Hardware
Sony will take a 33% stake in Sharp's $3.5 billion liquid crystal display plant, which is set for completion by March 2010. Japanese flat-screen television makers are forming alliances as they try to secure enough panels while keeping initial investments in check to fight steep price declines. Sharp, which makes Aquos LCD televisions, plans to turn its LCD factory into a joint venture. The JV will also produce LCD modules and LCD driver chips. Global LCD television sales are expected to more than double to 155 million units by 2012, according to the Japan Electronics and Information Technology Association.
Semiconductors
Toshiba Corporation and IHI Corportation have denied a Yomiuri newspaper report that they are in talks to form a venture to build nuclear power plants. The paper said Toshiba and IHI are discussing starting a venture with annual sales of Ñ1 trillion ($9.5 billion), which would surpass revenues at Mitsubishi Heavy Industries' power unit, which includes its nuclear plant business. Toshiba is targeting the US and China to more than triple nuclear sales by 2015. IHI, which corrected last fiscal year's profit to a loss after underestimating costs at a unit, is selling its unprofitable cement operations and is reorganising itself to revive earnings.
Telecommunications
NTT DoCoMo, Japan's largest wireless operator announced that it will offer free calls among family members to challenge similar discounts by KDDI and Softbank. Family members using DoCoMo's existing plan, which offers a 30% discount, can make calls and send e-mails to each other for free from April 1, the Tokyo-based company said in a statement. KDDI, Japan's second-largest mobile-phone company, last week stepped up competition in the $83 billion market by waiving call fees for family members, countering a plan by Softbank. DoCoMo also said it will raise monthly charges for the i- mode mobile internet service by 50% to Ñ315 from June 1 and will offer corporate customers a flat rate for domestic calls. The moves by DoCoMo will lead to a net sales reduction of Ñ30 billion in the year starting April 1, spokeswoman Makiko Furuta said.
Korea
Telecommunications
The slowdown in South KoreaÆs digital growth is pushing companies to expand into other entertainment sectors, while telecom and media companies are increasingly buying into the local music business. SM Entertainment (SME) spent most of 2007 spreading into areas including film production, new media, musicals and karaoke distribution. According to the company, total revenues have climbed sharply, not because of digital sales, but because of brand power in the past years. Digital music sales in Korea were worth $321.3 million in 2006, up from $297.4 million in 2005 compared to physical sales of just US$98.7million in 2006. The industry consensus is that digital sales leveled off last year, raising the pressure on labels and production companies to find new revenue streams by striking deals with non-music companies.
Mobile/wireless
South Korea's saturated mobile market is forcing local carriers looking for continued growth to move into the content business. Currently, there are more than 43 million mobile subscriptions in a country of 49 million people. KTF, Korea's second-largest mobile carrier, bought a controlling 35.3% stake in Seoul-based business-to-business retail music service provider Blue Code Technology for $20.7 million in December 2007. Blue Code provides music to more than 3,000 shopping centres and convenience stores, and KTF says the deal will allow it to expand into full digital and physical distribution. SK Telecom, South Korea's biggest mobile carrier, has been even more aggressive, buying music labels and distributors and putting some $30 million into three music investment funds. Meanwhile, CJ EntertainmentÆs music affiliate, MNet Media, teamed up with KTF in 2006 to operate a $10 million music investment fund that has invested in 11 local music labels and many individual performers' albums and live concerts.
Semiconductors
Adept Technology, a provider of intelligent vision-guided robotics and global robotics services, is expanding in Korea has signed up Han Shin Power Tech as an exclusive dealer in the country. Korea is presently the fourth largest robot market in the world with growing demand for high speed, intelligent robotics in labour-intensive and quality sensitive applications such as incasing, packaging, material handling, and assembly. Under the terms of the agreement, Han Shin Power Tech will sell Adept's complete portfolio of robotics, controls, vision and software products in Korea. Han Shin Power Tech is a factory automation and engineering solutions provider and robot systems dealer with over 35 years of experience in the business.
