Mobile/Wireless
ò Sony Ericsson Mobile Communications announced that it will get its GSM (Global System for Mobile Communications) mobile phones made in India by contract manufacturers, starting with entry-level color phones and mid-level phones with music. The company said the annual production of its phones in the country is to reach 10 million by 2009. The phones will be made by the local operations of Hon Hai Precision Industry, which uses the brand name Foxconn, and Flextronics. These companies already make phones for Sony Ericsson in other locations. Contract manufacturers meet about two-thirds of Sony EricssonÆs phone production worldwide. Sony Ericsson joins a number of mobile manufacturers, including Nokia, which are manufacturing in India or contracting Indian manufacturers, to meet the countryÆs booming demand for mobile phones.
Media, Entertainment and Gaming
ò Industry sources are saying that Sony may slash prices of its flagship console as market reports show that PlayStation 3 sales trail Nintendo's Wii by about two-to-one. SonyÆs spokesperson said that the price cut would not make any significant dent on the companyÆs target to break even in the games division next fiscal year. A price cut is expected to win market share and boost sales to help the PlayStation 3, which retails for about twice the price of Nintendo's Wii,
Hardware
ò Matsushita Electric reported a 60 percent rise in profit for the latest quarter, with the company ascribing the growth to solid demand for its flat-panel television sets and digital cameras countering pressures brought about by plunging electronics prices. The Japanese electronics company posted a group net profit for the October-December quarter of Ñ78.7 billion ($649.6 million), up from Ñ49.3 billion ($407 million) the same period a year ago. Matsushita said its quarterly sales posted a slight 2 percent rise to Ñ2.4 trillion ($19.8 billion). Matsushita's robust results contrast sharply with those of its rival Sony Corp, which registered a 5 percent decline drop in quarterly earnings, a performance largely attributable to start-up costs for the PlayStation 3 video-game console. The two companies compete in many product categories, including television sets, camcorders and digital cameras. Matsushita, however, pulled out of game machines years ago. Matsushita raised its profit forecast for the fiscal year to Ñ205 billion ($1.6 billion) from the earlier forecast of Ñ190 billion ($1.5 billion). In fiscal 2005, it earned Ñ154.4 billion ($1.2 billion), with the company revising guidance upward for full-year sales to Ñ9 trillion ($74.2 billion) from Ñ8.9 trillion ($33.4 billion).
ò Toshiba announced that its net profits more than tripled to Ñ72.5 billion ($598.4 million) in the third quarter of the fiscal year from Ñ21.9 billion ($180.7 million) a year earlier. The company ascribed the performance to strong sales of electronic goods and the acquisition of US nuclear power plant company Westinghouse. Toshiba, however, disclosed that its operating profit declined by 12.2 percent to Ñ55.9 billion ($461.4 million), explaining the drop to the ôdeteriorationö in the semiconductor market. It posted a 13.3 percent rise in its sales to Ñ1.7 trillion ($14 billion). Toshiba said it looks to net profits for the full financial year to March of Ñ120 billion ($990.5 million), up from an earlier projection of Ñ110 billion ($908 million). Toshiba, however, revised down its operating income to Ñ250 billion ($2 billion) from Ñ270 billion ($2.2 billion), citing the price declines in NAND flash memories as the reason.
ò Industry sources named Texas Pacific Group, European investment fund Permira and CCMP Capital Asia as among potential bidders for Victor Co. of Japan, which makes JVC brand electronics. The names are added to the list, which includes Kenwood and Funai Electric. Sources also said that Matsushita Electric Industrial closed applications for bids to its Victor subsidiary on February 1. Victor executives are also said to be considering a management buyout of the company in cooperation with US investment fund Cerberus Group. Matsushita, which holds 52 percent of Victor, is expected to decide on whom to sell its stake to this month.
Ventures/Investments
ò Nomura Holdings, one of Japan's biggest securities companies, announced that it has paid $1.2 billion to acquire US electronic stockbroker Instinet from majority-owner Silver Lake Partners, a California-based private equity firm that bought a majority stake in Instinet from the Nasdaq Stock Market in December 2005 for $208 million. Nomura said the acquisition is part of the companyÆs bid to strengthen its business in the high-tech trading systems, which is becoming popular with hedge funds and other institutional investors. The deal expands Nomura's overseas reach and gives it access to Instinet's 1,500 clients worldwide and the ability to trade on more than 50 securities markets in the United States, Europe and Asia.
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