Japan
Internet
- The value of stocks traded online in the April-September period posted a massive 42 percent growth to a record 93.2 trillion yen ($779 billion), a result ascribed to a brisk buying by individual investors as the market trended upward from summer, according to data released by the Japan Securities Dealers Association. Total trading by individual investors surged 44 percent to 112.6 trillion yen ($941.1 billion). For the past three six-month periods, online transactions have accounted for more than 80 percent of the overall trading by individual investors. In the first half of this fiscal year, individual online trading fell from 86 percent to 83 percent because transactions through securities houses that offer face-to-face sales have risen in the wake of the market rally. But Internet trading volumes are growing and will continue to fuel stock investments by individuals. Various online securities firms are cutting fees and expanding trading services via cellular phones. E*Trade Securities Co., a major online brokerage house, says the range of customers is widening, with first-time traders making up 60 percent of new accounts opened.
Telecommunications
- A rivalry for territories is arising between Nippon Telegraph and Telephone Corp. and other telecom carriers in fiber-optic internet communications services. KDDI has a tie-up with Tokyo Electric Power Co. that includes a possible merger of their fiber-optic operations, a move seen as an effort to face its rival NTT East Corp. in the Kanto region around Tokyo. NTT West Corp. in the Kansai region around Osaka NTT West Corp is facing K-Opticom Corp., an optical-fiber leasing unit of Kansai Electric Power Co., which has introduced rate cuts and other promotional efforts. According to a survey by the Ministry of Internal Affairs and Communications, the number of contracts signed for fiber-optic services stood at 3.4 million at the end of June 2005, or 16.6 percent of Japan's total broadband subscribers, surpassing the number of contracts for high-speed services provided through cable TV networks. In terms of a net increase in subscribers, fiber-optic services surpassed services provided over ADSL (asymmetrical digital subscriber line) networks for the first time ever in the latter half of 2004. NTT East and West corporations are aiming at attracting a combined 30 million subscribers to fixed phone services to shift to their fiber-optic services. Among powerful players other than the NTT group firms are Kyushu Telecommunication Network Co., affiliated with Kyushu Electric Power Co., as well as Energia Communications Inc., a communications unit of Chugoku Electric Power Co.
Mobile/Wireless
- Major direct marketing companies selling goods on television are starting to promote them via video-capable mobile phones, aiming to tap the growing market for phone-based online shopping. QVC Japan Inc., a firm that sells products mainly through 24-hour cable TV shopping programs, earlier this month began web casting its programs via mobile phones. Users can make purchases through their handsets. Through its service is currently available only through Foma mobile phone service, QVC Japan said it plans to expand coverage to users of other mobile phone networks next year. Japanet Takata Co. will next spring begin using video to present goods on its mobile phone site, given the positive customer response to its use of video on its web site for personal computers. The company plans to offer three-minute videos per item. Jupiter Shop Channel Co., Japan's largest TV shopping company, uses 40-second videos to introduce each of three different popular products via NTT DoCoMo's Foma service. The company plans to offer five-minute videos for all of its products by the end of next year. The market for mobile phone-based online shopping continues to expand sharply as more people are won over by its convenience. Sales from the business posted a 46.6 percent growth in fiscal 2004.
Media, Entertainment and Gaming
- Dentsu Inc. said it plans to start web casting television reruns next spring by joining forces with five Tokyo-based commercial TV broadcasters and several dozen web portal operators and internet service providers. The leading Japanese advertising agency's plans include broadcasting shows on a preset schedule. Most will be offered free of charge via the insertion of commercials, but viewing fees may be charged for some. By also offering transmission for internet- and video-enabled cellular phones, Dentsu hopes to attract several millions of viewers. Dentsu plans to run the web casting business through a new company to be set up later. It has called for Tokyo Broadcasting System Inc., Fuji Television Network Inc., Nippon Television Network Corp., TV Asahi Corp. and TV Tokyo Corp. to invest in this planned firm. While all five Tokyo-based TV broadcasters intend to provide programs for the new web casting service, only TBS has agreed in principle to have a stake in the venture. Dentsu also plans to invite Hakuhodo DY Holdings Inc. and other ad agencies to invest.
