006. The company said advertising and other non-transaction revenues for the first quarter of 2007 went up by 114 percent to $19 million from $8.9 million for the same period in 2006. Operating income for the first quarter of 2007 rose by 256 percent to $5.8 million from $1.6 million for the same period in 2006. GmarketÆs net income for the first quarter of 2007 posted a 246 percent growth to US$7.1 million from $2.0 million for the same period in 2006. During the first quarter of 2007, the company's registered user base grew to about 11.8 million from 11 million registered users at the end of the fourth quarter of 2006. Gmarket said it also averaged 16.9 million monthly unique visitors in the first quarter of 2007, compared to 15.2 million unique visitors during the first quarter of 2006. Gmarket Inc. is a leading retail e-commerce marketplace in South Korea.

ò NHN Corp, South Korea's top Internet company by market value, reported better-than-expected earnings for the first quarter, which it ascribed on gains from search-related online advertisements and games. The company said net income went up 77.6 percent to 62.3 billion won ($67.6 million) in the January-March period, from 35.1 billion won ($3.7 million) it posted a year earlier. Revenues grew 63.9 percent year on year to 199.6 billion won ($215.3 million), with its operating profit climbing 83.8 percent to 85.6 billion won ($92.3 million). The company noted that its first-quarter earnings were higher than the market consensus. The company ascribed the earnings improvement to increased revenue from its search-related Internet ads and online games. T

Media, Entertainment and Gaming
ò Gravity Co, an online game developer and publisher, announced that it has entered into a two year game service agreement with NHN Corp., the operator of Naver and one of the largest Korean Internet companies. The source said the move is aimed at expanding its market share in Korea. Under the agreement, the two parties agreed to jointly service and market Gravity's online game line-up through establishment of a Gravity Zone in NHN's Hangame web site, the largest game portal site in Korea. In accordance with the agreement, Gravity will provide certain online games, which include its flagship title Ragnarok Online and its anticipated upcoming titles Ragnarok Online2, Requiem, and Emil Chronicle Online through their own web sites as well as Gravity Zone, in order to provide easier access, attract new users and to implement aggressive marketing strategies. Gravity Zone is expected to offer up to twelve online games, with Emil Chronicle Online seen as the first online game offered through Gravity Zone by the end of May 2007. Gravity expects to increase its market share in Korea by providing its large online game titles, such as Ragnarok Online2 and Requiem through individual game sites and Hangame. According to Gravity officials, the agreement between NHN and Gravity is not a mere channeling alliance, but a new business model for online game service. Gravity is a developer and distributor of online games.

Telecommunications
ò Hanarotelecom, the countryÆs leading integrated telecommunications company, announced that the company registered the highest-ever quarterly revenues of 451.1 billion won ($486.7 million), with its operating profit becoming positive, at 12.4 billion won ($13.3 million) for the first quarter of 2007. Hanaro attributed the quarter-on-quarter surge in its revenues to 4.6 percent growth across all business segments including broadband, voice and corporate business. The company said its net loss went down by 80 percent from the previous quarter to 9.6 billion won ($10.3 million). Hanaro also reported strong subscriber growth, with broadband net posting an additional 34,000 and voice net some 73,000 for the first quarter, backed by marketing activities focused on bundled products. Hanaro also said that the 100Mbps service coverage it offered has expanded to 7.3 million households as of the end of the first quarter of 2007 from 4.3 million households as of the end of 2006, on the right track to achieve the full-year target of 12.6 million households.

Hardware
ò Samsung Electronics announced its development of a digital TV receiving chip using 65-nano technology for the first time in the world. The new chip uses nearly half the electricity than current products and is more effective in receiving TV signals. The company said the TV receiving chip will mainly be used in digital TVs both in South Korea and the U.S. Samsung also said it is the first time for a digital TV chip to be developed based on 65-nano technology. According to industry researcher DisplaySearch, 87 million units of digital TVs expect to be sold worldwide this year and the number will grow to 147 million in 2010.

