Internet
ò Industry reports show the trading of imaginary assets within the virtual world for actual money, called real money trading (RMT), is believed to have become a Ñ15 billion ($126 million) industry. According to the Online Game Forum comprised of game developers, about 320 online games are available in the country as of the end of 2005, and about 28 million people are registered players. Online gaming is now an Ñ82 billion ($689 million) market, an increase of about 140 percent compared with last year. Since there are no regulations or specific rules for RMT, more problems are expected. Players usually gain their virtual items or currency as they clear certain stages of the game, hoping to clear the stages quickly or to obtain expensive items, some dedicated game fans sell and purchase the virtual items individually through bulletin boards on gamer web sites. After confirming that money has been sent into their accounts from intended buyers, the sellers then provide the items or virtual weapons through a character appearing in the games. The trend has created some professional traders who mediate game players. A Tokyo trader said items or weapons difficult to obtain can be priced at Ñ50,000 ($420) to Ñ100,000 ($840), or occasionally even Ñ2 million ($16,800). However, people unknown in the gaming community, causing frequent problems, have regularly conducted trading on the internet.
ò Domestic TV manufacturers will start a portal site in February to provide online services via TV sets. The companies, backed by the government, aim to establish a global standard for the service as US companies push convergence between personal computers and consumer electronics. TV Portal Service Corp. said the portal will be operated under the name acTVila, with the service connecting TV users free of charge to various web sites that provide consumer-oriented services, such as news and shopping. Five consumer electronics manufacturers--Matsushita Electric Industrial, Sony, Sharp, Toshiba and Hitachi, set up TV Portal Service in July with So-net Entertainment Corp., a Sony-affiliated Internet service provider and shareholder. In fiscal 2007, the joint venture plans to start a streaming video-on-demand service. The five TV manufacturers plan to increase the number of models, which will enable viewers to browse the Internet with the simple operation of a remote control.
Mobile/Wireless
ò NTT DoCoMo Inc. announced a deal to add three new search services for its mobile phone users, including Yahoo Japan Corp. Industry sources said the firm will offer the new online search engines for its wireless internet browsing service, which will expand its lineup to 13 search engines. Yahoo Japan is the country's biggest portal and is 41 percent-owned by Softbank, which earlier this year bought a mobile phone operator from Vodafone Group Plc. DoCoMo said it has opted for an open online search service for mobile phones, compared to Sofbank working with Yahoo Japan on such services and KDDI Corp with Google for its search technologies for mobile phones.
Hardware
ò Hitachi announced a recall of 16,000 potentially hazardous Sony laptop batteries, a development that is seen as undermining the companyÆs recovery from a profit slump. Hitachi joins a growing list of computer makers, which have recalled more than 7.5 million Sony-made batteries since mid-August. Earlier, Sony said that it would incur costs of as much as $257 million after massive recalls by Apple Computer and Dell due to concerns that they could burst into flames when overheated. Other companies have since followed with recalls by Toshiba, Lenovo and Fujitsu. Last week Sony offered to replace all of the potential defective batteries worldwide.
Ventures/Investments
ò Toshiba Corp. announced its acquisition of a 77 percent stake in Westinghouse, British Nuclear Fuels' U.S. power plant unit, in a deal valued at $4.1 billion, buying a much bigger chunk of the firm than it initially planned. Earlier in February, Toshiba agreed to buy Westinghouse for $5.4 billion as part of a consortium, in which it wanted to take a stake of 51 percent or more. Toshiba's stake then grew after it failed to get Japanese trading firm Marubeni Corp. to invest. Under the agreement, the US engineering firm Shaw Group Inc. will take a 20 percent stake for $1 billion, while Ishikawajima-Harima Heavy Industries Co. Ltd. is taking the remaining 3 percent. For the deal, Toshiba revealed that it will turn to bank borrowings for the deal, slated to close by the end of the month, and has no plans for equity financing. As Toshiba is still negotiating with some companies to take a minority stake in the firm, the companyÆs stake in Westinghouse could go down from 77 percent.
Korea
Internet
ò Industry observers are saying that the countryÆs GMarket seems to have gained popularity by creating a web site that has quickly become a top online destination in South Korea. GMarket is seen as competing directly against eBay Inc.'s Korean subsidiary. The company has already attracted the attention of Yahoo Inc., which recently bought a 9 percent stake. It went public in June, offering shares on the NASDAQ stock market, and is pondering future expansion, with an eye to entering Japan next year and later moving into China and the U.S. GMarket offers online storefronts and a variety of tools to make it easier for sellers to set up shop and manage inventory. GMarket handles payments, earning its revenues from transaction fees that vary depending on the product. The company said the value of all the merchandise traded on its site in the second quarter of this year was W543.8 billion ($567 million), an increase of 163 percent from the same period in 2005. The site has more than 9.2 million registered users in a country of 48 million people, with the most active being females in their 20s and 30s. The company is looking to open a Japanese site next year where it is expected to face the dominant online seller Rakuten.
ò Naver, the countryÆs primary internet portal site, revealed that it may stop offering its news service. The president of the company made the statement as a response to the mounting criticism that Naver is attempting to gain the upper hand over the internet sites of domestic media outlets. Up to six million people read news articles or review TV programs daily on the site, which serves as the equivalent of Google. The large number of visitors pushed up Naver to practically the No. 1 spot among news outlets in Korea and this generates two contrasting responses from traditional media outlets. A total of 90 content providers - including newspapers, magazines and TV stations queued up to place their news on Naver's news site. At the same time, some influential dailies and TV networks criticised Naver's ability to present articles according to its wishes while taking little social responsibility for their impact. The accusations prompted Naver to take an emergency measure in late August, allowing users to customise the front page of the news service. Naver also phased in the so-called link-out formula, where users click on headlines on the Naver site, and then be redirected to the web sites of appropriate newspapers or broadcasters instead of the original Naver site.
ò A government survey indicated that business confidence among South Korea's e-commerce operators remained in positive territory for the fourth quarter despite slower growth compared to the previous three months. The survey showed that more companies predicted e-commerce conditions would improve rather than deteriorate in coming months. The survey was conducted by the state-run Korea Institute for Electronic Commerce (KIEC) on 600 companies in late August. The institute said the business survey index for the business-to-business (B2B) firms reached 108.8 for the new quarter. A reading above 100 means optimists outweigh pessimists. The KIEC said many off-line companies were entering the B2B sector to cut personnel expenses, and this interest is fueling growth even as many companies were starting to express concern that the economic downturn will hurt transactions. Companies in the sector said a rise in consumer demand toward the end of the year, better marketing, and a more diverse range of goods sold online would attract customers.
Mobile/Wireless
ò LG Electronics, Asia's second-largest mobile-phone maker, said it is looking to increase its share of the European handset market to 10 percent next year, with the company saying it expects to sell more 10 million mobile phones in Europe this year, representing a market share of about 6 percent. LG introduced its ôchocolateö phone model in Europe in May. LG aims to sell more than 2 million of its first so-called high-tier the handsets in Europe. LG sells the phone to European wholesalers for more than 200 euros ($252) on average. The company expects 20 percent of its mobile sales in Europe to consist of high-tier phones this year and in 2007. It will start selling a second high-tier model, dubbed öBlack Labelö, in Europe next year, focusing on UK, Germany, France, Italy and northern Europe. The company forecasts the European mobile phone market unit sales will increase as much as 2 percent next year, with the growth to be propelled by Eastern Europe.
Telecommunications
ò KT announced that the company is to set up 1,500 public optical repeaters valued at 20 billion won ($21 million) to provide Wibro service in the subway area. The suppliers are FRtek (586 repeaters) for the first to fourth lines, MTI (522 repeaters) for the fifth and sixth lines, and Kisan Telecom (400 repeaters) for the seventh and eighth lines. The offers of optical repeaters for the subway have been delayed due to a problem of contributions between KT and SKT. But they recently reached an investment agreement and have started. So far, KT has invested over 100 billion won ($104.6 million) to buy FR and terrestrial optical repeaters and plans to buy additional repeaters. It is also preparing the selection of suppliers for standard optical repeaters under compatibility test among repeaters.
Hardware
ò Samsung Electronics Co. announced its plan to expand its handset business to get the fast-growing low-end market while emphasizing its laser printers. The company was known for using the high-end handset market to boost its brand recognition. The company said it is also taking advantage of its position in IT and optics circuitry to gain a larger stake of the printer business. A top official of the company said he expects printer sales of about $3 billion this year and an annual growth rate of about 20 percent.
China
Mobile/Wireless
ò Linktone Ltd., a leading provider of wireless entertainment, media, and communication value added services to consumers in China, announced that the company made a strategic investment in Beijing Center National Radio Media, Ltd. (BCNRM), a nationwide advertising company. The company explained the move as part of its ongoing strategy to develop interactive programming with traditional media outlets such as television, radio, and print. BCNRM is the largest advertising agency for China National Radio-1 and 2, which boasts broadest audiences in China, the U.S., Hong Kong, and Macau. Linktone provides a diverse portfolio of services to wireless consumers, with a particular focus on media, entertainment and communications.
Hardware
ò Foundry Networks, Inc., a performance and total solutions leader for end-to-end switching and routing, announced that Baidu, the leading Chinese language Internet search provider, deployed Foundry's 10 Gigabit Ethernet (10GbE) LAN and application switching solutions to meet their current and future traffic demands. Baidu's extensive network currently handles up to 50 percent of Internet search activities throughout China. Foundry Networks, Inc. is a leading provider of high-performance enterprise and service provider switching, routing, security, and web traffic management solutions.
