Internet
ò Industry analysts note that social networking service, a members-only online community, has been rapidly gaining popularity in Japan, fueling competition among major Internet service providers. As an invitation from an existing member of an SNS site is usually required to join the site, members can chat with each other with a sense of security, which is often cited as the reason behind the popularity of these sites. Mixi Inc., the largest SNS website operator in Japan, has attracted some 5.7 million registered members since its launch two years ago and on September 15 it went public on the Tokyo Stock Exchange's Mothers market for startup firms. Mixi's profits mostly come from banner ad revenue on its SNS web site. Major companies such as Yahoo Japan Corp. and Rakuten Inc. have launched their own SNS sites, while KDDI Corp. has invested in SNS site operator Gree Inc., aiming to link its mobile phone business to the site.
Mobile/Wireless
ò NTT DoCoMo has become the first mobile operator to introduce a BlackBerry service in Japan. The country's largest mobile operator said it will initially provide Research In MotionÆs wireless devices to corporate customers together with the BlackBerry Enterprise Server, which offers firewalls, push e-mail and a data access solution. The operator also announced that it will roll out RIM handhelds and push e-mail/data access service to its 51 million GSM/GPRS and W-CDMA network subscribers soon. Separately, Taiwan Mobile, which has 6.1 million subscribers and is Taiwan's third largest operator, said it would become the first operator to start offering BlackBerry service in its home country later this month.
Media, Entertainment and Gaming
ò Sony Corp., the world's biggest maker of video-game players, will cut the price of its PlayStation 3 by 20% in Japan in response to complaints from consumers that the device cost twice as much as consoles from Microsoft and Nintendo. A top Sony official said the game player will retail for Ñ49,980 ($430) from November 11 and will have an HDMI connection that allows high-definition pictures. The company previously said it would sell a lower-end model for Ñ59,800 ($512), excluding tax. Sony is relying on the PlayStation 3 to revive a company that has lost half its market value in the past six years.
The price cut would still make the PlayStation 3 the most expensive player on the market. Microsoft this month said it will start selling a cheaper Xbox 360 in Japan for Ñ29,800 ($255), while Kyoto-based Nintendo is offering its Wii console for Ñ25,000 yen ($214).
Hardware
ò Matsushita Electric Industrial Co. will launch two Blu-ray DVD recorders in Japan on November 15, a move that is expected to intensify the competition for next generation DVD technologies. The Panasonic brand maker, which promotes the Blu-ray format in competition with the HD-DVD standard led by Toshiba, said it expected the two types of recorders to retail at about Ñ240,000 ($2,045) and Ñ300,000 ($2,556). Sony has earlier said it plans to launch a Blu-ray DVD recorder in the Japanese market by the end of the year, without specifying details. Toshiba become the first company to offer next-generation optical disc players in March when it deployed its HD-DVD players, while Samsung Electronics introduced the first Blu-ray player in June. At the core of both formats are blue lasers, which have a shorter wavelength than the red lasers used in current DVD players, allowing discs to store data at the higher densities needed for high-definition movies and television.
Semiconductors
ò Shin-Etsu Chemical, the world's largest silicon wafer maker, will invest about $1 billion to boost its production capacity of 300-mm silicon wafers by 43% to 1 million wafers per month by the autumn of 2007. Industry observers note that the move is expected to raise the ante with rival SUMCO Corp. Shin-Etsu said it will build two new domestic plants and expand production lines at its US plant and at one existing plant in Japan. Meanwhile, SUMCO has agreed to buy 51% of Komatsu Electronic Metals in a move that will bring it neck-and-neck with Shin-Etsu in terms of global market share. Gartner Dataquest expects annual demand for 300-mm wafers to reach 34.9 million wafers by 2008, nearly triple last year's figure. A Macquarie Securities analyst, however, warned that Shin-Etsu's move could still result in a supply glut and growing price competition. In 2005, Shin-Etsu controlled 31.7% of the world's wafer market, ahead of SUMCO's 22.1% and Komatsu Electronic's 8.7%, according to Gartner Dataquest.
Korea
Internet
ò Internet phone operators and equipment providers have teamed up to boost Internet phone services. Tentatively called the Internet Phone Committee, the group said that they would cooperate to provide additional services seeing that major communication operators like KT, Hanaro, and Dacom are obstructing benefits to customers by cutting off additional advantage services like automatic calling and image phone for Internet phones. The committee includes new common carriers such as SK Networks, SK Telink, Dreamline, EPN, and ONse Telecom, as well as the first special Internet phone operators such as Samsung Networks, AnyUsernet, Moohannet, Saerom Leaders and Wintel.
