A Week in Japan tech
e-Commerce
- Department stores expect online summer gift sales to hit Ñ1 billion. Eight leading department stores revealed that summer gift sales on the Internet so far jumped by 25-620% year-on-year, with total sales during the entire season forecasted to treble to Y1 billion. Daimaru Inc. fared the best of the industry, expecting online summer gift sales to grow 620% on the year, exceeding its target by 10%. The success is largely attributed to its sales of alcohol on the Net.
Telecommunications
- KDDI's IP service is to bolster declining fixed-line operations. KDDI Corp. will launch an IP (Internet Protocol) telephone service in October that is much less expensive than existing phone services, a move that will put further downward pressure on domestic telephone charges. Nippon Telegraph and Telephone Corp are expected to follow KDDI's lead, and Softbank Corp has already launched IP phone services in the spring. The number of IP phone users in Japan has climbed rapidly to an estimated 1.6 million at the end of last year. Some industry observers say about 30% of fixed-phone users will switch to IP phones in the near future.
- NTT DoCoMo Seeks is seeking new alliances in Asia, eyes KTF, Singtel. Despite recent setbacks in its overseas strategy, NTT DoCoMo Inc. is still seeking new alliances in Asia. With its focus on South Korea, Singapore, Hong Kong and Taiwan, DoCoMo is placing South Korea's KT Freetel Co. and Singapore Telecommunications Ltd. high on the list of potential tie-up candidates. DoCoMo will consider options ranging from simple cooperative relationships to a 100% buyout, but delays in introducing 3G technologies have complicated the pursuit.
Mobile / Wireless
- Nokia has licensed phone software to rival Matsushita. Nokia has sold its software for smartphones that send e-mails, pictures and play games to Japanese rival Matsushita. Nokia gave no financial details of the agreement. The deal is seen as another success for Nokia, as it moves beyond handset manufacture into software design. In May, Nokia signed up Germany's Siemens to buy its mobile software. It also hurts Microsoft's aims to crack the software market for mobile phones.
Internet
- Japan's xDSL subscribers reach 3.3 million by end of June, showing growth slowdown, according to the Ministry of Public Management, Home Affairs, Posts and Telecommunications of Japan. This figure breaks down into 1,387,409 subscribers of NTT East Corp. and NTT West Corp., and 1,913,517 subscribers of other service providers. In May, the increase in xDSL subscribers totaled 329,271, setting a historical record. The increase in June, however, was down 17 percent from May, with only 272,370 subscribers.
Hardware
- Nikkei Market Access survey shows demand for PCs rests on renewal plans. For consumers planning to buy a PC during the 2002 summer sales season, first-time shoppers accounted for only 16.1%, while respondents with renewal plans accounted for 26%. This indicates that the Windows XP effect to renew demand did not last until the summer sales season in 2002. The survey also claims that, with PC penetration nearing saturation levels, the PC market for home users is becoming more and more dependent on purchasers who buy extra PCs.
Media, Entertainment and Gaming
- Sofmap to acquire Yamagiwa's soft-media business for about Y2 billion. YamagiwaÆs division accounts for annual sales of around Y8 billion and pretax profit of some Y300 million. Since the sale will be completed at the end of August, the contribution to Sofmap's pretax profit should be about Y150 million in the fiscal year ending February 2003. Gross margins in the soft-media business tend to be about 25% for CDs, 20% for DVDs and 30% for used products including game software, which is significantly larger than the 7-8% margin for personal computers, Sofmap's main business.
- Hitachi joins up with NTT DoCoMo, Digi-Book Japan and Sharp to distribute electronic books for PDAs by October 2002. Hitachi will be responsible for managing the distribution and billing systems, while NTT DoCoMo and Sharp will build their respective Web sites for distributing contents that users may access with their PDAs, and from which users can download their favorite electronic books.
A Week in Korea Tech
e-Commerce
- Online sales generate W522.53 billion. The monthly amount of sales through online shopping malls surpassed the W500 billion mark for the first time in Korea in May, in an 86.9% surge from W279.61 billion won in the same month last year. According to the National Statistical Office (NSO), the number of online shopping malls increased by 19.9% to 2,372 from a year earlier. An NSO official attributed the surge to the growing popularity of online shopping malls and the more widespread use of the Internet and other online networks.
Telecommunications
- LG Telecom Partners with Telecom New Zealand. LG Telecom, KoreaÆs smallest mobile carrier, announced that it has signed a memorandum of understanding with Telecom New Zealand in hopes of deepening ties in wireless data communications and mobile technology. Under the agreement, the two parties will exchange information on business operations, marketing, equipment maintenance and technology covering data communications, especially for CDMA2000 1X networks.