Hardware
Samsung Electronics has released what it claims to be the world's first plasma display panel television that supports three-dimensional imagery. The 3D Ready TV, which Samsung calls the ôPAVV Cannes 450ö, features a million-to-one contrast ratio and 3D content support. Users can enjoy 3D games or movies if they put on special glasses and their Cannes 450 is connected to a high-performance PC supporting 3D software. The new PDP TV comes in two screen sizes, a 42-inch model and a 50-inch model. Other companies and research institutes have tested 3D PDPs but Samsung claims it's the first to commercialise the technology.
Media, entertainment and gaming
An industrial source said that Yedang Online, DragonFly, T3 Entertainment, Mgame and NC Soft are following each other to announce a plan to develop a second installment of their best-selling games. This is part of a business strategy to enjoy the halo effect of the original games. Since 2006, these companies have failed to draw gamers' attention to the newest games and this is a safe way to attract gamers' enthusiasm to the second installment.
Korea's National Assembly passed a special act to turn analogue television broadcasting to digital television broadcasting and promote digital broadcasting, according to an announcement by the Ministry of Information and Communication. Under the act, land-based television broadcasters are required to stop analogue broadcasting before the end of 2012. The act also requires manufacturers to install receiving equipment for digital broadcasting in television monitors and related electronic goods. Policies are also required to smoothly provide broadcasting services for low-income people, such as welfare recipients, who fall under the National Basic Living Welfare Law. The act also demands making recommendations to the National Assembly and related agencies about support programs to adjust television broadcasting fees and improve advertising systems to take account of the costs that land-based TV broadcasting service providers will have to bear to swoitch from analogue to digital broadcasting.
China
Internet
China's eight leading online media officially sanctioned to publish news have signed the "Chinese Pact on the Self-discipline on Visual-Audio Programs and Services of the Internet," which urges all domestic websites to spread positive, healthy programs and boycott corrupt, outdated ones. It urges all the signers to abide by the country's laws, regulations and policies on the development and management of Internet culture and to boycott programs, including films, teleplays and cartoons that advocate elements in the catch-all categories of violence, pornography, gambling and terror. The eight signers are the official websites of Xinhua News Agency, People's Daily, the State Council Press Office, China Radio International, China Central Television, China Youth Daily, China Economic Daily, and the State Administration of Radio, Film and Television.
Baidu.com intends to launch an instant messaging service in China. The Beijing-based Chinese language internet search provider said the new IM service will be called ôBaidu Hiö but didnÆt disclose any details.
Search engine advertising and in-game promotions pushed China's online advertising market up 75% to Rmb10.6 billion ($1.5 billion) in 2007, according to internet research group iResearch. The surge was driven by a boom in search engine optimisation (SEO), which experienced a 108% increase. The report said SEO accounted for 27.3% of the market and this year would represent some 30% of all online advertising. Online brand advertising jumped 65.3% to Rmb4.8 billion and by 2011 would reach Rmb23.7 billion. The iResearch data is slightly above a prediction by Nielsen Online that online advertising would increase to more than Rmb10 billion in 2007. The Nielsen's report said Lenovo, Coke and Samsung, all Olympic sponsors, were among the internet's biggest spenders.
Mobile/wireless
Mobile entertainment is popular among the Chinese, with 34.8% saying they listened to mobile music in a month, and 10% playing a downloaded mobile game, according to research firm M:Metrics. The firm surveyed 5,163 Chinese mobile subscribers aged 13-54 via telephone in Beijing, Shanghai, Guangzhou, Shenyang, Chengdu, Wuhan and XiÆan. The survey also revealed that 6.1% accessed news via their mobile browsers, while about 2.4% accessed a downloaded application. Aabout 15.2% of respondents have sent and received photos or videos, while about 4.4% purchased ringtones. According to the survey, 2.5% used mobile emails and 2.2% accessed social networking sites.
Zhu Ling, editor-in-chief of China Daily, and Wang Jianzhou, chairman of China Mobile have launched China's first English-Chinese mobile paper called China Daily Mobile News. The mobile paper sends English-Chinese news to users' cell phones as multimedia messages through wireless technology. China Daily Mobile News will allow the expected surge in visitors in China to receive updates about China's internationalisation, technological advancements and improved English communication standards. China Daily has the rights to publish the official English newspaper for the Beijing Olympic and Paralympic Games, as well as the Village News - the official newspaper of the Beijing Olympic and Paralympic villages.
