Mobile/Wireless
ò Following Vodafone GroupÆs agreement to acquire a controlling stake in Hutchison Essar, NTT DoCoMo announced that it has revoked a license given to the Indian operator. According to the company, this is the first time it has cancelled an i-mode contract even as it is already considering other options to provide i-mode in India. DoCoMo initiated i-mode in 1999, which enables users to surf the Internet, send e-mail and download games.
Software
ò The Japanese government wants to go open source, as a way to rely less on a single vendor IT software infrastructure. Among the 10 vendors waiting in line to help make this possible are Oracle, NEC, IBM, HP, Hitachi and Dell. Industry sources said these IT equipment and software vendors are forming a consortium to develop and sell Linux-based servers and computers for the Japanese market. The move by the vendors to collaborate on Linux in Japan comes from an announcement from the country's government to make Linux an open source a priority for all IT procurements, starting this July. The central government of Japan says it plans to spend approximately 1.2 trillion yen,(US$10.4 billion) on IT over the next year. The government has said explicitly it wants to decrease its reliance on Microsoft as a server operating system platform. Analysts note the absence of any major Linux operating system distributor as part of the announcement.
Hardware
ò Toshiba is reportedly opening a development centre next month in Hanoi, Vietnam. The Toshiba Software Development (Vietnam) will focus on the development of embedded software for consumer electronics products. The center's low-level software processes will be combined with upper processes from Japan designers to develop the embedded software used in the company's digital consumer electronics products and cell phones. According to Toshiba, the Vietnam center is part of its goal to increase software development work over the medium term while not concentrating resources in any one country. The company also has software development centers in India and China.
ò Funai Electric revealed its decision to leave the PDP (plasma display panel) TV market, a move the company ascribed to sharply falling ASP (average selling price) and rising competition from vendors. Funai offers 42-inch PDP TVs in North America with panels sourcing from LG Electronics (LGE), with the TVs manufactured in Malaysia. The company said its sales volume from its PDP TVs in North America could not go beyond 100,000 units in 2006. In the future, the company said it will focus on LCD TV business and said it is also planning to seek for more LCD TV OEM orders. In a related development, Funai announced that its new LCD TV plant in Poland will commence operation next month with monthly capacity of 200,000 units. The company looks to the new plant as helping the company shorten lead-time, reduce the inventory level of finished goods and lower tariffs. Funai shipped about 600,000 LCD TVs in fiscal year 2005, and it is aiming for LCD TV shipments of 1.8 million units worldwide in fiscal year 2006. It holds a 1.2 percent stake in Chi Mei Optoelectronics (CMO) and about 90 percent of Funai's LCD TVs use panels from CMO. Earlier in March, Royal Philips Electronics announced it has decided to phase out of the PDP TV market and focus on LCD TVs in the future. In 2005, Sony also decided to drop out of the PDP TV sector.
Telecommunications
ò Nippon Telegraph & Telephone Corp., Japan's largest phone company, reported a 4.4 percent drop in its annual net income to 476.9 billion yen ($4 billion), with the company ascribing the decline to its wireless unit NTT DoCoMo Inc. having spent more on mobile phone subsidies. The company said sales posted a 0.2 percent growth to 10.7 trillion yen ($89 billion). DoCoMo, which controls 54 percent of Japan's mobile-phone market, contributes about 45 percent of NTT's revenue. To reduce dependency on its wireless unit, former government monopoly NTT announced that it is building a 3 trillion-yen ($25 billion) fiber-optic network nationwide that is expected to enable movie providers and wireless operators to transfer data such as videos and songs via simpler and cheaper means. Earlier, DoCoMo said payments for handset subsidies went up 4.2 percent to 1.8 trillion yen ($15 billion) in the year ended March 31. NTT's annual operating profit also went down by 7 percent to 1.1 trillion yen ($9.1 billion). The company forecasted net income to drop to 460 billion yen ($3.8 billion) and sales to 10.7 trillion yen ($89 billion) for the 12 months ending March 31, 2008, with operating profit estimated to remain flat at 1.1 trillion yen (US$9.1 billion). NTT revealed plans to pay a dividend of 9,000 yen ($74.8) a share this fiscal year, rising from 8,000 yen ($66.5) a share for the 12 months just ended.
Korea
Internet
ò According to the countryÆs Fair Trade Commission FTC), it has initiated an investigation into major Internet portal operators for alleged price-fixing. The report said FTC has started the inquiry into six operators including NHN Corp, Daum Communications and SK Communications Co. Yahoo! Korea said it was also part of the investigation. A source was quoted saying the move is not merely aimed at a few portal operators but the whole industry. FTC officials declined to comment, saying they will hold a press conference soon. Earlier this year, FTC said it would look into portal operators for their alleged abuse of market dominance and other unfair business activities. Some firms are suspected of fixing prices for advertisements and imposing a ceiling on payments to content providers.