Mobile / Wireless
- Handset subsidies are under scrutiny from telecom regulator. The Korea Communications Commission (KCC), under the umbrella of the Ministry of Information and Communication, launched an investigation into alleged illegal business activities of local telecom companies. In the next two months to August 31, KCC will be investigating the subsidization of mobile handsets by the four telecom companies - SK Telecom, KTF, LG Telecom and KT. The probe aims to determine whether the companies go beyond their legitimate promotional allowances to subsidize buyers of mobile phones, a tactic that threatens to choke off competition in the market.
Internet
- KoreaÆs dot-coms post record first-half earnings, helped by a steady economic recovery and an increase in advertising revenue by corporations. This strong performance from the major portals suggest that the KoreaÆs internet infrastructure is becoming increasingly important to the local market at large, as companies are more willing to expose their products to online users. However, whether the impressive earnings of major dot-com players in the first half signal the end of the protracted high-tech downturn is still uncertain.
Semiconductors
- South Korean chip rivals Anam and Dongbu form strategic alliance, even as beleaguered Hynix Semiconductor struggles under massive debt while seeking to sell its assets. Earlier this month, Anam said that it will sell W60 billion (about US$50.63 million) worth of equity to Dongbu, which now owns 9.7% of Anam. Dongbu may also be in talks with Amkor Technology to buy part of the US semiconductor maker's 41.7% stake in Anam.
Information Technology
- A merger is still a possibility between Hanaro and Thrunet, South Korea's second and third largest internet service providers. Four months of merger talks between the two parties broke off in March, when Thrunet agreed to sell its high-speed leased line business for corporate clients to the SK Group, rebuffing interest from Hanaro. Hanaro and Thrunet are both seeking a stake in cable network operator Powercomm Co, a unit of state-run Korea Electric Power Corp, and a Hanaro spokesman said talks with Thrunet might resume after the bidding on Powercomm.
A Week in China Tech
Mobile / Wireless
- Ericsson has sold 2.5G phone licences to ChinaÆs TCL Mobile. Under the contract, the value of which was not disclosed, Ericsson will supply TCL, China's biggest domestic handset supplier, with tailor-made blueprints to build general packet radio service (GPRS) phones that enable the user to be constantly connected to the Internet.
Semiconductors
- Toshiba has poured Ñ5 billion into China to boost chip output. Toshiba will invest a total of Ñ5 billion over the next two years into its existing manufacturing subsidiary in Wuxi, China. Toshiba will take full control of the joint venture Wuxi Huazhi Semiconductor Co. by purchasing a 5% stake from partner Huajin Electronics Group Corp., one of China's leading semiconductor manufacturers. The operation will then be moved to a nearby site in Wuxi in order to increase the monthly chip output capacity to 30 million units from 3 million units.
Information Technology
- Outsourcing to the Mainland is on the rise. There is a strengthening trend for Hong Kong's software companies to move parts of their operations across the border to take advantage of both the engineering talent and lower costs offered on the mainland. Especially popular are website development or outsourcing business-software projects to mainland-based companies. However, industry sources still emphasize that much of their project management and marketing functions remain in Hong Kong.
- PCCW and China Telecom in equity joint venture to begin providing IT services to China's financial sector. The agreement covers banks, insurance companies and securities firms, but no investment commitments were mentioned by either side. The financial sector in the mainland has long been a target for domestic and overseas IT vendors and integrators. Other integrators operating in this area include Datacraft and China National Computer Software and Technology Service Corporation.
A Week in Taiwan Tech
Mobile / Wireless
- Chunghwa Telecom is top dog with seven million handset subscribers in Taiwan. The state-run telecommunications company has so far signed up nearly seven million subscribers for its handset services, and expects the figure to formally pierce the level of seven million by mid July. That figure surpasses those of the combination of the Taiwan Cellular Corp. and TransAsia Telecommunications Inc.
Semiconductors
- June chip sales in Taiwan have seen a qualified improvement. Although revenues soared in June from a year earlier, they were only marginally better than figures from the previous month, which underscores how hopes of a stronger recovery in global technology spending are fading amid weak corporate earnings. Taiwan Semiconductor Manufacturing Co., for example, said its June sales soared 83% to NT$15.62 billion (US$470 million) from NT$8.52 billion a year earlier but rose only 2.7% from May.