Telecommunications
China Unicom is expected to sell its CDMA mobile network to China Telecom as part of an industry restructuring plan. Analysts estimate the deal could be worth up to Rmb115 billion ($15.8 billion). Beijing is widely expected to announce news of its industry restructuring plan as early as next month. The move is expected to create three full-service operators: China Mobile will merge with fixed-line network operator China Tietong; China Telecom will acquire Unicom's CDMA network and operations; and China Netcom will merge with Unicom's GSM business. Market watchers say once the government makes the announcement, China Telecom's listing vehicle will kick off the process by acquiring Unicom's CDMA network and operations. The CDMA network assets are owned by China Unicom Group, which leases network capacity to its listed subsidiary, leaving network investment and depreciation at the parent company level to maintain profitability. HSBC estimates Unicom's CDMA network to be worth Rmb60 billion ($8.2 billion) and its user base Rmb55 billion.
Rumours that China United Telecommunications seeks to raise Rmb60 billion ($8.2 billion) through a share sale to buy China Netcom Group's assets in an industry restructuring pulled down the value of its shares. The company denied the rumour.
China's Datang Telecom recorded total revenues of Rmb2.5 billion ($340 million) in 2007, compared with Rmb2.2 billion in 2006. Net profit amounted to Rmb31.6 million, which marked a significant turnaround from the net loss of Rmb731.8 million in 2006.
ChinaÆs National Development and Reform Commission has allocated funds for the development of fourth-generation (4G) mobile technology. The planning agency said development of telecom network equipment, chips and components for broadband and internet applications will receive primary financing. It did not say how much funds will be allocated, but added that state-owned companies and research agencies can apply for funding. Earlier media reports said that China is expected to put together a research plan for 4G after the National People's Congress in March, involving total investment of over Rmb70 billion ($9.6 billion).
Shareholders of China Telecom have approved the company's plan to consolidate 20 of its wholly-owned subsidiaries including Shanghai, Guangdong and Jiangsu Telecom. Its Northern Telecom subsidiary will become a directly-controlled northern China telecommunications business department.
IndiaÆs Tata Communications has entered into a network-to-network-interface (NNI) agreement with China Enterprise Netcom Corporation (China Entercom) to expand its global VPN service to China. Under the NNI agreement, Tata and China Entercom have interconnected their respective multi-protocol label switching infrastructure. This will give TataÆs corporate customers VPN connectivity to 347 cities in China, in addition to 120 cities in India and 19 major business centres across North America, Asia and Europe.
Media, entertainment and gaming
Shanda Interactive Entertainment has reported a 21.8% increase in fourth-quarter profit after it upgraded titles and strengthened promotions. Profit for the quarter reached $40.1 million as sales surged 51.8% to $97.8 million from a year earlier. The company expects first-quarter revenue to grow another 6% to 9% to between $103.6 million and $106.6 million, against a consensus estimate of $97.5 million. Active paying accounts increased by 12.7% from the previous quarter to $3.47 million, but the average rate dropped 3.1% percent to Rmb57.8 ($7.92) per month. According to JPMorgan, Shanda's more diverse portfolio compared with other leading mainland game operators makes the company less risky. Shanda operates 11 games and plans to launch eight more in the next two years. It also runs a set of casual games, such as card games, which account for 12% of its total revenue.
Mobile Entertainment, a Chinese interactive mobile game and wireless application developer, as started trials of a WAP version of its game, The Ninth Heaven, on the WAP sites of China Mobile and China Unicom. Game subscribers will be allowed to play the game for free during the trial period. After the game is formally launched, players will be required to pay for in-game items if they wish to enhance their game characters. The operators and Mobile Entertainment will share this revenue, according to an announcement. Mobile Entertainment began making the game suitable for WAP sites last December. The Ninth Heaven is a massively-multiplayer online role-playing game (MMORPG) with an East Asian and martial arts theme.