Information Technology
ò According to IDC, South Korea's IT security market is forecast to post an average annual growth of 11.1 percent over the next five years. The forecast is made amidst the scenario where there is an increased demand for firewalls aimed at defending attacks by viruses and malicious codes. The study said the software and hardware industries related to the development of security solutions for computers and other networks predict market valued to be 815 billion won ($883 million) by 2011.
China

Internet
ò Baidu.com, the largest Chinese search engine service provider, announced that it is offering a large scale website ranking program that will provide web site certification rankings for its 110,000 partner web sites. Observers see the launching of the new service as a way for Baidu to face its rival Google. According to BaiduÆs preliminary quarterly results, its partner web sites have earned more than Rmb70 million ($91.1 million) in 2006. With the launching of the service, the partners even forecast to derive more income share from Baidu.com.

ò Ninetowns announced the launching of tootoo.com, the companyÆs new business-to business vertical search platform. According to the companyÆs top official, tootoo.com will be the cornerstone of Ninetowns' new B2B strategy of providing vertical search and trade services. Ninetowns said tootoo.com is built upon its market intelligence in business-to-government trade processing and its experience in evaluating supplier capabilities for companies ranging from small businesses to large multinational corporations. Industry observers state that, by leveraging this foundation with the recent acquisition of Ample Spring and strategic partnership with ThomasNet, tootoo.com is positioned to become a leading edge B2B search and service provider. In addition to the core search services, tootoo.com will also offer value-added services such as MeiMaoTong, which is a customized catalog solution provided through Ninetowns' recent strategic partnership with ThomasNet.

ò PacificNet announced that it will sell its entire 51 percent ownership in Guangzhou 3G IT Company to HeySpace International Limited in a deal valued at $6 million. According to the CEO of PacificNet, the ôstrategicö sale is in line with its ônew focus on gaming.ö The sale will be paid in cash in five installments over seven months. PacificNet acquired 51 percent of controlling interest in Guangzhou 3G in March of 2005 for US$5.5 million, which was paid partially in cash and mostly in PACT stock. Based in Guangzhou and Hong Kong, HeySpace International Limited is one of the many social network services and virtual community service providers operating in China.

ò Sohu.com reported its unaudited financial results for the first quarter ended March 31, 2007, declaring total revenues for the first quarter declining to $33.1 million, compared to revenues of US$34.4 million for the fourth quarter ended December 31, 2006, and up from $30.4 million for first quarter ended March 31, 2006. Sohu posted net income of $4.5 million for the first quarter of 2007. Non-GAAP net income for first quarter of 2007 was placed at $7.0 million compared to non-GAAP net income of $8.1 million and $7.8 million for first quarter of 2006. Sohu said its advertising revenues for first quarter of 2007 totaled $25.6 million, representing a 27 percent year-on-year increase and a 3 percent quarter-on-quarter increase.
Media, Entertainment and Gaming

ò CDC Games, a business unit of CDC Corporation and pioneer of the "free-to-play, pay-for-merchandise" model for online games in China, announced the launching of its open beta program for Special Force, the first free-to-play, pay-for-merchandise FPS (first person shooter) game in China. Industry sources said that Special Force was recently ranked as the top online game in Korean Internet cafes for more than 50 consecutive weeks and provides CDC Games with first-mover advantage in securing significant market-share in the FPS category of online gaming in China. Special Force, which was developed by Dragonfly, has been deployed into 9 Internet Data Centers in China in Anhui, Dongguan, Xian, Qingdao, Zhengzhou, Shenyang, Shanghai, Tianjin and Chengdu on China Telecom and China Netcom. Users from around the country can download the client for free, which is available via China content distribution networks. The open beta of Special force will also be promoted in over 1,200 Internet cafe events in more than 100 cities across China during May. Special Force is a first person shooter online game that originated in Korea. CDC Games is targeting the commercial launch of Special Force before the end of the second quarter 2007. The CDC family of companies includes CDC Software is focused on enterprise software applications and services, CDC Mobile is focused on mobile applications, CDC Games is focused on online games, and China.com is focused on portals for the greater China markets. CDC Games is one of the market leaders of online and mobile games in China with over 46.5 million registered users.