Media, Entertainment and Gaming
- Hot sales of PS2 may bring more business to Hon Hai, Asustek as outsourcers. With Sony Corp.'s PlayStation2 in short supply due to strong buying, Sony has decided to scale up production from 1.4 million to 2 million sets per month. Industry sources expect the increased production to be outsourced to Taiwan contract makers Hon Hai Precision Industry Co., Ltd. and Asustek Computer Inc.
- Ogilvy PR buys technology communications specialist Era Public Relations, making Ogilvy almost three times the size of its closest competitor in the country. The acquisition, the value of which was not disclosed, will raise OgilvyÆs Taiwan revenues to NT$200 million. Earlier, Ogilvy PR also bought H-Line PR in Shanghai, making it the largest foreign public relations firm in the mainland, and announced an equity stake in PRAP Japan Inc., Japan's largest PR firm, this year.
A Week in Singapore / Malaysia Tech
Telecommunications
- Telekom takes TRI, paving the way for a quick merger that will create the country's biggest mobile group. Telekom's victory over mogul Tajudin Ramli marks the start of a long-awaited consolidation in the crowded telecoms industry, where five firms vie for a slice of an M$18 billion (about HK$36 billion) market that analysts say is not big enough to support costly higher-speed third-generation (3G) mobile technology.
Mobile / Wireless
- Virgin, SingTel venture abandoned after mobile flop in Singapore. The Virgin Mobile Asia Pte. Ltd. joint venture between Virgin and Singapore Telecommunications Ltd. was abandoned after it attracted just 30,000 subscribers since its launch nine months ago. The shutdown deals a blow to the infant concept of mobile virtual-network operator, where the virtual operators lease capacity rather than own their own networks in order to focus more exclusively on services and marketing.
A Week in Hong Kong Tech
Life Sciences
- Public swamps CK Life while institutional investors hold off. The retail portion of CK Life Sciences International Holdings' initial public offering is more than 100 times oversubscribed, while international institutional portion of the offer fails market expectations by being less than 10 times oversubscribed. At HK$2 a share, the Li Ka-shing-controlled biotechnology start-up CK Life Sciences will raise HK$2.61 billion. Following the strong response from the public, CK Life Sciences will have a fivefold increase in the number of shares for retail investors.
e-Commerce
- Hong Kong-based software firm Core Solutions enlists anti-virus specialist Symantec to add Internet security management capabilities to its e-business system. The Symantec-Core Solutions alliance, the first of its kind for Symantec, is expected to target e-business projects in a range of sectors, including the corporate and retail banking, securities and insurance sectors.
Telecommunications
- Sunday supports consolidation but denies merger talks with other operators, particularly Telstra's CSL or Pacific Century CyberWorks (PCCW). Sunday claims that although consolidations would be beneficial to them, current valuations in the mobile sector were "ridiculously low" and that the recent CSL deal was more indicative of what they should be. Telstra paid an effective US$1,100 per subscriber for CSL, more than 10 times the value of a Sunday subscriber, based on the smaller company's current market value.
- Peoples bucks market trend, rejects consolidation theory. Despite rumours over its future, the CEO of Peoples Telephone, Charles Henshaw, says he sees no further consolidation in the market. "Competition is what made the Hong Kong market and that is something OFTA [Office of the Telecommunications Authority] is encouraging very actively. We haven't approached anyone and no one is approaching us. There are no mergers and acquisitions in our plans at all."
- Analysts say new 802.11 standard for wireless networking will not compete with 3G, although it will likely become an extension of fixed networks. The 802.11 standard allows wireless connections of about 11 megabits per second and up, via a hub and wireless receivers that connect to personal computers or mobile devices. The standard will gain in popularity as more home electronics makers integrate 802.11 receivers in their products and offices installed wireless networks.
Media, Entertainment and Gaming
- Hong Kong Broadband Network hopes to launch paid digital TV, with up to 180 channels, by the end of this year. Research firm International Data Corp estimated the number of metro Ethernet broadband subscribers in Hong Kong would grow from 25,250 last year to about 700,000 by 2006, with market revenue rising from US$116.82 million to US$3.48 billion. Furthermore, high-density housing and commercial building developments in Hong Kong make fibre-optic connections highly scalable.
- Tom.com to buy substantial stake in Hong KongÆs ATV. In a statement, Tom.com said that it signed a memorandum of understanding for the deal with Lai Sun Development Co. Ltd., a company headed by the television network's founder, Lim Por Yen. This marks a shift in Tom.comÆs focus back to more traditional media such as advertising, magazine and book publishing and television. In March, it announced the launch of ôChina Interactive TV,ö a broadband television service targeting China and audiences elsewhere interested in learning about China.
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:
