A week in tech

A round-up of all the latest tech news.

ò NTT DoCoMo, Japan's biggest mobile phone operator, disclosed a 5.2 percent decline its in quarterly operating profit in from Ñ272.7 billion ($2.3 billion), from Ñ287.6 billion ($2.5 billion) a year earlier. Industry analysts ascribe the decline to weaker average revenue per user (ARPU) on voice services and huge spending on handset subsidies. Industry sources are saying that the unit of Nippon Telegraph and Telephone Corp. (NTT), the world's largest telecom group by revenue, may face a decrease in its customers when a new number portability rule takes effect in October unless it offers promotions or other incentives. DoCoMo contributes about 70 percent of NTT's total operating profit.

ò Motorola announced that itÆs entering an agreement with Softbank Group for the deployment of a WiMax trial network in Tokyo. Under the agreement, Motorola is supplying an end-to-end trial system including access points, an access network, and prototype WiMax mobile handheld devices. The five-month trial, expected to begin in September, will enable the Softbank Group to assess the effectiveness of WiMax as a wireless broadband technology. Motorola will be deploying five WiMax access points and 25 prototype WiMax mobile handheld devices, operating in the 2.5GHz spectrum. The trial will also showcase MIMO (multi-input, multi-output) capabilities of Motorola's WiMax solutions in supporting multi-antenna telecommunications systems as well as enabling greater data through put and range.

ò Sony Corp reported a turnaround in its performance, with quarterly operating profits hitting Ñ27 billion yen ($235.4 million), which goes beyond the consensus forecast of Ñ18 billion ($157 million) made by a poll of seven analysts under Reuters Estimates. The company ascribed the recovery to huge sales of its Bravia LCD televisions and Cybershot digital cameras and a weaker yen. In explaining the profit, the company cited the gains it derived from its mobile phone joint venture with Ericsson. Sony's electronics division, which accounts for about 70 percent of its revenues and makes Walkman music players and Vaio computers, posted a Ñ47.4 billion ($413.4 million) profit, its first profit for the April-June quarter in two years.

ò Canon announced a 28.8 percent rise in its net profit to Ñ105.9 billion ($923.6 million) for the quarter to June. It reported revenues climbing by 12.8 percent to Ñ1 trillion ($8.7 billion) from a year earlier, citing as one of the main factors in its growth the popularity of its high-end digital SLR cameras. For the six months to June, Canon said its net profit climbed by 22.2 percent to Ñ214.1 billion yen ($1.8 billion) on revenue of Ñ1.9 trillion ($16.5 billion), up 11.2 percent year-on-year. For the full-year to December, Canon said it is looking to a record net profit of Ñ440 billion yen ($3.8 billion), up from Ñ384.1 billion ($3.3 billion) in the previous year. The company also stated that it would cease the manufacture of traditional film cameras.

ò Sharp announced a 23 percent growth in its net profit to Ñ23.8 billion ($207.5 million) from Ñ19.4 billion ($169.2 million) in the first quarter of the previous fiscal year. The countryÆs leading manufacturer of LCD panels and TVs ascribed this growth to the strong sales of LCDs and cell phones. It posted a 13.7 percent climb in its operating profit to Ñ40.4 billion ($352.3 million) in the first quarter of the previous fiscal year. Sharp reported that it sold about 1.1 million LCD TVs during the quarter, 1.5 times the sales the firm had in the same period of 2005. For the full year to March, Sharp maintained its forecasts of net profits of 100 billion yen ($872.1 million), and revenue of Ñ3 trillion ($26.1 billion).


ò Dacom Corp, Korea's no. 2 fixed-line carrier, announced that its second-quarter earnings reached a record W52.4 billion ($55.1 million), a figure that represents a 215.4 percent rise from the same period last year. It ascribed the record-high quarterly earnings to robust sales from its internet business, which jumped 7 percent from a year earlier to W189.9 billion ($199.5 million). Dacom said its Internet business has accounted for 62 percent of sales, up from 57 percent at the end of last year.