Mobile/Wireless
ò China Unicom said it has finally introduced its new IM (Instant Messaging) software called Chaoxin, a comprehensive instant communications service. It enables users to enjoy instant messaging services, including emoticons, graphics and voice communications through BREW-enabled devices, PCs, short message terminals, WAP client terminals, and IVR client terminals. There are currently many instant communications software on the Chinese market, including QQ, MSN, POPO, and ICQ. China Unicom was the first to announce its plan to launch its instant messaging service although China Mobile got to launch its competing IM system called Fetion.

ò Nokia said it has secured a phone order valued at $2.5 billion from ChinaÆs largest distributor China Postel for deliveries during 2007. Nokia said some of the phones have already been delivered. Nokia and China Postel also said the companiesÆ look to enhancing their strategic ties. China Postel has already distributed more than 37 million Nokia mobile phones across China since 1998. The Finnish firm, which sells more than a third of all mobile phones across the world, maintains a strong position in emerging markets like China. According research firm GfK, NokiaÆs share of the Chinese market topped 35 percent in late 2006.

Hardware
ò Even as companies are opting to place Linux in their computers, Lenovo has announced its move to work with Microsoft to promote the benefits of validly licensed Microsoft software products through joint sales, marketing and training programs in China and around the world. Under the agreement, the two firms are continuing their strategic business partnership with the aim of protecting intellectual property. Industry observers also see the agreement as allowing customers to enjoy the Windows capabilities they expect, and take advantage of ongoing system improvements that let them do more with their PCs. Lenovo sells pre-installed genuine Microsoft software on its PCs sold in more than 65 countries and regions around the world.

Semiconductors
ò Semiconductor Manufacturing International Corporation's reported sales for the first quarter of 2007, climbing to $388.3 million from $383.8 million in the fourth quarter of 2006. The company also posted a decrease in capacity to 177,150 8-inch equivalent wafers per month and a utilisation rate of 86.2 percent in the first quarter of 2007. It declared a net income of $8.8 million in the first quarter of 2007, compared to a net loss of $9.6 million in the first quarter of 2006 and a net income of $0.1 million in the fourth quarter of 2006.

Ventures/Investments
ò Industry sources said that China Unicom, the second largest mobile service provider in the country, is planning to make an investment worth some 70 million yuan ($9.1 million) in order to build a WiMax experimental network in 21 provinces in China. The reports noted that that China Unicom started WiMax a long time ago and is now testing on some relevant nodes on the network. No details were released as to when the full roll-out of the service will begin.


Taiwan

Internet
ò Shine Want Technology the operator of the community website YouthWant in Taiwan, stated that South Korea-based Bugs Interactive is planning to make an investment of $3.3 million for a 39 percent stake in the company. The report stated, however, that the company has no plans to participate in its business operations. YouthWant features an online community of college and high school students aged 16-22. It currently has 1.7 million members and the number is expected to grow to 2 million at the end of this year. Shine Want said it is tapping the China market with a ôconservative attitudeö because competitors in China have many advantages. In China to date, Shine Want has been a content provider rather than a web site operator in China. It acts as a sales agent of online teaching for TOEFL, GRE, GMAT, IELTS tests offered by the China-based web site Koolearn.com. In addition, Shine Want has cooperated with China Mobile Communications to provide Taiwan-produced articles for online reading through the latter's MMS (multimedia messaging service) and WAP (wireless application protocol) network.

Ventures/Investments
ò Tatung, a worldwide leader in the design and manufacturing of a vast array of digital consumer products, including LCD TVs and PDPs, network-connected devices, storage-based media players and home appliances, announced plans to invest $20 million in Proview, a Hong Kong-listed display specialist. With the investment, Tatung is expected to secure a nearly 20 percent stake in Proview and make it the second largest shareholder of the display maker. Media sources said that Proview would begin to purchase panels for monitors and LCD TVs from Chunghwa Picture Tubes (CPT), an affiliate of Tatung. At present, Proview buys panels mainly from AU Optronics (AUO) and Chi Mei Optoelectronics (CMO). In the future, Proview may also place orders for LCD TVs and monitors with Tatung, which will produce the products at its plants located in China, Mexico, Czech Republic and the Netherlands. Established in 1989 in Taiwan, Proview focuses on the manufacturing of CRT/ LCD monitors, LCD TVs, PDP (plasma display panel) TVs as well as own-brand business and, according to DisplaySearch, is ranked No. 8 in worldwide LCD monitor manufacturing market in 2006.

Semiconductors
ò Powerchip Semiconductor Corporation (PSC) revealed that it is adjusting its strategy over the allocation of its fabs, a decision that includes spinning off fabs that do not have optimized production on commodity DRAM. The company said it is also exploring the possibility of a tie up with Renesas Technology on 8-inch wafer production in China. Following the recent spin-off of its 8-inch fab (Fab 8A), PSC said it is considering doing the same with its 12-inch fab, Fab 12A within two to three years. If PSC chooses to continue running Fab 12A, it will need extra funding in order to upgrade it to meet 50nm requirements. Regarding the update of its 8-inch wafer production status in China, PSC said production in China will extend to logic ICs in a bid to broaden its product portfolio. To achieve this goal, PSC is considering strategic partners, and Renesas Technology is a one of those being considered.

Telecommunications
ò Chunghwa Telecom (CHT) reported self-estimated net profits of NT$15.4 billion ($462.4 million) for January-April 2007. The figures stand for about 34.6 percent of the company's goal for the year. CHT reported about 4.1 million subscribers of ADSL and FTTx (fiber to the home/building) in aggregate at the end of April. Of the ADSL subscribers, more than 2.4 million used bandwidth of over 2Mbps. In addition, CHT had 4.3 million subscribers of its Internet-access service HiNet and over 1.4 million subscribers of 3G mobile communications at the end of April.
Hong Kong

Telecommunications
ò Hutchison Telecom announced the completion of its transaction with Vodafone. The company disclosed the estimated pre-tax gain from the sale, which is expected to be about $9 billion following certain adjustments. The adjustments include the provisions for the previously announced settlement agreement with the Essar Group, retention of $352 million by Vodafone in consideration for their waiving of certain potential claims against Hutchison, the receipt of interest from Vodafone and transaction costs and expenses. The net cash inflow to Hutchison Telecom before payment of the settlement amount is placed at about $10.8 billion. The company's board also confirmed the declaration of a special dividend of HK$6.7 (US$0.8) per share following the completion of the necessary formalities.

Mobile/Wireless
ò The CDMA Development Group (CDG) commended the Office of the Telecommunications Authority (OFTA) on announcing the plan to release spectrum through an open auction to enable the provision of CDMA2000 services in Hong Kong beginning November 2008. The auction expects to be held in the fourth quarter of 2007 when the OFTA will grant one license to a CDMA2000 operator in the standard 850 MHz band for voice and advanced broadband data services. Currently, CDMA voice services and roaming are available in Hong Kong. However, this spectrum allocation will enable the provision of CDMA2000 1xEV-DO advanced broadband data services and international data roaming. Hong Kong will join nearby Macau, which has already launched CDMA2000 1X services and will soon introduce 1xEV-DO Rev A broadband data services, and mainland China, which is expected to award 3G licenses within the next 12 months. Asia Pacific is the largest region for CDMA2000 with 63 commercial CDMA2000 1X and 13 1xEV-DO networks and nearly 150 million users, and CDMA2000 is expanding rapidly in the region, growing at 34 percent annually, fueled by the rapid subscriber growth in China and India.

