A week in tech

A round-up of all the latest tech news.

Japan

Internet

- Google has established an R&D base in Tokyo, the company's third base outside the US and an addition to those set up in India and Switzerland. The Tokyo Centre is expected to collaborate with Google's US-based R&D staff in developing technologies and services for the Japanese market, aside from working with leading Japanese telecommunications companies and electronics makers. Until the setting of the Tokyo Centre, all the technologies and services offered in Japan by Google were Japanese-language versions of what Google was mainly offering. The local R&D activities will concentrate on technologies that can improve the precision of Japanese-language searcher. Google is looking to this base as one from which a Chinese-language service would also be launched.

- Kyocera Corp. is producing and supplying base stations to be installed outdoors and special terminals that connect to personal computers in South Africa. The company is targeting 50 base stations and 20,000 terminals by June. The commercial service will be using iBurst, wireless high-speed broadband communications, which are capable of downloading speeds of up to 1 megabit per second. These shipments combined with those to Australia are expected to generate 30 billion yen ($277 million) in revenue for fiscal 2007, the company said.

- Mizuho Corporate Bank announced that it has developed jointly with Mizuho Information & Research Institute Inc. a new information system for regional banks that will provide sales staff the capacity to share their financial expertise and marketing know-how. In the new system, a bank employee will open a web site that will inform their colleagues about their work and specialization. Those who want to explore customer base and gather relevant information can do so under the system before they leave for a sales call. The system is seen as replacing the traditional printed instruction manuals on marketing. The site can also display data on stock prices and foreign exchange rates as well as corporate news.

Mobile/Wireless

- Toshiba Corp. said it had sold its 33 percent stake in a mobile phone joint venture in China to a local partner. The company, Japan's second-largest electronics conglomerate, set up the venture with Nanjing Putian and a Hong Kong-based firm in 2000 with the aim of manufacturing and selling Toshiba handsets on the mainland. A Toshiba spokesperson identified the slow take-off of the high-end mobile phones as the one that triggered the withdrawal. The move of the company is seen as a withdrawal from a highly competitive market with a lot of potential. Toshiba said that their withdrawal does not mean the company had flown out entirely from the Chinese market as the company said it would consider an appropriate timing for re-entry. In the meantime, Toshiba said it plans to push ahead with its mobile phone business in Europe, the region where demand for high-speed 3G mobile is increasing.

- Japanese cellular phone manufacturers are reported to be focusing on their entry into the 3G cell phone market in China. NEC has already expanded its network of stores in China from 700 last June to the present 2,000. The company also said it plans to increase its sales by about 50 percent to 3 million units. Another company, Matsushita Electric Industrial Co. subsidiary Panasonic Mobile Communications is seeking agents that will sell its handsets. The company also aims to increase deliveries to cellular service firms. The two firms have market shares of less than 2 percent each in China. The 3G cell phone market is attracting the two companies especially that licenses for 3G cell hones are expected to be given at the end of this year.

Media, Entertainment and Gaming

- Sony Music Entertainment and three other major record and music software companies in rejecting before the Fair Trade Commission (FTC) the charge that they have blocked other firms from entering the mobile phone ring-tone service. Sony with Avex Network, Victor Entertainment, Universal Music Group and Toshiba EMI set up a company called Label Mobile Inc., which offered the "ring-song" service, a service that enables users to download part of a song from the artist's original version to their mobile phones to use as ring tones. The group, owning the master versions of the songs, proceeded to block about 30 companies by refusing them the use of the master versions. The act, according to FTC constitutes a practice that violates the Antimonopoly Law.

- Nintendo said it has decided to distribute more of its profits to shareholders because of what it got for 20 billion yen ($184.8 million) in foreign-exchange gains on dollar-denominated assets in fiscal 2004. The move of the game console maker is said to be a reaction to strong calls for higher dividends from overseas investors who took note of the fact that the company held 780 billion yen ($7.2 billion) in cash and deposits at the end of December last year. Nintendo plans to pay 200 yen ($1.8) in dividend for the second half of fiscal 2004, up 130 yen ($1.2) from a year earlier.

