Japan
Internet
- Fuji Television agreed to pay $1.6 billion to end the take-over battle over an affiliate with Livedoor, a move that has been described by analysts as a "face-saving deal." Under the agreement, Fuji TV would shell out 131.5 billion yen ($1.2 billion) to transform Nippon Broadcasting System (NBS) into its wholly owned unit, a deal that includes the acquisition of a Livedoor unit for 67 billion yen ($632.8 million). Fuji also agreed to buy a stake in Livedoor for 44 billion yen ($415 million) and, with it, the forming of an alliance with the internet portal, which values the deal to a total of 177.7 billion yen ($1.6 billion). Livedoor's bid for NBS has been perceived as hostile by the industry and has caused alarm in the Japanese business circles.
- Yahoo Japan Corp. announced a group net profit of 36.5 billion yen ($344.7 million) for the year ended March 31st, a 47.1 percent increase. The firm attributed the growth to its online advertising segment, with the increased online ad demand from major companies giving a 74.8 percent boost to a record 38.9 billion yen ($367.4 million), with the segment accounting 33 percent of the company's overall sales. Group sales of the company posted a 55.4 percent growth to 117.7 billion yen ($1.1 billion), with the gross profit reaching 108.8 billion yen ($1 billion). The Internet advertising market was placed at 181.4 billion yen ($1.7 billion) in 2004, following the figures tracked by Dentsu Inc.
Mobile/Wireless
- Index Corp., a mobile phone content distributor, announced its interim group pretax profit for the period ended Feb. 28th as posting a huge 150 percent to 3.8 billion yen ($35.8 million) on solid sales of settlement systems for cell phones. The company's sales also had a 140 percent increase to 34.5 billion yen ($325.8 million), which was ascribed to expanding overseas demand from Europe and the U.S. The company's net profit showed a 340 percent increase to 3.4 billion yen ($32.1 million). Its domestic content distribution sales also rose 20 percent, with total sales in the firm's distribution increasing 470 percent to 18.4 billion yen ($173.7 million). The expansion of Index's settlement system building business is brought about by the growing popularity of mobile phones equipped with smart cards that can be used as electronic money.
- Sumitomo Mitsui Card Co. and JCB Co. are partnering with NTT DoCoMo with the purpose of securing a more substantial lead in the credit card market. The credit card is topping at 34 trillion yen ($321.1 billion). The alliances of the three firms is expected to give Sumitomo Mitsui and JCB access to DoCoMo's huge capital and large subscriber base at the same time optimizing the customer convenience as the technology will allow users to carry only their wireless phones to charge their purchases. For NTT DoCoMo, its entry into the credit card business will allow it an opportunity to move away from its business model that depends on an increase in the communication traffic .The company is said to be looking to a new growth business because the mobile market is becoming saturated, with the war rate expected to affect its earnings.
- Zappallas Inc., a developer of digital content for mobile phones and online shopping service firm, has been approved for listing on the Tokyo Stock Exchange's Mothers market. For the current fiscal year through April 30, 2005, the company predicts a parent pretax profit of 470.5 million yen ($4.4 million), net profit of 266.9 million yen ($2.5 million), and sales of 4.1 billion yen ($38.7 million). Last year, the company had a parent pretax profit of 224.2 million yen ($2.1 million, net profit of 92.1 million yen ($870,000), and sales of 3.7 billion yen ($34.9 million). The Tokyo-based company will offer 1,940 shares to the public in its IPO, of which 1,500 are newly issued shares and 440 are shares currently held in private. Nikko Citigroup is the lead underwriter of the offering.
- Shipments of mobile phone handsets for sale in Japan in the year to March went down 12.2 percent to 43.9 million units, according to MM Research Institute. NEC was No. 1 for the domestic market with a share of 18.6 percent even as its shipments by volume went down by 29.8 percent. Panasonic Mobile Communications was second with a market share of 17.3 percent, its shipments going down 2.8 percent. Sharp grabbed the No. 3 place with a 14.3 percent market share, with its shipments showing an 11 percent increase. From its seventh slot, Sanyo went up to fourth place as its market share grew to 9.6 percent. The other firms followed, with Toshiba getting 8 percent of the market share, Sony Ericsson 7.9 percent. Mitsubishi Electric and Fujitsu had each 7.5 percent. The research firm explained the slump to the absence of new hit products. Sharp's growth was attributed to its strong shipments to NTT DoCoMo while that of Sanyo's were boosted by shipments for KDDI Corp's au service.
