A week in tech

A round-up of all the latest tech news.



- E*Trade Securities Co. announced its forming of a tie-up with JCB Co., a partnership aimed at offering cash cards with credit functions. Users of the service, which will allow users to deposit or withdraw money at convenience stores, will be allowed to choose whether they want the credit functions or not. The service will give the customers access to E*Trade's ATM networks found in convenience stores all over the country, all in cooperation with IY Bank Co. Card holders. Through the offering, the securities company said it hopes to boost its customer base. As of the end of June, E*Trade had 680,000 accounts, with the company's total assets on deposit at 2.5 trillion yen ($22.4 billion), an amount considered the largest among Internet securities traders.

- IDU Co. expects its online real estate auction business to expand after going into a tie-up with E*Trade Securities. The agreement will have IDU Co. set up a property auction site on the homepage of Japan's largest online securities company, a move that is aimed at attracting E*Trade's online traders. Part of those to be auctioned on the site will be condominiums and office/commercial buildings. Under the partnership, IDU is forecasting an increase in the number of its auction customers to rise to 50,000 by the end of August 2006, from the present 12,000 customers.

- Yahoo Japan Corp. posted a 24 percent increase in net profit year on year for the April-June quarter. The Japanese Internet service company said its group profit increased from 8.3 billion yen ($74.5 million a year earlier to 10.3 billion yen (US$92.5 million). Yahoo Japan announced group revenue of 38.8 billion yen ($348.4 million), a 59 percent increase from its year-earlier revenue of 24.5 billion yen ($220 million). The company ascribed its "steady" growth to its mainline Internet services, which would include advertising, auctions and shopping.


- The Tokyo Financial Exchange (TFX) announced its plans to offer foreign exchange futures margin trading by way of mobile phones, a service that is an additional to the market's online trading via personal computers. TFX said the new offering will enable investors to trade forex futures 24 hours a day, Sundays and New Year's Day as an exception. The bourse said it would increase the number of currencies it handles from the present four to seven. TFX specializes in the trading of financial futures contracts.

- Using a NTT DoCoMo Inc. handset fitted with a wireless IC card, Alpha Corp. said it is ready to put in the market a system that would allow the doors of a house to be locked and opened by way of a mobile phone. The system is developed by Connect Technologies Corp. and can be installed in most doors without any special wiring or engineering work. Together with the service is the function that would enable users to check whether their doors are locked or unlocked through their cell phones. The system can run on batteries that need to be replaced only once a year.

- NTT DoCoMo Inc. and Sun Microsystems revealed that they have started working on a new Java platform with the aim of improving the mobile Java platform for the present more advanced handsets and applications. The joint work of the two companies is part of what is dubbed the Star project. According to Ovum Ltd., a U.K. research company, Java is running on more than 700 million handsets all over the world even if not all handsets run the same version. The most successful of these versions is Doja, NTT DoCoMo's Java platform. Doja is however available only to DoCoMo and a few of its overseas partners. DoCoMo and Sun did not disclose the length it would take them to craft the new platform.

Media, Gaming and Entertainment

- Bandai Co. said it will introduce in late September a portable game machine manufactured with six- to eight-year old girls in mind. Dubbed "The Miracle Commune", the machine is expected to be the main product of the company during this year's Christmas sales campaign, with the company targeting sales of 200,000 units. The machine, described as "thin, compact, and pink", has an LCD screen and can be folded. Bandai posted sales of 10.1 billion yen ($90.7 million) in fiscal 2004 for goods related to Precure characters. The company aims for 12.5 billion yen ($112.2 million) in sales for this year.


- IBM Japan said it would begin offering a new emergency-replacement service to the small and midsize companies that use its eServer iSeries machines for their core office systems. Called the IDR Express service, it is designed to help companies become operational immediately after their systems have stopped. In situations of power loss, damaged machine or corrupted data, IBM Japan assures the delivery of a replacement machine "up and running" within 48 hours.


