A week in tech

A round up of all the latest tech news.

Japan

Telcoms

- NTT DoCoMo overtook KDDI as the largest Japanese mobile phone operator in 2005 in terms of net growth in subscriptions, according to the Telecommunications Carriers Association. The group said the number of subscriptions to NTT DoCoMo increased by about 2.4 million units on a net basis - new subscriptions minus cancellations. KDDI, the operator of "au" phones, fell to second place with 2.3 million units in net increases. The figure takes into account subscriptions to the TU-KA cell phone service group, which was acquired by KDDI last year. Vodafone K.K. ranked third with a net decline of 43,000 units. NTT DoCoMo's return to the top spot came amid the popularity of its new "Push Talk" service, which enables up to five people to talk to each other at the same time. Its "wallet" phone service, which adds an electronic money function to a mobile phone, was also favoured by users, the association said. Vodafone saw a net decrease for the first time due to the negative effects of its delayed introduction of third-generation handsets capable of high-speed data transmission. Overall, mobile phone subscription in Japan totaled about 90.1 million units, a growth about 4,745,000 units, which represents the smallest margin of increase since 1996. The result is seen as pointing to the near saturation of the market for mobile phones.

Media, Entertainment and Gaming

- CinemaNow Inc. announced its support for Intel Viiv-technology-based PCs on a global basis. In 2005, CinemaNow and its partners launched CinemaNow Japan to better serve the expanding Japanese market on a more localized level. CinemaNow Japan recently became the first online service to offer movie downloads from a major Hollywood studio to the Japanese market via an online subscription over the open internet with the addition of content from Warner Bros. Throughout 2006 CinemaNow will continue its international expansion into new territories, all of which will make content available for Intel's Viiv technology platform. CinemaNow legally offers content from a library of more than 7,500 new and classic movies, television programs, music concerts and music videos from 20th Century Fox, ABC News, Disney, HDNet, Lions Gate, MGM, Miramax, NBC Universal, Sony, Sundance Channel, Warner Bros. and more than 250 other licensors via downloading or streaming. CinemaNow continues to be an innovator in the video-on-demand industry with the introduction of high-definition content and support for portable media devices. CinemaNow counts Menlo Ventures, Lions Gate Entertainment, Microsoft, Cisco Systems and Blockbuster as investors. CinemaNow Japan as established as a joint venture between US-based CinemaNow, Inc., Tokyo-based transcosmos inc., and US-based Microsoft Corporation to provide broadband video-on-demand services in Japan.

Hardware

- Toshiba is looking to grow its consolidated operating profit to approximately 30 percent, a figure that will allow it to hit over 200 billion yen ($1.7 billion) in fiscal 2005, a performance seen as beating its previous estimate by more than 30 billion yen ($262.7 million). The major electronics firm projects that booming semiconductor sales as well as strong sales of digital products and medical systems will boost its earnings, marking the first operating profit increase in two years. Group sales are now seen increasing 6 percent to 6.2 trillion yen ($54.3 billion), more than 200 billion yen ($1.7 billion) greater than its previous estimate. Demand for flash memory chips, which are used in portable digital music players, is growing. Operating profit from the semiconductor segment is now seen surpassing 100 billion yen ($875.8 million), compared to the initial estimate of 75 billion yen ($656.8 million).

- Sharp said it hopes to generate revenue of 980 billion yen ($8.5 billion) from its liquid crystal display (LCD) business alone in the financial year to March next year, a figure that is approximately 18 percent more than in the current fiscal year. Flat-panel TVs are proving hot-sellers in Japan as fierce competition drives down prices. It also helps that consumers are becoming less cautious amidst the improving economy. Sharp, Japan's largest maker of LCD panels and televisions, said it plans to sell six million LCD TV sets in the next fiscal year, 50 percent more than in the current term. Sharp has set aside 275 billion yen ($2.4 billion) for capital investment next year, up from 220 billion yen ($2 billion). For the financial year to March this year, Sharp expects a net profit of 87 billion yen ($762 million) on revenue of 2.7 trillion yen ($26.6 billion), both of which will be record figures if achieved.

Semiconductors

- IBM, Sony and Toshiba announced their joint partnership aimed at the development of production technologies for chips with circuit widths of 32 nanometers, a level of technology beyond the next generation. The three firms said they are researching basic technologies needed to fabricate 32nm semiconductors by gathering technicians at an IBM research facility and production site in the US state of New York over the next five years. They expect to start fabricating such chips in volume around 2013. Details about funding and human resources were not disclosed. Currently, the most advanced chips in the market are fabricated using 65nm technology, with major chipmakers working on development of next-generation chips with 45nm circuit widths. By beginning development of 32nm chips soon, the three companies hope to gain an edge on rivals with huge development budgets, such as US chipmaker Intel Corp. and Samsung Electronics of South Korea. Since 2001, IBM, Sony and Toshiba have been jointly developing the Cell microprocessor, which will be used in Sony's PlayStation 3 game console due out this year. In addition, Sony and Toshiba are already collaborating on development of 45nm process technologies.

Korea

Internet

- Intel announced partnerships with South Korean firms SK Telecom and NHN. The two firms will provide music, movie and online game contents to the Viiv home entertainment system. The new platform is composed of Intel's Centrino dual-core processors, chipsets and network controllers. It can perform as a home entertainment hub, which provides games, music, and movies and e-mail service on TV screens using a remote control. The Viiv PCs will be made by some 30 PC manufacturers, such as Samsung, LG, TriGem and many others. It will use Microsoft's Media Center Edition (MCE) as its operating system. SK Telecom, the nation's largest mobile carrier, is providing its on-demand music and music video download service Melon. The company also plans to launch its famous Internet community service Cyworld for Viiv soon. South Korea's leading Internet company NHN also joined the Intel team. NHN will provide its movie and video file streaming service via Naver, the largest Internet portal in South Korea, as well as its Hangame online game portal.

- KT announced the construction of what is reputed to be Asia's largest internet data centre (IDC), targeted for completion in April, 2008. KT already has 13 IDC and data centres in Korea. The IDC newly established for enhancement of internet business will be set up on the basis of international standards and KT's own standard and experience in construction and operation.

- Cyworld, a leading Internet firm, announced its plan to enter India. Cyworld is South Korea's largest personal homepage services company and has over 17 million users in South Korea alone. Also known as an Internet-expression company, it recently set up base in China and Japan. The site is also popular for 'Cy-ing', the technology that allows postings or uploading photos onto Cyworld. The company calls its subscribers "Cyholics", or someone who is addicted to Cyworld. The company is still evaluating various options for its India foray. Even though an internet firm does not need physical presence, a base in the country is nonetheless seen as helping it localize content and target the market better, while also increasing the number of internet advertisements, which helps in building a brand image. Cyworld may also offer software development contracts to various companies for its ongoing expansion plans in the country. This raises the number of multinationals looking to foray into India to approximately eight, including Amazon India, Yahoo! India, Google and MSN India, among others.

Mobile/Wireless

- KTF denied a report that it may double the amount it had planned to spend on its 3G network, following NTT DoCoMo's 10 percent stake acquisition in the company last month. The company , which reported earlier as having plans to spend 697 billion won ($710 million) this year and next on its 3G network, may almost double that amount to expand its network instead of using SKT's 3G network. KTF said the company has no plan to drop its plan to use some of SKT's networks. KTF said that it will spend 350 billion won ($356.5 million) this year on infrastructure and has not set spending levels for 2007. KTF also said that the spending amount quoted in some reports was inaccurate.

- DMB is predicted to become a key part of global broadcasters' strategies for future business diversification, and will provide tactical momentum driven by bundling of services. According to Seoul-based ABI Research analysis, DMB may emerge as a multimedia and broadcasting sub-function for WiBro or WCDMA handsets, similar to the situation that developed with camera- and MP3-equipped phones as they became mainstream. The study said that the long-term value for DMB users will lie in the content and the applications that can deliver differentiated and personalized broadcast media. The study also says that there are two things DMB operators must face: technical integration and provision of sufficient amounts of compelling content. After the commencement of S-DMB and T-DMB commercial services in May and December, 2005, European operators such as TF1 and the BBC are offering T-DMB pilot services with successful deployment experience and proven performance. ABI Research anticipates intense competition in European regions for mobile TV services given the numerous technologies and vendors.

