- Japanese wireless carrier NTT DoCoMo has launched a service for smart-card handsets that allow customers to use their cellphones as a mobile wallet. The Felica system enables people to make bank withdrawal and credit card purchases and even check in for some airlines' flights. In this system, information is sent from the cellphone over NTT DoCoMo's own networks. Another way is for the data to be transmitted to a special reader attached to cash machines and cash registers. Phones introduced for the service include Fujitsu's F9001C, the first cellphone with an embedded smart card to work with DoCoMo's wireless broadband network. Other handsets that can work with the service are those made by NEC, Panasonic, Sharp Mitsubishi and Sony Ericcson. The Felica system is based on the Sony smart-card technology of the same name. DoCoMo, with its 46.6 million subscribers is a testing ground for new services that get mainstream into the worldwide markets.
- The number of subscribers to Vodafone KK fell by 3,100 in July, the first net decrease since the cellular phone service went national in October, 1999. Last month, the company revised its discount scheme in which users could call other Vodafone users for just ¥5 yen ($0.05) per minute on weekends. In place of that old system, it introduced one in which subscribers get the next 30 minutes free after talking for five minutes. Subscribers are believed to have read this change as essentially a rate hike for people who make many short calls. Logging the largest net increase in subscribers for the second consecutive month is NTT DoCoMo. Its shift from the second-generation service to 3G (third-generation) FOMA service appears to have gone well as shown by the number of subscribers declining for the former and increasing for the latter. The increase in FOMA users is also believed to be due to DoCoMo's July release of handsets that allow users to make payments at convenience stores and other establishment stores.
- Fujitsu is targeting the information technology outsourcing business in Japan as a major source of revenue, the Financial Times reported. Fujitsu, the largest outsourcing service provider in Japan and the world's fourth largest is aiming for double-digit growth in the business this year. Outsourcing is becoming a big business and will provide the strongest growth among Fujitsu's businesses. Given the low potential for growth in the Japanese IT market, Fujitsu, which already sells more servers overseas, will have to expand its server business in foreign markets even further to sustain future profits. To improve margins in servers, it is necessary to take a high global market share. Fujitsu trails IBM, Hewlett-Packard Co., Dell Inc. and Sun in the global server market.
- Nine major high-tech companies will band together to increase efforts to prevent customer data leaks. The companies will form a nonprofit organization to share state-of-the-art methods to block personal information leaks. This would be a shift away from their current practice of taking preventive steps separately. Member firms will disclose, by means of web sites and seminars, a wide range of expertise to each other on how to prevent data leaks. These companies, which include KDDI Corp, NEC Corp. and NTT Communications Corp., will invite other firms to join the group. A prerequisite for joining the group will be certification of the company's ability manage information security under the Ministry of Trade and Industry's scheme for Information security management system certification and registration.
- Upcoming, an Internet-related service start-up, has merged with Ele, a software development start-up, to beef up services development and marketing capabilities. Upcoming started offering internet-based TV phone services called Homepage Phone 2 in 2002. It has 10,000 subscribers. In this merger, Ele will provide software development capability, which will be used by Upcoming to expedite the speed of new services development as well as help its marketing system. The new company will first develop a new internet-based TV phone service in which each user will be able to show each other two images in addition to the one projecting their own images. All this will be via two cameras installed in their personal computers. The new service is to be called eLe-MIT and will be made available this autumn. The new company expects the service to be in demand for activities like net auctions. Although Upcoming is the surviving company, the new company created has adopted Ele as its corporate name.
- Softbank Corp.said that its consolidated net loss for the April-June quarter was ¥17.8 billion ($161.0 million), about half of its loss in the same period a year earlier. Overall sales gained 42% on the year. The company's mainline broadband services business generated 90% more sales due to the increased number of subscribers to the Yahoo BB Internet service. Revenue from the Internet advertising also grew. The company's loss was smaller than in the previous year. Softbank's online brokerage business fared well because of a robust stock market and the operating profit of its financial business increased nearly ninefold.
- Dai Nippon Printing Co. has introduced a grid computing system at its printing plant; Nippon Steel Corp is testing the same technology at its steelworks. Grid computing is the system in which computers are connected so that they can act as one large computer. Used mostly in scientific fields such as astronomy and genome analysis, grid computing is starting to be adopted in corporate information systems, which require more stable operations. The result is a computing power of a supercomputer at about the tenth of the investment costs. The system will be able to immediately change the amount of raw materials procured or shift the order of production processes if an automaker or electronics manufacturer, to cite an example, suddenly submits additional orders or alters specifications. With the use of grid computing expected to be adopted by industrial firms, several companies started developing and marketing related software. NLI Research Institute has developed software that makes it possible to conduct risk analysis of financial assets in about one hour.
