- The world's No.1 plasma TV maker Panasonic Corp (PC) reported a net loss of 52.98 billion yen ($559 million) in April-June 2009, down from a 73 billion yen profit a year earlier. For the year to March, the company kept its net loss forecast of 195 billion yen (US$2.0 billion), half of last year's 379 billion yen loss (US$4 billion), but worse than analysts' estimate of a 185 billion yen loss (US$1.5 billion). Revenue for the April-June quarter fell 26% to 1.595 trillion yen (US$16.8 billion) from 2.152 trillion yen (US$16.7 billion) a year earlier, partly because of slow sales of digital cameras and flat-panel television sets. Panasonic is still targeting TV sales of 15.5 million units this fiscal year, up from 10.05 million last year, to lift its market share to 12%. As part of its TV, Panasonic will aggressively push plasma TV sets greater than 50-inches diagonal in the U.S., Europe and China given such screen sizes earn higher margins. It also will seek to cut production costs.
- Sony Corp. (SNE) will offer two new e-reader devices priced at US$199 and US$299. This will intensify competition in a burgeoning market dominated by rival Amazon.com (AMZN). Sony plans to cut prices on best-selling e-book titles in its online store to US$9.99 from US$11.99, matching the discount price offered by Amazon for users of its Kindle device and Barnes & Noble's (BKS) Fictionwise. Sony's new Readers, called the PRS-300 and PRS-600, are expected to go on sale later in August at such U.S. retailers as Best Buy Co. (BBY) and Wal-Mart Stores Inc (WMT). The smaller Sony device costs US$100 less than Amazon's least-expensive Kindle.
- NTT Docomo (DCM) became the top net subscription gainer among Japan's mobile phone service providers in July for the first time in three years, wresting top spot from Softbank Mobile which had retained it for 26 months. NTT Docomo secured 143,600 contracts on a net basis. Softbank Mobile posted the second largest net subscription gain of 137,600 contracts thanks to brisk sales of Apple's iPhone 3GS handset launched by Softbank Mobile in late June.
- Elpida Memory (ELPDF.PK) said that it plans to more than double its output of advanced DRAM chips for high-speed computers and servers next month. Elpida will boost output of its DDR3 chips to about 75,000 wafers per month starting in September, up from its current output of 20,000 to 30,000 wafers per month. As spot prices of DDR3 chips are at about US$2.10, up around 30 percent from May, Elpida and rivals Samsung Electronics and Hynix Semiconductor started to shift more weight to the new chips.
- Elpida Memory Inc. has signed a contract to receive around 30 billion yen (US$307 million) in investment from the state-backed Development Bank of Japan. The government picked Elpida as its first recipient for de facto public funds under its emergency financial aid program introduced amid the global economic downturn. Elpida will issue two types of preferred shares to the DPJ and the payments will be made by late August. If the investment fails, the government says it will cover 50 to 80 percent of the losses incurred by the DBJ with taxpayers' money.
- Japanese electronics manufacturers and chip makers are stepping up efforts to boost production of semiconductor chips and liquid crystal display panels to meet burgeoning demand partly due to the government's ''eco-point'' shopping incentive program. The consumer electronics appliance manufacturers include Sharp (SHCAY.PK), Toshiba, NEC Electronics (NELTY.PK), Renesas Technology and Fujitsu (FJTSY.PK). Semiconductor and LCD panel output has returned to levels before the global financial turbulence as progress has been made on inventory adjustments amid a pickup in demand. Eco-points are awarded for the purchase of highly energy-efficient products. The points can be exchanged for merchandise vouchers or electronic money cards with one point basically equivalent to 1 yen (US$0.10). Sharp boosted LCD panel production capacity at its No. 2 Kameyama factory in Mie Prefecture by 10 percent, starting in August, and that the workers there had given up their summer holidays. The panels are used in Sharp's Aquos televisions and supplied to other manufacturers.