- The Japanese government would be proposing a standard for the upgrading of domestic telecom networks to move into a next-generation telecommunications network (NGN) to the International Telecommunication Union (ITU). The government said it plans to set up a forum with telecommunications carriers, such as Nippon Telegraph and Telephone Corp. and KDDI Corp., and with communications equipment manufacturers like NEC Corp., Fujitsu Ltd. and Hitachi Ltd. The Ministry of Communications looks to Japan to initiate the formulation of NGN standards by drafting a proposal ahead of other countries and help the domestic industry tap the potentials of the global market. The adoption of an NGN is seen as lowering communication costs because it would need only half the plant and equipment investment and maintenance expenses demanded by the present phone systems.

Information Technology

- The introduction of the Information Technology Infrastructure Library (ITIL), a set of guides developed by the U.K.'s Office of Government Commerce on the management and provision of operation, is slowly gaining ground in the country. Kawasaki Kisen Kaisha Ltd. and Softbank BB Corp. have already introduced ITIL-based operation management system with the aim of improving support divisions that provide internal IT assistance. Hewlett-Packard Japan Ltd. said it will initiate a training service on ITIL knowledge and skills next month. Fujitsu Learning Media Ltd. has already commenced its own ITIL training service. As IT systems are becoming a crucial part of business operations, the quality of IT support is becoming the focus of experts.



- With the company gaining two mobile phone production licenses in China, Pantech Co. disclosed that it has entered China's mobile phone market. The licenses are: one CDMA mobile phone production license received by way of a joint-venture with Dalian Daxian Co. and one GSM mobile phone production license obtained directly from the National Development and Reform Commission in April. Pantech has two mobile phone production bases in Dalian and Xinjiang, respectively. The two production sites have a combined production capability of about 10 million units. South Korea's second-largest mobile phone company said it aims to take about 5 percent share of the Chinese market within two to three years.


- LG Electronics disclosed a net profit for the quarter to last month of 150.6 billion won ($147.4 million), compared with 493 billion won ($482.6 million) a year ago and 83 billion won ($81.2 million) in the first quarter. The company said it registered sales of 5.6 trillion won ($5.4 billion), a decline from 6 trillion won ($5.8 billion) a year ago. LG, the world's No. 4 mobile phone maker, is predicting sales of mobile phones to hit 62 million this year although analysts are bringing down that figure to 55 million. The decline it posted this quarter is explained as the result of competition in mobile phones and the diminished prices of flat screens. Its ongoing competition from Nokia and Motorola pushed its marketing expenses while its sales of 3G mobile phones did not meet its expectations.


- Magnolia Broadband, Inc., a fabless semiconductor company and innovator of antenna diversity radio frequency (RF) solutions for the wireless industry, said they are going through the final field testing of Magnolia's Mobile Transmit Diversity solution with SK Telecom. The commercial deployment of Diversity Plus chips in dual antenna cell phones will enable wireless carriers to boost the carrier's service to more subscribers within the same wireless infrastructure. This would eliminate the need for cell towers. SK Telecom Co., Ltd. is Korea's leading information and communications company.



- China Direct Trading Corp. (CHDT) disclosed that information about the company will now be made available through Standard & Poor's Market Access Program. The information that will be made available through the program, an information distribution service that allows subscribing publicly traded companies to have their company disseminated through Standard & Poor's Advisor Insight, will include share price, volume, dividends, shares outstanding, company financial position and earnings. Standard & Poor's Advisor Insight is an Internet-based research engine used by more than 100,000 investment advisors. CHDT is a public holding company that trades through its subsidiaries Chinese manufacturing goods in North America. It also assists in doing business in China and Chinese companies doing business in North America. It maintains an office in Beijing for its business development program.