Ventures/Investments
ò Industry sources said an Australian entertainment giant is set to become the newest foreign entrant to the Macau gambling industry, with Crown Macau preparing to open a hotel casino on the island. The complex, which features a 36-storey tower with 216 hotel rooms, 220 gaming tables and 500 slot machines, is being funded by Melco-PBL Entertainment, a joint venture between Hong Kong-listed Melco and Australia's Publishing and Broadcasting Ltd (PBL). According to sources, MacauÆs casinos earned some US$7.2 billion in revenue last year, reportedly outstripping the $6.6 billion dollars reported in Las Vegas, to become the world's biggest casino draw. Apart from Crown Macau, the Melco-PBL consortium said it will also build a large integrated resort to be known as the 'City of Dreams', targeted for opening in late 2008.The joint venture had also acquired a site on the Macau Peninsula on which a third hotel and casino project will be developed for a 2009 opening. PBL has a portfolio of television, gaming and entertainment interests. Hong Kong-listed Melco is run by Lawrence Ho, the son of Macau gaming magnate Stanley Ho.

Singapore/Malaysia/Philippines/Indonesia

Telecommunications
ò Singapore Telecommunications disclosed a 41 percent decline in its net profit in the January-March quarter, with lower profit margins in its home market offsetting growth from mobile telephones in the region. SingTel said its net profit for the fiscal fourth quarter was S$989 million Singapore ($651 million), down from S$1.6 billion ($1 billion) a year earlier. For its underlying net profit, which removes goodwill and exceptional items, the company posted S$971 million ($639 million) in the three months ended March 31, down 3.7 percent from S$1 billion ($658.4 million) year earlier. Underlying net profit for the year ended March 31 went up 7.9 percent from the previous year to S$3.5 billion ($2.3 billion).

ò Philippine Long Distance Telephone Co. (PLDT) announced its target to double its broadband subscribers this year as it rolls out its next generation network (NGN), with the company aiming to reach a subscriber base of more than 530,000. In the first quarter this year, PLDT said its service called SmartBro added 42,000 subscribers to 164,000. In order to achieve this target, the company said it is investing some $100 million to enhance its international cable capacity to support the expansion of its broadband and other next generation services for corporate and retail clients. PLDT had allotted about 20 billion pesos ($423.7 million) to 22 billion pesos ($466.1 million) as capital expenditures for this year. Earlier, PLDT posted a net income of 8.5 billion pesos ($180.1 million) in the first quarter from P8.5 billion ($180.1 million) in the same period in 2006, with the company ascribing the flat growth largely due to foreign exchange losses. The company reported a 10 percent rise in its consolidated wireless service revenues to 20.8 billion ($441.4 million) pesos from the 18.9 billion pesos ($397.8 million) it posted in the same period last year, with cellular subsidiaries, Smart Communications Inc. and Pilipino Telephone Corp. maintaining their solid performance. In a separate development, PLDT and Smart are co-hosting the 3rd Asian Carriers Conference, which will be attended by more than 300 delegates from over 100 telcos in Asia, Europe and the Pacific Rim, to be held in Cebu, Philippines next week.

Internet
ò DiGi.Com Bhd of Malaysia announced its interest to acquire a rival or form partnerships to offer high-speed Internet access, with the company revealing that it is in talks with several parties. The company revealed no names. It also did not comment on reports that it was in discussions with a possible partnership with Time dotCom Bhd, which has a 3G spectrum and a virtually unused fiber optic network. The companyÆs rivals, Telekom Malaysia Bhd and Maxis Communications Bhd offer broadband services. Recently, four new WiMAX licenses were issued to help speed up broadband penetration in Malaysia. Industry sources indicate that DiGi approached some of the four winners but nothing has been disclosed if the talks could lead to a deal or agreement.
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