A week in tech

A round up of all the latest tech news.

Japan

Internet

- GMO Payment Gateway, a company which offers credit card settlement for shops on e-commerce sites, announced that it would go public on the Tokyo Stock Exchange's Mothers market next month. About 7,000 stores are utilizing the firm's services, which include credit screening, payment demand, checking of receipt of money, etc. GMO Payment gets about 90 percent of its revenues from store management fees and settlement commissions. The company expects more than 270 million yen ($2.5 million) in parent-only pretax profit in the year through September, a 42 percent year-on-year growth. The company plans to use funds that it will generate from the public offering mainly for investment in personal information protection and other systems. Studies show that credit cards account for half of the settlement methods of e-commerce.

Telecommunications

- KDDI announced an increase in its dividend payout plans, from 2,400 yen ($23) to 3,500 yen ($33.4). The second-largest telecommunications company in Japan cited the continued strength of its earnings and the reduction of its interest-bearing debt as the key reasons for the increase. KDDI, with this move, joins a number of Japanese companies announcing increases in its planned dividends.

Media, Entertainment and Gaming

- With Livedoor and Fuji Television Network securing an overwhelming combined stake in Nippon Broadcasting System Inc., there is a stronger possibility that the radio broadcaster will be delisted. Under the rules of TSE, a firm is delisted after a one-year grace period where the combined interest of the top 10 shareholders, the directors and the company itself exceeds 80 percent of the outstanding shares. To block the delisting, Livedoor may let Nippon Broadcasting issue new shares or find other means to increase the number of shareholders. A source at Livedoor said the company does not intend to see Nippon Broadcasting delisted.

Hardware

- Daifuku is predicting a group net profit of 5 billion yen ($47.7 million) a figure three times bigger than the previous year's figure and surpassing an earlier forecast of 2 billion yen ($19 million). Consolidated sales, according to the company, are expected to reach 165 billion yen ($1.5 billion), a 19 percent increase from a year earlier. The revision made by the company is attributed to the brisk sales of electronic components, which include computer boards and devices for liquid crystal and semiconductor.

- Dell Japan Inc. is seeking to attain a high rank in the blade server market by the end of the year through lowered prices and enhanced functions of its models. A blade server is made by mounting major components, such as a CPU and memory chip, on a blade-like board and then storing such blades in a box shaped like a bookshelf. A blade server is able to consolidate and manage plural in-house servers. Dell Japan, which is the local unit of U.S.-based Dell Inc., has been marketing blade servers since 2002 but its domestic share stands at only several percent. The company said it will lower the price of its blade server by 18 percent to 41,000yen ($391.3).

- Konica Minolta Holdings Inc. is slashing its annual profit forecast by 72 percent, pointing to the delay in the release of its new copiers and falling camera prices as the reason for the move. Net income is expected to decline to 7 billion yen ($67.2 million) for the year ending March 31, from 19.3 billion yen ($184.2 million) a year earlier. The company, which was set up after Konica Corp. and Minolta Co. merged in August 2003, is competing against Canon Inc. and Xerox Corp. for office equipment orders as users replace older monochrome copiers and printers with color models. Konica had earlier forecasted a 25 billion yen ($238.6 million) profit.

- NEC Corp. said it has plans to make investments that will bolster its LCD panel business. This investment plan includes a 30 billion yen ($285 million) at a Chinese joint venture and a 10 billion yen ($95 million) at a domestic subsidiary. NEC plans to increase output of large LCDs at Shanghai SVA NEC Liquid Crystal Display Co., a joint venture with China's SVA (Group) Co, where the Chinese partner holds a 75 percent stake and the Japanese the remainder. At home, NEC plans to being production of advanced LCD panels at wholly owned subsidiary NEC LCD Technologies Ltd. NEC's global market share in large LCD panels is less than 1 percent for large panels and 2 percent or lower for small and midsize panels in 2004.

Korea

Mobile/Wireless

- KT Freetel Co. released a Bluetooth-enabled phone that gives customers usage of both fixed-line and wireless telephony services, and provides video-on demand and digital music capabilities. The device was developed by Korea's second-largest mobile phone carrier with LG Electronics. Subscribers can access fixed-line networks over the mobile phone within 10 to 20 meters of an installed access point, or through a transceiver connecting wireless device to wired infrastructure. The handset is priced at 583,000 won ($580). KT was granted a license by the Ministry of Information and Communication last year to provide Bluetooth-based "one-phone" telephony services that connect fixed-line and mobile calls. The company controls about 94 percent of the local fixed-line traffic.

- LG Electronics announced its target of selling 70 million handsets this year as it points to European 3G markets as the source of its projected growth. The company said that this year it has set a sales goal of 20 million phones in Europe, a target that would take about 10 percent of the regional market and help it strengthen its fast start last year in WCDMA handsets. LG Electronics, considered to be the world's fastest growing mobile-phone maker, has 6.5 percent market share of the global mobile phone. It expects the world market for 3G WCDMA phones reaching 50 million units in 2005, with LG accounting for 10 million of these. The global mobile phone market is seen to reach 730 million units this year from 650 million in 2004.

