A week in tech

A round up of all the latest tech news in the region.



- Sony Corp. may post a group operating loss for the April-June quarter because of higher costs, a sign that the firm may get off to a slow start as it aims for profit growth this fiscal year. A loss in the April-June quarter would not be that much of a surprise as Sony's annual earnings depend heavily on the company's performance in the October-December quarter, including the important Christmas shopping season. Sony's quarterly results also will depend much on the amount of restructuring costs it plans to book this fiscal year. Nevertheless, the bearish outlook for this quarter may highlight Sony's structural weakness. The company relies on other manufacturers for devices used in some of its digital products, such as display panels for its flat-screen television sets.

- Omron Corp. reported substantially improved earnings for the year ended March 31 thanks to strong sales of factory-use sensors and control equipment, a recovery in corporate capital outlays, and restructuring benefits. The Japanese maker of automated control equipment posted a group net profit of ¥26.8 billion ($23.9 million), more than 50 times the year-earlier profit of ¥511 million. Group operating profit jumped 59.1% to ¥51.4 billion ($4.6 billion) while group revenue rose 9.3% to ¥584.9 billion ($5.2 billion) from ¥535.1 billion ($4.8 billion). Omron, which also makes automated teller machines, public transportation ticketing systems, thermometers and other health care-related goods, expects higher profits for the year ahead.

- Oki Electric Industry Co. will invest a little more than ¥5 billion ($44.5 million) in fiscal 2004 to increase production of driver ICs for LCDs (liquid crystal displays). The company is responding to greater demand for the products for use in devices such as personal computers, large televisions and mobile phones. The company will expand facilities at its key production site in Miyazaki Prefecture, and will introduce production equipment at a manufacturing site in Miyagi Prefecture. Both sites are operated by production subsidiaries. Oki Electric expects to ship 120 million LCD IC drivers in the current fiscal year, an increase of 66% from the previous fiscal year.

- NEC Corp. and Murata Machinery Ltd. plan to co-develop a smart-tag-based distribution management system and hope to commercialize the operations within the year. The companies have just launched a joint research team. Murata, a material-handling equipment manufacturer located in Kyoto, has expertise in factory automation machinery such as automated warehouses. This skill will be combined with NEC's wireless communications and information processing technology. NEC and Murata aim to introduce within the year a product management system that can immediately access information such as inventory levels at warehouses and stores as well as shipments.

Information Technology

- Toshiba Corp. and NEC Corp. have built the necessary facilities to mass-produce discs based on their proprietary HD DVD format. The facilities will allow them to make read-only discs at a cost comparable to that of existing DVDs. The two manufacturers intend to promote their products to major US movie companies, a move that is expected to spark intense competition with Sony Corp., Matsushita Electric Industrial Co. and other firms supporting the Blu-ray format. Two production lines for making HD DVDs have been installed at the Ibaraki Prefecture plant of Memory-Tech Corp., which supplies optical discs to Toshiba.


- Hitachi Ltd. has developed inexpensive software to prevent wiretapping of IP (internet Protocol) telephones, which have been increasingly used at companies because of lower communications costs. The software, which is expected to hit the market this summer, can be used without expensive electronic circuits. Installed in telephones, the software will both encode and decode audio data transmitted through the internet. The time gap between the encoding and decoding has been reduced to 1/1,000th second, making it almost unnoticeable for users. Net-based phones are spreading fast, but are flawed in that voice data can be tapped relatively easily with the help of a personal computer and data analysis software. Hitachi will sell IP phones with the anti-wiretapping software, initially targeting corporate customers. Individual IP phone subscribers, now totaling 4 million, are a potential market.

Media, Entertainment and Gaming

- Sony Corp. has launched its Connect music download service in the U.S., a market dominated by Apple Computer Inc. and others. The major electronics and entertainment group is planning to expand its lineup of compatible portable music players and is aiming to generate a synergistic effect between its content and hardware. Sony Connect Inc., the new service offers more than 500,000 tracks in Sony's ATRAC3 file format. Downloaded tracks can be played an unlimited number of times on up to three personal computers and can be transferred to any number of compatible portable music players. The tracks can also be burned onto CDs up to 10 times.

Mobile / Wireless

- NTT DoCoMo Inc. reported higher net income and revenue for the fiscal year ended March 31, but it forecast lower revenue for the current year due to Japan's increasingly competitive mobile-phone market. DoCoMo's net income tripled to ¥650 billion ($5.8 billion) for the last fiscal year from ¥212.5 billion ($1.9 billion) a year earlier. In the year-earlier period, the company took steep write-downs on overseas investments. Revenue for the year ended March 31 rose 5% to ¥5.1 trillion ($45.4 billion) compared with ¥4.8 trillion ($42.7 billion) a year earlier. NTT DoCoMo expects revenue to fall 2.5% to ¥4.9 billion ($4.4 million) the current fiscal year, marking the first decline in annual revenue in its 12-year history.



- Samsung Electronics overtook rival LG-Philips in the first quarter as the world's top maker of high-resolution computer monitors, according to industry data, and the South Korean firm is set to keep its lead. Electronic display market research firm DisplaySearch said recent data showed Samsung, the top maker of notebook computer displays, had overtaken LG-Philips in sales of desktop computer monitors, where LG-Philips had long been the leader.

Information Technology

- Buoyed by higher semiconductor prices, exports of information-technology products reached $5.9 billion in April, a 42.3 percent increase from the same month last year, according to the Korean Ministry of Information and Communication. Imports were tracked at $3.4 billion, a 21 percent increase from last year's number, resulting in a trade surplus of $2.4 billion. The export total represents a slight drop from March's US$6.3 billion. Ministry officials point out the rise of semiconductor prices as the driving force behind greater exports, with the major destinations of the United States, Japan and Europe in states of recovery. Overseas sales of semiconductors were $2.2 billion, with U.S. exports showing a 63 percent increase from last year at $370 million. Asian exports also rose by 53.1 percent at $1.5 billion.


- Online shopping malls are forecast to record explosive sales growth this year, with estimates of more than 50 percent. Internet Auction, Korea's largest online auctioneer and a unit of the United States-based auctioneer eBay said it posted 6.2 billion won ($5.3 million) in its first-quarter profit, up 2 percent from a year ago, as more people frequented to its site. Analysts forecast transaction volume of Interpark, the country's No.2 online retailer would reach W813.7 billion ($694.3 million) this year, taking up 9.1 percent of the total transaction via online shopping malls.

Media, Entertainment and Gaming

- The conflict between the recording industry and mobile carriers over online music is widening, with lobby groups threatening to seek an injunction on the sale of LG Telecom Co.'s MP3 player-equipped handsets. The statement comes a day after mobile operator LG Telecom offered to pay a percentage of sales from its MP3 phones to set up a digital music development fund, in a belated attempt to mend fences. However, officials of the producer's association balked at the offer and insisted LG Telecom halt the sale of its MP3 phones immediately.

- Lotte forms joint marketing ventures with online game companies. The local food and beverage industry has joined hands with local Internet firms to strengthen their marketing efforts, a move that is expected to be a growing trend. Food and beverage giant Lotte Confectionery Co. last month set foot on a joint marketing venture with NHN Corp.'s game portal www.hangame.com, the nation's largest online game company. The company is promoting its newly improved Atlas chocolate bar, which ranks within the company's top five chocolates, inside NHN's newest online basketball game. Players will see Atlas ads glowing from the floors of the basketball court as well as around the court.


- Chipmakers expect to march back into the black, but gloomy forecasts create doubts for future. The Korean information-technology sector was a major contributor to record monthly highs in exports and trade surplus in March, and the surging sales are expected to continue through this year. According to figures released by the Institute of Information Technology Assessment, local IT companies exported $6.3 billion worth of products this March, up nearly 50 percent from the same period last year. Mobile phones, computer chips and liquid-crystal-display screens and digital televisions pumped up the exports, accounting for about 30 percent of Korea's $21 billion in goods sent abroad. Imports reached $3.7 billion, bringing the IT sector's trade surplus to $2.6 billion since last August.

- Hynix Semiconductor Inc. saw the greatest revenue growth among the five major players in the random-access memory market during the first quarter according to Gartner. The DRAM market recovered in the first quarter from two years of recession with revenue reaching $5.6 billion. Among the top five vendors, Gartner said Hynix stood out with its revenue increasing 11.4 percent from the last quarter, compared to Samsung Electronics Co. which saw a 4.3 percent rise. Hynix ranks third in DRAM market share after overtaking Germany's Infineon in the fourth quarter of last year.


- LG Telecom Co. of South Korea swung to a net loss in the first quarter, as hefty marketing costs amid the introduction of mobile number portability in the country ate into its bottom line. The wireless operator said net loss for the three-months ended March 31 amounted to W25.2 billion ($21.6 million), reversing from a net profit of W17.8 billion ($15.2 million) a year earlier. However, revenue rose 48% to W768.2 billion ($655.4 million) from W518.3 billion ($442.2 million) as the company added more subscribers from market leader SK Telecom Co.


Mobile / Wireless

- Siemens has agreed to form a venture with Chinese manufacturer Ningbo Bird to develop and market mobile phones. The German handset-maker, the world's fourth-largest, will sell its phones through Ningbo Bird's 30,000-shop dealer network in China, giving it extensive coverage in the world's most populous country. Its partner will market, promote and sell Siemens phones. Ningbo Bird will also buy the basic engineering components for making mobile phones, the so-called "platforms", from Siemens. Together, the two will develop phones to be sold under the Bird brand.


- China's three publicly listed telephone companies are growing up by assuming all of the major assets of their state-run parents. The three companies -- China Mobile (Hong Kong) Ltd., China Telecom Corp. and China Unicom Ltd. -- will include the lesser-performing operations that have been hidden with the parents. And investors, many of whom bought the stocks just to ride the growth from the predictable asset injections by their parent companies, must now consider fundamentals and industry conditions. All three companies have shares listed on the Hong Kong Stock Exchange and depositary receipts on the New York Stock Exchange. Each of the three generates cash, possesses adequate capital and has solid revenue and profit growth prospects, given the relatively low penetration of telephones in China. At present, roughly two in 10 households have fixed-line service and about two out of 10 people carry a cell phone.

Singapore / Malaysia / Philippines / Indonesia


- Singapore Telecommunications Ltd. said its earnings rose more than threefold in the latest fiscal year on one-time gains and a robust performance by regional operations, including Australia. The company also announced a S$4.1 billion ($2.4 billion) payout to shareholders, including a capital reduction that returns 90% of the cash SingTel raised from divesting itself of non-core assets during the year. Southeast Asia's largest telecommunications group reported net profit for the year ended March 31, rose to S$4.5 billion ($2.6 billion) from S$1.4 billion ($822.4 million) a year earlier. Fourth quarter net profit rose to S$2 billion ($1.2 billion) from S$313 million ($183.9 million).

- Singapore Telecommunications plans to buy back 7.1 percent of its stock after the sale of a stake in Belgacom helped boost profit six-fold in the fourth quarter to March.

- Singapore Telecommunications said its mobile user base in the Asia-Pacific region grew 37 percent on year to 47.3 million in the March quarter, with the surge coming from its regional associates. The subscriber base of the four regional associates - Thailand's Advanced Info Service, Bharti of India, Indonesia's Telkomsel and Globe from the Philippines - rose an annual 42 percent to 40.3 million users in the first three months of the year.

Hong Kong

Mobile / Wireless

- Li Ka-shing may sell his stake in online travel agency Priceline.com in a transaction that could raise $250 million to fund his third-generation (3G) mobile phone businesses. Nasdaq-listed Priceline filed a shelf registration statement with the Securities and Exchange Commission that would allow Hutchison Whampoa and its sister firm, Cheung Kong (Holdings), to sell 10 million shares on the open market within two years. The two companies own a combined 12.7 million shares, or about 34 percent of Priceline, which they bought three years ago.

- Hutchison Whampoa is close to announcing a handset partnership with South Korea's LG Electronics that may involve a US$1 billion order for third-generation (3G) mobile phones. Both firms could sign a deal as soon as the second quarter. Under the pact, LG phones would be sold in Hutchison's leading 3G markets, including Hong Kong. A tie-up with Korea's second-largest handset manufacturer would make LG Hutchison's third 3G handset vendor after NEC Corp of Japan and Motorola of the United States.


- PCCW Ltd. reported its United Kingdom wireless broadband unit is planning a national rollout in August following a $35 million soft launch. The firm had chosen six areas in the Thames Valley for trial services, which targets about 300,000 households. Initially, two services at a speed of 515 kilobits per second and one megabit per second will be available to users at a rate of £18 (US$32.3).

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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