- Reigncom, popular for iRiver, announced that it has entered into an agreement to cooperate with Posdata, the owner of WiBro's original technology, in WiBro handset business. Under the agreement, Reigncom will launch mobile WiBro handsets powered by Posdata's WiBro chipset this year. The two companies have decided to share the whole process of the business including planning, development, production, distribution, marketing and after-sales service. The companies will also carry out overseas marketing for turnkey-based provision of system and devices. Showing great enthusiasm for wireless broadband, Reigncom announced the planned development of the mobile device capable of downloading multimedia contents such as online games from KT's WiBro network last year.

- Mobile TV and WiBro are predicted to be the biggest issues in the Korean mobile industry this year, according to the survey conducted by Korea Mobile Industry Association. The survey said 24 out of 150 companies or 63.2 percent expected DMB to be the hottest item and 13 companies or 34.2 percent selected WiBro. Regarding the industry outlook, 23.7 percent predicted brisk market growth and 71.1 percent said the market would be the same as the previous year, a response that indicates the overall sense of depression about the market. Meanwhile, 78.9 percent of participants said Asian countries will take the lead in the world mobile industry, outnumbering 15.8 percent and 5.3 percent who anticipated the market leadership to be taken by Europe and North America, respectively. In particular, some respondents named India and Korea as the next generation mobile market leader.

Hardware

- LG Philips LCD Co, the world's second-largest maker of liquid-crystal displays, reported a surge in its fourth-quarter profit, ascribing the growth to demand for flat-panel televisions. Net income in the fourth quarter went up to $337 million, compared with $35.6 million a year earlier, while sales showed a 53 percent rise to $3 billion. Shipments rose 74 percent from a year earlier. TVs accounted for 34 percent of sales compared with 15 percent in the fourth quarter of 2004. The company forecast capital spending to decline to $4.2 billion this year, from $4.4 billion in 2005. LG.Philips had forecast in October that it would spend $3.5 billion to $4.5 billion during 2006. Global sales of LCDs used in computers and televisions posted a 17 percent climb to $42 billion last year and may gain 12 percent growth this year, according to December estimates by ISuppli Corp. The company said there will be a shortage of LCDs for televisions this quarter, while oversupply of screens for computers will worsen. LG.Philips and larger rival Samsung Electronics Co are benefiting as lower prices for flat-screen TVs and sporting events including the soccer World Cup spur demand in the US$42 billion LCD industry.

Ventures/Investments

- The Korea Culture and Contents Agency (KOCCA) unveiled a business plan for year 2006, and said that it would spend a total of 47.3 billion won ($48.1 million) promoting growth of the culture and content industry this year. The agency plans to devote resources to helping firms expand into overseas markets; fostering skilled workforce; and developing core culture and content technologies. KOCCA has decided to dispatch a market survey team to such emerging markets as Brazil and India, and draw up a mid-term plan for overseas expansion. It also plans to set up or upgrade export information systems. The agency aims to foster workforce specializing in planning and creation by establishing the culture and content creators' academy with a year-long course. KOCCA also disclosed its plans to continue devoting resources to developing technologies used to produce culture content such as games and animations. The agency said it has decided to provide support for quality culture content used for new digital media such as digital multimedia broadcasting and data broadcasting. It is also seeking to build a culture and content distribution information network, and beef up efforts to protect copyrights of content.

China

Internet

- Doll Capital Management (DCM), a leading US-based venture capital firm, is strengthening its position in China by bringing in Hurst Lin, co-founder and chief operating officer of Sina Corporation, as a general partner. Different from other partners who pay more attention to multinational companies, Lin said he is more interested in domestic firms. After entering the Chinese market in 1999, DCM has invested in over 10 companies, including 51job, SMIC (Semiconductor Manufacturing International Corp) and Vimicro. They have already completed successful IPOs in the US. While investing more money into China, DCM has also enhanced its co-operation with local partners. Last April, DCM formed a strategic partnership with Legend Capital, a firm that manages more than US$100 million and has about 30 investments across two funds. Legend Capital's parent, Legend Holdings, also owns Lenovo Group Ltd, which in late 2004 agreed to purchase the personal computer operations of International Business Machines Corp (IBM). DCM has undertaken four investment projects, two in China and two in US, with Legend. Established in 1996, DCM has over $1 billion under management and is actively seeking entrepreneurs in the communications and Internet software/services sectors in the US, Japan and China.

