A Week in Tech

Our weekly round-up of the key news in the technology sector.

A week in Japanese tech

- Nippon Telegraph & Telephone expects to double its group operating profit in the next three years. NTT says cost-cutting and new mobile services will help drive the companyÆs profits. However, the telecom giant did not point to any specific restructuring plans that the market had been looking for. NTT, parent of mobile operator NTT DoCoMo, is targeting strong performance in the mobile market, as well as new customers for its optical-fiber-network services.

- NEC, Matsushita Electric Industrial, KDDI and Japan Telecom will set up a joint venture to provide Internet-access services. The new company, to be launched in June, is expected to provide Internet service to 10 million people. The venture will allow the companies to pool resources in telecom infrastructure, content development and purchasing. The alliance will include NECÆs Biglobe access service, KDDI's Dion service, Japan Telecom's ODN service and Matsushita's hi-ho service. The group is inviting other ISPs to join, including NTT, which is considering restructuring its ISP operations. The consortium expects to begin operations this fall.

- Yahoo Japan said its net profit doubled last fiscal year, due largely to growth in its high-speed Web-access service and online auction business. The Japanese subsidiary of US Internet portal Yahoo said net income for the year ended March 31 grew to Y6,123m ($47.83m), up 106% year-on-year. Net income per share was Y52,225.19, up 32.8% compared to a year ago. Net sales rose by 127% from year-ago figures to Y9,606, with Yahoo BB, the company's web access service, accounting for 51% of overall net sales. Last week Yahoo, the world's largest Internet portal, announced its sixth straight loss for the quarter ended March 31, but the company upgraded its revenue and earnings forecasts for the rest of the year.

- Amazon.com is planning to add a new service for its Japanese customers. In a bid to expand its market in Japan, Amazon will introduce a service that will allow customers to sell used books and other products on its Japanese-language site. The U.S.-based online retailer launched its Japanese site in November 2000, selling books, music, videos and DVDs. In addition to selling Japanese books and CDs, Amazon has been offering a growing selection of foreign products at a discount. Earlier this year, the retailer began selling music software from Europe and books published in the U.K., expanding on its selection of products shipped from the United States.

- Hikari Tsushin InternationalÆs move into the natural gas business is received positively by investors. Shareholders of the beleaguered Internet investment company seem to be looking favorably on its plans to acquire an effective 50.97% stake in the China City Natural Gas joint venture in a deal worth about HK$90 million. City Natural Gas is a Sino-foreign joint venture between China Oil & Gas Pipeline Bureau (China Oil Gas), a wholly owned subsidiary of China National Petroleum Corp, and a group of private investors through Zhongda Industrial and Alta Financial Holdings, which are registered in the British Virgin Islands.

A week in Korean tech

- Samsung Electronics will slash contract prices. Samsung, the world's largest memory chipmaker, said that it would cut its contract prices for DRAM chips by an average 5%. The companyÆs decision follows a much-awaited bounce in the global chip-making industry in December after a severe slump during the high-tech meltdown. SamsungÆs plans are expected to put pressure on other chip producers.

- LG Electronics posts record-high sales in the first quarter of 2002. The companyÆs sales grew to W4,697.8 billion during that period, driven largely by sales of digital home appliances and mobile phones. Operating profits in the quarter rose to W366.9 billion, up 23.6% from the same period a year earlier. LG also returned to net income of W219.8 billion after posting a net loss of W243.5 billion in the fourth quarter of 2001.

Media, Entertainment and Gaming
- NCsoft sees disappointing results in its first year in the US market. The online gaming company says that at the peak time for its Lineage game, about 2,500 American players simultaneously plugged in, compared to about 100,000 users who play the game at any given time in Seoul. The company says there are now 200,000 American registered subscribers to Lineage. NCsoft has been trying to lure customers in the United States by offering free use of its online game for 45 days with a $3 purchase of the Lineage game CD. For Korean customers, it costs 40,000 won, or $33, to play Lineage for 45 days. The company has also spent 50 billion won -- almost half of its 2001 revenue û to recruit famed U.S. online game developer Richard Garriott.

A week in Chinese tech

Internet - China has taken the number two spot for home Internet access. According to ACNielsen, 56.6 million people in China could access the Web from home in the first quarter of this year, second only to the United States with 166 million home users. ACNielsen predicts that China will take the number one spot within four years. China has overtaken Japan to become the country with the largest group of home Internet users in Asia.

- Chinese portal Sohu.com will launch a trading site. SohuStock.com, set to launch in the third quarter of this year, is a joint venture with Chinese securities broker Guolian Securities. The two companies have joined forces to form Sohu-Guolian Information Technology, which will operate the new site. Sohu holds a 51% stake in the new company. This is Sohu.com's first venture into online trading and Guolian SecuritiesÆ first time selling financial services online.

- Netease.com will expand its range of online games in China. The move is part of the Chinese Internet portalÆs efforts to boost revenues and rebuild investor confidence after the turmoil of 2001. Last week, the company released its earnings for first-quarter 2002 as well as full-year 2001, bringing its financial reporting up to date after accounting problems last year. These problems, involving irregular accounting of advertising revenue, led to a lawsuit and an exodus of top executives. The company was also threatened with delisting from Nasdaq. Netease.com has since hired a number of new senior managers, but the company is still looking for a permanent CEO.