Hardware
- Hoya Corp. said that its group net profit had a 48 percent increase to 15.1 billion yen ($142.6 million) in the quarter ended March 31st, up from a 10.2 billion yen ($96.3 million) profit a year earlier. In the three months ended March, group sales rose 8.3 percent to 76.9 billion yen ($726.2 million), from 71.6 billion yen ($676.2 million). The company explains the growth as boosted by sales of electronic devices for semiconductor manufacturing and hard disc drives. Investors observe Hoya's earnings because the company is the first major electronic parts maker in Japan to report its earnings for the quarter of the full year, which ended March 31st. The company is also known for having a high rate of ownership by foreign investors, with non-Japanese investors owning 54.4 percent of Hoya's equity as of Dec. 31st.
- Fujitsu Ltd. and NEC Corp. said they would begin manufacturing models of their home-use personal computers with the aim of making them compatible with digital home electronics. The move of the company is along the promotion of "digital home networks", a system that enables computers to be connected to televisions, DVD recorders and other audiovisual appliances. These initiatives by Fujitsu and NEC follow the technological specifications of the Digital Living Network Alliance, which is composed of about 200 companies that counts as its members Microsoft Corp., Intel Corp. and Sony Corp.
Telecommunications
- The Ministry of Internal Affairs and Communications said it aims to start providing subsidy in fiscal 2006 the regional companies of Nippon Telegraph and Telephone Corp. for losses in their fixed-line phone service in under populated areas. The fund to be used for the subsidy is called "universal service fund" and was set up in June 2002 to subsidize the losses of NTT East Corp. and NTT West Corp. The subsidy was for the maintenance of phone service throughout Japan. Since its inception, no fund has been given yet because the present system is for the extension of financial assistance only if the NTT group fixed-line phone service providers face overall net losses. The two firms have requested a change in the system because of its claim that its fixed-line phone services are facing intense competition from cellular phone and Internet protocol phone services and the competitors offering much lower rates.
Korea
Internet
- The country's four terrestrial television broadcaster's withdrawal from their decision to participate in trial operations for web-based television is seen as a major drawback for the development of the next-generation Internet. According to the government's National Computerization Agency, KBS, MBC, SBS and EBS, all land-based television stations, sent a notice to the agency about their decision to postpone participation in the trial operations and said that they might backed out from the project completely. If pushed through, the alliances would have embarked on joint pilot projects for the broadband convergence network, due for commercial launch next year. The broadband convergence network is seen as a huge Internet protocol providing connections at speeds about 50 times faster than the conventional broadband services. Policymakers were looking to the system as providing the backbone for future information and communication technologies.
Mobile/Wireless
- SK Telecom Co., South Korea's largest mobile-phone carrier, launched a new wireless internet service, which gives subscribers access to customized data services by way of an interactive cartoon character on the handset display. All the user has to do is "talk" to the cartoon character. The new service is named 1 mm and has simple features like short-text messaging and games. The service also features news and information on weather, restaurants, television programs and movies. The new service is available on LG-SD340 and LG-SD840 handsets made by LG Electronics Inc. and the V650 handset from Samsung Electronics Co. SK Telecom is planning to introduce another service that will combine the 1 mm wireless internet service with the company's digital music service Melon. SK Telecom presently controls more than half of Korea's mobile-phone users with its 19 million subscribers.
Hardware
- LG Electronics posted 5.9 trillion won ($5.9 billion) in sales, beating market forecasts, even as its profitability went down compared to the same period last year. The company's operating profit went down 31 percent to 280 billion won ($280 million). Its net income went down 80 percent to 83 billion won ($83 million). Despite the profit reduction, analysts saw something good in LG Electronics. Samsung Securities Co. predicted a better year for LG Electronics because of rising handset sales to the US. and Europe. Given the increase in global demand, LG Electronics hopes to sell 62 million units this year. The company's weak performance was attributed to the won appreciation and the higher cost of raw materials. In another development, LG Electronics Inc. released a notebook computer that is able to receive land-based television broadcast signals while on the move. Named LW40, the computer can enable the user to take, record, save and scan television programs and images. LG Electronics also announced it plan to invest $100 million by 2010 in a manufacturing plant to be built in Russia. The Russia plant would be producing washing machines, refrigerators, display panels and audio systems for sale mostly in Russia and the neighboring countries.
Semiconductors
- Hynix Semiconductor admits to price-fixing in the US and agrees to pay a $185 million fine to settle everything. The case was considered the third-largest criminal antitrust fine in the history of the United States. Analysts, however, remain optimistic about Hynix as they said the fine would finally erase all uncertainty about the company. With things settled, the company's management could now focus on its raising of the company's corporate value. The news came with an overwhelming endorsement of creditors, led by Korea Exchange Bank, for a proposal to end their joint control of the company, allow it to stand on its own. The company is also preparing to replace their loans with new funds raised under a refinancing program. The creditors also praised Hynix's efforts to making a turnaround through a corporate restructuring.
China
Internet
- AliPay, Alibaba.com's online payment system in China, announced its new service that enables its customers to use their Visa credit card for their online purchases. The payment system is available to buyers and sellers on two of Alibaba's online marketplaces, Alibaba China (B2B) and Taobao.com (C2C). Through the service, AliPay customers can make their payments in three manners: Visa card, wire transfer and online transfer from their bank account. The system will hold their payments in escrow until they buyer has signified that the product has been duly received. AliPay transactions are reported to have doubled in just the last quarter. There are 6 million Visa cards issued to date in China.
- Shanda Interactive Entertainment Limited announced that it will be signing a deal with Turbine, Inc., to bring Dungeons & Dragons Online to China. The agreement will give Shanda the exclusive rights in China to operate this first and only 3D massively multiplayer online role-playing game (MMORPG) based on the world-renowned Dungeons & Dragons franchise. The game is expected to be launched in 2005. No financial terms of the agreement were disclosed. According to IDC, China represents one of the world's largest and fastest-growing markets for online games, a market it valued at $1.3 billion. Turbine Inc. is a premier producer, publisher and operator of online subscription entertainment.
- CNET Networks, Inc. announced that it has agreed to acquire the assets of PCHome, in cooperation with Chinese subsidiaries and affiliates. The transaction, which is effective immediately, has a value of $11 million in cash payments. The definitive agreement will allow the founders of PCHome to retain 10 percent minority interest. PCHome is a leading personal technology and commerce web site, headquartered in Shanghai and serving all of China. Last year, CNET Networks acquired ZOL and Fengniao, two leading personal technology web sites based in Beijing, making CNET Networks as a leading provider of personal technology content in two of the largest and fastest growing Chinese markets. CNET Networks, Inc. is a worldwide media company and creator of content environments for the interactive age.
Mobile/Wireless
- China's domestic mobile phone handset manufacturers will be seeing their operating margins squeezed over the years in the face of intense competition in the market, according to Gartner. In 2004, China bought around 68 million handsets, with Nokia as the No. 1 vendor with around 20 percent market share. Motorola followed with 12 percent. The two leading domestic vendors, Ningbo Bird Co. and TCL Corp. were in fourth and fifth spot, with 8.6 percent and 7.2 percent shares, respectively. The year saw domestic handset makers with declining operating margins as the industry faced overcapacity and competition with foreign brand names. As the margins are eroded, Gartner pictures domestic handset makers going into emerging markets. TCL has already announced plans for expansion of its manufacturing to Russia even while it has plans to develop new markets in Indonesia, the Philippines and the Middle East. Ningbo Bird said it will double its exports of handsets this year, to target developing markets in Southeast Asia, Eastern Europe and India. Gartner says by 2006, only around 25 to 30 of the 37 current handset manufacturers will be around.
- China Mobile announced a 20 percent increase in its first-quarter net profit to 11.2 billion yuan ($1.3 billion) in the three months ended March 31st, an increase over the 9.3 billion yuan ($1.1 billion) recorded in the same quarter last year. China's largest mobile network operator posted for the quarter revenue of 54.8 billion yuan ($6.6 billion), up from 42.1 billion yuan ($5 billion). China Mobile saw an additional 9.5 million subscribers in the first quarter alone, which gives it a total of 213.8 million subscribers. China is the world's largest telecom market, with about 344 million mobile users as of February. It registered a mobile penetration rate of 25.9 percent. In another development, China Mobile announced that it is deploying a switching solution from Nortel, with the aim of making available a secure 'anywhere, anytime' mobile Internet data capabilities to its subscribers.
Hardware
- Lenovo Group lost the top spot in Asia-Pacific personal computer sales to Hewlett-Packard, with the sales slowdown in the mainland as one of the reasons. The company had to face, aside from the dip in sales during the holiday, high levels of inventory from the previous quarter. Completing the top five personal computers in the Asia-Pacific region, excluding Japan, were Dell, IBM and Founder Electronics. Despite this result, Lenovo remained the mainland's top computer firm, with the first-quarter desktop and notebook computer sales in the region reaching 8.9 million units, a 13 percent increase year on year, following IDC's preliminary estimates. The company's acquisition of IBM personal computer business is expected to give it bigger distribution and sales network, with 160 countries in the coverage.