ò Industry sources said that home networking companies are upping the ante on IPTV by rolling out IPTV services tailored for the joint IPTV pilot project led by the Ministry of Information and Communication and the Broadcasting Committee. Cocom plans to provide a home gateway called "IP Multicast Snooping," a wall pad and other patrol and security systems. In the longer term, it aims to develop a home media server capable of streaming services. Comax is also seeking to explore the IPTV market, which it expects to take off by the end of this year, and has joined hands with a set-top box maker. Taehan Wizhome aims to secure a foothold in the market by leveraging its IP-based networking infrastructure. It has teamed up with a content provider, and plans to launch a joint marketing campaign together with its parent company Taehan Cable Group.
Mobile/Wireless
ò KTF will soon unveil a new advanced navigation service that allows users to identify destinations on their mobile handsets anytime, anywhere. Users do not need to buy GPS receivers as the wireless service will work on any mobile phone with a KTF subscription. Called "bangbang gokgok gilchatgi," which roughly equates to "finding destinations through every nook and cranny" in Korean, the service is an expansion of KTF's current navigation service "K-ways." The company charges a fixed daily fee of W1,000 ($1), which allows the subscriber unlimited usage within 24 hours without any additional data access fees.
ò SK Telecom and KT Freetel has announced a decision to significantly reduction in the number of DBDM (dual band dual mode) handsets. Under the agreement, the two mobile operators will focus on supplying SBSM (single band single mode) handsets in the first half of 2007. Industry experts note that not only are DBDM handsets more expensive to make but the number of models available is limited. Separately, KTF said it is planning to gradually remove its 2G network starting from the end of next year, a move that is expected to have a negative impact on LG TelecomÆs call quality in smaller villages where LGT does not have its own network but relies on KTFÆs network.
ò LG Electronics has added a new feature to one of its mobile handsets that enables reading books for the visually impaired. The company started marketing the model, the LF1300, through LG Telecom, at around W400,000 ($423). The service is only for the blind, the visually impaired and dyslexic people who can acquire the talking phone after presenting a government certificate at sales outlets of LG Telecom. Users of the gadget will be able to download approximately 300 audio books from the Internet site of LG Sangam Library to their handsets free of charge. The user interface of the LF1300 is also customized for the blind, enabling handset users to control it through a voice guidance system.
Media, Entertainment and Gaming
ò KT Corp. will soon start trials of a digital cinema service, following its conclusion of a memorandum of understanding with three major multiplex operators, Lotte Cinema, Cinus and MMC. Digital cinema refers to the use of digital technology to distribute and project motion pictures. Digitally made film files are first stored on computer servers, and then relayed to digital projectors via optical telecom networks. The company said it plans to set up related equipment and operate integrated management systems on 100 screens by the end of this year, and plans to expand its digital cinema service to nearly 500 screens by 2007, or around 30% of the country's 1,600 screens.
ò Multimedia solution firm Ontime Tech has launched the industry's first encoder for IPTV supporting MPEG4 AVC. The domestically-developed MPEG4-level IPTV encoder is significant as the country had long been dependent on imported products. The new encoder is also expected to be shipped abroad. Encoders are key equipment used to set up broadcasting systems and help users send input broadcasting signals in compression types. Tandberg and Harmonic have so far dominated the market with high compression rates and enhanced picture quality. In 2005, KT chose Tandberg over Harmonic to provide solutions for its IPTV systems.
ò KT Corp. has unveiled a new video download service called "toest," which will allow easy and legal access to high-definition movies and dramas on demand through mobile devices such as personal digital assistants or KT's wireless LAN service-enabled swing phones. Until now, video content has been illegally downloaded through peer-to-peer applications. KT, however, stated that its new service will help establish a standardised business model for content distribution, through which revenues will go to copyrighted content owners. Video clips, protected by a digital rights management (DRM) system, will be offered via a single authorised terminal per user. The new service will offer nearly 1,000 pieces of video clips, ranging from movies, TV dramas and animation to education content. The company said it will charge W12,000 ($12.5) per month for unlimited downloads, except for some education content and the latest films.
Telecommunications
ò KT has completed the purchase of 12.5 million shares in KT Freetel at an average price of W28,517 ($30) per share, or a total of W356.1 billion ($376.7 million). KT now holds 50.7% of the company.