ò Google Korea disclosed that it is trying to protect private data leakage through the use of a search tool on its website. According to the Korea Ministry of Information and Communication, Google started the protection activity with the Korea Information Security Agency (KISA) early this month, while the company promised to cooperate with new countermeasures offered by Ministry of Information and Communication. To do this, the ministry said it developed new software, which searches automatically for private data and information on Google. The software is able to search for private data even in the cache database, which contains Google's information.

ò Cyworld, the South Korean-born social network, announced that it has opened its US site into public beta, meaning anyone can now access the site and create those "minihomes" and "minirooms" that have captured a huge chunk of the countryÆs population. Like MySpace's web pages, US Cyworld users are able to customise their sites with photos, images, and music and can send and receive messages for other users. Unlike MySpace, the site is based around cute avatars called "Minime's", buying and shopping with "acorn" points and design elements that have been described as calling to mind a ôwholesome goodnessö. The company said its US effort is a way for staging a platform to build sites that will be launched in Europe as well as in South America and East Asia. Cyworld has sites already in China, Japan, and Taiwan. The company said it is planning to open a site in Germany early next year in alliance with Deutsche Telecom.


ò KOSDAQ-listed tech firm u-Gentech announced its development of a low-magnetic field speaker used for mobile phones. The company said the new product prevents magnetic fields being generated from a speaker, by using iron oxidation. A technology expert from the company said that unlike electric fields that can easily be prevented, magnetic fields are permeable in their nature and thus difficult to control harmful waves. The new speaker is also only 3mm-thick compared to rival products around 5mm-thick. The company is now in talks with mobile phone companies at home and abroad.

ò SK Telecom Co is expected to report a slight decline in quarterly profits, with the firm expected to cite marketing costs as well as fierce competition as reasons for the drop. SK is looking to its new services such as Wibro and HSDPA (high speed downlink packet access) that will boost data downloads to help sustain its revenue growth. Earlier, SK Telecom agreed to invest up to $1 billion in China Unicom Ltd, China's No 2 mobile firm, in a bid to expand into growing Asian markets. Industry analysts, however, have expressed doubts whether those moves will bring in profits to the company in the near future. SK is expected to report a W457.8 billion ($480.2 million) net profit for April-June, down 2 percent from W467.1 billion ($491 million) it posted a year earlier, according to eight analysts surveyed by Reuters. Quarterly sales are seen climbing to W2.6 trillion ($2.7 billion), from W2.5 trillion ($2.6 billion) reported a year earlier. For the full-year, SK is forecasted to earn W1.7 trillion ($1.7 billion), down nearly 6 percent from W1.8 trillion ($1.8 billion) in 2005.

ò Sohu.com. Inc disclosed that its revenues hit $34.1 million in the second quarter, 36 percent higher than the same period of last year and 12 percent higher than the first quarter. Even with the report of continued growth brought about by advertising business and the FIFA World Cup, the results did not match analystsÆ estimates, which then led to a sharp decline of its stock prices on the NASDAQ. The firm said its ad business posted a 35 percent growth year-on-year to $22.8 million in the second quarter. Its non-advertising business registered a 39 percent year-on-year rise to $11.2 million. It did not help the marketÆs perception, too, that SohuÆs guidance was perceived as moderate. The company said its revenues for the third quarter are expected to reach $32.5 million to $34.5 million, a decline of 4.7 percent, and growth of 1 percent over the second quarter. Brand advertising revenues are forecasted to be $20 million. Sohu said it would continue to boost its Internet content and online advertising business. In a separate development, Sohu announced that it has signed an alliance with Eurosport Group, a France-based sports broadcaster and web site operator. The agreement is seen as enhancing SohuÆs sports content.

ò Baidu.com reported a massive increase in its net income in the second quarter to $7.3 million, a figure that went beyond the $1.5 million it had the same quarter 2005. The company said it prioritizes revenue growth and expansion, rather than profits, a statement that appears to address the reaction of the market that saw BaiduÆs shares go down. Observers are saying that investors appear to be disappointed with the results, where the company merely matches the analystsÆ consensus forecast. Baidu said it predicts a near tripling of its revenue for the third quarter.

