A Week in Tech

A round-up of all the latest tech news.

Japan

Internet

- Yahoo Japan, the top Japanese Internet portal, declared its plan to pay a dividend, saying it will distribute ten percent of its income this business year. Although the company had not yet decided the specific amount per share, according to Reuter's calculations based on the company's forecast for net profit, the payout could range from 3.5-3.6 billion yen ($33.8-34.8 million). Yahoo Japan is 33.5 percent owned by Yahoo Inc. and 42 percent owned by Softbank, a Japanese Internet conglomerate.

Mobile/Wireless

- Nippon Telephone, a Japanese phone seller, has been approved for listing on the JASDAQ Securities Exchange, according to Japan Stock Exchange. For its initial public offering, the company will offer 6,000 shares to the public, 4,000 of which are newly issued shares and 2,000 being shares currently held in private. The company forecasts for the current fiscal year through April 30 a parent pretax profit of 427 million yen ($4 million), net profit of 199 million yen ($1.8 million), and revenue of 12.8 billion yen ($122.1 million). SMVC Friend Securities is the lead underwriter of the offering.

- Advanex Inc. has announced its intention to increase in-house production and at the same time reorganize it hinge business with subsidiary Strawberry Corp. The plan was made in the middle of strong sales of hinges, which are used in clamshell-type cell phones. The company aims to reduce costs in its production by making more products on its own and having more synergy by way of closer collaboration with its subsidiary. Advanex will transfer the domestic sales operations to Strawberry, which does not have any production facilities. Presently, Advanex purchases some 6 billion yen ($57.2 million) worth of hinges from outside contractors annually.

Media, Entertainment and Gaming

- Yoshimoto Kogyo Co., Japan's top comedy entertainment company, said it would form with a partner an investment fund worth about 10 billion yen ($95.4 million) in April. The fund will be formed in April to invest in projects to distribute vaudeville programs via the Internet and for the production of its comic shows in DVD format. Yoshimoto aims to boost its revenue and profitability by increasing its vaudeville show and music content in cooperation with Faith Inc.

Hardware

- Online PC sales in Japan increased 77.2 percent in 2003 from a year earlier, which accounted for 10.5 percent of total domestic PC sales, according to IDC Japan. The growing online sales are read as indicators of greater competition between PC makers and mass-retailers with the condition that overall market size remains unchanged. Amidst this situation, major domestic personal computer makers are altering their marketing strategies by expanding online sales. Presently, these strategies rely on mass-retailers as key sales outlets. The renovated web site allows consumers to choose memories, CPUs and other PC parts, offering the consumers about 100 million different parts combinations.

Telecommunications

- NTT East and NTT West, regional units of Nippon Telegraph and Telephone Corp., said they plan to spend a total of 780 billion yen ($7.4 billion) next fiscal year in order to improve their fiber-optic communications networks. The figure is a slight decrease from the 790 billion yen ($7.5 billion) in spending the two units expected for the current fiscal year ending March 31. NTT East said its targeted capital expenditures would total 400 billion yen ($3.8 billion); NTT West said its planned capital investment for the next fiscal year would be a total of 380 billion yen ($3.6 billion). Both NTT East and NTT West expect their combined outlays on optical fiber networks to increase to 330 billion ($3.1 billion) yen next business year.

Korea

Telecommunications

- KT Corp. said it would spend 20 billion won ($19.9 million) through the second quarter for the upgrading of its telephone networks in four cities. The four cities of Busan, Daegu, Suwon and Anyang experienced their phone services shutting down due to sudden increase in traffic. Korea's largest fixed-line telephony company, KT entered into an agreement with the Ministry of Information and Communication. Under this agreement, KT would start purchasing equipment to advance their transmission systems and increase the lines to the networks in the said four cities. KT, a former state telecom monopoly, controlled 93.8 percent of the domestic fixed-line telephony market as of January.

- SK Telecom Co. said it has attracted more than 200,000 customers to its wireless internet services in China. Korea's largest mobile-phone operator established a $6 million venture, called UNISK, with China Unicom, China's second-largest mobile operator. Under the venture, SK has been delivering wireless Internet and data services since March and the company predicts UNISK's customer pool would grow to 500,000 by the end of the year. The figure is estimated by company as generating $2.5 million in revenue. SK Telecom has a 51.3 percent market share in 2004.

Mobile/Wireless

- LG Telecom Ltd. is expecting further setbacks in its deployment of 3G services as it faces uncertainties with the provision of its base technology. Qualcomm, the developer of CDMA technology announced that it had abandoned efforts to develop chip sets to electronics manufacturers for CDMA2000 1xEV-DO evolution for data and voice mobile Internet handsets. LG Telecom is the only wireless carrier deploying the technology for its 3G services. Given the present situation, analysts are predicting that LG Telecom will likely give up its third-generation deployment plan and secure a license for widely used third-generation standard instead. The slow deployment by LG of 3G mobile telephony services is seen by industry watchers as hurting the company's competitiveness.