- Toho announced a 7.1 percent increase in its equity stake in Fuji Television Network Inc. after acquiring an additional 1.4 percent of outstanding shares in the TV broadcaster. The additional share acquisition of Toho was said to have been made upon the request of Fuji TV as a step to "strengthen the position of stable shareholders" who were holding their shares on a long-term basis. With the move, Toho becomes the third-largest shareholder in Fuji TV after Softbank Investment Corp. and Daiwa Securities SMBC Co. Toho, which is one of Japan's major movie production and distribution companies, said the additional share acquisition is aimed at strengthening its business relationship with Fuji TV.

Software

- NEC Corp. and Sun Microsystems Inc. announced the expansion of their partnership as they seek more business opportunities in the global market. Covered by the expanded cooperation is NEC's boosting of system integration services for servers operating on Sun Microsystems' "Solaris" operating system. With the Solaris-based servers, NEC said it would be able to respond more to corporate customers' needs to integrate servers running on different operating systems such as Unix, Linux and Windows. The team will be working on the provision of the middleware that links Solaris and customers' application software.

Hardware

- Fuji Photo Film Co. reported its development of a film material for LCD television that expands the viewing angle beyond 160 degrees both horizontally and vertically. The company will begin manufacturing this film called WV Excellent-Ace for LCD TVs with 25-inch or smaller screens. The company said it would make WV Excellent-Ace at a rate of around 30 million sq. m. a year in 2006. It has a capacity to make 50 million sq. m. of angle-widening film a year. It is planning to have a factory expansion that will help boost total capacity to 90 million sq. m. in June.

- Avix Inc., a Yokohama-based developer and marketer of LED systems, plans to go public on the JASDAQ Securities Exchange. The company is planning to boost its two main operations, composed of supplying components to domestic and foreign manufacturers of LED displays and providing computer graphics and other image content to LED system users. Its main product is called Cyber Vision, a large outdoor color display. In the year ended March 31, the company is reported to have posted 2.8 billion yen ($25.8 million) in parent-only sales, a 29 percent decrease from fiscal 2003. Funds raised through the initial public offering will be used by the company to repay bank loans so that the company can strengthen the firms' financial structure.

- Matsushita Electric Industrial reported the settlement of its patent infringement row over plasma display panels with LG Electronics. With the agreement, the companies dismissed the applications of the import suspension and other legal actions in Korea and Japan with regard to their respective patents. The settlement also brings the two companies into a cross-licensing agreement regarding PC and DVD specifications.

- Fuji Photo Film said it would build a second plant in China for the production of printing plates. The move is part of its efforts to expand its printing business. The film and camera maker has earmarked $39 million to build the plant to be operated by its new wholly owned subsidiary, Fuji Photo Film Printing Plate (Suzhou) Co. The company will be manufacturing in the pre-sensitized plates, commonly known as PS plates, and computer-to-plate, or CTP, plates at the plant.

Semiconductors

- Elpida Memory Inc. plans to move the assembly and testing stages of memory chip production to two firms in Taiwan as early as fiscal 2007. With cost cutting as the reason for the move, Elpida's decision marks the first time that a major Japanese chipmaker will shift all of the latter stages of production overseas. The processes of cutting out each chip from wafers and finishing the products are handled by four companies at home and abroad presently. These are the same processes that, after the transfer, will be done at two Taiwanese firms: Walton Advanced Engineering Inc. and Powertech Technology Inc.

- Nippon Systemware Co., (NSW), plans to introduce a one-stop system chip fabrication business aimed at start-ups. According to the company, production will be outsourced to Taiwan Semiconductor Manufacturing Co. and will begin in July with 300,000 units a month. The plan is to expand it to 1 million units monthly by the end of fiscal 2005. To boost its price competitiveness, NSW will sign an exclusive contract with TSMC and receive discounts on its charges. The product quality will be guaranteed by a new department to be created at NSW. Clients will only focus on the theoretical design of the system chips. The practical design and testing will be conducted by NSW while TSMC will do the circuit printing process. Taiwan's Advanced Semiconductor Engineering Inc. will handle mainly the actual fabrication.

Korea

Media, Entertainment and Gaming

- Electronics manufacturers Samsung Electronics and LG Electronics said they plan to provide HSDPA-enabled handsets to mobile-phone carriers SK Telecom and KT Freetel for their WCDMA services. These services will be expanded across the nation in the second half of the year. HSDPA is a new third-generation mobile telephony specification designed that is able to deliver data at a peak rate of 14.4 Mbps, considered to be better than the third-generation WCDMA networks that offer data rates of 2 Mbps. By adding more bandwidth, the HSDPA system would allow individuals to send or download data quicker.

Information Technology

- Official sources in the government point to services rather than product as the driving force behind Korea's information and technology industry. The government has identified nine product areas as growth engines: mobile telecommunication; digital televisions and broadcasting devices; home network devices; IT system-on chip; next-generation PCs; embedded software; digital contents and software solutions; telematics devices; and intelligence service. The ministry source said the reason for the selection of the nine growth sectors is that said areas are noted for their fast growth. Infrastructures also exist to support the development of the key growth engines.

Software

- Sun Microsystems opened its first research and development center in Asia in Korea. The center plans to develop a wide range of software utilizing its Java programming language. The company said it plans to spend some $50 million in the next four years to support the center's development activities. South Korea leads the world in broadband Internet usage, with more than two-thirds of its 15 million homes connected to high-speed Internet.

China

Internet

- Netease is going to focus on expanding its Internet portal business this year. For the past two years, Netease has concentrated on the development of online games and e-mail systems with the firm becoming one of the biggest online games operators earning profit along the way. Netease said that this year the company would focus on Internet portals, recognizing big potential in online advertising. From its $115.7 million revenue in 2004, 66 percent of this was attributed to online games. The company, according to the report, will focus on the development of Netease's Internet content business and increase investment in the area. The company has already formed a strategic partnership with Chinese sports brand Lining, with the sports channel on the Netease website to be called Lining Sports Channel. Netease said it would team up with NASDAQ-listed financial information web site China Finance Online with the aim of strengthening the width and depth of its website content.

Media, Entertainment and Gaming

- The move of China to open film and television sector to foreign investments is being perceived as 'cautious' as the country's media regulator looks if some overseas companies are moving much to fast with their reforms. The State Administration of Radio, Film and Television (SARFT) and the Ministry of Commerce have been reported to give a go-signal to only one foreign-invested production joint venture between Sony Pictures Television International and a China Film Group subsidiary Huaso Film/Television Digital Production. Viacom for one has not set up a children's programming joint venture with Shanghai Media Group even if the U.S. media giant said it has already approval from SARFT. A planned joint venture between the National Geographic Channel and China Central Television is among those waiting for approval. Industry sources said SARFT was particularly concerned about how overseas media groups were exerting de facto control over regional broadcasters by selling their time slots to advertisers on a commission basis as well as providing programming.

- Digital Media Group (DMG) announced that it is launching a $6 million round of venture financing by way of partnership with Japanese investors. Gobi Partners leads the investment that has significant contributions from NTT DoCoMo and Dentsu. A DMG official said the funds would be used to hasten the nationwide expansion of DMG's media platform, which will be used so that advertisers can reach out China's massive consumer population in an effectively interactive way. Industry analysts are saying that the group will bring an early stage venture capital focused on the digital media sector, telecoms and technology expertise as well as advertising experience to the field of digital out-of-home media. DMG is the first company in China to operate PIDS (Passenger Information and Direction Systems) inside metro networks.

- China Business Press Release Newswire (PRnews.cn) and Factiva, a Dow Jones and Reuters Company, announced that full-text and multimedia news announcements from PRnews.cn are now available through Factiva. Covering important and major Chinese companies, organizations and government bodies, the materials from PRnews.cn are now made accessible to more than 1.6 million Factiva subscribers. News release subjects include Industry Focus, Company Conferences, Exhibitions, Corporate Announcements, Stock Market News, Financial News and many others. PRnews.cn has a customer base that includes more than 500 publicly listed companies on the China Stock Exchange Market, a number that represents about one-third of all publicly listed companies in China. PRnews.cn is a subsidiary of Beijing-based TIXA Internet Technology.

- Xinhua Finance said its board has approved a plan for the implement of a stock split within a year. The news and financial information provider said moves in the company's share price would determine the timing of the split as well as the split ratio. Listed for startup companies last October, Xinhua Finance is the first non-Japanese company to list on the Mothers market. It was also the first initial public offering in Japan by a China-related company.

Mobile/Wireless

- Lucent Tecnologies said it will invest $80 million in its 3G mobile telephony research center in Nanjing, which brings Lucent's investment in the center to a total of $200 million. The investment is the latest in a series of investments by foreign investors readying themselves for the issuance of 3G licenses this year. Giant firms like Huawei, ZTE and Datang are seen as big winners when bids for 3G equipment are held. Foreign vendors like Siemens, Nortel and Alcatel are anticipating that one operator will deploy TD-SCDMA and are working on partnership with local companies. Lucent currently has a 21 percent market share in 2G and 2.5G CDMA equipment in China. Analysts believe Lucent hopes to leverage its strength in CDMA 2000 to secure contracts if China Unicom's existing CDMA network follows its movement toward 3G.

- Ranger Wireless Corp. announced that the company has signed cooperation and licensing agreement with Soyea Technology. Under the agreement, Ranger Wireless Corp will market Soyea mobile handsets in North American and other global markets excluding China. Soyea Technology is considered to be at the top 100 electronics and communication companies in China. The Chinese firm has total revenue of about $150 million, with its cellular manufacturing unit selling over 1.5 million units in 2004. Ranger Wireless Corp is a company that markets services to mobile operators, content providers, ISPs and corporate enterprises worldwide that allow them to provide their subscribers, customers and employees with content and mobile instant messaging

Telecommunications

- China Netcom Group, China's second largest fixed line company, posted a turnaround net profit of 9.2 billion yuan ($1.1 billion) last year, compared against the net loss of 11.1 million yuan ($1.3 billion) in 2003. The figures are the first results since its initial public offering. Identified as the factors that drove the growth in 2004 are broadband and Internet services, which grew by 145.3 percent to 6.2 million subscribers. From its pan-Asia network, revenues amounted to 2.6 billion yuan ($318 million) in 2004, a remarkable 91.7 percent growth. The good performance in broadband services and international telecommunications services happens amidst the decline in its core business: PSTN (public switched telephone networks) usage went down by 5.8 percent because of mobile substitution and the accompanying 25.4 percent decline in revenues from leased lines. The company also disclosed that in order to expand market share, it is considering acquiring four provincial networks in Heilongjian, Shanxi, Jilin and Inner Mongolia, which are currently held by its parent. An official also announced that China Netcom Group has entered into a memorandum of understanding with PCCW regarding cooperation in the six cities and provinces in Southern China.

Semiconductors

- Network equipment maker Shenzhen Donjin Communication Technology Co. Ltd., a company targeted by Intel Corp in its first copyright lawsuit in China, countersued by accusing the U.S. chip giant of engaging in illegal monopolistic practices. The company's countersuit mentioned how the Intel software was so tied to its hardware that it prevented customers from using the software in a third-party hardware. Donjin is asking the court to order Intel to end monopolistic practices. Intel, in January accused Donjin of illegally including Intel software in its products. Officials of the U.S. firm were not available for comments.

- China, through the State Council, announced its plan to provide funding and increase income-tax-breaks for semiconductor companies. Having scrapped a rebate on value-added tax, the State Council said it is looking to providing funding for up to 50 percent of the cost of a chip manufacturer's R&D project. The industry official said the chipmakers might also be granted exemption from the payment of income tax for up to 10 years. An official of the China Semiconductor Association sees the research funding and income tax breaks as form of compensation that would help chipmakers affected by the cancellation of the VAT rebates. The statement issued by the Ministry of Finance, Ministry of Information Industry and National Development and Reform Commission stated that funding may reach 50 percent. From the present two-year exemption and three years at half rate given to preferred companies, the government mentioned plans to increase chipmakers income tax breaks to five years exemption and five years at half rate.