Ventures/Investments
ò iPackets International, Inc. (iPackets) a global developer and provider of wireless and communications solutions for the mine-safety industry, announced its signing of a Letter of Intent to establish a Chinese Joint Venture with China Coal Information Institute (CCII) and Henan YongAn Investment Guarantee Co. (YongAn). The joint venture will be responsible for the manufacturing, distribution, sales, marketing, installation, deployment, and support of iPackets' iPMine solution to the mining industry in China. The operation will be based in the province of Henan, China's second largest coal producing province. According to the agreement, YongAn will provide funding of up to $50 million to the venture, and over 10,000 square meters of land to build and outfit a world-class manufacturing facility in Henan. Under the deal, CCII will provide professional services including product certification, sales and marketing, technical support, and market intelligence. iPackets will provide technology intellectual property, continued product development, technology direction, and technical knowledge transfer. The agreement is expected to be finalized in two months. China Coal Information Institute, a national research organization, is part of the newly established National Institute for Occupational Safety. YongAn is one of the first investment guarantee companies to be approved by the Chinese National Development and Reform Commission. iPMine is a real-time two-way wireless communications solution that tracks, monitors, and communicates with miners and equipment underground and above ground.
Taiwan
Internet
ò eBay announced the establishment of an international on-line auction platform created specifically for sellers in Taiwan. The company said the service would allow Taiwan-based clients to market their merchandise to potential overseas buyers through eBay's web sites in 33 countries or areas around the world. The move follows its alliance with PChome Online. eBay said that it has closed its local on-line auction website in Taiwan, a leading web portal and the largest on-line shopping platform in Taiwan, to set up a joint-venture on-line auction platform, Ruten, for the Taiwan market, according to eBay Hong Kong, which also in charge of eBay Taiwan. The company said that eBay Taiwan will continue to operate its two existing business units, an international on-line auction and Kijiji, a classified advertising website providing local-area information.
Hardware
ò Market sources indicated that Foxconn reportedly will invest in Quanta Storage, the largest maker of slim-type optical disc drives (ODDs) in Taiwan, through subscription of the ECB (euro convertible bond) to be floated by the latter. Both Foxconn and Quanta Storage denied the report. Foxconn is the registered name of Hon Hai Precision Industry. Sources noted that Foxconn has actively engaged in OEM production of half-height (H/H) ODDs following its investment in Taiwan-based ODD maker Pan International Industrial in 1999 and acquisition of France-based Thomson's production base of optical pick-up heads in China in April 2004. In 2005, Foxconn took over the ODD business unit of Taiwan-based Behavior Tech Computer.
Ventures/Investments
ò Chunghwa Picture Tubes (CPT) announced its plans to raise $600 million via a bank loan in the fourth quarter of 2006. The company said the amount to be raised from the planned bank loan is second only to the NT$38 billion ($845 million) CPT raised via a bank loan in 2004. No details about the purpose for the loan were revealed. Earlier though, CPT indicated it would start construction of a next-generation plant at the Central Taiwan Science Park (CTSP) soon, with 7G, 7.5G and 8G glass substrates among the potential choices for processing at the new plant. Industry sources said that the company will have more than NT$56 billion ($1.6 billion) on hand by year-end, with cash and cash equivalents of over NT$10 billion ($302.2 million), an unused bank loan amount of more than NT$7 billion ($211.5 million), a cash flow of NT$20 billion ($604.5 million) and the planned $600 million bank loan
Hong Kong
Telecommunications
ò Market sources indicated that shares of Sunday Communications climbed recently to their highest in almost eight months after the company's parent firm, PCCW, offered to buy its mobile-network assets for HK$1.9 billion ($244 million). The offer needs the approval of a majority of Sunday's independent shareholders, unlike a buyout of the company, which requires 90 percent approval. PCCW, the city's largest telephone company, failed in December last year to get enough backing to take the mobile-telephone operator private for HK$401.3 million ($51.5 million). PCCW owns 79.4 percent of Sunday. Hong Kong rules required PCCW to wait 12 months before again attempting a buyout. PCCW already uses its own name to market Sunday's 3G telephone service, which supports faster data transfer and value-added features such as video calls and music sales. Sunday now has a market value of HK$1.8 billion ($231.1 million). The buyout offer is HK$401.5 million ($51.5 million) in cash and a promissory note of HK$1.5 billion ($192.6 million) related to money Sunday owes PCCW. Sunday's board has recommended Sunday's listing be withdrawn from the stock exchange and that the cash from the sale be distributed to the company's independent shareholders.
Singapore/Malaysia/Philippines/Indonesia
Internet
ò Sources say Malaysia's government is setting up a new infrastructure to make internet surfing cheaper by reducing local reliance on servers in foreign countries such as Singapore and the US. The countryÆs Energy and Communications Minister said the formation of the Malaysia Internet Exchange will mean that internet traffic for Malaysian surfers who visit domestic web sites will no longer be routed through foreign servers. The initiative, with an initial cost of 15 million ringgit ($4.2 million), will likely be operational in six months and is seen as helping Malaysia save millions in foreign exchange annually incurred from Internet server access charges. There were no immediate estimates on how much savings would be passed to individual users and companies following the creation of the Internet exchange point. Officials have previously said the plan was needed to connect all service providers in Malaysia through a common backbone.
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