- China Expert Technology announced its signing of a $17 million contract, a deal which will allow the firm to implement their e-government services for the city government of Huian. Under the deal, the company will provide the services like e-government planning, feasibility report, e-government training, e-government portal web site, hardware platform, security platform, application platform, information database and financial supervisory system to the city government project. China Expert Technology, Inc. has subsidiaries in Hong Kong and China. It specializes in providing large-scale network infrastructure construction for communities and municipal governments in China.

- Shanda Interactive Entertainment Ltd., announced the establishment of Nanjing Shanda Networking Co. Ltd. The established company is acknowledged now as the country's largest professional online gaming evaluation and software testing unit. Its platform would function as a quality control tool for Shanda's interactive family-oriented online games. In a related report, Softbank Asia Infrastructure said it has earned $560 million from the $40 million of investment in Shanda. The sum, which is 14 times the amount invested, makes Shanda one of the company's most successful investments in China's Internet industry.

- The9 Limited announced that its paying player base for World of Warcraft (WoW) has exceeded 1.5 million in China, about a month after its commercial launching. WoW is an MMORPG developed by Blizzard Entertainment. WoW players are defined as individuals who have bought a CD-Key that enables them to access World of Warcraft in China. Excluded in the counting are players participating under free promotions. The9 Limited is a leading online game developer and operator presently concentrating in the development and operation of MMORPGs. The company holds also the exclusive licenses to operate additional MMORPGs in China, a list that includes ZhiZun and Granado Espada.

- Google announced its plan to open a research and development office in China. The company presently offers already a Chinese language version of its search engine but its presence in China is still considered limited. Google has received in May a license to operate a "representative office" in China. Located in Shanghai, the office is described by Google as a take-off point for it to learn the Chinese market. With the announcement, Google received a lawsuit from Microsoft for hiring one of Microsoft's top China experts to spearhead the new undertaking.

- A report released by the China Internet Network Information Center places China's Internet users to about 103 million at the end of June. The figure is an 18.4 percent increase over the same period last year, or 9 million more users than half a year ago. The report indicates also a 23 percent increase to 53 million in the number of China's broadband users, a figure that shows broadband use overtaking dial-up use. The report states that there are 45.6 million computers with Internet access in China, a 25.6 percent increase from the same period last year. The report says some 20 million Internet users in China have made online purchases, with their purchases valued at 10 million yuan ($1.2 million) in the first half of the year.

- Figures gathered by organizers of the third China Digital Entertainment Forum show that Internet game sales revenue in Shanghai reached 1.8 billion yuan ($222 million) last year. The findings revealed that online network games were popular in Shanghai. Six out of ten these games were produced and operated in Shanghai, according to the General Administration of Press and Publication. The Shanghai Administration of Press and Publication sees the sales revenue of Internet network games reaching between 6 billion yuan ($739.7 million) and 7 billion yuan ($863 million) when Shanghai hosts the World Expo in 2010. Observers are saying that the optimistic outlook of the online gaming industry is one reason for the listing of Chinese Internet game companies on the overseas stock market.

- Baidu.com Inc. was reported to be planning to offer nearly 3.7 million American depositary shares (ADS) for between $19 and $21 per ADS in an IPO, according to the U.S. Securities and Exchange. Based on the prospectus, the 3.7 million ADS will represent about 11.7 percent of Baidu's issued and outstanding shares. The report said that if the offering were to be priced at $20 per ADS, which is the mid-point of the expected range, the company is going to have an estimated initial market capitalization of about $634 million.


- China Unicom Ltd. said it has signed up an additional 1.3 million new customers in June, a figure that marks a slowing down when compared to the previous month. The company reported signing up 450,000 users to its CDMA service, which brings the total number of subscribers to 30.9 million. The company's bigger network, GSM, posted an additional 855,000 new users, bringing the total number of its subscribers to 89.6 million. The company holds about a third of China's mobile-phone market.

- UTStarcom Inc. announced its signing of a contract that would allow it to deliver an initial shipment of 250,000 units of CDMA handsets to China Unicom. The announcement is seen as the first contract in what is expected to be a long partnership with China Unicom in the development of CDMA handsets. UTStarcom is a global leader in IP-based, end-to-end networking solutions and international service and support. China Unicom is the second-largest CDMA operator in the world with more than 30 million subscribers.

- The Tianjin Economic-Technological Development Area (TEDA) announced the completion of the new premises of Tianjin's Samsung Telecom Technology Co., Ltd. Located in Tianjin TEDA Micro-Electronic Industrial Park, it is reputed to be Samsung Group's largest mobile phone production base. It is expected that once completed, the monthly capacity of its production lines will double, with figures that are forecast to go beyond the present national standards. In 2004, annual mobile phone production reached 49.5 million units. It is predicted that by 2010, more than 80 million mobile phones will be manufactured in Tianjin and the output value from the electronic information industry will go beyond 300 billion yuan ($37 billion), a figure that experts say would make China the "Mobile Phone Capital".

Media, Gaming and Entertainment

- China Mobile (Hong Kong) Ltd. announced the signing of an agreement with Shanghai Media Group (SMG) aimed at providing TV services to mobile phone users. Under the agreement, Shanghai Dragon Mobile Information Co. Ltd., a subsidiary of SMG, is responsible for giving access to China Mobile subscribers streaming media services. SMG is the only company authorized by China's media regulator, the State Administration of Radio, Film and Television to provide audio and video services to mobile phone users. In a separate report, China Mobile announced that it has signed up 3.2 million new subscribers in June, a figure that is a decline from the 3.4 million subscribers it had for May. At the end of June, the company had 223.7 million subscribers, 163.1 million subscribers of which were prepaid and 60.6 million postpaid.


- Huawei Technologies Co. Ltd. announced global sales revenues of 33 billion yuan ($4 billion) in the first half of 2005, a figure that represents an 85 percent year-on-year growth. The company, China's largest telecommunications equipment maker, said it registered sales from its overseas markets of $2.4 billion, which is a 62 percent contribution to its total sales revenues. The report noted how the company's overseas sales have been doubling each year. Huawei Technologies provides customized network solutions for telecommunications carriers worldwide.

- Data from the Ministry of Information Industry (MII) revealed that the number of phone users in China hit a record 700 million at the end of June. Of these numbers, 337 million were fixed-line phone users and 363 million were mobile phone users. The report noted that in less than a year, the number of phone users showed almost an increased to 100 million from the previously reported 600 million in July 2004. One of the main reasons cited for the growth was the infrastructure restructuring of the telecommunications industry. The report, however, ascribes the rapid growth to more competitive market happening in condition of relaxed government regulations.


- Toa Capital Corp., an investment fund operator, announced the opening of its industrial park intended for Japanese companies in Suzhou, Jiangsu Province. The company, aside from brokering land sales to firms, will also offer rental factories. The total cost of the project is placed at 1.7 billion yen ($15.2 million). Toa Capital expects to attract about 80 firms in the next three years. Toa Capital manages 10 billion yen ($89.8 billion) for investment in several midsize Chinese businesses. Daiwa Sangyo is the first tenant in the industrial park.

- Accel Partners announced that it would partner with the venture capital arm of the International Data Group, the American publisher and media company, in putting up a $250 million fund that would be used for investment in Chinese technology companies. The move is noted as one of the biggest ever venture entered into by Silicon Valley venture capital firms in the fast-growing but highly competitive Chinese technology market. Accel Partners is one of Silicon Valley's biggest venture capital firms. Analysts are also expressing caution in the rush of American venture capitalists and private equity firms into the Chinese market. With too much speculative money flowing into China, analysts are saying that this may push up the value of the Chinese technology companies and, consequently, result to the foreign investors saddled with huge losses. In 2004, venture capital firms invested nearly US$1.3 billion, a 30 percent increase from 2003, in China, according to Zero2IPO, venture capital research and consulting company based in Beijing.