Software
- Eighting Co, a developer of home video game software, plans to go public on the Tokyo Stock Exchange's Mothers market. Among its major clients are Namco Bandai Holdings Inc. and Takara Corp. The company has developed proprietary software technology for controlling the complex three-dimensional movements of the joints and other body parts of game characters, giving it a particular advantage in developing violent action games. The company projects parent-only pretax profit of 353 million yen ($3 million) for the business year through Sept. 30, up 19 percent. The company aims to expand its business operations to areas other than video game development. But the development of digital content for cell phones, which the firm started a year ago, still makes up less than 10 percent of total sales. The company said funds raised through the initial public offering would be spent on upgrading equipment used to develop cell phone content and for other purposes.
Hardware
- Japanese electronics maker Pioneer Corp revealed its plans to cut 10 percent of its domestic workforce, an equivalent of about 1,000 jobs in the company. The announcement also touched on the scaling down of its DVD recorder business as a response to its struggling operations. Pioneer's restructuring plans follow the actions measures by another consumer electronics company, Sanyo Electric. Sanyo said it planned to raise up to 300 billion yen ($2.5 billion) by issuing new shares to Goldman Sachs and others to strengthen its weak capital base, a plan that goes with its downsizing of its chip and home appliance divisions. Among major Japanese consumer electronics makers, Pioneer, Sanyo and Sony Corp are all forecasting red this year, ascribing the performance to its inability to keep up with falling prices of key products such as flat-panel televisions and DVD recorders. Pioneer said it had a net loss of 12.2 billion yen ($102.7 million) for the first half, compared to a profit of 4.8 billion yen ($40.4 million) a year earlier. Officials from the company were not available for comment yesterday. The company also planned to stop designing and making DVD recorders targeted at the mass market by turning to Funai Electric and other makers for procurement on an original equipment manufacturer basis while focusing on high-end models.
Semiconductors
- Meiko Electronics Co., a major circuit board manufacturer, announced its plans to expand its production capacity by 140 percent by constructing a new plant in China at a cost of 11.6 billion yen ($97 million). The factory is scheduled to go on stream next summer. Demand for circuit boards, which are widely used in digital equipment, is sharply growing for use in automobile components that require high durability. Behind the rising demand is a renewed appreciation for the high technology and reliability of Japanese manufacturers. The plant will be located in Wuhan, Hubei Province. The circuit boards made at the new facility will mainly be produced for automakers. The manufacturer plans to gradually increase circuit board output in Japan and China. Domestic circuit board production began increasing after hitting bottom in 2002, rising 6 percent to 1.1 trillion yen ($9.1 billion) in 2004.
Korea
Internet
- Google is reported to be gearing for its business expansion in Korea, with the US internet giant, said to be interviewing candidates for the CEO of Google Korea. No details were released about the search except for the fact that the interviews are being held at its headquarters in Mountain View, California. The company is also hiring product managers, marketing managers and finance managers who will operate Google Korea. Currently, it only has a few sales representatives in its liaison office in southern Seoul, while its Korean services such as the search engine and e-mail service are all developed and managed at its headquarters in the United States. For years, Korea has been one of Google's main target markets. Google has been servicing most of its web sites in Korean language, including its Internet search engine, a news portal and e-mail service. It has also released Korean versions of additional software programs such as a photo viewer and a desktop search program. With rumors about the launching of Google Korea, the company has increased its marketing activities in the country this year. Recently, it opened a Korean-language blogging site, which is the first non-English Internet community service of the firm.
Mobile/Wireless
- Pantech Group, the second largest handset maker in Korea, is preparing to enter into the low-priced handset market. The company noted that Ultra low-price handsets are under development at Group level including Curitel and Pantech. Pantech Group's announcement to advance into the low-cost handset product market following LG Electronics is expected to stimulate Samsung's appetite for the market. In the meantime, CDG from the CDMA group, which was conscious of the GSM group's movement to the low-cost phone market, recently announced that it would seek various support measures for facilitating entry-level mobile handsets from next year.
- Samsung Electronics announced the signing of a strategic alliance with Italy's largest telecommunication company Telecom Italia (TIM) Group to introduce the WiBro mobile wireless broadband technology to the country. Samsung will provide 50 WiBro personal digital assistants to TIM. The two also agreed to try and demonstrate the WiBro service during the 2006 Winter Olympics in Turin, Italy. That brings Samsung's wireless broadband internet equipment deals with leading international telecoms to five. The others include Japan's KDDI Corp., Sprint Nextel of the U.S. and Brazil's Abril.
- SKT said it would initiate a nationwide WCDMA roaming service in France and Italy. SKT announced that it has partnered with TIM in Italy and SFR in France to provide the service. Subscribers in Korea with WCDMA phones can use their phones in France and Italy. SKT plans to commercialize its WCDMA roaming service in Germany, Spain and the Netherlands by year-end. SKT will be able to provide roaming services in 17 countries as of year-end including the US, China, Thailand, Canada, New Zealand and Australia. SKT currently runs a commercialized service of WCDMA in Seoul and will expand its service to other major cities by year-end and to 84 cities by 2006. The company predicts global roaming service users to exceed 1.7 million this year, up from 1.1 million in 2004. In a separate report, SK Telecom, unveiled a pair of cell phones designed by the company itself, a move that has people thinking the carrier still has plans to venture into the mobile phone industry after losing its handset-making unit earlier this year due to government regulations. SK Telecom sold its 60-percent stake in its handset making affiliate, SK Teletech, to Pantech Group for 300 billion won ($288.7 million) in early July. SK Telecom disposed of SK Teletech because of regulations associated with the dominance of SK Telecom in the local mobile telephony service market. Pantech, the country's third-largest cell phone maker, said it plans to merge with SK Teletech.
- The three mobile service operators in Korea, namely SK Telecom, LG Telecom and KTF, announced the signing of a memorandum of understanding to unify the interface of mobile handsets. Phone makers now use different connectors for earphones, microphones, and data and power cables. A researcher from SK Telecom said no cell phone manufacturer opposed the idea, but said negotiations will be necessary to decide which connectors to use for which external accessories. With phones now doubling as music players, cameras and other devices, this will not be a trivial task. The companies said they wanted that work completed by the end of 2006.
Media, Entertainment and Gaming
- Orion Group, a diversified company with interests in media, film and dining businesses, is expected to enter the online game market in Korea, according to industry sources. Orion is planning to set up a new online entertainment business division and recently brought in an ex-CEO of Gravity to head the new business. An official at Orion's online entertainment division said that the game business will start early next year and that their business model will be different from a publishing model, a statement that implies they will be developing their own games in-house. An official at the Orion Group said that the group has not come to an official decision yet.
- According to a survey conducted by TU Media, based on 200,000 subscribers who signed up for satellite DMB service during the previous five months up to September 2005, more men are subscribing for the services, accounting for 65 percent. The survey said the users in their 20's and 30's are dominant in the subscription ratio, representing 45 percent and 27 percent respectively. According to the survey, the most preferred Satellite DMB content turned out to be a drama. In the meantime, the statistics from the end of July this year showed that subscribers use DMB services for an average of 57 to 80 minutes a day. They are also found to use the service evenly across time bands from 7 a.m. to 9 p.m. with a relatively high usage rate while they commute.
Hardware
- Samsung Techwin, Korea's biggest producer of digital camera, disclosed its plans to equip the cameras with a mobile TV and a function to play movies downloaded from computers. Up until now, mobile phones or laptops have been the devices capable of receiving the DMB signals. Korea's major terrestrial broadcasters are launching terrestrial DMB services starting next month with multiple video and audio channels. Portable Media Players (PMP) is an emerging all-in-one handheld tool, which allows users on the road to view full-motion video or still images, listen to MP3 music and record voice messages. This is not the first time that Samsung Techwin became prominent in the digital camera market with high-tech products. The firm, however, is not considering fitting mobile telephony functions into digital cameras, a move that would bring on a confrontation with one of its sister companies, Samsung Electronics. Samsung Electronics is the world's third-largest cell phone vendor with about a 14 percent share of the global market, following Nokia and Motorola. Samsung Electronics is now leading the digital convergence trend among cell phone makers by cramming many functions into the mobile handset.
Information Technology
- PosData, a traditional system integration company, is seen as a strong competitor against Samsung Electronics in the WiBro (Wireless Broadband) system and chipset area. PosData, which acquired the final approval on the equipments for base stations from KT, a designated WiBro operator, will begin to supply the equipments from 1st or 2nd quarter of next year. A local securities company forecast that sales of WiBro service equipments would grow to reach 53 billion won ($51 million) in 2006, which will offer PosData a stepping stone to transform from an SI business to an IT equipment manufacturer. In a way to protect its intellectual property, PosData applied for patents regarding 10 core technologies and 20 applied technologies for wireless telecommunication at home and abroad.
Telecommunications
- According to a report by MIC, the number of broadband subscribers increased for KT by 8,400 subscriber month on month to 12 million in October. The growth is seen as much slower than the monthly average growth of 51,000 subscribers this year. In October, KT recorded 62.4 million subscribers, down nearly 4,000 subscribers from the month before, a performance attributed to a saturated market and growing competition. Other broadband providers such as Hanaro Telecom, Thrunet, Onse Telecom, Dacom and Dreamline also saw net subscribers decline in October. On the other hand, Powercomm recorded almost 30,000 increases in net subscription despite the ban on adding new subscribers. Powercomm's total subscribers totalled 89,490 subscribers as of end-October.
- KT, Powercomm and Hanaro Telecom, are expanding deployment of optical LAN networks into households, a move aimed at tapping the expanding broadband internet service market. An optical LAN service is a high speed internet service based on combination of optical internet circuits and LAN gears, featuring data rate of 100 Mbps or higher. KT, which has been providing high-speed optical LAN service 'Entopia' primarily to internet cafes and enterprises, plans to expand deployment of Entopia service environment to large apartment complexes and densely populated regions. With a goal to increase the number of subscribers to Entopia service to 150,000 by the first quarter and 1 million by the latter part of next year, KT said it would aggressively expand its service environment across the country. Hanaro Telecom will also expand coverage of its broadband internet service 'Hanafos' from the current 1.9 million households to 2.2 million households by the end of this year.
- KT, Korea's dominant fixed-line carrier, said that it would start pilot service for telematics after disclosing that it finished developing telematics service and handsets. Telematics service provides real-time traffic information combined with navigation, living information and telephone number-based location service. KT plans to provide commercial service from February 2006 after it improves the service and handsets according to the pilot service result. The telematics handset, which was developed by KT, allows for the use of navigation service through wider LCD screen and provides living information service at the same time. It also offers music service.
- IDC Korea forecast that the overall Korean telecommunications market including wire, mobile, voice and data communications is expected to grow at an average annual rate of 5.4 percent for the five years in the future with its sales volume reaching around 32 trillion won ($30.6 billion) in 2009. The report said the future convergence of telecommunications, broadcasting, financing and media will provide a good opportunity to telecommunication businesses but it can also pose a treat to them. It is important to harmoniously solve the conflict and competition that can be raised within the organization or from the alliance between companies.
Semiconductors
- Samsung Electronics and Hynix Semiconductor announced their entering into long-term agreements with Apple Computer to supply NAND flash memory chips used in Apple's iPod Nano and other music players, digital cameras, storage gadgets and handheld devices. Apple said it planned to prepay $1.2 billion for flash memory components during the next three months. In a separate report, Intel and Micron Technology agreed to form a joint venture, IM Flash Technologies, to produce flash memory for consumer electronics and said the new company has a $500 million deal to supply chips to Apple. Japan's Toshiba also secured an agreement with Apple. Samsung Electronics said last month that talks with Apple on a possible joint investment to produce flash memory chips had broken down. Samsung said it would receive an initial payment of $500 million from Apple, while Hynix Semiconductor said it would receive an initial payment of US$250 million within three months. Samsung and Hynix did not provide further details of their agreements with Apple in their statements. The agreements would run until 2010.
China
Internet
- Bokee.com, China's leading blog portal, announced its plans to make some acquisitions before the end of this year. The company said the acquisitions would be related to its present offerings. An official disclosed that the company has been in close contacts with about 10 web sites. The same official said Bokee.com will be utilizing the $10 million venture capital it got for technology upgrading, marketing promotions and acquisitions. .
- Tencent, the mainland's largest instant messaging (IM) service provider, posted a 58.4 percent decline in its net profit quarter on quarter to 78 million yuan ($9.6 million) in the July-September, a performance attributed by the company mainly to the appreciation of the yuan and a lower tax rebate. Despite the drop in net profit, the company's revenue went up to 362.8 million yuan ($44.8 million), an 8.7 percent growth quarter on quarter.
- Analysys International says that China's annual online learning market will reach 11.6 billion yuan ($1.4 billion) in 2005. According to Analysys International's data, the largest segments of the market will be online certifications, accounting for 8.5 billion yuan ($1 billion) of the market, and online fundamental education, accounting for 1.5 billion yuan ($185.6 million). The market for online professional qualification and authentication training, which will grow to 1.4 billion yuan ($173.2 million) this year, has the most potential for growth due to better product quality and higher levels of customer recognition, Analysys said.
- Tom Online is negotiating with China Telecom and China CNC for possible cooperation in offering VoIP services via Skype, according to one of its key officials. The executive said Tom Online is seeking to establish possible partnerships with the two operators, which are entitled to carry out PC-Phone business in China based on a notice issued by China's Ministry of Information Industry. Tom is hoping to offer VoIP services with the telecom operators by the end of this year. The Chinese government earlier announced plans to block free Internet calls, saying the service is affecting the revenues of state-run operators.
Media, Entertainment and Gaming
- The auction of more than 300 advertising slots on CCTV's 2006 programme listings was closed, with the company bringing in a total of 5.8 billion yuan ($717.7 million) from the auction, a figure that stands for 13 percent growth on the previous year. The amount, however, falls short of the station's target of 6 billion yuan ($742.5 million). State-owned enterprises bid a total of 1.2 billion yuan ($148.5 million), a 44 percent increase over the previous year as some giants like China Mobile Communications Corp., China National Petroleum Corp., China Petroleum and Chemical Corp. and China Life Insurance Co. met their bidding targets. Private companies are in the spotlight by bidding a total value of 3.8 billion yuan ($470.2 million). The amount accounts for 65 percent of all bids. Proctor & Gamble Co. was the top bidder, spending 394 million yuan ($48.7 million) and topping other bidders like it did the previous year.
Mobile/Wireless
- Huawei Group and Vodafone, the UK-based cell phone giant, announced their signing of a procurement agreement. Huawei is the first Chinese company enlisted in Vodafone's global procurement list and also the fifth Vodafone communications equipment supplier in the world. Under the agreement, Huawei is expected to provide solutions and equipment of 3G to Vodafone, concerning prices and services. Vodafone spends $5 billion on procurement, which puts Huawei in a good position in Vodafone's global procurement system. Huawei's sales of mobile communication equipment have amounted to over 50 percent of the company's total sales this year. Its contract with Vodafone is expected to bring new momentum to Huawei's business. Vodafone, the biggest international mobile phone operator, offers mobile communication services to more than 171 million subscribers, covering 27 countries and regions.