ò Huawei Technologies and U.S. wireless giant Motorola announced their entering into a partnership to jointly develop next generation communications technologies. The alliance is seen as demonstrating the increasing consolidation of major telecom equipment companies. The two companies said the new equipment will be based on the UMTS (universal mobile telecommunications system) and HSPA (high speed packet access) systems, faster versions of the 2G (second generation) GSM (global system for mobile communications) mobile technology, which currently dominates the world's mobile telecoms market. As part of the agreement, Huawei and Motorola will establish a joint research and development (R&D) centre in Shanghai.

ò AAC Acoustic Technologies Holdings, a mobile phone components maker, revealed its plan to raise as much as HK$646 million ($83.1 million) by selling shares in the company. The company raised about HK$7.6 billion ($978.2 million) in an IPO in August 2005. With Motorola, Sony-Ericsson, and Kyocera as is customers, AAC said it holds about 7.9 percent share of the mobile handset speaker market worldwide. The company cited that its revenue growth over the past two years was biggest in overseas markets, especially in Asia and Europe. According to a poll of analysts made by Thomson Financial, ACCÆs earnings are forecast to register a 73 percent climb year on year to HK$553.4 million ($71.2 million).

ò SmartPay Jieyin Ltd announced a nationwide partnership with China Minsheng Banking Corp., Ltd (CMBC) on mobile payment services. Industry observers see this partnership as marking a wider adoption of SmartPay's mobile payment services with all CMBC's customers over 19 main cities in China. SmartPay enables mobile subscribers to easily receive, send, and spend money anywhere, anytime. In addition, SmartPay also processes payments for digital cards, utility bills, and lottery tickets. In the near future, SmartPay said it will be able to provide payment services for airline tickets and much more. China Minsheng Banking Corp, is the first national joint-stock commercial bank in China with stocks mainly held by non-state-owned enterprises. It is also a standard joint-stock financial institution.

ò Qualcomm announced a strategic agreement with Semiconductor Manufacturing International Corp (SMIC), ChinaÆs top semiconductor company. Under the deal, SMIC will now make Qualcomm's chips at its plant in Tianjin, which the Chinese firm acquired from Motorola in 2003. The two companies said the alliance will fuse SMIC's wafer fabrication capabilities and subcontractor infrastructure with Qualcomm's leadership in 3G wireless technologies, with a focus on power management integrated circuits (ICs). According to research firm IC Insights, Qualcomm spent $3.1 billion in semiconductor R&D during 2001-05, which accounted for 15 per cent of its total sales in the period. The agreement with Qualcomm is expected to help improve SMIC's performance. SMIC posted a net profit of $2.2 million for the second quarter of this year after a string of quarterly losses.

ò The biggest Indian software and IT service provider, Tata Consultancy Services (TCS) Co, and three Chinese partners announced the setting up of a joint venture named TCS (China) Co. Two of the three partners Beijing Zhongguancun Software Park Development Co and Tianjin Huayuan Software Area Construction and Development Co are the developers of two government-backed software parks in the Beijing and Tianjin municipalities. The third Chinese firm is Uniware Co, a software service company in Beijing. Under the agreement, TCS will have a 72.2 percent stake. The remaining will be distributed among the three Chinese firms. TCS (China) Co. is set to begin operations in September from its Beijing base. Microsoft promoted the foundation of the joint venture and is set to pay $2.1 million for a 10 percent stake later this year, which would then result in stakes of TCS and the three Chinese companies to go down to 65 percent and 25 percent respectively. Industry observers note that this tactic is part of MicrosoftÆs strategic plan in China.

