A week in Japan tech
- Japan's internet access providers had a combined 9,397,426 broadband subscribers as of the end of March, more than double the 3,861,195 figure of a year ago, the telecom ministry in a preliminary report. The surge is due mainly to aggressive promotional campaigns by broadband operators, such as waiving charges on new contracts for an initial period, according to officials at the Ministry of Public Management, Home Affairs, Posts and Telecommunications.
Mobile / Wireless
- Japan's top mobile phone carrier DoCoMo said it had sold more than 10 million picture-taking handsets in 11 months, overtaking rival J-Phone. The product, which enables users to send images taken with their mobile phone via e-mail to other handsets or computers, was particularly popular among those aged 20 to 30, who made up some 60% of total purchasers. NTT DoCoMo first started the i-shot service on June 1, and has introduced 11 different types of digital-camera-fitted handsets. Rival J-Phone, controlled by British-based telecoms giant Vodafone, once led the camera phone market after launching the world's first picture-taking handsets in November 2000.
- Sony's credit rating may be cut for the first time in 17.5 years by Moody's Investors Service on concern the world's second-largest consumer electronics maker will struggle to regain its past profitability. Moody's placed Sony's Aa3 long-term unsecured senior debt rating under review for a possible cut. The rating is the fourth highest of Moody's 10 investment-grade levels.
- Two of Japan's biggest chip and computer makers have unveiled sharply different earnings, with Toshiba squeezing out a profit but rival Fujitsu losing more than $1 billion for the second year running. Fujitsu, Japan's largest computer maker, said it planned to bounce back to profit this year by shaking up its management team, although investors were less confident. Its net loss of Y122.1 billion for the year to March was an improvement on last year's record loss of Y382.54 billion, but compared poorly with Toshiba's Y18.5 billion profit on the back of booming market demand for its chips. Rival Toshiba said continued strong demand for chips used in digital cameras and mobile-phones was expected to more than double its net profit to Y40 billion this year.
- Hitachi Ltd. and Mitsubishi Electric Corp. improved their respective earnings in the year ended March 31, but aren't getting too excited about the year ahead. The two major Japanese electronics companies see little chance of a recovery in the global economy this year as corporate spending remains weak and as severe acute respiratory syndrome takes its toll in Asia and elsewhere. Hitachi's group net profit swung to ¥27.9 billion ($231.8 million) for the year ended March 31, a sharp turnaround from its ¥483.8 billion loss a year earlier. It also reported group operating profit of ¥153 billion, slightly beating analysts' forecasts ranging from ¥140 billion to ¥150 billion of profit. For the current fiscal year, Hitachi expects its group operating profit to rise 11% to ¥170 billion despite a likely 2% decline in sales to ¥8 trillion. It also forecast a ¥5 billion in group net profit for the year, disappointing investors who had hoped for more. Meanwhile, Mitsubishi Electric narrowed its group net loss to ¥11.8 billion, compared with a loss of ¥78 billion a year earlier. Contributing to the just-ended fiscal year's result were heavy valuation losses on stockholdings and changes in its accounting methods related to deferred tax assets. But the figure beat the company's own estimate for a loss of ¥14 billion. ishi Electric said it expects group sales to fall 11% this year to ¥3.25 trillion.
Media, Entertainment and Gaming
- Japanese game maker Namco has set a May 9 deadline for fellow game manufacturer Sega to respond to its merger proposal. Namco, creator of the popular Tekken fighting video games, said on April 17 that it wanted Sega to open merger talks, threatening to torpedo Sega's planned October integration with pinball-style pachinko machine maker Sammy Corp. In an effort to reduce uncertainty among investors, Namco said that it had written to Sega and wanted an answer to its proposal by next Friday. A Sega spokesman confirmed it had received the request and would continue to consider the issue in order to come up with an answer.
- Nintendo Co. announced plans to open a new game software development site in Tokyo. The new development centre will be located at the company's Tokyo branch in Kanda, Tokyo, and is expected to be in operation in September. The plan at present is to have 40-50 employees at the facility. Around 20 software developers will be recruited this fiscal year, and the rest will be transferred from the company's only existing development center in Kyoto.
A week in Korea tech
- KT Corp announced a first-quarter net income jump of 94.2% year-on-year to W973.9 billion ($799.6 million), stemming from a one-time gain of 568 billion won from an equity swap with SK Telecom. Revenue in the first quarter ended March 31 reached W2.95 trillion, up from W2.92 trillion in the first quarter of the previous year. Operating profit, however, slid to W706.1 trillion in the first quarter, down from W770.2 billion a year earlier.
Mobile / Wireless
- KTF posted W92.2 billion ($75.8 million) in net profits for the first-quarter, down 45.7% year-on-year. First-quarter sales also dropped 9.1% year-on-year to W1.2 trillion, with its earnings before interest and taxes down 16% to W195.4 billion during the same period. The poor showing is attributable to a 6% phone rate cut and reductions in subscription fees and revenues from the sales of mobile handsets that resulted from a slowing growth in new subscribers. The firm's sales and earnings is expected to rebound in the second quarter, boosted by a growth in the number of 3G subscribers.