Hardware

- Samsung Electronics announced conservative business plans even as it points to unfavourable market conditions such as the local currency's appreciation against the dollar for its outlook. A company official has this year's sales target "conservatively" at 58.1 trillion won ($57.6 billion), which is up from last year's 57.6 trillion won ($57.1 billion). The company said it would revamp its business structure this year to focus on high-value added products. Samsung's mobile phone business profitability had declined because of the price war with Nokia and Motorola. Samsung has a planned capital expenditure of 10.4 trillion won ($10.3 billion) this year.

Semiconductors

- Hynix Semiconductor, the world's second-largest DRAM maker, reported a business rebound with a record-high operating profit last year ascribed to increased sales of upscale chips. The company reported an operating profit of 2 trillion won ($1.9 billion) last year, with a 58 percent sales increase to 6 trillion won ($5.9 billion). In the fourth quarter, Hynix posted an operating profit of 459 billion won ($455.2 million), which is the company's sixth consecutive quarter of profitability. The company also announced that it had set aside provisions for in preparation for a price-fixing investigation in the United States.

Information Technology

- An official of the country's Ministry of Information and Communication said his ministry plans an outlay of 790.7 billion won ($783 million) to build by 2010 an information technology hub in a free trade zone in Inchon known for its proximity to China. The fund will be particularly focused on helping domestic and foreign companies specializing in the radio frequency identification (RFID) system set-up. The government has been keen in promoting RFID technology in its search for a new growth engine for the domestic high-tech industry. According to a government source, worldwide sales from the RFID industry will roughly total $90 billion by 2015, which is claimed to be similar to the level of the current mobile phone industry. The funds will be used to construct infrastructure for high-tech companies to set up research and development facilities in the trade zone.

China

Internet

- According to government sources, the country will have a total of 120 million Internet users by the end of 2005. The figure would be a 28 percent growth from 94 million at the end of 2004 and makes China the second-largest market in the world after the United States. The same figure, however, appears conservative when placed side by side with independent forecaster Analysys International earlier predicted this year to be the total number of Internet users in China reaching 134 million by late 2005. From 1997, China's online population is recorded to have grown rapidly from 620,000.

- Leading online travel service provider eLong announced its unaudited financial results with total revenues for the fourth quarter ended December 31, 2004 of 40.3 million yuan ($4.9 million), a 48 percent increase from 27.2 million yuan ($3.3 million) reported in the same period in 2003 and an increase of 6 percent from 38 million yuan ($4.6 million) reported in the previous quarter. Total revenues for fiscal 2004 were 138.5 million yuan ($16.7 million), an 86 percent increase from 74.4 million yuan ($9 million) for fiscal 2003. The company also reported a net loss of 21 million yuan ($2.5 million) for fiscal 2004. Founded in 1999, eLong is an independent travel service headquartered in Beijing and with a national presence all over China. The company provides consumers with travel information and the access to hotel reservations at over 2,6000 hotels in major cities across China by way of web-based distribution technologies and a 24-hour nationwide call center.

- Credit card giant Visa International and eLong announced in a joint statement a partnership aimed to tap the great potential of China's e-travel industry. The partnership combines the respective strength of both companies: Visa will facilitate e-shopping while eLong with its online network of hotels, airlines and tourist destinations could help expand the choices available to Visa card holders. With security a major concern in the growth of e-shopping, Visa International is expected to provide an online security service to protect the interests of Internet shoppers. The partnership comes amidst the fact of China's younger generations becoming major users of online services. The sharp increase in the number of business travelers provides a new growth engine for travel service companies like eLong.

- Alibaba announced the finalization of its strategic cooperation with the Industrial and Commercial Bank of China (ICBC) for online payment services. With Alibaba's expertise in running auction and e-commerce web sites, the new service will enable users to conduct online transactions with much ease. The cooperation is said to be different from what Alibaba has forged with other banks; in this new strategy, Alibaba will work directly with the headquarters of ICBC.

Mobile/Wireless

- The overall trend of the wireless value-added service market is described by iResearch as good and its prospects bright. The Chinese wireless value-added service market will have a steady growth despite the ongoing regulatory campaign and the reshuffling of the industry, according to the Shanghai-based Internet research house. The report mentioned the popularity of smart phones, the continuing evolution of the content of wireless value-added services, and the deployment of the third-generation mobile communications systems as some of the factors assuring the prosperity of the industry. According to a recent report on the wireless value-added service market, the impact of the regulatory campaign would be in the 65 percent growth to 38.5 billion yuan (US$4.6 billion), compared to the 149 percent year-on-year growth in 2003.