- Gartner predicts in its latest report that Chinese telecom regulators are most likely to issue 3G licenses in the first half of 2006. Fixed-line telephone operator China Telecom and China Netcom may get the wireless network from China Unicom, the second-largest mobile telecom carrier in the country. The report states that telecom vendors with a strong 2G presence in China and a record of strong performance in the global market such as Ericsson, Motorola, Nokia, and Siemens will stand to benefit along with domestic players such as Huawei, ZTE, and Datang when Chinese telecom carriers start purchasing equipment next year. Hardware
- Lenovo Group, the world's third biggest personal computer maker, said mobile phones might become the company's second largest business after computers. In the second quarter, Lenovo was the biggest local maker of mobile phones in China and was the fifth largest, including foreign brands. In the three months that ended on September 30, Lenovo sold 1.4 million mobile phones, a rise of 139 percent from a year earlier. Revenue from handset businesses, mostly from China, more than doubled from 2004 to HK$1.1 billion ($142 million). Overseas phone makers such as Finland's Nokia and Motorola Inc. are trying to win market share in China as the nation prepares to introduce high-speed wireless licenses, which may spur demand in the world's largest cell-phone market by users. Competition intensified after China approved 16 companies in the first nine months of this year to make and sell handsets. Huawei Technologies Co, Benq Corp and other manufacturers will add annual production capacity of 25 million mobile phones
Taiwan
Hardware
- A-Data Technology, a memory module maker, announced that it aims to raise NT$1.5 billion ($44.7 million) in capital by issuing new shares and floating NT$1 billion ($29.8 million) in convertible bonds. The company aims to improve its financial structure and expanding capacity. A-Data will issue 6.2 million shares with a target share price of NT$80 ($2) and five-year Taiwan Dollar denominated convertible bonds at a per unit price of NT$100,000 ($3,000).
- BenQ announced its plans to withdraw its Joybee series MP3 player models from the Taiwan market, citing as reason the strong competition posed by the Apple Computer iPod series. BenQ, however, declined to comment on the report. Retail channel observers note that Rio and Olympus have both withdrawn from the local MP3 player market. BenQ said it would gradually replace its Joybee series with its mobile phones equipped with MP3 players, according to industry sources.
Hong Kong
Internet
- City Telecom (HK) said it is ready to spend more on marketing to acquire the 369,000 customers it needs to increase its customer base to the one million mark. The company sees a decreasing competition in the city's five-player fixed-line telephone sector in the next two years and the company was ready to face up to further losses that could be deepened by price cuts aimed at pricing their competitors out of the market eventually. The company cautioned its investors during its interim results announcement in May that it would continue to post losses until at least the current financial first half to February next year. A HK$237.7 million ($30.6 million) depreciation and amortization expense dragged the company into a loss at interim. Revenue shrank 2.8 per cent to HK$1.1 billion ($141.8 million), as sales from its international direct dialing (IDD) business dropped 15.2 percent, offsetting the 11.6 percent improvement from its fixed-line voice, data and pay television revenue. City Telecom is set to issue up to six new licenses for broadband wireless access technology, such as WiMax, early next year that will allow new entrants to operate voice and data services on wireless devices such as laptops and personal digital assistants.
- Hutchison Telecommunications International Limited announced that it has successfully completed a HK$9 billion ($1.1 billion) three-year senior revolving loan facility with a consortium of 18 banks. The company said the facility would be used to refinance existing maturing facilities.
Malaysia/Philippines/Indonesia
Internet
- In the Philippines, the conflict between internet service providers (ISPs) and fixed-line operators still continue. The guidelines for the registration of the VoIP service providers and resellers issued by the National Telecommunications Commission (NTC) require ISPs to negotiate for an access charge with landline operators such as Philippine Long Distance Telephone Co., Globe Telecom and other phone firms. The access charge should be bilateral in nature. The carriers have been saying that VoIP cannot be classified as value-added service because VoIP is marketed as a telephone service, a service that is already being offered by existing carriers that have complied with the law to put up at least four million fixed lines before they were allowed to operate. The major carriers had also earlier warned that VoIP could lead to the decline of the telecommunications industry.
Mobile/Wireless
- Smart Communications Inc. disclosed that it is setting aside 3.3 billion pesos ($61 million) in initial investments to fund the first two years of 3G mobile network operations. The firm said it will initially spend from $50 million to $60 million for the first year and a half until the second year of its operations, an amount that Smart said it is already included in the 2006 budget set for the entire Philippine Long Distance Telephone Co. (PLDT). The firm said its capital expenditure for next year will be somewhere between 18 billion pesos ($332.2 million) and 20 billion pesos ($369.1 million).
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