- Changhong Electric Appliance Co. Ltd., the top Chinese TV manufacturer, posted a loss of 3.6 billion yuan ($445 million) for last year. The figure meant that it registered a loss in the fourth quarter of about 3.7 billion yuan ($447 million), compared with a profit of 85.8 million yuan ($10.3 million) in the fourth quarter of 2003. The company had forecast the loss after it set aside some $330 million to cover debts owed by Apex, a U.S.-based company Changhong cooperated with in 2001 to sell the Chinese televisions to Wal-Mart Stores, Inc. under the Apex brand. In the same report, Changhong said it is suing Apex in order to take back half-billion dollars in unpaid bills. In January this year, Changhong won a $360 million credit line as part of a State bailout. The granting of credit is seen as marking the strategic importance of a company that remains the largest taxpayer in the province of Sichuan.
Telecommunications
- Qiao Xing Universal Telephone, one of China's largest manufacturers and distributors of telecommunications terminals and consumer electronics products, announced that its major subsidiary, CEC Telecom Co (CECT) had been consolidating its position in the Chinese mobile phone handset market. According to the latest survey conducted by the Chinese market research firm SINO-MR, CECT went up one place higher in the league table of market share by sales volume in the first quarter of 2005. The report said the stranglehold of foreign players around PDA mobile phone handsets has been broken by CECT with the success of its T868 model.
Taiwan
Mobile/Wireless
- The five licensed operators of 3G mobile communication services in Taiwan set up a 3G Mobile Services R& D Alliance in order to promote their services and build cooperation among makers of 3G handsets, telecommunications companies and digital content providers. Composing the alliance are the top three operators of mobile communication services, which include Chunghwa Telecom, Taiwan Cellular and Far EasTone Telecommunications, as well as VIBO Telecom and Asia Pacific Broadband Wireless Communications. Using the financial aid from the Ministry of Economic Affairs, the group will conduct first a 4-month pilot project aimed at promoting local development of digital content to be offered through 3G services. The alliance will proceed to working on the development of local industries related to 3G mobile communication services. The alliance is hoping that its activities will attract makers of handsets, providers of digital content and companies doing R&D platforms and encourage them to enter the market.
Hong Kong
Mobile/Wireless
- Hutchison Telecom, SmarTone Telecom and Sunday Communications jointly submitted to the Office of the Telecommunications Authority (OFTA) a statement opposing the regulator's plan to remove the speed cap on the new spectrum for 2G operators. Originally, a 144-kilobit per second limit on 2G services was imposed. 3G services employ a higher speed of 384 kilobits per second. The proposal is viewed by 3G players as unfair penalty after they have shelled out millions for their licenses. In a sense, the new rule will give 2G operators the extra speed for free. The OFTA's proposal is a result of a consultation that looked into how to allow the 2G operators to expand their spectrum.
- PCCW said it plans to offer fully mobile voice and data services in the British market once the spectrum policy is liberalized. This move would put the telecommunications firm face to face with 3G mobile operators such as Hutchison Whampoa and Vodafone. PCCW also intends to test fixed voice services using VoIP technology in coming months. PCCW's services are at present fixed although the technology from the U.S.-based IP Wireless makes it a variation of 3G mobile phone technology.
Information Technology
- Advanced wireless networking technologies are crucial to the delivery of e-government services in Hong Kong, experts said. The platform would be a mix of broadband internet systems and the longer distance WiMAX. In Hong Kong, the Office of the Government Chief Information Officer is already looking into wireless as a way to widen the reach of VoIP services from its Cyberport office to other sites in the city. A survey conducted by the Hong Kong Wireless Development Center, with the support from the Hong Kong Wireless Technology Industry Association and the Hong Kong Productivity Council, predicted an increased demand this year for mobile access applications and content in the business and consumer sectors.
Singapore/Malaysia/Philippines/Indonesia
Semiconductors
- Chartered Semiconductor reported a net loss of $84.5 million, worse than the $26.8 million net loss in the December quarter. The Singapore-based Chartered, which makes computer chips for other companies on contract, said its revenues went down 20.6 percent to $181.4 million. The company said the revenue decline was caused by the weaknesses in the communications sector, which was partially offset by the strength in the communication sector.
Hardware
- Creative Technology, a digital entertainment products maker, said its net profit in the third quarter to March went down 72 percent to $15.9 million from $57 million. The said result happened, according to the company, despite soaring sales as strong competition pushed down prices of MP3 players. Creative Technology said the competition forced it to slash prices for its MuVO flash players and Zen Micro 5GB hard disk players, following Apple sharply slashing price tags for its iPod mini and introducing newer and cheaper products. For the nine months to March, the company posted a net income of $37.7 million, a 74.5 percent decrease from $127.6 million the previous year. Creative Technology began as a maker of sound cards that helped transform the personal computer into an entertainment centre.
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