Taiwan

Semiconductors

- With global demands on the rise, two leading foundry service providers announced increases in their sales. Taiwan Semiconductor Manufacturing Co. (TSMC) saw its March sales post a 2.4 percent growth month-on-month to NT$17.6 billion ($558 million) from NT$17.2 billion ($545.3 million) in February. The firm, however, said the figure marks an 11.8 percent decline year-on-year. The company attributes the sales increase to higher wafer shipments brought about by higher demands. The company announced that its parent sales posted a 3.2 percent decrease from a year earlier to $55.6 billion in the first quarter to March. United Microelectronics Corp. (UMC) announced sales rising 14 percent to NT$7 billion ($222 million) in March from NT$6.1 billion ($193.4 million) a month earlier. UMC said its parent sales in the first quarter to March had a 19.9 percent decline to NT$20.2 billion ($640.4 million) from NT$25.3 billion ($802.1 million) in the previous quarter. The company expected its average selling price in the current quarter to go down 10 percent sequentially.

Information Technology

- Taiwan-based Quanta Computer Inc. and Massachusetts Institute of Technology (MIT) announced their agreement to team up on a $20-million, five-year project aimed at developing a technology that will have PCs, laptops, cell phones, and handhelds to work together "seamlessly, intuitively and in sync." The agreement, financed by Quanta, is seen as the first phase of a long-term partnership to incorporate new ideas into products. Under the agreement, MIT will be putting together prototypes and Quanta will put the ideas together into more solid prototypes. Quanta is considered the world's largest producer of laptops, manufacturing portable computers and other devices for companies like Dell Inc., Hewlett-Packard Co. and IBM.

Hong Kong

Mobile/Wireless

- Mobile carriers have urged the Office of the Telecommunications Authority (OFTA) to consider changing the present wholesale charging model and put in a calling-party pays (CPP) principle. Under CPP principle, an operator pays the receiving-end network for the cost of conveying the voice call, a system that is closer to the fair user-pays principle. The concern is born out of the convergence of fixed and mobile services, the regulatory impact of which will be the basis of a consultation to be conducted by OFTA.

Media, Entertainment and Gaming

- SCMP Group, which puts out the South China Morning Post and Sunday Morning Post, registered a higher than expected HK$317.1 million ($47.5 million) profit last year, compared to HK$1.7 million ($218,000) in 2003. The reason for the profit was the resurgence in advertising spending, which was driven in part by an active job market. A poll of 13 brokerages by Thomson Financial has estimated a profit of HK$271.7 million ($34.8 million) from sales of HK$1.4 billion ($179.5 billion). The group's official web site, SCMP.com, also made profits, with 22 percent growth in its turnover.

Singapore/Malaysia/Philippines/Indonesia

Internet

- More Singaporeans are using infocomm for "work, learn and play", according the 2004 Annual Survey on Infocomm Usage in Households and Individuals by the Infocomm Development Authority (IDA) of Singapore. An IDA official said the survey results show the steady transformation of nation into a well-connected society. The survey shows Internet access in household stands at 65 percent. Officials explain the steady growth of computer ownership and Internet access to the various national infocomm usage education programs such as National Infocomm Training and Literacy Programme and other similar activities.

Telecommunications

- Singapore Telecommunications Ltd.'s Optus unit will begin to sell subscriptions in its rival Telstra Corp.'s Foxtel Digital Television. Under the new agreement, Optus will do an upgrading of its cable network and then offer Foxtel Digital television and entertainment to its telecommunications customers. Australia's biggest phone company, Telstra, owns 50 percent of Foxtel. Optus is considered as Telstra's biggest rival for phone services in Australia.

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