Media, Entertainment and Gaming
- SunTV and JET TV will break into the US cable-TV market. Sun TV has joined forces with Hong Kong cable channel JET TV to broadcast in the United States beginning July 1 through AT&T Broadband. The deal was made through JET TV, which belongs to TVB (Television Broadcasts), the first wireless commercial TV station in Hong Kong. JET TV is partially owned by SunTV. AT&T Broadband's new channel, also to be named JET TV, will provide programs from both SunTV and JET TV. AT&T Broadband has 28 million subscribers; 16 million of them are digital subscribers. The new JET TV channel will reach all of AT&T Broadband's digital subscribers. JET TV is looking to sign up 1 million viewers within the next few years. SunTVæs focus is on producing documentaries targeting Chinese audiences worldwide.

- Japan's Asatsu-DK has acquired half of China's largest ad agency. Asatsu-DK bought a 50% stake in the Shanghai Municipal Advertising & Decorating Corp. for $604,595. The state-owned Shanghai firm has been China's largest ad agency since it was launched in 1956. The new joint venture will continue to service the Shanghai firmÆs clients. Current projects include a billboard for Southeast Motor and more than 1,000 billboards in new residential areas, which together generate more than 1 million yuan (US$120,918.98) in income each year. Asatsu-DK has taken advantage of the opening of ChinaÆs ad industry, establishing 10 joint ventures in Beijing, Guangzhou and Shanghai. China has promised to open its advertising industry to foreign investment one year after its accession to the World Trade Organization. - Tom.com will expand its presence in the mainland's advertising and distribution businesses. The company also intends to penetrate the magazine and book market by setting up joint ventures with mainland publishers. The joint ventures will focus on advertising, distribution and other businesses, and steer away from content, editing, and ownership of the print media. The company also plans to spin off its print media business for listing and is eyeing the Hong Kong market for its IPO. Driven by aggressive acquisitions begun last year, Tom.com has become the largest company in publishing, outdoor advertising and sports marketing in the Greater China region.

- Oracle plans to open a software development center in Beijing. The center, which is expected to employ 100 people, will be the U.S. company's second on the mainland. Last June, Oracle opened a coding base in Shenzhen. The Shenzhen base will employ about 100 software developers. The centers are part of OracleÆs plans to target ChinaÆs government sector.

A week in Singapore tech

Telecommunications - Singapore Telecommunications is under pressure to slash the value of Optus' $1.7 billion cable network. SingTel has until the end of September to review the value of all Optus assets as it tries to bring the Optus accounts in line with its own. SingTel paid $14 billion for Australia's second biggest telco last September. Under merger accounting rules, SingTel has 12 months from the time of purchase to revalue any assets. Optus has spent more than $2 billion on its cable network. It is valued in OptusÆ books at $1.7 billion, after SingTel wrote off some depreciation of the asset when it acquired the telco last year.

- Asustek Computer is tapping into the US broadband communication market. The company has received orders for cable modems from Com21 Inc., one of the top five US broadband communication equipment companies. The contract manufacturing deal will have Asustek delivering more than 600,000 sets of broadband communication equipment, putting the company ahead of competitors Askey Computer, TurboComm Tech, Kinpo Electronics and Ambit Microsystems. AsustekÆs full-year deliveries in 2001 amounted to 200,000 to 300,000 sets of broadband communications products. Asustek has also teamed up with China's largest telecom equipment supplier, Huawei Technologies, and shipped more than 100,000 sets in China last year.

A week in Taiwanese tech

Hardware - Taiwanese chemical companies are now producing photoresists for liquid crystal displays (LCDs), printed circuit boards, color films, thin film transistor liquid crystal displays, and IC applications. Many photoresist producers have expanded their production lines in China and Taiwan. Tokyo Ohka Kogyo has 27% of the photoresist market, JSR Corp. accounts for 16%, and US-based Shipley Co. holds 21%. Other producers include Sumitomo Chemical and Arch Chemicals. Distribution channels of Taiwan-produced photoresists are mainly controlled by these companies.

A week in Hong Kong tech

Hardware - Mobile commerce in Hong Kong is expected to see a significant boost soon, thanks to the recent successful completion of an m-certification system trial. M-certs, like e-certs, are a way to authenticate online identities, using public key infrastructure (PKI) technology, which ensures that messages and documents are not seen or tampered with during transit. In April 2000, Hong KongÆs six major mobile operators formed the Hong Kong M-Cert Implementation Forum to establish a single m-cert for all PKI-based mobile commerce services.

- ASM Pacific TechnologyÆs uncompleted orders rose to US$35 million at the end of last month, compared with US$20 million a year ago. In the first quarter, the number of new orders and shipments were about the same, reversing a one-year trend of shipments exceeding orders. However, orders for the world's number two semiconductor-assembly equipment maker are still low compared with 2000, as the industry recovery is still in its early stages.

Internet - Tom.com has become Tom Group. The company, which began as an internet portal, says it has changed its name to reflect its recent moves into more traditional businesses such as media and telecommunications. Tom.com was the poster boy of the internet boom as well as the aftermath, as its share price soared at the height of the dotcom frenzy and plummeted in the gloom that followed. Despite the change of name, the company will remain registered as tom.com Ltd.

Media, Entertainment and Gaming
- Global China Technology and EC-Founder have formed a joint venture to offer business intelligence and information in China. The new company, called GCT InfoHub, is 81% owned by GCT, parent company of Sing Tao Holdings, which publishes the Sing Tao Daily and the Hong Kong iMail. The rest is owned by Hong Kong-listed EC-Founder, the leading provider of advanced information technology products and services in China. The new venture charges by subscription and provides business intelligence and analysis of ChinaÆs economy from a pool of content sources. Content partners include China Economy Information Network, China Industrial Network Information Center, China Daily and Sing Tao Daily and its group publications, as well as more than 70 industrial newspapers on the mainland. GCT InfoHub is also the exclusive distributor of Xinhuaonline's products outside the mainland. The new ventureÆs clients include PC Home, a media conglomerate in Taiwan.

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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