ò Chi Mei Optoelectronics announced its plan to invest of about $30 million to build a thin-film-transistor liquid crystal display (TFT-LCD) module plant in Guangdong. The firm, one of TaiwanÆs leading flat panel display makers, said that the plant is set to initiate operations by the end of this year and is seen as capable of a monthly capacity of 2 million units in the fourth quarter of 2007. The Taiwan government following its policy that all projects for the mainland worth more than $20 million would need to secure authorisation has approved the investment. The plant in Foshan called Nanhai Chi Mei Optoelectronics is Chi Mei's second production centre in the mainland. Another plant is in Ningbo, in central Zhejiang province, which operates with a capacity of 1.3 million units per month.


ò Taiwan Semiconductor Manufacturing Co (TSMC), the worldÆs largest contract chipmaker by revenue, reported an 85 percent surge in its net profit to NT$34 billion ($1 billion) for the April to June period, from NT$18.3 billion ($559 million) for the second quarter of last year. The company said its revenue for the second quarter hit NT$82.2 billion ($2.5 billion) from NT$59.9 billion ($1.8 billion) in the year-earlier period. TSMC attributed to the surge from the high demand in communications and consumer electronics segments, which countered the decline in demand in the computer segment. The company is looking for third quarter revenues to hit between NT$79 billion ($2.4 billion) to NT$82 billion ($2.5 billion) as it considers factors in the continuing high inventory levels in the computer industry.

ò Au Optronics, an LCD panel maker, reported for the second quarter a decline in its net profit to NT$182 million ($5.5 million) from NT$470 million ($14.3 million). The company put the decline down to a huge drop in prices, with the average selling price of the large panels going for $162 each from $184 in the year-earlier period.

Hong Kong

ò PCCW revealed that it has terminated all talks related to buyouts with Macquarie of Australia and TPG Newbridge of the U.S. The opposition cited its major reason for ending the talks was the opposition presented by China Netcom. Hong KongÆs dominant phone operator said it had ended buyout talks with AustraliaÆs Macquarie Bank and United States firm TPG Newbridge due to opposition from its major shareholder, China Netcom. Earlier, the two foreign companies submitted bids worth some US$7 billion. PCCW said that for any deal to succeed, the company would have to get the agreements from all relevant parties.

Media, Entertainment and Gaming
ò Mattel, the firm behind Barbie, disclosed that it has agreed to buy Hong Kong-based electronic game and toy manufacturer Radica Games, a Hong Kong-based manufacturer of electronic games and toys, in a deal valued at about $230 million in cash. Mattel said it looks to the acquisition as enhancing its capacity to increase its electronic toy offerings. Radica maintains offices in the US and has more than 6,000 employees.


ò Singapore Telecommunications disclosed that it is considering of hiring a foreigner for its top post following the resignation of Lee Hsien Yang, who was head of Southeast AsiaÆs biggest phone company for eleven years. The company explained the choice of an external successor with experience of managing assets across the continent as a bid to respond to its slow sales growth. Analysts are saying that what is needed is someone with experience to manage an international and growing portfolio. An analyst at DBS Vickers Securities said that a new leader with a closer tie to China would definitely help SingTel. The company reported a 27 percent climb in its net profit to S$4.1 billion ($2.5 billion) in the year to March. It posted a 4.1 percent rise in its sales to S$13.1 billion ($8.3 billion).

ò Venture Corp, a contract electronics maker based in Singapore announced that it would acquire GES International, a maker of retail transaction systems, for S$980 million ($621 million) in cash. The acquisition is on record as the largest acquisition by cash in Singapore following SolectronÆs purchase of SingaporeÆs NatSteel Electronics in a deal worth some $2.4 billion. Venture Corp said it looks to the acquisition as a way to enhance its electronics services business. Venture disclosed that funds for the deal are expected to come in the form of cash and bank loans. With GES making point-of-sale (POS) systems, the deal is significant in a market that is valued at around $5 billion. Venture Corp said it would continue to look for firms to acquire in its bid to enhance its own growth. A top official of Venture Corp said that the GES acquisition would be part of its group earnings by the fourth quarter, during which GES would see itself delisted.

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