Internet
ò Sony, Matsushita, Sharp, Toshiba and Hitachi, the Japanese consumer-electronics giants, announced an agreement to develop a joint standard for internet-connected TVs. Under the alliance, the group plans to establish a common standard for aspects of internet TV such as the OS, security, copyright protection and network connectivity. The move is aimed to make it easier for content makers to produce viewing material for televisions that link to the web. Industry observers are saying that the alliance might push rivals overseas either to develop alternatives in competition, or adopt the planned Japanese standard. For the OS, companies have decided to adopt Linux, rather than MicrosoftÆs Windows system. Beyond that, the specifics of the standard are undecided. The five rivals set up a joint company last month called TV Portal Service Corp to develop this common standard, with Sony and Matsushita as the lead shareholders, each with a 35 percent stake. The others have 10 percent shares.
Telecommunications
ò Nippon Telegraph and Telephone reported an 18.5 percent decline in profit for the first fiscal quarter to Ñ144.7 billion yen ($1.2 billion) from Ñ177.6 billion ($1.5 billion) the same period the previous year. The company ascribed the drop to the continuing declines in income from its fixed-line business as well from the costs it incurred in promoting its broadband internet services, and its mobile operations. The company said that its mobile carrier unit NTT DoCoMo still dominates the Japanese market, and the service still continues to grow. Its operating profit, however, went down by 21 percent in the latest quarter, despite rising revenue. The company said expenses at NTT DoCoMo were also higher, mostly related to selling new handsets, while service prices have been plunging because of intensifying competition. NTT said it has been increasing users of a fast 3G data transmission on mobile phones called Foma, which allows people to use handsets to watch video clips and relay more data.
Media, Entertainment and Gaming
ò Camelot Software Planning, the studio that has become known for its line of Mario sports software, disclosed that it will take a pause from its alliance with Nintendo to concentrate on a partnership with Eleven-Up Inc. and Yahoo! Japan. The studio revealed it will develop a new golf title for the PC called Golf Daisuki. The game begins beta testing later this month and once complete, will be distributed on the G-Planet service created by Eleven-Up and Yahoo! Japan. Camelot is a small studio of about 30 development staff. The team has not ruled out future development with Nintendo. Camelot said the studio would devote its full resources to G-Planet because it sees immense potential in the service's future.
Hardware
ò Sharp announced that it would initiate operations in its LCD plant this month, two months ahead of schedule in a bid to meet surging demand in bigger but slimmer TVs. The plant, which costs about Ñ150 billion ($1.3 billion), was set to open in October. It is expected to manufacture top-notch panels for flat-panel TV called ôeight-generationö TV. Observers note that Sharp was successful in its operations compared with other Japanese electronics makers in competing with cheaper Asian competition. The Osaka-based maker of Aquos brand TVs got a head-start by focusing on flat-panel TVs and has the advantage of making both panels and TVs in-house, instead of having to buy panels from other companies. According to DisplaySearch, Sharp holds about 13 percent of the global market in LCD TVs, even as it is in a tight competition against three strong rivals, Sony, Samsung and Royal Philips Electronics. Sharp said the new plant would produce 15,000 panels a month, enough for 120,000 40-inch TVs. Production will be boosted to 30,000 panels a month by March next year. It looks to sell some 6 million LCD TVs worldwide during the fiscal year ending March 2007, up from 4 million in the fiscal year through March.
ò Dell beat Fujitsu in April-June to become the second-largest PC supplier in Japan, according to IDC. Dell is already the world's largest personal computer vendor, but Tokyo-based NEC Corp. and Fujitsu have been the largest and second-largest PC suppliers in Japan in recent years. IDC noted that Dell made use of aggressive pricing and advertising campaigns to boost its market share. NEC remained in the No. 1 spot, with a 19.6 percent share, followed by Dell with 16.1 percent, and Fujitsu with 15.6 percent. Overall PC shipments in Japan, the world's third-largest personal computer market in unit terms, fell to 3.4 million units in April-June, down 2.3 percent from a year earlier and the first decline in more than three years.
Korea
Internet
ò HanaroÆs IP Media TV portal service, Hana TV, said it has attracted 13,000 subscribers in just nine days since the service launch. The service has attracted a lot of attention and Hanaro says it is getting more than 1,000 calls daily from potential subscribers who are interested in the service. Hanaro TelecomÆs internal target for Hana TV is 250,000 subscribers by the end of the year.