- Shanda, China's leading online game developer, has confirmed in the local media that, with the company's focus shifting to digital home entertainment, it is going to relocate many of the services at its Beijing branch office to Shanghai. The move, which is part of its shifting of focus to digital home entertainment, has been interpreted as a move by the company to lay off a large portion of its employees at its Beijing office and move the remaining staff to Shanghai. A Shanda representative has been quoted as denying this and saying that all the Beijing employees can choose to relocate to the Shanghai office if they like. The representative also says the Beijing office will still remain open, and will be in charge of the company's sales channel, business development and daily server maintenance. Shanda currently has more than 2,500 employees, of which most are working in Shanghai.

Media, Entertainment and Gaming

- Warner Bros Entertainment revealed its plans to move its cinema construction design centre from London to Shanghai. The move is part of its program of continued expansion into the Asian market and out of Europe. The centre would design and build theatres in China, Italy, Japan, the US, and other countries where the company has set its expansion. The company used to have theatres in London, Spain, Holland, Germany and Denmark. The company maintains a Shanghai office that handles cinema construction and also oversees a joint venture to produce Chinese films. As part of its expansion, Warner Bros. signed an agreement to open theatres in malls operated by real estate developer Dalian Wang Group. Currently, Warner Bros. operates 65 multiplexes in Japan, Italy and China, with more than 600 screens. The company operates 16 theatres with 106 screens in the U.S.

- The number of Chinese online gamers sustained strong growth in the past year, with the figure almost double the growth of overall internet users, according to a report released by the General Administration of Press and Publication (GAPP) and US research house International Data Corporation (IDC). The report said a total of 26.3 million people played online games last year, which represents a 30 percent increase than in the previous year. The rapid growth of online gamers generated 3.7 billion yuan ($468 million) last year, compared with 2.4 billion yuan ($305 million) in 2004. A top official of NetEase.com, a top Chinese online game provider, said the revenue from massive multiplayer online role-play games is expected to go beyond 1 billion yuan ($120 million) once the 2005 figures are validated. Mobile/Wireless

- Cgogo Technology Co. Ltd., a Beijing-based wireless search engine developer, stated that prospects for the Chinese mobile search market are good. The company said that Chinese mobile subscribers are gradually becoming more aware of the mobile search concept, in which mobile phone users can use their phones to search for information online. Cgogo estimates that the launch of the 3G network in China in 2006 and the increase in competition in the market will lead to a gradual decline in payment rates and a corresponding increase in data flow. Cgogo is currently promoting and marketing its mobile wireless search engine, while at the same time, developing services such as mobile shopping malls and mobile WAP yellow pages.

Hardware

- China's television makers disclosed their plan to go into strong export drives this year in a bid to offset thin profit margins by boosting volume and selling more high-end models. Sichuan Changhong Electric Appliance, the mainland's No. 2 TV maker, aims to recover from its performance last year, when its exports plunged after it dropped a major US customer over a business dispute. Shenzhen Konka Group, the nation's number three TV maker, is targeting a 60 percent growth, a target that accompanies its move to specialize in manufacturing TVs for other companies' brands. Changhong saw its exports decline to $200 million last year from $700 million in 2004, a result ascribed mainly to lost business from Apex Digital. Changhong, which posted a 3.6 billion yuan loss in 2004 as a result of the dispute. Analysts say the firm is now expected to posting growth, with an export target of $500 million. Konka said it predicts its exports to rise to $400 million this year from $250 million in 2004.

