A week in tech; part 1

All the latest tech news from Japan and Korea.

A week in Japan tech


- Hewlett-Packard Japan Ltd. lowered the prices of UNIX servers for corporate information systems by 40-63%, pushing entry-level models below ¥1 million ($8,000). The price cut by Japan's UNIX server leader follows a similar move by IBM Japan in May and will likely trigger intensified price competition. HP Japan cut the prices of nine models in its HP Servers Advantage, rp2400 and rp5400 series. The biggest reduction was for the 5470 model in the rp5400 line, whose price was slashed by 63% to ¥4.8 million ($4l,000). HP Japan commanded a leading 32.8% of the UNIX server market in shipment value last year, according Gartner Dataquest.

Life Sciences

- Mitsubishi Kagaku Bio-Clinical Laboratories Inc., a clinical testing and research firm affiliated with Mitsubishi Chemical Corp., has developed a genetic test that can identify drug-resistant strains of human cytomegalovirus (HCMV). Treatment for HCMV typically involves the use of such drugs as ganciclovir. But over the course of several months of therapy, the virus can mutate into a form resistant to the drug. When this happens, a quick change to another medication is essential or the pneumonia symptoms will worsen. Mitsubishi Kagaku BCL already provides a service for doctors analyzing the antibody titer in blood samples to track the efficacy of treatment for HCMV infections. Now the company has developed a gene test that can tell the doctor whether the patient is infected with a drug-resistant form of the virus. The test is based on the fact that drug-resistant forms of HCMV carry a unique gene sequence. Mitsubishi Kagaku BCL plans to combine this gene test with its antibody titration service to help doctors determine the best choices for therapy.

Mobile / Wireless

- The mobile phone service of KDDI Corp. held the top spot for the second month in a row in May for net monthly increases in mobile phone service contracts, according to results announced by the Telecommunications Carriers Association. J-Phone Co. also surpassed NTT DoCoMo Inc. knocking the mobile phone giant down into third place. The total number of mobile phone service contracts at the end of May of all the companies combined came to 76.7 million, up 0.5% from the end of April.


- Elpida Memory will get ¥81.5 billion ($687.2 million) in extra financing by the year-end, giving Japan's last big maker of standard computer memory chips much-needed funds to boost production. The amount includes a $100 million injection by Intel Corp. and investments of ¥9.5 billion ($79.9 million) each by parent companies NEC and Hitachi.


- Mitsui & Co. and Amazon Japan have teamed up to sell software for small office/home office operators through Amazon's Web site. The companies are offering discounts of up to 70% and target orders from 10,000 offices in the initial year. Under the alliance, the web site of License Online Ltd., a Mitsui subsidiary that sells PC software, is linked with the Amazon site, with License Online handling payments and product delivery.

A week in Korea tech


- Samsung Electronics Co. is expected to post a second-quarter net profit of below W1 trillion ($834 million), its lowest quarterly net profit since the fourth quarter of 2001, because of the economic downturn at home and abroad. The general downturn in global economics and a host of local factors such as slumping consumption, a strike in the local distribution industry and the company's involvement in financing its credit-card affiliate are to blame.


- SK Communications announced that it would merge one of its units, Nate.com, with an Internet community service provider, Cyworld. At the board of directors meeting yesterday, SK Communications passed a vote on its Internet portal's merger with Cyworld via a stock swap. Following the merger, SK Telecom, the largest shareholder of SK Communications, will see its stake drop by 7.1% from 89.9%, while Cyworld's biggest shareholder IMM Group will hold 7.8 % of SK Communications.

Media, Entertainment and Gaming

- Korea's mobile game market is showing signs of a slowdown, reflecting the overall downdraft in the high-tech sector. Korea is one of the leading mobile-oriented countries, with three wireless operators offering advanced cdma2000 1x services to more than 32 million subscribers. The mobile sector witnessed strong growth over the past years, prompting some analysts to claim that the industry is largely immune to negative market conditions. But the mobile gaming industry, which is estimated to be worth about W200 billion ($166.7 million) in 2003, is sputtering amid growing signs of a slump in the wireless sector as a whole. The majority of developers are struggling to jack up their profitability. Com2us, a major mobile game developer, is expected to achieve its revenue target of W5 billion ($4.2 million) in the first six months, thanks largely to its market dominance and continued release of new titles. Yet minor developers are finding it increasingly hard to meet their own revenue targets.

Mobile / Wireless

- The Korean Ministry of Information and Communication said that W-CDMA would be fully deployed across the nation by June 2006. Now that the ministry has finalized the implementation schedule, SK Telecom and KTF will be pressed hard to go ahead with the controversial new service despite growing concerns about overlapping facility investment. Korea is already offering 3G services using US-based Qualcomm's cdma2000 1x technology, but the government is eager to push carriers to implement W-CDMA as well, a move that analysts say will benefit domestic handset makers only.

- Korea's camera-module market for mobile phones is heating up as LG Innotek Co. and Samsung Electro-Mechanics recently joined the sector. Mass production of their camera modules will start from September for LG. The initial product will have a 300,000-pixel image sensor, while modules with charged-couple devices providing better picture quality will be introduced in November. LG's foray into the camera-module market reflects the firm's resolve to nurture its value-added mobile parts business. Samsung Electro-Mechanics, meanwhile, developed an ultra-slim camera module in late 2002 and began rolling out the product in January this year with the first shipments going out to customers in March. Samsung said it is targeting camera-module revenues of W80 billion ($66.7 million) this year, W210 billion ($175 million) in 2004 and W330 billion ($275 million) in 2005.

A week in tech is brought to you by FinanceAsia, and IRG, Asia's boutique investment bank to the telecoms, media and tech sectors. More can be found at:

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