A week in tech

A round-up of all the latest tech news from the region.

Japan

Internet

- Yahoo! Japan Corp. said profit and revenue increased sharply in its fiscal first quarter, with advertising, online shopping and job-information services continuing to grow. Yahoo! Japan, which is affiliated with Yahoo! Inc. and Softbank Corp., said group net profit jumped 83% to ¥8.3 billion ($76.5 million) from ¥4.5 billion ($40.9 million) in the year-earlier period, while revenue climbed 57% to ¥24.5 billion ($222.5 million). The Internet portal site operator said revenue from its auction service increased 4.2% to ¥6.1 billion ($55.4 million). Commissions from users of the service rose, but the value of transactions was almost flat as measures the company implemented, including tighter customer screening, drove away some users. Revenue from information services grew 27% to ¥5.6 billion ($50.9 million), and revenue from online shopping services grew 4.8% to ¥2 billion ($18.2 million).

Korea

Internet

- NHN Corp. reported that its first-half net income grew to 31.7 billion won ($27.2 million) on the sales of W108.2 billion ($92.7 million). Net income in the first half last year was W29.5 billion ($25.3 million) on sales of W76.4 billion ($65.5 million). NHN, the operator of Korea's number two internet portal Naver.com and popular online game site Hangame.com, reported W166 billion ($142.3 million) in revenue and W55.5 billion ($47.6 million) in net income last year. The company has been recently accelerating its overseas investments, spending W120 billion ($102.9 million) to acquire China's Ourgame.com, the country's number one online game portal with more than 140 million registered users. NHN plans to release 20 new game products in China during the second half of the year. In Japan, NHN has more than 6.5 million registered users for its Naver and Hangame services. Hangame Japan is the country's leading online game site with 5.7 million customers and 65,000 concurrent users. It posted W2.4 billion ($2.1 million) in sales for in first quarter. The company expects to earn W8.5 billion ($7.3 million) in the first half through Naver Japan's search services and digital content commerce.

- More than three months have past since Daum decided to relocate its headquarter to Jeju from Seoul but the operator of Korea's largest internet portal Daum.net is still unclear what Jeju Island will mean to Daum's future. However, driven by the local government's intentions of developing the area into the country's next boomtown as well as the increasing demand for an efficient workplace environment, the company is committed to carrying on with the experiment and hopes for future advantages in administrative support and overseas marketing.

Media, Entertainment and Gaming

- The number of mobile phone users in Korea will probably reach 39.4 million, or 81% of the population, by 2008. By the end of this year, the number of the country's cell phone users may rise to 37.6 million from 33.6 million a year ago, according to researchers at the Korea Information Society Development Institute (KISDI). Profitability in the mobile phone service industry is expected to slow this year due to rising competition and market saturation. Korea boasts one of the world's fastest mobile phone networks, allowing cell phone users to send or receive images and songs via wireless Internet.

Semiconductors

- Hynix Semiconductor's shareholders approved the planned sale of its non-memory operations to US financial services giant Citigroup. The approval was given at a shareholders' meeting held at the company headquarters in Incheon. The world's third-largest memory chip maker has signed a deal with Citigroup Venture Capital to sell its non-memory operations for W954 billion ($822 million). Hynix said the proceeds would be used to repay debts and fund new operations. The deal, the biggest sale of assets since Hynix launched a sweeping restructuring program two years ago, is expected to help the South Korean firm focus more on its core memory chip business, reduce its debt and boost investment needed to recover its competitiveness.

Telecommunications

- Hanarotelecom Inc., Korea's number two fixed-line carrier and broadband internet service provider, is seeking growth opportunities in the saturated local telephony market by offering cheaper long-distance and international call services and introducing products that blend traditional voice communication with network computing and broadcasting. The company recently unveiled a new corporate image, changing its logo from Hanaro Telecom to Hanarotelecom and unveiling a red hummingbird as its new symbol, celebrating the launching of its long-distance and international telephony services. Hanarotelecom targets W372.5 billion ($320 million) in sales for its telephony services this year, an 18% increase from last year. The company received a business license to market long-distance and international call services starting July 1. The company believes its large user pool, 1.1 million customers for fixed-line telephony services and 2.8 million customers for its broadband Internet services, will provide a strong market based for its new telephony services, despite the local fixed-line market reaching saturation.

China

Internet

- China's internet population grew 28% over the past year to 87 million, while use of broadband and online commerce is soaring; however this growth nonetheless failed to meet analyst lofty expectations. China now has 31 million subscribers to broadband high-speed lines, an increase of 79% over the past six months, the China Internet Network Information Center said on its website. The country aggressively promotes internet use for business and education. However, the pace of growth for China's internet market in the first half of the year has fallen short of analysts' expectations, sparking concern that rapid expansion in the sector is no longer sustainable. According to a survey by China Internet Network Information Centre (CNNIC), the mainland added just 7.5 million internet users in the first half of this year, bringing total users to 87 million. The first half of this year saw expansion of 27.9%, substantially lower than the 48.5% in the previous year's first half. The growth fell short of analysts' expectations of more than 10 million new internet users in the first half.