Information Technology
ò In the third round of free trade agreement talks recently ended in Seattle, U.S. negotiators called for their South Korean counterparts to open the market for convergence services, which include broadcasting, telecommunications, financial services and construction industries. The discussion marks the first time convergence services have been mentioned during trade talks between the two countries. A fourth round is set for next month in Korea.
Ventures/Investments
ò According to South Korean government sources, Google has said it will be spending $10 million to build an R&D centre in South Korea. Observers note that Google and the South Korean government had been in talks since the beginning of the year on building an R&D centre. The two parties signed an MOU at the end of June and have been in discussions about the timeframe and investment amount ever since. A government official said Google is expected to make an official announcement on the investment as early as next month.
China
Internet
ò China Finance Online Co., a provider of online financial information and public company data, has completed its $1 million acquisition of Shenzhen Genius Information Technology. Shenzhen Genius owns a financial information database serving mainly domestic securities and investment firms. As part of the deal, China Finance also paid $62,370 to a shareholder of Shenzhen Genius to cancel an outstanding loan.
ò Seek Ltd. is planning to buy a 25% stake in Zhaopin.com, one of the top job recruitment web sites in China, in a deal worth about $20 million. The Australian online recruitment company said the acquisition is the first that Seek has ever conducted outside Australia and New Zealand.
ò Google Greater China, a unit of the world's leading search engine, has seen its market share decline to 20.6% in leading cities such as Beijing, Shanghai and Guangzhou from 32.9% a year earlier, according to the survey by mainland market research firm China Intelli Consulting. Google China offers about 13 services involving basic Web site searches, pictures, news and similar topics, plus products such as China map search, a useful tool for city visitors. Analysts say new products will be needed to challenge the market leading position of Baidu, which is coming out with new products regularly. Google China is working on improving its general Chinese search capability to counter the notion that Baidu is better when it comes to China-related searches. It is also boosting its affiliate network of third-party Web sites that carry Google's advertisements in return for a share of revenue. Google China is reportedly talking with China Mobile about a mobile search service.
Media, Entertainment and Gaming
ò Industry sources said that Microsoft will soon set up a games development office in Chengdu, which will be its first such facility in China. According to Microsoft, the output value of the global games industry is expected to reach $46 billion by 2010 and China will contribute a great deal to that figure. Microsoft said it will regard the new office as an open talent-training base to help China educate its own game developers and promote development within the industry. Microsoft's new platform is aimed at developing games with Chinese characteristics for Microsoft's Xbox.
ò NHNÆs Chinese subsidiary, Ourgame, said it was confident that revenue in the third quarter of 2006 would exceed Rmb40 million ($5 million). A top company official said the Chinese entity would be able to reach Rmb50 million ($6.3 million) in the fourth quarter and $21.1 million for the full year. In 2005, Ourgame reported revenues of $10.5 million. The company, which expects its revenue to double again next year to $42.3 million, attributes its success in China to games that specifically cater to the needs of Chinese gamers as well as to its diversification from Web-based board games to MMORPGs and casual games. Earlier this year, Ourgame acquired a casual game developer in China.
ò WPP, the world's largest advertising and public relations agency, is on the hunt for acquisitions in the mainland online marketing sector to add local knowledge to its international clout. The group said it will spend $300 million a year on mainland investments. Ogilvy already has a well-established digital marketing division, Ogilvy One, which integrates marketing for Internet and electronic media and advertisers and marketing companies such as Focus Media, which this year bought Dotad Media Holdings, are starting to use the mobile Internet platform to capture the attention of some of China's 400 million mobile phone users. China Unicom uses its own advertising business to sell banners or spaces on handset screens.
Hardware
ò Hitachi Global Storage Technologies has affirmed the importance of China's hard disk drive market by investing $200 million to build a global manufacturing facility in the Free Trade Zone in Shenzhen. The company, which is a unit of Japanese electronics giant Hitachi, has committed investments worth $500 million to build the 200,000 square meter manufacturing complex, which will initially produce 3.5-inch hard disk drives. The company said it aims to produce 50% of the firm's annual global output at the site. Analysts note that Hitachi and other leading vendors are boosting production to keep up with demand from the mainland's fast-growing consumer electronics manufacturing sector. Separately, Seagate Technology is expected to spend $1.3 billion in the year to June to bolster its operations and integrate former rival Maxtor, which it bought in May for about $2 billion. Both companies have manufacturing plants in China.