- MIPS Technologies, Inc., a provider of processor architectures and cores for digital consumer and business applications has extended its engineering operations with its opening of MIPS Technologies (Shanghai) Co. Ltd. The opening of the R&D Center is expected to work on the development of new MIPS processor hard cores and assist Chinese companies design digital consumer devices and at the same time provide technical support to licensees throughout the region. Magma Design Automation, with offices in China and the Far East, is the company that will provide the R&D Center with software design tools and engineering support.

- Intel Capital and Jafco Asia announced their team up with two other firms to invest early-stage venture capital in Pollex Mobile Holdings. Intel's role will be that of a strategic investor with Pollex while Jafco's part would be that of a financial investor. With the investments, Pollex is expected to optimize software solutions for the semiconductor giant's chipsets. Japanese handset manufacturer NEC used Pollex software for its N940 TV and camera phone sold in China' domestic market. The company was said to be keen in using software solutions for smart phones running the Linux operating system. A Jafco spokesperson said that the company would be utilizing its homeland connections (the firm's parent is listed in Tokyo) to introduce Pollex to handset vendors in Japan.

Semiconductors

- Motorola offered 517 million shares in Semiconductor Manufacturing International Corp (SMIC) shares, which represent about 47 percent of its holdings in the company. The report said that the disposal, however, would not cover the investment made by Motorola in the Shanghai-based foundry. Motorola had invested US$1 billion in the plant. With the attempted share placement and the shares offered in the SMIC initial public offering in March last year, Motorola has recovered about US$360 million. Deutsche Bank, which was arranging the placement, declined to comment.

Taiwan

Hardware

- According to the semi-official Institute of Information Industry, computer hardware production of Taiwanese firms totaled $67 billion. The figure is a 23 percent increase over the previous year. Most of the goods however were made in the mainland by Taiwanese firms, with these firms investing more than $100 billion in the mainland. The firms capitalizing on cheap labor and lower production costs are continuing to transfer production to mainland. The report said about 73 percent of the value of Taiwanese computer makers' output last year was coming from their factories in the mainland. The institute said the $67 billion worth of laptops, motherboards and other hardware produced by these makers last year was the highest in the world. The report did not mention what countries came after Taiwan.

- Teco Electric Machinery, a leading Taiwanese home appliance company, announced that Japan's Sharp had already withdrawn a request filed with a Tokyo court last year for a temporary ban on its products in Japan. The request filed in June last year has something to do with suspending sales of Teco's two models of 20-inch LCD TV sets fitted with panels made by AU Optronics Corp. The withdrawal by the Japanese company came after it was told by the court that that its patent claim on Teco products was invalid as the technology involved was considered "prior art" - something that was already in existence.

Hong Kong

Media, Entertainment and Gaming

- Asia Television (ATV) will revive its long-delayed main-board listing plan in the fourth quarter of this year, according to sources close to the station. The company, which is Hong Kong's No. 2 free-to-air broadcaster, plans to float at least 25 percent of its issued share capital to the public. It aims to raise up to $1.2 billion to be used for its expansion into mainland markets and to allow existing shareholders to offload their shares. ATV, according to sources, has plans to use the listing proceeds to improve programming and expand its reach in Cantonese-speaking markets in Guangdong, Guangxi and Hainan provinces. The company collects advertising revenue in China through Yaguang Media, a joint venture between ATV and Southern Television Guangdong. ATV is talking with mainland TV operators and advertising agents to extend its revenue-sharing agreement to other parts of Guangdong.

- Leading pay-television operator I-Cable Communications announced that it plans to spend more on programming, with a focus on financial news and entertainment shows. Aside from its plan to increase live news coverage, the company would be going into film production targeting the local and overseas markets with an investment of up to HK$300 million ($38.5 million) in the next two years. The pay-television operator reported a customer base expansion to 656,000 in 2003 to 702,000 last year. NOW Broadband TV has an estimated 480,000 subscribers and Galaxy Satellite Broadcasting with 20,000. With its announcement of making five to six movies a year, i-Cable also announced a 29 percent increase in its net profit to HK$284 million (US$36.4 million).

Singapore/Malaysia/Philippines/Indonesia

Telecommunications

- Philippine Long Distance Telephone (PLDT) announced net profits of 28 billion pesos ($511 million) for last year. PLDT's said it is investing on upgraded fixed line business for data services to sustain revenue streams, which are now derived mainly from its wireless business. Sales posted a 13 percent growth to 126 billion pesos ($2.2 billion), with cell phone revenue rising 27 percent as PLDT added 6.2 million mobile users during the year. The Philippines had Southeast Asia's biggest mobile-phone market with 32.7 million subscribers at the end of 2004, followed by 30 million in Indonesia, 27 million in Thailand, 14.6 million in Malaysia and 3.1 million in Singapore. A company official said that while PLDT was ahead in January when compared with year-earlier figures, this year's environment may not be as favourable as last year's because of increased foreign exchange risks.

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