- Apple Japan will start a sales campaign in which 1% of the purchase price of Apple products is paid to companies and individuals who run web sites through which consumers are linked to the company's online shopping mall and actually buy something. The campaign will cover all products displayed on the shopping mall and will include personal computers and iPod portable music players.
- NEC Corp. has adopted a "cell" system for its personal computer maintenance centre so that a single worker can handle an entire repair process. The new system aims to enhance the repair capacity from the level reached in 2002 to 50%. This is done by reorganizing the existing 23 lines into 26 cells, each cell composed of about 10 workers. Repair work for PCs is largely divided into three stages ---analysis of the problem, replacement of old parts and testing. In the previous "line" system, each worker dealt with a specific task.
- South Koreans will be able to access portable internet 10 times faster than they are currently starting next year. The reason for this is the homegrown WiBro service. The Ministry of Information and Communication said it would issue 2-3 WioBro licenses next February. Spectrum usage fees would be set at 3% of service providers' annual sales. WiBro promises a downstream speed of around 1 Mbps and seamless mobile connectivity at up to 60 kilometers per hour. The downstream speed is about 10 times faster than the current mobile connection to the net via cell phone based on the CDMA 1x EV-DO (evolution data optimized) technology. This means people will be able to savour the benefits of internet on the move at a speed similar to the current fixed line broadband with the advent of WiBro. According to the MIC's recent survey, around half of respondents said they would utilize the portable internet through cell phones, while 30 percent opted for note books, with the remainder preferring personal digital assistants (PDAs).
- Korea's Internet population reached the 30 million mark in the first half of the year, with the penetration rate exceeding 68%. This was according to government figures released recently. In annual research conducted through June by the Ministry of Information and Communication, 30.1 million people over six years of age accessed the internet at least once a month. The penetration rate reached 68.2%, up by 2.7% from the end of last year. This has resulted in an increase of 1.5 million internet users.
- Hanarotelecom Inc., Korea's No. 2 fixed line telephone and broadband internet carrier mobile phone networks, said its first-half net income grew to W9.8 billion ($8.5 million) on sales of W712 billion ($618 million). Hanarotelecom, which controls 4.9% of the fixed-line market and 24% of the broadband market, reported W1.3 trillion ($1.1 billion) in revenue and lost W165 billion ($143 million) in 2003. Hanarotelecom has recently been expanding its fixed-line business with long distance and international call services in July.
- China's largest computer maker, Lenovo, is selling basic PCs for between Rmb2,999 and Rmb5,999 ($366-732) each. In its latest promotion, the computer maker is targeting lower-tier, non-urban users who are highly price sensitive. The move comes amid efforts by the PC giant to refocus on its core business and defend market share. The cut-price PC is possible because Lenovo stuck special deals with five suppliers: AMD, Taiwanese motherboard maker VIA Technologies, United States hard-disk drive manufacturer Maxtor and Hong Kong-listed monitor maker Proview International Holdings.
- Tom Online will acquire Beijing-based Treasure Base, a mobile content provider specializing in sports. The deal, the report says, could be worth as much as $64.4 million. Tom Online said its acquisition of Treasure Base should help earnings in the second half. The content provider is heavy on sports programming such as the Olympic Games, Formula One motor racing and the China Open Tennis tournament. Treasure Base has deals with 60 mainland television channels in 20 channels to supply sports-related SMS. Treasure Base earned $3.8 million in the first half and $4.5 million between September 2002 and December last year. Tom online will pay between 3.5 and 4.5 times Treasure Base's earnings this year, and one to 1.75 times next year's profit, capped at $66.4 million.
- China Mobile has suspended internet company Sohu.com as a supplier of mobile phone picture services for one year for unsolicited marketing to some customers. Last week, rival Sina said China Mobile temporarily suspended its interactive voice response service after Sina offered a toll-free telephone sex service to mobile-phone users with the system. The move by China Mobile is seen as part of the crackdown by the state-controlled mobile phone company which is seeking to control aggressive marketing of mobile phone services across the mainland, the world's largest wireless market.