Semiconductors

- The World Trade Organization (WTO) has dismissed European Union claims that Hynix Semiconductor, South Korea's microchip giant, was provided an illegal subsidy by the Korean government. Hynix had complaint that the EU had imposed unfair tariffs on its products mainly because Hynix was rescued from near bankruptcy by way of a bailout arranged by Korean creditor banks. As some of these banks were controlled by the European government, the EU considered the rescue package as the equivalent of illegal state subsidies. Hynix said that the government did not have any hand in the bailout, which the company claims was made purely on commercial basis. Hynix, the world's fourth-largest memory chip-maker, is facing a similar trade dispute with Japan.

China

Internet

- China Telecom secured a license from the Ministry of Culture to operate Internet cafes nationwide. China Telecom is the sixth operator to receive a license. Mainland media said that China Telecom was given licenses to operate Internet cafes in 26 provinces, out of 31, in China. Analysts say that the granting of nationwide licenses to larger operators could bring about the acquisition of smaller firms thereby reducing the number of operators. The smaller number of operators would give the government, in a sense, a higher degree of control over its development. According to the report, China's booming online games industry, which registered a 48 percent growth to 2.4 billion yuan ($290 million), in 2004, is a major source of profit for the Internet cafes that often provide the only access to computers for the 20 million online game players on the mainland.

- SS8 Networks announced the opening of a new research and development centre in Nanjing, China aimed at addressing the growing trend of converged networks of TDM and Voice over the Internet (VoIP). The development comes as Asian telecom operators such as China Telecom, China Mobile and China Unicom have begun focusing on the trend toward converged networks and communications. SS8 Networks, headquartered in California, is leading provider of IP messaging systems and lawful intercept solutions for the global telecommunications industry. Its new R&D center in Nanjing is seen as empowering service providers that will answer the growing needs for the important China and nearby Asian markets.

- Online job recruitment company 51jobs posted revenues for the fourth quarter of $14.5 million, 11 percent down from its third quarter revenues of $16.3 million. The firm's net income also went down 51.6 percent to $1.5 million in its fourth quarter results from the $3.1 million reported in the third quarter. Of particular interest are the online recruitment service revenues of the firm, which went down 14.3 percent in the fourth quarter to $3.6 million from $4.2 million in the third quarter.

- Google is expanding in the mainland market with the internet search giant's unveiling of a beta version of its desktop search application. The application uses simplified Chinese characters. The company also released beta versions for traditional Chinese characters and the Korean language. Google accounts for about 30 percent of the search inquiries in the mainland but, according to a report, derives little revenue from China's Internet search advertising market. The company, however, owns a small stake in Baidu, which accounts for 48 percent of search inquiries. Baidu is also said to be preparing a NASDAQ listing. Web advertising in China is expected to generate $277 million in sales next year, and analysts say Google could increase its stake in Baidu. It could put up as well sales its own operations in China.

- China's largest instant message provider Tencent posted $133 million in revenues and $54 million in profit for 2004. For the fourth quarter, the firm said it earned $38 million, a 4.3 percent growth on its revenues of $36.6 million for the third quarter. Its fourth quarter net income registered a 9.3 percent rise to $14.2 million from $13 million in the third quarter.

Mobile/Wireless

- Hurray! Holding Co., Ltd., a firm which provides advanced wireless value-added services and mobile telecommunication network software in China, announced the signing of agreements with three record companies: Warner Music, EMI and Ocean Butterflies Music. With the agreement, Hurray! will have the capacity to use music from the libraries of all three companies for its Color Ring Back Tone (CRBT) services. The agreement will also allow Hurray! to offer the music from Warner Music and Ocean Butterflies Music through its Interactive Voice Response (IVR) services. Hurray! provides wireless value-added services such as ringtones, picture downloads, community and entertainment services to mobile users in China and is one of the market leaders in providing these services using wireless application protocol.

- China Unicom and China Post announced the signing of an agreement on joint development of the 'Uni Video' visual information service in Beijing. The agreement will allow the two companies to use the extensive network of service outlets of China Post in a joint expansion of the coverage of the Uni Video visual information service. The partners plan to launch the service at China Post outlets, which will enable users to speak face-to-face with others over the videophones at service halls in China Post. Under the agreement, China Post will sell videophone cards at its service outlets around China and promote Uni Video visual information service through its postal channels and at postal outlets around the country.

Telecommunications

- China Netcom Group was reported to be exploring new international ventures with PCCW, Hong Kong's dominant fixed-line carrier. The exploration is part of the alliance that Netcom has entered into with PCCW. In another development, independent shareholders of PCCW approved the bid by China Network Communications Group to buy 20 percent of the local fixed-line operator's enlarged issued share capital for HK$7.9 billion ($1 billion).