- MSN Korea announced that the number subscribers for its avatar service connected with MSN instant messenger surpassed the 1 million mark, underscoring the potential of new business models customized for real-time communication platforms. MSN Korea, which offers Korea’s most popular instant messenger service, launched the new paid service in late February that allows subscribers to set up their own virtual characters on the Web.
A week in China tech
- Red-chip China Unicom recorded a Rmb1.29 billion net profit on Rmb15.98 billion in revenue for the three months to March. It was the first set of quarterly earnings results issued by the telecoms carrier and was the first set of results that included mobile operations in nine provinces acquired at the end of last year. Dragged down by losses from its CDMA mobile operation, the carrier saw its EBITDA margin decline to 41.2%, compared with the 45.8% recorded last year.
- A faster than expected decline in China Unicom's average revenue per user (ARPU) has raised analysts' concerns about aggressive price-cutting and sparked heavy selling of the company's shares. They closed down 2.4 per cent at HK$4.15 on Wednesday. China's No 2 mobile carrier, which operates both global systems for mobile communications (GSM) and code division multiple access (CDMA) networks in 21 provinces, saw a sharp fall in ARPU in the first quarter. GSM ARPU fell 12 per cent to 60.6 yuan (about HK$57) from last year. The CDMA figure was down 8.4 per cent to 157.9 yuan.
- Nasdaq-listed Chinese portal NetEase.com has reported a surge in profits during the last quarter and seen strong demand for its self-developed online games. The company posted a quarterly profit of Rmb68.9 million, compared with Rmb43.1 million profit in the previous quarter and a Rmb17.8 million loss a year earlier. Online games contributed about 31% to the total revenue, while wireless services accounted for 48% and 10% came from advertising.
- Advanced Micro Devices (AMD), backed by key partners in Greater China, believes there will be strong demand in Asia for two- and four-processor computer servers based on its new Opteron chip, which was launched last week. AMD officials said commitments made last week by computer industry heavyweights IBM and Sun Microsystems to build servers that run the Opteron would encourage more enterprises in the region to consider the chip. AMD Greater said about 20 computer manufacturers and systems developers in Greater China were moving to release Opteron-based servers in the next few months. These partners included Guangdong-based TCL Group, Taipei-based Mitac International, Dawning Technologies, 3D PC Systems, and Great Wall Computer in Shenzhen.
Venture Capital / Investments
- JP Morgan Chase will set up a Rmb150 million fund management joint venture with Shanghai International Trust and Investment Corp (Sitico) to tap China's vast reserves of private savings. Government encouragement coupled with growing wealth, an emerging institutional investment culture and a fast growing stock market of $520 billion have attracted the foreign involvement. JP Morgan will initially take a 33% stake - the maximum foreign holdings allowed under current rules - in the Shanghai-based fund joint venture with Sitico, the financial arm of the Shanghai municipal government. The new firm plans to launch its first fund late this year or early next year.
- ING Group announced that its China fund joint venture, China Merchants Fund Management (CMFM), raised Rmb4.5 billion through its maiden fund sale, nearly doubling an earlier target of Rmb2.5 billion. The successful fund sale by CMFM - China's first Sino-foreign fund joint venture - is seen as a positive start for a string of foreign-invested fund managers.
- Chinese personal computer giant Legend Group is planning to strengthen its overseas expansion efforts amid concerns over domestic per cent information technology consumption. The PC giant would spend at least Rmb 1 billion a year on product development to boost sales to overseas markets. Legend was also planning to increase marketing and promotion budgets by about 20% to help overseas expansion plans. As part of the company's overseas expansion, it will drop its English brand name of 19 years, Legend, and replace it with "Lenovo". It will also adopt a new logo.
Media, Entertainment and Gaming
- The Sars outbreak was hurting sales at Li Ka-shing-owned Tom.com. Some of its media businesses had suffered from the negative effect of Sars, particularly its sports-related advertising business. Sales in sports-related business had dropped at least 10 per cent, partly offset by a growth in telecom value-added services, in the first quarter. Tom.com had achieved a HK$20 million sales target for short message services (SMS). SMS daily traffic reached six million messages, up from 3.5 million at the end of last year. The publication business, which accounted for 46 per cent of Tom.com's sales last year, had not been affected by the Sars outbreak. In addition, Tom.com was in negotiation to buy Chinese Entertainment Television Broadcasting from AOL Time Warner and talks were "on track" without committing to a fixed timetable. Tom.com, which added new acquisitions every month, could see the pace of deals slow because of a cutback in unnecessary travel. However, Tom.com would become more selective as more companies were put up for sale.
- Fierce competition in the first year since China's accession to the World Trade Organization has squeezed profits at most China-based information technology companies, even though revenue continues to grow. The mainland's top-100 IT and electronics companies recorded a 5.9% dip in net profit, despite 15% revenue growth, according to the Ministry of Information and Industry's (MII) recent annual survey. The companies last year generated Rmb571.94 billion in sales revenue and net profit of Rmb23.76 billion, trimming net profit margins to 4.2% from 5.1% in 2001.
