- Yahoo Japan announced that it has launched an advertising service that will drive growth of virtual stores on its internet auction site. Ads placed by online shops appear on the auction site when visitors enter certain key words purchased by vendors. Yahoo Japan stresses that the ads will have a greater impact than conventional search word-linked advertisements because the ads are seen by people who actually plan to shop on the site. Yahoo Japan said the service will help increase the number of virtual stores on the auction site. In a separate report, Yahoo Japan, which operates the country's most-visited web portal, said its third-quarter profit went up by 37 percent on increased advertising revenue and fees from its auction services. Net income rose to 12.6 billion yen ($107.4 million) in the three months to December from 9.3 billion yen ($79.2 million) a year earlier.
- There is a rise in cellular-phone-based electronic money services with companies seeing the business potential of the technology. Four cell-phone-based electronic money services are already being offered and two are in the pipeline. One of the services in the works is going to be employed by Seven & I Holdings Co. and is expected to allow customers to use their handsets to make cashless payments at the company's supermarket and convenience stores. The convenience offered by cell-phone-based e-money services is expected to make the offering hugely popular among many consumers. Given the large market, even if only a small percentage of consumers sign up purchases settled through these services will still add up to a significant amount. An estimate shows the market for small-purchase settlements at such businesses as convenience stores and coffee shops is worth roughly 60 trillion yen (US$511.5 billion). The one problem that may stall the use of this technology is the incompatibility among in-store reader devices, which may require stores to install multiple reader devices if they want to accommodate users of different services. To address this, a discussion is ongoing now among the members of the Mobile Payment Promotion Association on the standardization reader devices.
Media, Entertainment and Gaming
- A broadcasting service that will enable people to store TV shows in receivers and watch them at any time will likely start in fiscal 2007 on a trial basis. A task force comprising representatives from about 90 broadcasters, telecommunications companies, electronics firms and others stated that the standardization of related technological formats will be done by the end of March this year and step up preparatory work, including developing receivers. Firms participating in the project include Japan Broadcasting Corp. or NHK and private broadcasting companies; telecom service providers such as Nippon Telegraph and Telephone Corp. and KDDI Corp.; and electronics equipment makers like Matsushita Electric Industrial, Sony and Canon. NHK said it plans to officially announce the launch of server-type broadcasting in its new business plan. Initially, NHK aims to adopt the service for educational programmes and air them for fee to schools nationwide through its broadcast satellite channels.
- Nintendo announced that it would begin sales in March of a new high-end Nintendo-DS portable game console. Made more compact, the product is about two-thirds the volume and 80 percent of the weight of the present model and is dubbed Nintendo-DS Lite. With the introduction of the new Nintendo-DS, the company aims to create demand mainly among novices to video games The console has the same wireless capabilities and screen size of the present model, but it is more compact and allows for adjustment of screen brightness to one of four levels. The manufacturer's suggested retail price is 16,800 yen ($143), which is 1,800 yen ($15) higher than the current model.
- Matsushita Electric Industrial and Sony said they will release memory cards capable of storing 4 or more gigabytes of data later this year. The actions of the two companies are a response to the growing demand for more capacity to store music and video clips on cellular phones, portable game machines and other tiny digital consumer devices. Matsushita plans to release a 4GB SD memory card, with the decision of whether to build the card from 8-gigabit NAND flash or 4G NAND flash dependant on NAND flash prices at the time of production. Sony plans to offer 4GB and 8GB versions of its Memory Stick Duo, which is about the same size as an SD memory card. The current largest-capacity SD memory card and Memory Stick Duo both can store 2GB and are priced at around 20,000 yen ($170). A 4GB memory card will not be able to hold as much as a DVD, but with data compression it will be able to store around 1,000 songs.
- Domestic shipments of televisions, DVD recorders and other consumer electronic products posted an increase for the fourth straight year in value terms in 2005, according to statistics released by the Japan Electronics and Information Technology Industries Association (JEITA). The report says for the first time more LCD TVs were shipped than regular TVs. The value of domestic shipments of the electronic products went up by 6.9 percent to 2.5 trillion yen ($21.3 billion). In volume terms, LCD TV shipments surged 58.3 percent to 4.2 million units while shipments of regular picture-tube TVs registered a total of 3.9 million units. The JEITA report showed that domestic shipments of DVD recorders and DVD players saw a 1.5 decline in 2005 to 7.1 million units, compared with shipments of audio equipment that went up in value terms for the first time in six years, showing a 13.3 percent growth to 23.7 billion yen ($202 million).