ò SK Communications said it has developed an in-house a search engine to be used for its Cyworld and Nate.com services starting the middle of this month. So far NHN is the only South Korean internet firm that has successfully developed and launched its own search engine. With the entry of SK Communications, competition is expected to be intense in the already highly competitive domestic search market. An industry official was also quoted as saying that Daum Communications is also in the development stage of its own search engine.
ò NHN Corp, Korea's top online portal, reported a 120 percent rise in its second-quarter net profit on year to W32.4 billion ($33.9 million), driven by a solid growth of online advertisement income. The company said net profit in the April-June period declined 7.7 percent from the first quarter. Sales jumped 59.9 percent to W132.9 billion ($138.7 million). Analysts said NHN earnings topped expectations through higher income from their online ad business, partly helped by internet-based events that included the World Cup soccer finals in Germany. Sales from search engine-based ads jumped 70.8 percent to W68.1 billion ($71 million) from a year earlier.
Mobile/Wireless
ò South Korea's three mobile carriers are expected to refrain from increasing handset subsidies in the second half, noting how snowballing marketing costs negatively affected their earnings in the second quarter. SK Telecom, KTF, and LG Telecom posted disappointing earnings in the second quarter largely due to bigger marketing expenses after the government lifted a three-year ban on handset subsidies in March. The Ministry of Information and Communication has long blocked the carriers from offering subsidized handsets in return for restrictive membership conditions such as obligatory subscription for up to two years. The lifting of the ban, however, is just limited to the handset subsidies of existing long-term subscribers, not the one for attracting new users. As the marketing strategy revolved around handset subsidies, the carriers had no choice but to raise the subsidies in a fierce competition. But the subsidy race is now expected to cease. KTF, the country's second-largest mobile carrier, is set to apply a new handset subsidy rule from July 5, allowing existing subscribers to get an extra subsidy of as much as W100,000 ($104) when they upgrade their handsets and keep their membership. KTF's generous offer this month is aimed at competing with LG Telecom, which raised the handset subsidy for its own subscribers by up to W100,000 last month. But SK Telecom said it would not follow suit for a while after releasing its second quarter earnings.
ò KTF Co., South Korea's second-largest mobile operator, exceeded its rivals in gaining new customers in July thanks to its marketing efforts to retain subscribers, according to industry data. KTF said it attracted a net 83,855 customers last month, bringing its total subscription base to 12.7 million at the end of July. The figure compares with the previous two months when it gained 49,600 and 21,500 subscribers respectively, as its business was affected by aggressive marketing by other operators on the back of the government's reintroduction of handset subsidies. LG Telecom added 52,117 customers last month. SK Telecom Co, the nation's top mobile operator, however, lost a net 10,685 subscribers amid advances by other smaller companies. SK Telecom led the market with a 50.5 percent share, trailed by KTF with 32.1 percent and LG Telecom with 17.2 percent.
Media, Entertainment and Gaming
ò Cinero.com, which launched the countryÆs first Online Download Movie Theater service in April this year, reported a sharp rise in the number of its fee-paying users in 3 months. Industry experts are closely watching the new service to see whether the movie content market would move toward the online download service area. The company is offering unlimited access to downloadable high-quality movies for a fixed rate of W8,000 ($8) monthly. In July, some 60 percent of members used the site pay for download service, which is higher than around 40 percent average among other streaming service users. In a related development, Cowon, a firm specializing in portable multimedia players and digital music players, said it is also seeking to launch content download service, and MBC teamed up with Warner Brothers to introduce a digital movie download service middle this month. Cinero.com is now offering 'My Great Teacher, Part II' and 'My Wedding Story.' The company is aggressively securing movie content, expecting online releases to move up to the time of video releases.
Telecommunications
ò SK Telecom Co., South Korea's largest mobile-phone operator, reported a 20 percent decline in its net income to W373.3 billion ($390 million) in the second quarter. The company said its sales went up by 4.4 percent to W2.6 trillion ($2.7 billion). SK Telecom joins rival KT Freetel Co. in reporting lower than expected profit in the latest quarter, underscoring how competition has intensified since the end of March, when wireless operators began offering handset subsidies.
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