A week in China tech
- The annual result for Legend last week highlighted some transitional risks the firm had to face in its quest to be the next Dell in China. Legend started branching out to develop computer and technology-related businesses. Last year, Legend made a HK$33 million ($4.2 million) provision on a 40% stake in Yestock, and the company saw drastic profit deterioration in its handset manufacturing business in the first three months of this year. Two months ago, Legend re-branded its products "Lenovo" to generate growth outside China. Legend Group president and chief executive Yang Yuanqing believed the company had strengthened core competencies in the past year by expanding value-added services and technological innovations.
- Distributors of internet games and films will soon have to obtain special licenses before sending the material to millions of computer users in China. The decision by the Ministry of Culture is an effort to control violent, sexually explicit or anti-government content. From July 1st, the ministry will allow only registered companies to distribute "cultural products" via the Internet, and make them apply for special licenses. The rules cover music and artwork and apply both to for-profit and non-profit distribution, including redistribution. They follow last year's State Council order that government ministries in charge of the Internet do more to guard against banned content. However, people in the information technology field say the regulations will not change much. High-profile game and movie distributors are based overseas and the government lacks co-ordination to control the person-to-person distribution of films or games within the country
- China's Huawei Technologies is ordered by a U.S. federal judge to stop using some software that rival Cisco Systems Inc. claims was stolen and copied. The preliminary injunction bars Huawei from using a portion of the software that runs Cisco's routers, and from using user manuals and on-line help files that Cisco claims were copied. Huawei said it had unknowingly obtained a small amount of Cisco software in 1999. The Chinese company promised to re-introduce its routers without the tainted software.
Mobile / Wireless
- SK Telecom said it would form a joint venture with Eastern Communications Co., stepping up its efforts to make inroads into the Chinese mobile market. The joint venture will be named FaceOne, a marketing unit that SK Telecom hopes will set the stage for its bid to win a significant share of the Chinese CDMA market. Under the agreement, FaceOne will be in charge of the mobile phone marketing, distribution networks and development of value added services to help China Unicom to expand its user base. SK Telecom will apply its marketing, distribution and service know-how to the joint venture. SK Telecom said it would invest $3 million in the joint venture through its subsidiary, SK Telecom China, securing a 35% stake of the startup. Eastern Communications is a unit of the Putian Group, a telecom equipment maker in China that has a total of 54 subsidiaries. The group posted $7.8 billion in revenue last year.
- Lucent Technologies said it would invest $50 million in China to develop a research facility dedicated to third-generation (3G) mobile communications technologies. The decision to increase investment in China is due to the success of the Chinese research and development division, said Mary Chan, president of global wireless research and development for Lucent Mobility Solutions Group. The facility will focus on code division multiple access (CDMA) and universal mobile telecommunications system (UMTS) technologies. Lucent already has about 3,000 employees in China at centres in Beijing and in the eastern cities of Shanghai and Qingdao.
- Nokia Corp. has been granted a license to make and sell mobile products using CDMA technology in China. BNMT, Nokia's manufacturing joint venture in China, is now able to proceed with its plans to introduce its first CDMA-based products in China. The company intends to start deliveries of its first CDMA terminals to the Chinese market during the second half of 2003.
A week in Taiwan tech
- Formosa Plastics Corp. is entering the market for plasma display panels with a cost-cutting strategy it hopes will grab market share from larger rivals in Japan and South Korea, according to a top executive at the Taiwanese industrial conglomerate. Its Formosa Plasma Display Corp. venture began pilot production in April of standard 42-inch plasma display panels used in large flat-panel television sets. The company expects to start mass production in August and to produce 10,000 panels a month by year-end.
- Spurred on by SARS fears, Taiwan electronic firms have hedged their expansion of operating in the low-cost mainland with projects in Eastern Europe. The island's leading downstream computer firms are building plants in the Czech Republic, Hungary and Poland, seeking an alternative cheap base to the mainland to serve the large Western European market.
- Chunghwa Telecom said the parliament's decision to restrict government sales of its shares would not derail plans to offer some of the stock as American depositary receipts (ADRs) overseas. The decision of the legislators followed the government's proposal to convert 13.8% of Chunghwa shares into ADRs, said spokeswoman Shen Fufu.
A week in Singapore / Malaysia / Philippines tech
Mobile / Wireless
- Digital Telecommunications believes there is still enough room left in the Philippines' mobile-phone industry to carve out a niche for itself, no matter how expensive the battle. When it first launched Sun Cellular in March, Digitel picked up 100,000 subscribers almost immediately through an aggressive promotional campaign. People in the industry say the company has doubled its subscribers since then.
- Chartered Semiconductor Manufacturing will post a smaller-than-expected quarterly loss, largely on demand for a new generation of high-end chips used for computer memory, graphics and other advanced applications. The Singapore chipmaker's stronger forecast came on the heels of Taiwan Semiconductor Manufacturing Co. announcement that shipments would surge more than 20% in the second quarter on increased consumer demand. But Chartered disappointed investors by forecasting revenue growth of only 17 to 20% for the three months to June - below market expectations of about 20 to 25%.
- Singapore Technologies Telemedia (STT) had a binding contract to buy Global Crossing that forbade the bankrupt telecommunications firm from considering another offer from United States investor Carl Icahn. Mr. Icahn's United States-based XO Communications said it had offered more than $700 million to buy Global Crossing. STT had agreed to pay US$250 million for a 61.5 per cent stake in the U.S.-based fiber-optic network and STT's binding contract with Global Crossing meant it could not consider a competing bid.
A week in Hong Kong tech
Media, Entertainment and Gaming
- Hong Kong has so far failed to carve its niche in the booming online gaming market which is one of the region's most lucrative technology businesses, with subscriptions last year valued at $533 million, according to International Data Corp. South Korea has the biggest share of the online gaming market at 54.3%, followed by Taiwan with 25.9%, says IDC. The mainland has 16.8%, while online-savvy Hong Kong has a share of just 2.5 per cent. Lineage, the world's biggest online MMORG, is the flagship game of Korea's NCSoft. With more than three million subscribers and over 300,000 players at any one time, it is probably the most popular MMORG in Japan, Korea and Taiwan. Another hot online game developed by a Korean company is Legend of the Mir. It is probably the most popular MMORG in China, with about a million subscribers and 200,000 players at any time. The U.S. pay-to-play business model differs from that in Asia, with most online games charging a flat monthly fee of about US$10. In Asia, many MMORGs are pay-as-you-go, with game time cards for sale at software stores. Each card offers about eight hours of online play.
Mobile / Wireless
- Microsoft has launched the Smartphone in Hong Kong in an effort to secure its foothold in the mobile phone market. The QTek 7070, featuring Microsoft's Smartphone 2002 operating system, is being offered through partners Synergy Technologies and CSL. Hong Kong is the second market in which the phone has been launched in Asia, after the Philippines. Microsoft has gotten off to a poor start, as reports of software glitches led to a lackluster response, and British mobile phone maker Sendo launched a lawsuit against the software giant for allegedly stealing its software. Plans to launch the phone in Germany three weeks ago with T-Mobile were cancelled reportedly due to technical glitches.
- Cable & Wireless PLC sold its remaining stake in PCCW Ltd. for about $400 million, a move analyst said would lift a major uncertainty that has clouded the Hong Kong company's stock for months. C&W said it placed 651.9 million shares -- its remaining 14% stake in the former Hongkong Telecom -- with investment bank Citigroup Inc.. C&W has long said that the stake wasn't a core holding -- a matter that came into prominence after the company appointed a new chairman a few months ago as part of a massive restructuring plan. The sale of its PCCW stake came a day after the U.K. company reported an even bigger loss than a year earlier and announced it would withdraw from the U.S. market and cut 1,500 jobs in its U.K. business.
- Hutchison's H3G UK launched two tariff plans charging voice calls at 4.5 pence (7.4 US cents) to five pence per minute, well below the peak rates of between 15 and 22 pence offered by most British 2G operators. The aggressive pricing strategy indicates a clear shift by Hutchison on its 3G services, moving away from high-end mobile data services back to basic voice services that can satisfy the needs of more than 90% of mobile users.
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