- China Unicom has built the fastest mobile data network in China but perceives a shortage of customers. The mainland's second-largest mobile phone carrier is looking to promote data usage for its advanced but underutilized CDMA 1x network which is capable of supporting 50 million users but has less half that number. Many customers talk over the network but do not do anything else despite download speeds of about 40 to 60 kilobits per second. The 2.5-generation GPRS network operated by rival China Mobile offers speed of less than 20 kbps. Yet, consumers cannot differentiate between the two services. The problem that China Unicom's CDMA network faces is that there are not enough wireless data applications and services to stimulate the use.
Media, Entertainment and Gaming
- Chinese online game operator Shanda Interactive Entertainment Limited achieved soaring revenues in the second quarter with diversified product offerings. Nasdaq-listed Shanda said yesterday its revenues for the quarter more than doubled those of the same period a year ago to $36.5 million. Chen Tianquiao, the CEO of the biggest online game operator attributed the growth to the increasing numbers of game players and diversified product offerings. The number of Shanda's concurrent players grew by 16.8% quarter-on-quarter to 798,000 in the past quarter.
- Winbond Electronics Corp. reported a profit for the second quarter on stronger chip sales and a technology deal it signed with Germany's Infineon Technologies AG that will ensure the smooth development of a state-of-the-art semiconductor plant. For the three months ended June 30, the Taiwan maker of specialty memory chips posted net profit of NT$1.8 billion ($52.8 million). Looking to the third quarter, Winbond said it expects demand for chips for personal computers to increase as a percentage of the company's sales. Winbond's long-term growth is centered on an advanced, 12-inch chip plant it is building in Taiwan with the help of Infineon.
- The world's top two producers of custom-made chips for computers and other electronic gadgets announced record monthly sales in July. The announcement underscores the strength of the semiconductor industry even as investors worry about an impending downturn. Taiwan Semiconductor Manufacturing Cp., the world's major contract chipmaker, said revenue in July rose 31% to NT$23.2 billion ($679.3 million), from NT$17.6 billion ($515.3 million) a year earlier. United Microelectronics Corp reported that its July revenue surged 60% to NT$11.2 billion ($327.9 million), from NT$7 billion ($205 million) a year earlier. TSMC and UMC, both of which make chips designed by customers such as Texas Instruments Inc. and Motorola Inc. are identified by many analysts as barometers of broader technology industry because of their mix of customers and products.
- Pacific Internet Limited, Asia's largest telco-independent internet communications service provider by geographical reach reported its 10th consecutive quarter of positive net income for the period ended June 30, 2004. Its net income grew to $1.4 million or 11 cents per diluted share, compared with $33,000 or 0.3 cents per diluted share a year ago. Revenues grew to $ 25 million, a 3.1% increase over second quarter 2003.
- Software company BEDD has seized on the city state's concerns over falling birth rates and its obsession with mobile phones and launched a mobile-phone matchmaking service, also called BEDD. Subscribers download the software to their phones, which are enabled with Bluetooth short-range wireless technology, and key in some personal details. These details include such data like who they are and the type of person they would like to meet. When a potential partner is in the vicinity the phone alerts them. The service can seek out other users within about a 20-yard range. There are other mobile-phone dating services in Asia: Singapore Telecom's MyCupic and Bharti Airtel of India's TrackUrMate. But BEDD is different from these because it uses Bluetooth phone-to-phone transmission, and not a central database.
- Singapore Telecommunications' quarterly profit before one-offs rose 16%. This development is underpinned by surprising strength in its Australian Optus unit and a jump in emerging markets avenues. Slower year-on-year growth for Optus Mobile from the second quarter and lower margins due to Telstra's aggressive pricing strategy has negatively impacted earnings. Net profit at Southeast Asia's largest telephone company for the first quarter to June nearly halved from a year earlier when Singapore's largest listed firm booked a S$703 million ($402 million) one-off gain on the sale of its postal services arm and a directory listings business.
- A boom in low-cost, prepaid phone cards could offer big payoffs to investors in some Asian telecommunications companies. Wireless-phone operators, led by pioneers such as Smart Communications, a unit of Philippine Long Distance Telephone, have seen subscriptions rocket since they introduced "micro-prepaid" phone cards. These phone cards can be bought for as little as $0.50. The low-cost cards have opened a new segment of the telecom market and helped phone companies reduce customer "churn". With the cards, users can now add small amounts of money to their accounts electronically. This makes customers less likely to drop out of a mobile service when run low on cash. It also saves the phone companies money because they do not have to pay for printing and distributing more cards.
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