- Sony and Samsung Electronics announced that they are in negotiations on the construction of their second joint-venture LCD panel plant, a move that is seen as a response to the strong demand for LCD televisions. The two companies are expected to make a total investment of roughly 300 billion yen ($2.5 billion) on a new plant in South Korea. The plant is expected to handle eighth-generation glass substrates and begin operating in 2007. Sony and Samsung established their LCD joint venture, S-LCD Corp, in South Korea in April 2004. The use of eighth-generation glass substrates is seen as enhancing production efficiency with fifteen 32-inch LCD panels capable of being made from one eighth-generation substrate, compared with 12 panels from one seventh-generation glass substrate. Eighth-generation glass substrates also allow more efficient production of 50-inch LCD panels. The final amount invested in the second joint-venture plant may change amidst other Japanese and Taiwanese companies possibly increasing their production capacities.
- Sony said it will cease manufacturing the Walkman in Japan, with production moving to China and Malaysia. Sony said it would close its production line of the MD and CD player Walkman at its Saitama Tech factory north of Tokyo by March next year, cutting about 200 jobs in the process. Sony has forecast shipments of the Walkman series at 13.8 million units for the year to March this year, up from 11.9 million the previous fiscal year. In a separate announcement, Sony said it would also end production of cathode-ray tube displays in the United States this year and will instead source production of cathode-ray tube displays in Singapore and China. Sony also said it will close its San Diego plant in June, laying off 400 employees, and also close it Pittsburgh factory, cutting about 300 jobs.
- NEC Corp. announced the development of a teleconferencing system that enables up to eight people to talk to each other even as they view pictures and documents on their cell phone screens. The new system uses 3G cell phones for the FOMA service of NTT DoCoMo. It allows conference participants to choose which pictures to view and also enables users to turn the pages of documents presented by other speakers. NEC said it aims to commercialize the system, which it developed by improving a similar PC-based arrangement, by the end of this year.
- Analysts are saying that Toshiba Corp's planned acquisition of Westinghouse, a leader in the Chinese nuclear power market, will bring the Japanese giant strong growth. The security concern regarding power supplies together with the growing demand for energy has pushed China to increase its investment in other energy sources. In this scenario, China was an opportunity for Toshiba to consider a new and stable source of profit. Toshiba was selected as the preferred bidder for Westinghouse, the US power-plant arm of British Nuclear Fuels. No information about the value of the bid was given but observers are putting the value at $5 billion, making it the biggest overseas acquisition by a Japanese firm in five years. The acquisition is seen also as playing a great part for Toshiba to win contracts in China. There is a plan for China to spend about $50 billion on 30 nuclear reactors by 2020, and Westinghouse might secure an $8 billion contract to build four nuclear reactors in China.
- Acme Packet announced that Dacom, the second largest long-distance service provider in Korea, is deploying the Net-Net session border controllers in its VoIP network that connects residential and business customers all over Korea. The Net-Net products are being integrated with the Dacom's Next Generation IP Softswitch platform designed to offer more enhanced services. The deployment of Acme Packet's session border controllers is being done by CommVerge Solutions Korea, a network integration partner of Acme Packet. The offering is aimed at Seoul and most major cities in Korea to offer VoIP and enhanced services in the next couple of years. Upon completion of the deployment, Dacom is expected to be able to secure an expansion of its current service offering of VoIP and high-speed data with secure, high-quality video conferencing and other multimedia IP services.
- KTF announced a net profit growth of almost 10 percent in the fourth quarter from a year earlier, a result it attributed to an increase in the number of mobile service subscribers. KTF said its net income went up 9.5 percent to W109.6 billion won ($113 million) in the fourth quarter ended December 31. Its sales posted a 7.9 percent growth to W1.5 trillion ($1.5 billion) with operating profit climbing 27.6 percent to W214.4 billion ($219.4 million). Compared with a quarter earlier, however, net profit and sales dropped 15.7 percent and 1.3 percent, respectively. Last year, KTF attracted around 570,000 new customers, holding a 32-percent share in the local mobile service, a share that went down slightly from 32.1 percent the previous year due to intense competition in the saturated mobile service market. SK Telecom holds 51 percent and LG Telecom 17 percent. KTF said it is targeting 400,000 new customers this year. The company revealed its plans to spend W1.1 trillion ($1.1 billion) in investment this year.
- The Ministry of Information and Communication said a new mobile spam-tracking system will be implemented in February with the hope that the move will drastically reduce unsolicited calls and messages. To be operated by the government-run Korea Information Security Agency, the system is expected to conduct an automatic filtering out of a good part of unidentified text messages leading to Internet web sites and "one-ring" calls, leaving the user with an unknown number. The government agency said it is readying to secure 1,000 spammers' numbers in cooperation with the nation's three mobile operators in order to implement the system. Until now, it was only possible to block mobile spams by reporting to a mobile carrier's call center or web site.
- Pantech Group, Korea's second-largest mobile phone manufacturer, has announced the introduction of the IM-U100 handset, which is designed to provide users with a state-of-the-art Portable Multimedia Player (PMP) phone. The device has an MP3 player, camera and movie functions. The model includes a 2.6 inch wide TFT LCD screen, which is two times larger than the screens on other multimedia handset models in Korea and among the largest of its type in the mobile handset sector globally, and thus allows an enhanced multimedia experience for mobile phone users. The device will be marketed under Pantech's SKY brand and will be initially targeted at the Korean market. The handset will be priced at approximately $550 and will be launched in Korea later this month.
- Remoba, a developer of software solutions for mobile phones, said it has deployed a new product called "RemoMail". The offering is a software application that provides access to email on mobile phones. RemoMail is seen as keeping the users linked to their family, friends, and business contacts. The solution works in an area with cell phone coverage and allows users to have connection to up to five of their personal and company e-mail accounts. The company believes RemoMail will become a mass market application. The offering is available for multiple mobile phone carriers in United States, South America, and India in English and Spanish, with future plans to launch worldwide with support for multiple languages.
- Hynix Semiconductor announced the quadrupling of its fourth-quarter net profit over the previous year, a result it ascribed to the huge demand for NAND flash memory chips and a one-time gain from a tax deferral. Hynix, the world's second-largest maker of memory chips, disclosed earnings of W751 billion ($768.8 million) in the three months to December versus a net profit of W186.1 billion ($190.5 billion) in the same period a year earlier. The sales of Hynix during the quarter showed a 30 percent increase. The company stated that NAND flash memory accounted for 40 percent of sales, an increase from 30 percent in the previous three months. DRAM chips contributed about 60 percent of revenue in the quarter.
- KT Corp., the country's largest telecom operator, disclosed its decision to acquire W356.7 billion worth of shares of its wireless affiliate KTF. The purchase will improve corporate value and is a response to the fast-changing telecom market, KT said. The company also said in a regulatory filing that its net profit declined 20 percent year-on-year to W997.3 billion ($1 billion) in 2005. The company said its operating profit dropped 21.6 percent to around W1.6 trillion ($1.6 billion) last year, which the company attributed to increased marketing and labor costs, while its revenue went up to about W11.8 trillion ($12 billion). Analysts believe KT's additional acquisition of KTF shares is part of its plan to merge with KTF in the long-term.
- The Ministry of Information and Communication said that Silicon Valley Overseas IT Support Center (iPARK) at the Korea IT Industry Promotion Agency exchanged a memorandum of understanding (MOU) for cooperation in DMB and Wibro with the Telecommunication Laboratories, the largest information and telecommunication laboratory in Canada. The discussion with the authorities of Canada federal government and Alberta provincial government revolved around a pilot service related to DMB and Wibro in the fourth quarter of this year. The two parties agreed to cooperate in conducting a pilot business in such areas as DMB, Wibro, home network and digital contents and exchanging information, a joint seminar and a joint incubating. They also agreed to work together in utilizing research facilities and test infra of TR labs, participating in joint research, taking a field trip for an advance technology and developing human resources.
- Telecom Communications (TCOM) announced the filing of an IPO with the SEC by its subsidiary, Alpha Century Holdings (Alpha). The company expects to raise through the IPO $10 million in investments to develop Alpha's SME's internet business services in China. The IPO is scheduled to start in May 2006. Alpha's revenue in fiscal 2005 was approximately $8.5 million while its profit was $3 million. If the IPO plan is successful, TCOM will continue to be the controlling shareholder of Alpha. TCOM offers integrated communications network solutions and Internet content services, including voice, video, data web and mobile communications.
- Sina announced that it has agreed to sell its 33 percent stake in 1Pai, an online auction website in China, to the leading e-commerce web site Alibaba. The online auction website was co-established by Yahoo and Sina as a C2C platform at the beginning of 2004, and two companies had a 67 percent and a 33 percent stake respectively. After being absorbed by Alibaba.com, 1Pai will be combined with the C2C platform Taobao.com
Media, Entertainment and Gaming
- Observers cite several factors for the resurgence of China's domestic game industry. One is that Chinese game developers have come up with more localized, personalized and customized games based on Chinese tradition rather than just serving as a sales conduit for foreign products. Another factor is that Chinese game vendors have been strict in management of their games, which results to a good market environment. Chinese game vendors have also expanded into international markets - Kingsoft has a presence in Malaysia, Singapore, and Vietnam, with concurrent online game players of 100,000. In Vietnam it has a greater than 80 percent share of the market. Beijing-based Gamlaxy International Inc is competing with local rivals in Japan and South Korea with its latest game that is based on Chinese classic stories. Objective Software, one of the leading game vendors in China, has expanded into Australia and Germany with its new games Tianjiao II and Hanghai Shiji. About 10 games have been exported by Chinese vendors. The government has also initiated a national online game publishing project, and is building four online game industry bases in Beijing, Shanghai, Guangdong and Sichuan.
- Shanghai Interactive Television Co Ltd (SiTV), one of China's major digital cable pay-TV operators, announced it is launching in Beijing, a move that brings expands its presence to 81 cities.
The Lenovo Group announced a net profit for the fiscal third-quarter profit of more than $47 million, a 12 percent increase from the same period a year earlier. The China-based personal computer maker attributed the growth to its 2005 acquisition of IBM's PC unit and strong sales in China. It posted a 392 percent year-to-year increase in its third quarter revenue to more than $4 billion.
- Revenues for the China's communication industry reached Rmb637.3 billion yuan ($79 billion) in 2005, an increase of 11.3 percent over 2004, according to the figures released by the Ministry of Information Industry of China.
- Skyworth Digital Holdings announced a joint venture with rivals TCL Corp, Changhong Electric and Konka Group to research the LCD television business. The joint venture is valued at around Rmb10 million ($1.2 million). Skyworth said the joint venture would form a body to be called Shenzhen Julong Optical-Electronic, and is expected to get the support of Shenzhen City Shenchao Technology Investment, an investment arm under the Shenzhen municipal government. Each partner will initially take an equal stake in the venture. Currently, Skyworth is conducting research on LCD television at its headquarters in the Nanshan district science park in Shenzhen. In a separate report, Skyworth said it sold some 1 million TV sets last month, a figure that represents a 36 percent increase on November, but a 7.2 percent decline when compared with a year earlier.
Media, Entertainment and Gaming
- Mindshare Hong Kong forecasts that overall growth in advertising spending in Hong Kong is slowing down to 5 percent this year. Media research agency admanGo reported that local advertising revenue went up 11 percent to HK$18.3 billion ($2.3 billion) last year. The report said the telecommunications sector are seen as spending less on marketing and advertising following the market consolidation that resulted to a decrease in number of mobile operators from six to five. Mobile operators such as Hutchison Telecom are also seen as spending less on marketing its 3G service. The banking sector, however, is forecast to up its advertising spending given strong growth this year. Experts state that marketing spending by banks is strongly correlated with their results. In 2005, the top three advertising spenders were banking and investment services, cosmetics and skin care, and toiletries and household goods. Ranked No. 8 and 9 were PCCW and mobile service provider SmarTone-Vodafone on the list of top spenders. Television remained the first choice of media advertising slot buyers.
- PCCW announced the re-launching of its video-on-demand service, this time on its Now Broadband TV platform. The move comes four years after the company closed down its predecessor, Interactive TV. The company said the new Now Select service would be bundled with PCCW's existing Now channels as a value-added service rather than as a stand-alone service like Interactive TV. Star Group's Star Chinese Movie channel will be the first to provide content to the Now Select service under the SCM Choice brand name. Under the Now Select umbrella, other Now channels such as Mei Ah Movie Channel and Hollywood movie channels will come with the video-on-demand service. The charging system will be the same as SCM Choice, which will be in the form of a monthly tariff for unlimited access to the archive. This monthly tariff will vary from channel to channel.
Travelocity announced the acquisition of regional online travel booking firm ZUJI for $34 million, a move aimed at strengthening its business in the Asia Pacific. The deal sees Travelocity and its affiliates increasing their stake in ZUJI to full ownership. Singapore-based ZUJI is a joint venture between 15 leading Asia-Pacific airlines and Travelocity. It has Internet travel operations in Singapore, Hong Kong, Taiwan, South Korea, New Zealand and Australia. The deal was completed in Singapore.
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