ò Gmarket reported total revenues of $51.3 million for the first quarter of 2007, which stands for a 70 percent increase from total revenues of $30.2 million for the first quarter of 2006. The report indicated that the company's gross merchandise value (GMV), which represents the total value of all items sold on Gmarket's web site, posted a 54 percent rise to $771.6 million for the first quarter of 2007 compared to $500.8 million for the same period in 2006. The company said advertising and other non-transaction revenues for the first quarter of 2007 went up by 114 percent to $19 million from $8.9 million for the same period in 2006. Operating income for the first quarter of 2007 rose by 256 percent to $5.8 million from $1.6 million for the same period in 2006. GmarketÆs net income for the first quarter of 2007 posted a 246 percent growth to US$7.1 million from $2.0 million for the same period in 2006. During the first quarter of 2007, the company's registered user base grew to about 11.8 million from 11 million registered users at the end of the fourth quarter of 2006. Gmarket said it also averaged 16.9 million monthly unique visitors in the first quarter of 2007, compared to 15.2 million unique visitors during the first quarter of 2006. Gmarket Inc. is a leading retail e-commerce marketplace in South Korea.
ò NHN Corp, South Korea's top Internet company by market value, reported better-than-expected earnings for the first quarter, which it ascribed on gains from search-related online advertisements and games. The company said net income went up 77.6 percent to 62.3 billion won ($67.6 million) in the January-March period, from 35.1 billion won ($3.7 million) it posted a year earlier. Revenues grew 63.9 percent year on year to 199.6 billion won ($215.3 million), with its operating profit climbing 83.8 percent to 85.6 billion won ($92.3 million). The company noted that its first-quarter earnings were higher than the market consensus. The company ascribed the earnings improvement to increased revenue from its search-related Internet ads and online games. T
Media, Entertainment and Gaming
ò Gravity Co, an online game developer and publisher, announced that it has entered into a two year game service agreement with NHN Corp., the operator of Naver and one of the largest Korean Internet companies. The source said the move is aimed at expanding its market share in Korea. Under the agreement, the two parties agreed to jointly service and market Gravity's online game line-up through establishment of a Gravity Zone in NHN's Hangame web site, the largest game portal site in Korea. In accordance with the agreement, Gravity will provide certain online games, which include its flagship title Ragnarok Online and its anticipated upcoming titles Ragnarok Online2, Requiem, and Emil Chronicle Online through their own web sites as well as Gravity Zone, in order to provide easier access, attract new users and to implement aggressive marketing strategies. Gravity Zone is expected to offer up to twelve online games, with Emil Chronicle Online seen as the first online game offered through Gravity Zone by the end of May 2007. Gravity expects to increase its market share in Korea by providing its large online game titles, such as Ragnarok Online2 and Requiem through individual game sites and Hangame. According to Gravity officials, the agreement between NHN and Gravity is not a mere channeling alliance, but a new business model for online game service. Gravity is a developer and distributor of online games.
Telecommunications
ò Hanarotelecom, the countryÆs leading integrated telecommunications company, announced that the company registered the highest-ever quarterly revenues of 451.1 billion won ($486.7 million), with its operating profit becoming positive, at 12.4 billion won ($13.3 million) for the first quarter of 2007. Hanaro attributed the quarter-on-quarter surge in its revenues to 4.6 percent growth across all business segments including broadband, voice and corporate business. The company said its net loss went down by 80 percent from the previous quarter to 9.6 billion won ($10.3 million). Hanaro also reported strong subscriber growth, with broadband net posting an additional 34,000 and voice net some 73,000 for the first quarter, backed by marketing activities focused on bundled products. Hanaro also said that the 100Mbps service coverage it offered has expanded to 7.3 million households as of the end of the first quarter of 2007 from 4.3 million households as of the end of 2006, on the right track to achieve the full-year target of 12.6 million households.
Hardware
ò Samsung Electronics announced its development of a digital TV receiving chip using 65-nano technology for the first time in the world. The new chip uses nearly half the electricity than current products and is more effective in receiving TV signals. The company said the TV receiving chip will mainly be used in digital TVs both in South Korea and the U.S. Samsung also said it is the first time for a digital TV chip to be developed based on 65-nano technology. According to industry researcher DisplaySearch, 87 million units of digital TVs expect to be sold worldwide this year and the number will grow to 147 million in 2010.
Information Technology
ò According to IDC, South Korea's IT security market is forecast to post an average annual growth of 11.1 percent over the next five years. The forecast is made amidst the scenario where there is an increased demand for firewalls aimed at defending attacks by viruses and malicious codes. The study said the software and hardware industries related to the development of security solutions for computers and other networks predict market valued to be 815 billion won ($883 million) by 2011.
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