Mobile / Wireless
- Imports of mobile phones in Shanghai surged fivefold in the first quarter, according to figures published on Thursday, swelling an oversupply market that analysts believe will lead to price wars and factory closures. The Shanghai Customs bureau figures show that the city imported 664,000 mobile-phones during the period, up 530% over the same quarter of last year, of which 496,000 units came from South Korea and 165,000 from Taiwan. The main reason for the surge was a cut in import duty on mobile phones, as part of China's commitment under the World Trade Organization, from 3% last year to zero this year, with suppliers delaying delivery to take advantage of the new rates.
A week in Taiwan tech
- Chunghwa Telecom, the largest telecommunications operator in Taiwan, posted a 13.6% year-on-year fall in net profit for the first quarter of this year in reflection of higher operating costs. In the January-March period, Chunghwa Telecom reported NT$10.8 billion (about $309 million) in net profit, compared with NT$12.5 billion a year earlier. In the first quarter, Chunghwa Telecom posted NT$1.12 in earnings per share, compared with NT$1.30 a year earlier, while sales grew to NT$43.18 billion from 42.48 billion dollars. The Ministry of Transportation and Communications (MoTC) holds a 79.5 per cent stake in Chunghwa Telecom. It aims to privatise the company by the end of this year after an earlier attempt to achieve the goal in 2001 was derailed by poor market conditions.
Mobile / Wireless
- Wi-Fi and broadband Internet have come out as mainstays of the data-communication equipment industry. Taiwan's shipments of data-communications products totalled $913 million in the first quarter, according to Market Intelligence Centre (MIC), an information technology research and consulting firm on the island. Local area networking (LAN) products such as routers and network interface cards made up 56% of Taiwan's data-communications production over the quarter. The largest proportion of that segment consisted of wireless LAN (WLAN) equipment such as gateways, PC-card adapters and network bridges. WLAN equipment rose from 25% to 29% of LAN products during the quarter. Strong demand for Wi-Fi was a significant contributor to the growth.
- United Microelectronics Corp. announced its net profit surged 87% in the first quarter from the year-earlier period to $11.6 million (US dollars). UMC credited the rise in the first quarter to increased wafer shipments and revenues. Revenue in the January-to-March period rose 47% to NT$17.90 billion from NT$17.54 billion for the year-earlier quarter.
- Taiwan Semiconductor Manufacturing Co. net profit fell 34% in the first quarter to $125 million (US dollars). The decline in earnings came even as revenue rose 9.9% to NT$39.33 billion from NT$35.79 billion a year earlier. In the first quarter, the firm's average selling price fell 7% from the prior quarter, but those effects were countered somewhat as wafer shipments rose 2% in the quarter.
A week in Singapore / Malaysia tech
- Singapore Technologies Telemedia's (STT) bid for Global Crossing is likely to receive United States government endorsement now that Li Ka-shing's Hutchison Whampoa has withdrawn from the deal. Officials from STT and Global Crossing expect the renewed bid to proceed smoothly. STT had been Hutchison's partner in their bid for Global Crossing. But Hutchison withdrew on Wednesday after criticism in Washington that the company could not be trusted with US network assets because of its allegedly close relationship with the Chinese government and military.
- Singapore's market for semiconductor chips was worth $9.7 billion last year, up a healthy 11.2% over 2001, according to a study just released by research house Gartner Inc. Of that figure, $3 billion worth were consumed within the country, while $6.7 billion worth were re-exported either in finished products or as chips. Gartner expects Singapore - and the Asia-Pacific region - to recover in overall IT spending in the second half of 2003, thereby leading to a rise in demand for semicon products later this year or early next year. Recovery in the PC market and the cell phone handsets application segment are the two major drivers in the semiconductor market.
- Singaporean computer-chip testing firm ST Assembly Test Services posted its ninth consecutive quarterly loss, but the result was much better than a year earlier and the firm reported robust customer orders. The world's sixth-largest microchip tester and packager reported a first-quarter net loss of $9.6 million, two-thirds smaller than the loss of $26.6 million recorded in the same period last year, and beating the expectations of many analysts. The reduced loss was driven by an almost doubling of revenue from the first quarter of last year, after the state-controlled firm increased capacity, invested in advanced new packaging equipment and expanded into new markets.
A week in Hong Kong tech
- As Hong Kong residents continue to shun shopping malls amid fears of contracting the killer Sars virus, sales of online goods and home delivery meals have surged, providing a bright spot for the city's gloomy economy. Sales of music compact discs (CDs) and movie digital versatile discs (DVDs) had seen the greatest rise, said Chow, as frightened Hong Kongers avoided crowded cinemas, causing a major downturn in box office revenues. Hong Kong's largest supermarket chain, Park 'n Shop, has seen online sales soar 40 percent as many residents, afraid to venture out of their homes, turn to the Internet seeking delivered-to-their-door groceries.
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