- KT Corp.’s (KTC) second-quarter net profit nearly tripled because of narrower foreign-exchange related losses and reduced marketing costs. KT posted a net profit of 456.1 billion won (US$372 million). KT Corp. absorbed its mobile unit in early June to become the country's dominant player in both the wireless and fixed-line markets. Sales increased 17.7 percent to 3.564 trillion won (US$2.9 billion). Operating profit dropped to 1.1 percent because of weaker revenue from fixed-line operations and broadband internet services. As sales were rising in July, the company will try to achieve sales and profitability growth in the second half.
- SK Telecom (SKM) is planning to sell its 15.3 percent stake in Virgin Mobile USA (VM), ending one phase of that firm's foray into the U.S. mobility market using the mobile virtual network operator model. SK Telecom also had been an investor in the failed Helio venture launched in conjunction with EarthLink.
- Samsung Electronics and Hynix Semiconductors are raising chip prices to meet a rising demand for DRAMs. Samsung said that the company is planning to raise their products' prices by an additional 5 percent to 10 percent this month. The Korea Times has reported that there is an expected growth in the demand for PCs from the third quarter, which is a traditionally busy season for the electronics industry. Samsung's key clients are Dell (DELL), Hewlett-Packard (HPQ) and Apple (APPL) of the U.S. Chipmakers negotiate prices with their customers roughly twice a month. The NAND flash memory market has also begun to stabilize and officials expect it to move toward a supply-demand balance.
- Hynix Semiconductor announced the appointment of Ji Bum Kim as the new Chief Marketing Officer. J.B. Kim replaces Dae Su Kim, who has currently resigned. In his new position, J.B. Kim will be responsible for all Sales and Marketing functions at Hynix, covering DRAM, NAND Flash, and CMOS Image Sensors.
- Alibaba.com (ALBCF.PK) widens its loans with the signing of agreements with China Construction Bank (CCB) to expand its loan-assistance program to small companies in Hangzhou, Zhejiang province and Shanghai. CCB and the Shanghai, Zhejiang and Hangzhou governments will set up a reserve pool of 60 million yuan (US$8.8 million) in each region as a guarantee for the loans. Each loan under the Ali-loan program is at 2 million yuan (US$292, 706).
- Alibaba.com Ltd. is planning to establish a joint venture in India to provide business-to-business e-commerce services. The new Indian firm will be similar to the joint venture Alibaba.com set up with Japanese mobile telephone and Internet company Softbank (SFTBF.PK). The Japanese joint venture caters to local small and medium firms. An assistance program launched in 2007 by Alibaba.com's parent. Alibaba Group has helped around 1,400 small and medium-sized enterprises in China's Zhejiang province obtain loans in excess of 2.6 billion yuan (US$380.3 million) as of June 30. While the non-performing loan ratio among commercial banks in China was 1.77 percent as of June, the ratio on the so-called "Ali-loans" for the same period was 1.08 percent.
- Ctrip.com International (CTRP) recorded its second quarter profit of 159 million yuan (US$23 million), up 33 percent year-on-year and 31 percent sequentially. Total revenues were up 26 percent annually and 18 percent higher quarter-on-quarter to US$69.73 million, its highest net revenue record in recent years. Hotel reservation revenues contributed 227 million yuan (US$33 million), up 16 percent year-on-year and 21 percent quarter-on-quarter, while air-ticketing revenues grew 32 percent annually and 20 percent sequentially to 222 million yuan (US$33 million). The company attributed the growth to increasing reservation/sales volume, offset somewhat by decreasing commission rates. Packaged-tour revenues hit 36 million yuan (US$5 million), up 51 percent on an annual basis, but sliding 5 percent from the previous quarter. H1N1 flu had had an impact to the company, as well as seasonality factors.