Giant Interactive Group reported a net income of Rmb1.13 billion ($155.8 million) for 2007, a 364.5% increase from the previous year. Online game net revenues for 2007, mainly from the popular "ZT Online" game, amounted to Rmb1.52 billion ($208.5 million). Net revenues for the fourth quarter were Rmb434.8 million, which represent an increase of 7.3% from the previous quarter, and a 151.8% percent improvement from the corresponding period in 2006. According to CCID Consulting, the online game market in China grew by 74.6% year-on-year to Rmb11.4 billion in 2007 and is expected to reach Rmb18.7 billion in 2008.
CDC Games International (CGI) has launched ôLuniaö, a massively-multiplayer online role-playing game (MMORPG) based on the popular manga-style comic art form, in North America. Lunia, which is developed by South Korea-based ALLM, can be played at the CDC Games portal 12FootTall.com powered by IBM servers and hosted at a Terremark data centre that provides direct access to the core of the North American internet. Lunia is played like an action arcade game, allowing players to move around using a keyboard's arrow keys, rather than a mouse. The game can also be played with a console D pad style controller, which makes the game familiar to Xbox users.
CDC Corporation has set a target to become the first Chinese software company with revenues above $1 billion. The company plans to meet that goal within the next three years in a move to help stimulate further development in the mainland software market. According to a Thomson Financial survey, CDC's sales should grow 15.6% to $426.1 million this year from $399.7 million last year. Net profit is forecast to rise 6.1% to $33.1 million. CDC adds that it is looking for new acquisitions that will help it expand its business, especially in the fast-growing mainland market.
Semiconductor/Alternative Energy
LDK Solar's fourth-quarter net income grew 18% from the previous quarter to reach $49.2 million amid increasing demand for sources of clean energy, such as solar power. Revenue more than tripled to $192.8 million from a year earlier. The company revealed that rising prices for raw materials, such as polysilicon, which is also used in computer chips, are expected to cut into its margins. However, LDK is prepared to face this issue as it obtains many of its materials under long-term contracts with fixed pricing. The company expects continued strong demand for its wafers in 2008 coupled with a significant backlog of long-term supply contracts. The construction of its new polysilicon plants is progressing as planned and is expected to result in further cost reductions and the advancement of production processes.
The founder of liquefied natural gas (LNG) supplier Xinao Gas Holdings, Wang Yusuo, is investing Rmb10 billion ($1.4 billion) in solar energy equipment production, making further forays into this fledgling and costly renewable energy segment. Wang is capitalising on the state policy of promoting sustainable energy sources and so far, he has spent Rmb1.4 billion of his private funds on build a factory in Langfang, Hebei province. The factory is expected to start producing thin-film solar cells by the end of the year, the chairman of the Hong Kong-listed company said. According to Wang, the current state policy not only boosts demand for wind and solar power equipment, but also lets investors achieve a viable return through incentives such as preferential loans and a system whereby electricity distributors are obligated to buy renewable energy rather than energy derived from fossil fuel. The investment will be funded mainly through a listing on the Hong Kong stock exchange and by low-interest loans from China Development Bank.
Taiwan
Internet
Global Mobile, one of the WiMAX license winners in Taiwan, has decided to postpone its commercial launch to early next year. The company will unveil its WiMAX service only after three major conditions are met: more devices to facilitate WiMAX connection, faster speeds to ensure smooth data transmission and lower base-station costs. Global Mobile has expressed concern at the high costs for building base stations as building just one of these would cost approximately NT$2.5 million ($79,900). According to the company, NT$1.5 million would be a more reasonable price. Global Mobile had planned to roll out a WiMAX service by December this year, matching the launch schedule of most players, including First International Telecom. To reach the required coverage of 70% of the population in the Greater Taipei area, Global Mobile will have to build at least 500 base stations.
Hardware
TaiwanÆs top-five original design manufacturers of notebook (NB) personal computers shipped 24.95 million units in the fourth quarter of 2007, accounting for 88.5% of the total shipments from Taiwan, according the International Data Corporation (IDC). The IDC predicted the industryÆs overall production value grew 31.6% year-on-year to reach $15.14 billion from the previous year. NB growth last year can be attributed to the booming market demand and sales of consumer models offered by such leading brands as Hewlett Packard, Acer and Dell in the fourth quarter of last year. Despite a slump in selling prices for NBs internationally, the overall production value for this line will continue to grow because of the still-high market demand. The IDC survey showed Quanta Computer was TaiwanÆs largest ODM manufacturer of NBs with a 33% market share, followed by Compal Electronics with 23%, Wistron with 13%, Inventec with 12% and Asustek Computer with 8%. TaiwanÆs NB industry shipped 28.19 million units of NBs in the fourth quarter of last year, up 44% year-on-year and a higher-than-expected 11.6% from the preceding quarter.