Semiconductors

- CSMC Technologies, a contract chipmaker, announced earnings nearly triple of what it got last year. The firm reported a net profit that rose to $11.3 million in 2004, up from $4 million in 2003. Revenue for the year was $79.9 million, up from $42.1 million in 2003. Much of the company's growth was ascribed to the massive increase in its production capacity. Analysts, however, say that this performance would be difficult to duplicate as the company faces a low demand in a softer market and as its expansion slows down.

Media, Entertainment and Gaming

- Media reports note the boom in advertising in China, with the growth rate of China's advertising market being placed at 40 percent a year, according to AC Nielson. While European and Asian newspapers are reported to be wrestling with the Internet in trying to find ways to bring about advertising dollars, and with Internet ad spending expected to grow 20 percent worldwide this year, China online news ad spending is far outpacing those numbers.

Taiwan

Hardware

- Sandmartin International, a digital satellite equipment maker, announced its plan to list on the Hong Kong Stock Exchange. The Taiwanese firm that claims it will be the only China-based digital reception product maker listed in Hong Kong, is aiming to raise HK$150 million ($19.2 million) in its initial public offering. The offering is targeting mainly Hong Kong investors and is being sponsored and arranged by Kingston Securities. An official of the firm said part of the proceeds from the IPO would be used to expand production capacity in its plant in Zhongshan.

- South Korea's LG Electronics said it plans to buy about $1.4 billion of technology products from Taiwan this year. An official of the firm announced that it would source more key electronics components from Taiwan. The company said it is looking for Taiwanese suppliers to assemble LCD television sets for LG. It did not identify potential partners.

Hong Kong

Internet

- PayPal, the online payments company, said it is looking to expanding its presence in Hong Kong through local partnerships. The company, which is owned by eBay, has no plans to offer its services in Hong Kong dollars even as it has provided already online payment services to shopping sites in the city. An official, clarifying the plans, said the company wants to expand business by partnering with web-hosting firms and retailers.

- Fixed-line operator Wharf T&T and its sister company i-Cable Communications have launched a promotional offer of HK$99 ($12.6) a month, that will give unlimited broadband access that comes with free Internet telephone service. The deal, which requires a 15-month subscription, intensifies the price war over residential broadband and fixed-line services. The competition is making Hong Kong already the most affordable broadband market in the world.

Mobile/Wireless

- New World is looking at its revenues from data and roaming services to improve so that it could move from its disappointing performance in the first half. From its mobile services, New World's revenues fell 10 percent to HK$669 million ($85.7 million) in the first six months to December. An official explained the decline as being caused by the aggressive promotions of 3G operators that intensified the market competition. The net profit of the company went down to HK$56 million ($7.1 million) from HK$77 million ($9.8 million). Despite this, the company managed to increase its subscriber base by 4 percent to 1.3 million during the period.

Australia/Singapore/Malaysia/Philippines/Indonesia

Internet

- SembCorp Industries Ltd has entered into an agreement with Kingsville Capital Limited (Kingsville) to sell its remaining 3.9 million ordinary shares in Pacific Internet Limited (PacNet) at $7 per share. The shares represent about 28.8 percent of the total outstanding shares in PacNet. Kingsville represents a group of investors put together by Titan Capital. The sale is in line with SCI's strategy to divest its non-core businesses. The company expects to generate approximately S$43.3 million ($26.5 million) in gross proceeds. T he sale price represents a premium of 17% over the closing price of PacNet's shares of $5.98 on March 17, 2005 and a premium of 16% over the 1-month volume weighted average price. The completion of the sale is subjected to approval by the InfoComm Development Authority of Singapore (IDA). Pacific Internet is Asia-Pacific's largest telco-independent Internet Communications Service Provider by geographic reach. It operates in Singapore, Hong Kong, the Philippines, Australia, India, Thailand and Malaysia.

- SkyNetGlobal announced that it has signed an agreement to acquire W Home Communications in Malaysia for A$1 million ($795,000). A separate agreement will allow SkyNetGlobal to take control of the exclusive technology and marketing rights throughout Southeast Asia for SkyNetGlobal's various branded businesses, which include home automation products, wireless Internet hotspots and W Home broadband services. W Home is unaudited and has not generated any revenue.

Telecommunications

- The Australian government plans to use windfall from Telstra sale to acquire more assets. The plan involves using the more than A$30 billion to buy shares in other companies, a move that is a marked change in the direction for the government, which used the A$30 billion form its two previous Telstra share sales in the 1990s to pay off debts. The country's finance minister said the purchase of shares or bonds would help Australia to finance services in the future, an idea that was criticized by some who argued that the money should be used immediately to fund road and rail projects.

Mobile/Wireless

- SingTel has sold 4.2 million common shares in Globe Telecom, reducing SingTel's share in the Philippine carrier to 44.6% from 45.1%. The arrangement also follow Globe's offer to buy one common share for every 15 common shares held at 950 pesos ($17.6) per share. The net amount received by SingTel from the Globe share buyback exercise, after transaction costs, was 4 billion pesos ($73.6 million). However, an estimated net loss of S$23 million ($14.2 million) will be recorded in SingTel's results for the quarter ending March 31 as a result of Globe buying back its shares at a premium.

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