- Hewlett-Packard (HPQ) and Foxconn International Holdings have agreed to jointly invest US$3 billion to develop a laptop personal computer manufacturing hub in Chongqing with a production capacity of 20 million units a year. The manufacturing base will be fully operational in 2012 with most of the computers being exported to European markets. The project, together with other complementary sectors, would have an industrial output worth up to 400 billion yuan (US$58.5 billion) by 2012, or 25 percent of Chongqing's industrial output, which would see the information technology and electronics sectors outpace the car and motorcycle industry as the biggest industry in the city. The global financial crisis and cost-efficiency pressures are driving major technology manufacturers to redeploy their China operations from the country's coastal areas to inland region.
- Pypo China Holdings Limited has entered into a definitive agreement to acquire Shanghai Xieheng Telecommunications Equipment Co., Ltd. Xieheng operates over 200 mobile phone retail stores in Shanghai, Chongqing, Guangdong, Shandong, Jiangsu, Zhejiang, Anhui and Hunan provinces in China. After the completion of the acquisition, Pypo will operate a nationwide mobile communication product retail network of nearly 430 retail stores in over 14 provinces and 80 cities in China. The acquisition will significantly increase the size of Pypo's retail sales establishing it as the largest mobile phone specialty retailer in China in terms of sales volume. Pypo will acquire 100 percent of the equity interests in Xieheng, including all interests that Xieheng holds in certain of its controlled entities in China, for approximately US$46.8 million plus the value of the net assets of Xieheng as of July 31, 2009, all in cash. The value of the net assets of Xieheng as of July 31, 2009 is estimated to be no more than US$1.46 million. Subject to the completion of Xieheng's internal restructuring and other customary closing conditions, the transaction is expected to close in the fourth quarter of 2009.
- China Unicom (CHU) says commercial trials of its 3G mobile service will expand to 168 more cities next month as its network catches up with rivals. The company, which began its 3G mobile service in May, has continuing commercial trials in 100 cities, bringing the total to 268 cities offering 3G services next month. The newly added cities are in 18 provinces, including Anhui, Fujian, Guangdong, Hebei, Heilongjiang, Hunan, Liaoning, Sichuan and Yunnan. Unicom has budgeted 110 billion yuan (US$16.1 billion) this year for mobile network expansion. The company, which was late in deploying its 3G network across the nation, is catching up with China Telecom Corp (CHA) in network coverage. China Telecom offers its 3G mobile service in more than 300 cities. China Mobile has a network covering 38 cities.
- China Unicom Ltd. plans to cooperate with three Taiwanese telecommunication companies in areas including third-generation mobile Internet and content services. Zhao Jidong, vice president of China Unicom, arrived in Taiwan and will meet executives from Taiwan Mobile Co., Chunghwa Telecom Co., and Far EasTone Telecommunications Co. China Unicom and Taiwan Mobile will discuss laying an undersea cable connecting Tamsui in Taipei County and Fuzhou in China's Fujian province as well as other undersea cables.
- China Mobile Ltd. (CHL) will launch a smartphone powered by Google (GOOG). The 3G OPhone will run on Google's Android operating system and is made by Lenovo Mobile. China Mobile will subsidize about half the cost of the OPhone for its prepaid and contract customers. China Mobile will also launch a version of HTC Corp.'s Magic smartphone at the same time, which also runs Android.
Media, Entertainment and Gaming
- China exported more than 30 online games to over 20 countries and regions in 2008 to earn overseas revenue of US$71.78 million, up 30.5 percent year-on-year. Perfect World (PWRD) generated revenue of 209 million (US$30.6 million) from game exports, representing 35 percent of China's total game export revenue. NetDragon (NDWTF.PK) had 21.9 percent. Kingsoft booked 15.5 percent. Nineyou took in 14.6 percent; and Shanda (SNDA) earned 7.3 percent. 15 China companies had exported a total of 33 in-house developed games in 2008 to earn overseas revenue of US$70.74 million, up 28.6 percent year-on-year.