Hewlett-Packard (HP) has launched its new tablet notebook PCs, which adopt improved touch panels and sell for less than NT$40,000 ($1,295) per unit. Institutional investors said the new notebooks are supplied by Quanta Computer and based on the brandÆs robust sales of tablet PCs last year, are expected to benefit Quanta this year. HP ventured into this market last year. Tablet PCs account for 20% of HPÆs overall PC product lineups presently.
Microsoft will seek Taiwanese strategic partners and work with them on its latest products, including the Round Table teleconferencing system and the Surface computer, through Microsoft Technology Center (MTC) in Taiwan,. The centre hopes to contract more Taiwanese manufacturers to make components including touch panels, wireless modules, and optical devices for Surface. Surface, MicrosoftÆs first tabletop computer relying on touch and hand gestures to operate, has adopted several Taiwan-made parts. Microsoft will demonstrate Surface in Taiwan in the second quarter. Several Taiwanese wireless-module makers, including Asustek Computer, Hon Hai Precision Industry, Universal Scientific Industries and GemTek Technology, have been major strategic partners of Microsoft in manufacturing products based on the Wintel structure, a format spearheaded by Windows and Intel.
Telecommunications
Far EasTone Telecommunications warned that its first quarter pretax profit may decline because of higher operating expenses and lower investment income. The cell phone operator projected a first-quarter pretax profit of about NT$3 billion ($97.1 million), down 7.9% from the fourth quarter of 2007. It estimated first quarter earnings per share at NT$0.71, without giving any comparative figures. Far EasTone said it expects consolidated sales to grow 4.3% to NT$12.7 billion in the quarter because of growth in subscriber numbers and increased individual usage levels.
Hong Kong
Telecommunications
TCL Communication Technology Holdings said its sales revenues reached HK$5.0 billion ($642.6 million) in 2007, compared with HK$5.5 billion in 2006. Net profit amounted to HK$33.1 million , which is almost double the HK$15.4 million it achieved in 2006.
Semiconductors
Solomon Systech (International), a Hong Kong semiconductor company providing display Integrated Circuit (IC) products and system solutions, plans to develop a hardware and software system design business for multi-system portable TV products as an important income source for the future. The company started research and development of related products two years ago and has injected over US$10 million. In the coming two to three months, the company will finish designing the product, which will be targeted at medium-sized electronic product manufacturers. The company said the gross profit margin of the system design business is 10 percentage points higher than for IC products. The new business will represent 10% of the overall income in 2008 and will grow further in the future. The company said it is optimistic about the semiconductor market in 2008 and plans to continue to launch new products and develop more finished than semi-finished products as a way of gaining more orders.
Foxconn International Holdings is struggling to gain more orders from Nokia and Samsung Electronics this year to offset a decline in business from its troubled top customer Motorola. According to Foxconn, revenues from non-Motorola customers such as Nokia and Samsung grew at an average 40% last year. The company plans to broaden its customer base to avoid reliance on one key customer. The potential spin-off of Motorola's handset unit is expected to be positive and aid fund-raising and restructuring efforts. Merrill Lynch estimates that Motorola accounted for 39% of FoxconnÆs sales last year, down from 59% a year earlier. Sales to Nokia are likely to have grown from 32% to 40% per cent, while Sonny Ericsson's contribution would have increased from 5% to 15%.
Philippines/Singapore/Malaysia
Semiconductors
Investments by the PhilippinesÆ electronics industry reached $1.4 billion in 2007, compared with $747 million in the previous year. It is the first time in seven years the electronics industry has leapt the $1 billion mark, according to the Semiconductor and Electronics Industries in the Philippines (SEIPI). The investments were registered by 83 firms, some of which have considered relocating here, while others are expansion projects of firms with an existing base of operations in the country. These investments are expected to create at least 24,212 direct jobs and around 170,000 indirect jobs.