- BenQ Corp. announced the expansion of the sales of its products in Japan, a move that will begin with the introduction of its first notebook personal computers to the market. Next in line for the launching in the Japanese market are BenQ's LCD televisions. The company said it would expand its lineup of LCDs for PCs, targeting the doubling of its sales from the present 100,000 units. BenQ posted $10.5 billion in worldwide sales in 2004. It is targeting worldwide sales of $20 billion by 2008.


- The three main mobile phone companies in Taiwan are all launching their networks this month with the timing of the compliance said to be source of anxiety for some of them. The companies, complying with the government rules, are worried basically about how the users' response to the services would since nothing really is being offered on GPRS. To boost acceptability, mobile companies are employing some marketing strategies. Chungwa Telecom Co. Ltd., the state controlled and leading mobile-phone company, is offering NT$1 ($0.03) handsets to consumers signing up for its 3G services. Aside from giving away handsets, Taiwan Mobile is offering its 3G services for free until the end of October. Taiwan Mobile has since signed up 2,000 users. The fact that most Taiwanese use their handsets for phone calls is the main reason why companies are worried. Over 76 percent use their handsets for calling, while only 18 percent use the phone for mobile Internet-like service. The company that launched 3G in Taiwan, Asia Pacific Broadband Wireless Communications, Inc. had a significant loss last year.

Hong Kong

Information Technology

- Digital China Holdings, Ltd. announced the surge in its net profit for the year to March to HK$210.3 million ($27 million), with its revenues posting an 8.2 percent growth to HK$15.4 billion ($2 billion). The report took note of some HK$95 million ($12.2 million) written off as part of obsolete handset inventory left over from its defunct mobile-phone distribution business. The company said its IT product distribution still accounted for 56 percent of its group revenue. Its systems integration and IT services had a respective share of about 30 percent and 14 percent to the group revenues. China's largest IT distributor disclosed its plans to boost its profitability by shifting its focus to high-margin IT services business.


- BEA Systems, a business automation platform supplier announced the opening of a solutions center in Hong Kong, with some business partners. With services aimed at helping users improve their work effectiveness and productivity, a solutions center is a source of advice on software use specifically targeting specific business sectors. The Hong Kong solutions center is a joint investment between BEA Systems and Hewlett-Packard, Intel, Documentum and Macromedia. BEA Systems is based in Silicon Valley and maintains its Asia-Pacific headquarters in Hong Kong and also maintains a presence in the mainland. In Beijing, it is incorporated as a domestic IT vendor. It has other offices in Sydney, Australia, Singapore, Tokyo and Seoul.



- Telekom Malaysia, Malaysia's biggest telecommunications company, announced its plans for an initial public offering for Excelcomindo Pratama, Indonesia's third-largest mobile phone operator. The state-owned telecommunications firm owns 27.3 percent of Excelcomindo. Telekom Malaysia said it is working with Credit Suisse First Boston and Commerce International Merchant Bankers of Malaysia on the planned offering. The company also disclosed its plans to raise up to US$300 million in the planned listing on the Jakarta Stock Exchange, which will involve the sale of between 15 percent and 25 percent of Excelcomindo. The proceeds, according to the company, will be earmarked for capital expenditure.


- Through its Singapore Trading Center (STC), IBM disclosed that it has routed about $5 billion worth of electronic components, memory chips, hard drives, LCD screens, sub-assemblies and other materials. According to IBM, Singapore is one of IBM's two global procurement centers and is considered important to the company's global manufacturing operations. The report said as the global economy expands and IBM's hardware business increases, the STC operation will also some expansion. Singapore is IBM's Asean and South Asian headquarter from which are managed operations in Singapore, Malaysia, Indonesia, India, Thailand, the Philippines and Vietnam. The Asia-Pacific region posted some $21.2 billion last year as its contribution to IBM's US$6.2 billion global revenues.

A week in tech is brought to you by FinanceAsia, and IRG, Asia's boutique investment bank to the telecoms, media and tech sectors. More can be found at:

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