- NetEase’s (NTES) in-house developed Q-style MMORPG recorded an average of 2.39 peak concurrent users (PCU) for 3 days specifically on July 5, August 2 and August 3, 2009.
- Giant Interactive (GA) hopes to release at least four new games in the second half of 2009. In-house developed MMORPGs King of the Kings 3 and Xiantu Online and web game Golden Kingdom will be the first games that Giant releases in the second half. The company will launch its in-house developed sequel to ZT Online, ZT Online II, at the beginning or in the middle of the fourth quarter. In-house developed 3D MMORPG Long Hun ("Dragon Soul") is likely to launch in the first quarter of 2010. The company is developing seven games. Giant planned to start first-round alpha testing of ZT Online II in the third quarter. The company planned to start alpha testing of Long Hunsoon.
- Tencent (TCEHF.PK) announced that its in-house developed Q-style 3D online car racing game QQ Speed recorded 700,000 peak concurrent users and has more than 119 million registered gamers.
- China’s television direct shopping is seeing a growth in demand after two years of decline, according to Acorn International (ATV). The company recorded a 251 percent increase in net profit to US$8.5 million for the first quarter of this year as revenue surged 37.3 percent to US$90.7 million. The company posted a net loss of US$25 million as revenue fell 4.37 percent to US$250 million. Growth in television direct shopping soared after it was introduced on the mainland in 2000, especially in the five years to 2007, when the market was worth 10 billion yuan (US$1.5 billion). More than 100 companies were offering goods on television, with about 33 percent of them including Acorn operating nationally and the rest regional players. Other well-known companies included China Seven Star, Hunan-based HappiGo and Shanghai's Oriental CJ Home.
- Perfect World announces the introduction of its first 2D real-time fantasy MMORPG, "Dragon Excalibur." The upcoming launch of the new game 'Dragon Excalibur' is an important part of the strategy of diversifying the portfolio of games. Perfect World has been dedicated to providing a variety of innovative games to cater to a wide range of players with differing interests.
- Chenggong Multimedia, a Ningbo-based online entertainment company, has licensed 3D fantasy MMORPG Shin Megami Tensei from Japan's Cave Online Entertainment for its mainland China operation. The company plans to release the game by the third quarter of 2009.
- CDC Software Corp. (CDCS), which focuses on enterprise software for midsized businesses, sank in early trading on its first day as a public company. A total of 4.8 million shares were sold at the midpoint of the expected price range, which was set by underwriters Lazard Capital Markets and JMP Securities LLC. The stock opened at $12 a share on the Nasdaq, flat with its initial public offering price, and lost 17% by the close of trading.
- QS Solar’s sales price for a-Si thin-film cells has reached US$1/watt, the lowest price in the global industry. The market's target price would be US$0.80 to US$0.85/watt in 2011 and US$0.65/watt in 2012, at which time QS Solar's cost to manufacture thin-film cells will drop to US$0.5/watt. A 1MW power station constructed with QS Solar's thin-film modules and integrated facilities would require investment of less than US$2 million, excluding installation fees and land costs.
- Semiconductor Manufacturing International Corp (SMI), citing strong orders, will maintain double-digit revenue growth for the third quarter sequentially and a higher capacity utilization rate. However, one analyst noted that revenue at the mainland's largest contract chip maker was still not enough to enable it to show a profit. The company posted 82.5 percent revenue growth to US$267.4 million in the second quarter over the first. This beat analysts' forecasts of US$264 million, thanks to stronger than expected shipments to communications and consumer customers. The recovery in the semiconductor industry in the past three months was mainly due to a rebound in customer demand across all regions. Greater China revenue was up 87.4 percent in the period, while North America rose 85.3 percent. SMIC's management hinted that revenue will grow 14 to 18 percent this quarter sequentially and it is receiving orders for September. It is also cautiously optimistic about fourth-quarter performance.