PSi Technologies Holdings, a Philippine-based independent provider of assembly and test services for the power semiconductor market, recorded revenues of $23.5 million in the fourth quarter 2007, an increase of 4.3% from $22.5 million in the previous quarter, but a decline of 5.6% compared with the same quarter in 2006. The increase over third quarter was largely driven by a steady increase in its standard package for high power, medium current and fast-switching power devices. The top five customers for the fourth quarter of 2007 were Infineon Technologies, NXP Semiconductors, ON Semiconductors, Power Integrations, and ST Microelectronics. The net loss increased to $3.3 million in the fourth quarter from $2.1 million in the third quarter.
Information Technology
The oneMeridian consortium, led by EDS International, has won a Singapore government contract to supply a new infocomm infrastructure to the public sector. The project, called SOEasy, is worth S$1.3 billion ($932 million) and aims to link more than 60,000 public officers and improve the overall operational efficiency of public agencies. In just two years, public officers will operate in a single infocomm environment that promotes innovation and enhances productivity. The SOEasy project will help government agencies to be more efficient and save some S$500 million. It involves introducing a standard desktop, network and messaging environment across the public sector by 2010.
Telecommunications
Vodafone, Emirates Telecommunications, AT&T, China Mobile and Vivendi have expressed interest in bidding for a stake in TM International, the holding company for Telekom MalaysiaÆs domestic and overseas mobile assets. Telekom Malaysia will possibly opt for a partner who can help the mobile operator expand in Vietnam or Pakistan to complement its overseas operations, instead of accepting the highest offer, said CEO Abdul Wahid, who is about to leave the firm to become CEO of Malayan Banking, the countryÆs largest bank, in July.
Telekom Malaysia said it would keep control of its wireless business following a stake sale, dimming the appeal for potential suitors including Orascom Telecom. Insisting on control might also hamper Telekom MalaysiaÆs ability to reap a premium for the business, which it estimates is worth M$28 billion ($8.7 billion). Egypt-based Orascom, one of the biggest mobile carriers in the Middle East and North Africa by number of users, has said it is interested in bidding for joint control of Telekom.
Sri Lanka Telecom (SLT) has appointed Leisha Chandrasena, who was already a board member, as its new chairperson effective February 25. Japan's NTT has a 35% stake in the firm but the chairman of the board is usually appointed by the government, while the chief executive is appointed by the Japanese shareholder. NTT is trying to sell a part of its stake to Malaysia's UT group but the issue has got into a legal tangle after a rebel lawmaker of Sri Lanka's ruling party took the matter to the courts. SLT is Sri Lanka's largest fixed access network with revenues of 43.2 billion rupees ($1.1 billion).
Smart Communications will start providing I-mode services in the Philippines from March 15. I-mode is a mobile email and internet service launched by Japanese mobile communications leader NTT DoCoMo in 1999. Today, it is used by more than 47.8 million subscribers in Japan. Through NTT DoCoMo's global partnerships, it is also available to mobile subscribers in 15 other countries in Asia and Europe. In the Philippines, I-mode will be available exclusively to Smart Gold subscribers. Under the I-mode service, Smart Gold subscribers will have access to I-mail, which will allow them to send email via their handset in the same simple way that SMS messages are sent and at the same cost of only Ps1 per message. I-mode is expected to enhance Smart's suite of cutting-edge wireless services, all designed to address the varying needs and lifestyles of the cellular leader's subscribers.
Software
MatrixView has reported a net loss of S$2.8 million ($2.0 million) for the six months to December 31, 2007, compared to a loss of S$3.2 million in the previous year. Revenue was up 543% to S$193 million. No dividend will be paid. The revenue increase reflected growing sales of the firmÆs HealthCare application software. Revenue was still below expectations due to a longer waiting period for obtaining certification for certain products. In the second half of last year the company increased its share capital by the issue of 3.1 million shares in a private placement for an amount of $S1.2 million. The shares were issued to raise additional funds for the expansion of the companyÆs research and development efforts.
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