Ventures/Investments
ò The China Banking Regulatory Commission has approved an application by TCL Group to set up its own financial company. The new company has a registered capital of Rmb500 million (US$63 million) and has received investments from TCL Group, The Bank of East Asia, TCL King Company and TCL Mobile Communications Company, which will hold 62%, 20%, 14% and 4%, respectively. The new company will be mainly engaged in providing accounting, financing, credit assessment and related consulting services as well as providing other fund- and insurance-related services to each of its members.
Taiwan
Media, Entertainment and Gaming
ò Eastern Multimedia Group (EMG) said it would use a cash injection from US private equity firm Carlyle Group to expand its digital television operations further into Mainland China. Due to regulatory caps, TaiwanÆs largest media group by revenue has been unable to boost the subscriber base in its home market. In April, Carlyle agreed to pay about $1.3 billion for stakes in EMG's cable operating unit Eastern Multimedia and TV station Eastern Broadcasting. Carlyle made the investments after selling its stake in Taiwan Broadband Communications. EMG said it is planning to spend an estimated NT$3 billion ($91 million) during the next five years to develop digital television content in a move to boost revenues. Last year EMG reported revenues of NT$59.9 billion ($1.8 billion). Eastern Multimedia said it planned to co-produce TV dramas with China's national broadcaster, China Central Television, and will consider film production in the future. Eastern Multimedia has a news-sharing agreement with CCTV, while the content of EMG's digital cartoon channels is designed in Taiwan and produced in the mainland.
Mobile/Wireless
ò BenQ is planning to halt production of handsets at its Taiwan factory before the end of the year to reverse losses in its phone division. TaiwanÆs largest maker of mobile phones is reportedly still struggling to integrate the unprofitable mobile phone business it bought from Siemens last year. The Taoyuan factory, in northern Taiwan, contributed about 10% of BenQ's mobile phone output by units. A company spokesperson said that BenQ's downsizing of its local phone production operations "is part of a series of efforts" being undertaken to reverse losses. In the future, BenQ will depend on its factory in Shanghai for the production of mobile phones. The Taoyuan facility, one of seven BenQ phone plants worldwide, will become a manufacturing process technology center that will conduct trials of new products. BenQ has reported three consecutive quarters of losses, with the net loss in the three months to June hitting NT$2.5 billion ($75.8 million).
Semiconductors
ò HannStar Board International Holdings, the world's largest maker of printed circuit boards (PCB) for notebook computers, plans to take advantage of surging demand for mobile phone handsets, liquid crystal display (LCD) television sets and other consumer products to diversify its customer base. The company will start construction in the fourth quarter on a plant that will boost its monthly production capacity for high-density interconnects by 200,000 square feet. Last year, 87.9% of HannStar's sales came from supplying PCBs to notebook computer makers, including Taiwan's three biggest producers û Quanta, Compal and Wistron. In the first three months this year, however, sales to notebook makers declined to 72.5%, with television set-top boxes accounting for 12.8% and game consoles 8%. The company expects to produce 23 million PCBs this year, or about 32% of the global notebook computer market. To fund its expansion, the firm is selling 325 million new shares in a Hong Kong IPO to raise about HK$566 million (US$72.8 million).
Hong Kong
Telecommunications
ò PCCW confirmed that the controversial sale of the Hong Kong telecoms operator by Richard Li Tzar-kai was initially financed by his father, Li Ka-shing. The report said the elder Mr. Li, who built his fortune in property, ports and telecoms in Hong Kong, provided the funds but had no interest in the deal. Richard Li sold his 23% stake in PCCW, held through his Singapore-listed company Pacific Century Regional Developments (PCRD), to his father's long-time associate Francis Leung Pak-to for $1.1 billion in July. PCRD said an initial HK$500 million ($64.2 million) deposit on the sale was paid with funds drawn on a facility provided by Li Ka-shing.
Singapore/Malaysia/Philippines/Indonesia
Mobile/Wireless
ò Nokia has secured a nationwide supply contract with Philippine telecommunications company Globe Telecom. The network modernisation deal includes an upgrade of the Globe Telecom circuit switched core network to also enable fixed mobile convergence. Nokia will provide implementation, commissioning, systems integration and training services.
ò Wireless services developer MobileArts Inc. is offering a new and inexpensive way of sending text messages from the Philippines to any number in the US. The company said the new service is an add-on to its existing hybrid e-mail and text messaging service, but this time the company has linked up with a free US-based email-to-text messaging web site called Teleflip. MobileArts does not have a direct partnership with Teleflip but simply acts as a forwarding portal for messages coming from the Philippines.
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