- An official at Best Buy's Asian headquarters was quoted as saying that, when they open their store on China mainland, it will be in Shanghai. Best Buy Co Inc is the largest US consumer electronics retailer. Local sources are saying that it is likely to choose Shanghai as a location after losing out to a Chinese rival to rent a Beijing commercial building. The plan of the electronics giant to occupy a commercial space in Beijing was stalled when Pengrun Electronics, a subsidiary of China's top electronics retailer Gome, secured the lease contract with the owner of the commercial building at 20 million yuan ($2.5 million) a year to open its first Beijing store. Pengrun, which sells only high-end electronic appliances, is reported to have set up several big stores in Beijing and has plans to bring its stores to Tianjin, Shanghai, Guangzhou and Shenzhen this year.

- Corning Inc announced that it will build its first LCD glass substrate manufacturing plant on the Chinese mainland this spring. The US-based technology giant said the investment in the liquid-crystal display project will surpass $1 billion, adding that the plant's location has not been decided. In a separate report, Corning said it has opened a $1.5 billion LCD glass substrate plant in Taiwan, which is Corning's biggest capital investment for a single manufacturing facility worldwide. LCD TV sales in China are expected to reach 3 million units this year, according to the State Information Center. In the global market, LCD TV sales are forecast to hit more than 17 million units in 2009 from 8.9 million units in 2004, according to iSuppli Corp, a US-based consulting firm.

Taiwan

Mobile/Wireless

- Accton Technology announced its plans to launch two wireless handsets by the middle of February. The product will enable users to place calls over the internet at little or no cost using Wi-Fi. When launched, it has chances of beating US rival Netgear to market the first Wi-Fi phones designed for VOIP. Existing phones designed for Skype and other VOIP services must be connected to a computer. Accton's phones need not have such connection although they would still be requiring a Wi-Fi signal, which is not always readily available. Both Accton handsets allow users to make calls wherever they are connected to a wireless internet access point, whether they are at home, at a coffee shop or some other public Wi-Fi hotspot. Costing around $100 to $150 each, the phones are planned to be deployed in the US and Europe first, then in Asia. The company said the phones work with the Wi-Fi standards and boast 4 hours of talk time before needing a recharge, which is equivalent to 80 hours of standby time.

Information Technology

- Taiwan's export growth accelerated last month as a weaker currency and rising global demand for electronics fueled purchases of personal computers and semiconductors, according to the country's Ministry of Finance. Its overseas sales posted a 15.4 percent growth from a year earlier to $17.1 billion following a 10.7 percent gain in November. Companies such as Acer Inc, the world's fourth-biggest maker of PCs, are benefiting from a weaker currency and a rebound in demand for electronics. Rising exports, which account for about half of the nation's $305 billion economy, helped drive the fastest economic expansion in a year in the third quarter. Taiwan's exports of computer chips and other electronic parts rose 34.3 percent to $4.5 billion after registering a 19.5 percent climb in November.

Hong Kong

Ventures/Investments

- Hutchison Whampoa announced plan to bring its Chinese herbal medicine business to the Alternative Investment Market (AIM) of the London Stock Exchange. According to observers, the move is not happening soon and is not expected to have an impact on the group's asset value.

Mobile/Wireless

- PCCW, announced its re-entry into the mobile industry with its offering of a branded 3G service, with the company looking to deploy the offering by the middle of the year. The product will use the network of listed subsidiary Sunday Communications. To attract customers, the company is offering six month free trials and free handsets for its "PCCW mobile" service. For the trial, PCCW mobile will be using existing content from its Now Broadband TV platform. Under the present program, Sunday would now only sell a 2G service, while retaining the 3G license and network. PCCW will resell Sunday's 3G service, making it off-limits to the subsidiary it failed to privatize last month. Sunday will still sell 3G handsets. The free trial is open to the public until the middle of next month, and each participant will get a free 3G handset made by Sunday shareholder Huawei Technologies, the key network equipment vendor for Sunday's 3G network. Hutchison Telecom, which claimed 383,000 3G subscribers as at August, said it would introduce two more 3G tariff plans with free handsets by LG and Sony-Ericsson. SmarTone Vodafone and CSL, the other two 3G players, were unavailable for comment.

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