- Mainland recruitment portal 51job has delayed its $90 million Nasdaq initial public offering amid cooling investor sentiment towards China's internet sector. A roadshow was to begin on Monday, but 51job is now waiting for conditions to improve. Some fund managers say it is demanding too high a valuation. The company might be hoping to command a valuation similar to its United States peer Monster Worldwide. Listing sponsor CLSA noted in its pre-IPO research report that Monster Worldwide traded at 29 times forward earnings. Another factor weighing on sentiment is the poor performance of Kongzhong, which made its Nasdaq debut on July 9. Kongzhong is trading 9% below its IPO price.

Hardware

- Intel Corp. and Founder Technology Group Corp. of China agreed to cooperate on technology innovation and research and development. As part of a memorandum of understanding, Intel will provide training in systems design to the Chinese company to develop digital home and office products for Chinese consumers. The two companies also will have joint marketing programs to accelerate the use of next-generation digital home and office personal-computer products in the Chinese market. Founder is a major Chinese high-tech company. Its products include PCs and networking systems.

Mobile / Wireless

- China Mobile posted its second consecutive month of weak subscriber growth, adding just 2.7 million users in June. Its subscriber base now stands at 158.6 million. The growth is below the average first-half monthly increase of 2.8 million.

- China Unicom has posted a marginal improvement in subscriber growth for last month, after industry regulators stepped in to tame a punishing price war with rival operators. The carrier added 1.7 million mobile users last month, bringing its total subscriber base to 102.5 million. While subscriber growth for its GSM network last month remained steady at about one million, China Unicom's CDMA network showed nascent signs of momentum as rival China Mobile began easing its aggressive marketing tactics. The carrier added 732,000 new CDMA subscribers last month - 4% more than the 701,000 CDMA users it signed on in May - bringing the total to 23.7 million. The figure was still disappointing when compared with the average monthly growth of 890,000 in the first quarter and considerably below the 1.2 million average in the second half of last year.

Telecommunications

- Telecommunications services firm Citic 21CN expects its purchase of short-messaging service provider Beijing HL95 will help it report a profit in the coming financial year. Citic 21CN reported a net loss of $2 million for the year to March, a 92 percent improvement from the previous year's loss of $27 million. Turnover grew 12-fold from $10.6 million to $139.5 million. The results did not fully reflect the profit contribution of the new acquisition as legal complexities prevented the Beijing HL95 deal from being completed until February. HL95 generated $2.5 million of profits for the company between February and March.

Taiwan

Flat screens

- AU Optronics Corp. reported a sharp jump in second-quarter profit as sales of its liquid-crystal-display, or LCD, screens more than doubled from a year ago. But the performance represented a peak for the time being as executives forecast a decline in profit margins in the third quarter and expressed a willingness to trim production if the flat-screen market becomes oversupplied. The company -- the world's third largest maker of LCD screens used in desktop monitors, notebook PCs, cellphones and other gadgets -- said it earned NT$14.4 billion ($431 million) in the three months ended June 30. A year ago, it earned NT$2.9 billion ($85.3 million) in the same period.

Singapore / Malaysia / Philippines / Indonesia

Mobile / Wireless

- Singapore's second-largest mobile phone company, MobileOne, reported net profits in the second quarter rose 26.4% year-on-year, mainly due to its international call service operations. MobileOne's second-quarter profits were S$39.7 million ($23.4 million), with international call revenues up 28.6% to S$27.9 million ($16.2 million). Revenues for mobile telecommunications services rose 5.1% year-on-year to S$141.2 million ($81.8 million). Overall operating revenues, including equipment sales, rose 4% year-on-year to S$185 million ($107.2 million).

Semiconductors

- Chartered Semiconductor Manufacturing swung to a profit in the latest quarter on robust demand for communications and personal computer-related chips. But it warned that slowing demand will hurt earnings in the current quarter. Chartered Semiconductor, the world's fourth-largest chip maker, reported a net profit of $15.3 million for the three months ended in June, compared to a net loss of $90 million for the year-earlier quarter. Chartered, which recently returned to profitability after three years of losses expects its net profit for the quarter ending in September to total $9.5 million, compared to a net loss of $75.9 million for the year-earlier quarter. The company said the expected decline in profits in the current quarter from the prior period reflects higher startup costs for a new factory due to start pilot production later this year. Revenue in the current quarter will be "essentially flat" from $255.8 million in the second quarter but up from $137.7 million in the year-earlier period.

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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