• Sony Corp.’s (SNE) PlayStation 3 video game console’s weekly sales jumped to a record in Japan following the introduction of a slimmer, cheaper model. The new PlayStation 3 sold 150,252 units. Sony cut the price of the PS3 in Japan by 25 percent to 29,980 yen (US$323) with similar reductions worldwide and introduced a model that is one-third the size of the original and consumes 34 percent less power. Microsoft (MSFT) followed with a US$100 reduction for its most expensive Xbox 360 player to US$300. Nintendo (OTCPK:NTDOY) kept the price of the Wii at US$250.
• Sony Ericsson (ERIC) denied plans to buy the stake of Canadian telecoms equipment maker Nortel Networks in South Korean LG-Nortel. LG-Nortel was established in November 2005 as a joint venture of Nortel and South Korean LG Electronics. Nortel, which is under bankruptcy protection since February, controls 50 percent plus one share in LG-Nortel. Sony Ericsson, Franco-US telecoms equipment maker Alcatel-Lucent (ALU) and a private equity unit of JP Morgan are among the potential buyers of Nortel's stake in the joint entity. Sony Ericsson is a 50/50 joint venture of Sweden's Ericsson and Japan's Sony Corp. The company targeted a 50 percent plus one share in LG-Nortel but it was unsuccessful.
• Japan ended August with 109.27 million mobile users as the operators added 366,900 new customers during the month, figures from the Telecommunications Carrier Association show. Softbank Mobile Corp. (OTCPK:SFTBF) ranked first among Japan's cellphone service providers in terms of net subscription gains with 115,100 new contracts on a net basis. New subscriptions lessened cancellations because of the continued popularity of Apple's (AAPL) iPhone 3G and 3GS. NTT DoCoMo (DCM) followed closely in second, securing 112,900 new contracts. KDDI (OTC:KDDIF) ranked third with 77,800 new contracts, one notch up from the previous month, as its new flat fee plan for up to three persons designated by users drew consumer support. With 61,100 contracts, Emobile came fourth, followed by Willcom, which offers mobile services using the personal handyphone system, with a net decline of 30,900 contracts.
• Sony Ericsson will focus its future mobile phone products on entertainment and communicative versatility. The Japanese-Swedish manufacturer has changed its marketing structure to reinforce its new focus and Ola Lilja Molén, head of the Scandinavian market, said that the firm aimed to be market leading on entertainment and communication. The future products are set to contain games, camera and music players and be easy to connect to other media platforms and technical products.
• Advantest Corp. (ATE) will have July-September orders for its chip-testing equipment to exceed April-June levels, rather than decline as forecast earlier. The company had projected that July-September orders would fall 14 percent from the preceding quarter, to 10 billion yen (US$107.54 million). They are placing advance orders with Advantest for its new chip testers. Advantest will have an operating loss of 3.7 billion yen (US$40.8 million) for the three months through September 30, and the firm is issuing a conservative outlook. The firm's break-even point stands at around 20 billion yen (US$220.4 million) in quarterly sales.
• TDK Corp. (TDK) has come up with a silicon wafer conveyor compatible with next-generation semiconductors featuring 22-nanometer line widths. Conveyors are the part of semiconductor manufacturing systems that carry wafers to and from the chipmaking apparatus. TDK analyzed the airflow patterns and placed slits near the bottom surface of the conveyor where the flow is stagnant to ensure that the air exits the system smoothly. By controlling the airflow around the conveyor, the company reduced the volume of dust particles measuring 60-100nm in diameter by 30-40. Such particles can cause problems when fabricating semiconductors in the 22nm mode. The new product will cost around 1 million yen (US$11,000), which is around 10 percent less than current offerings, thanks to a reduction in the number of parts and other cost-control efforts. Mass production at a rate of 100 units a month will begin this month.
• Toshiba Corp. (OTCPK:TOSBF) cleared the last antitrust-approval hurdle to purchase Fujitsu Ltd.’s disk- drive unit, after postponing the deal three times. All domestic and overseas regulators have cleared the acquisition. The two Tokyo-based companies will complete the transfer by October. The sale of the business, which lost 20 billion yen (US$219 million) last fiscal year, will raise about 30 billion yen (US$330.6 million) for Fujitsu.
• Sumco Corp. (OTC:SUMCY) had a first-half loss on weaker wafer demand from chipmakers, and expected a loss for the full year. Sumco, which trails Shin-Etsu Chemical Co in silicon wafers used to make semiconductors, reported an operating loss of 48.83 billion yen (US$527.5 million) in the six months ending July. It will have an operating loss of 80 billion yen (US$882.4 million) in the financial year to Jan. 31, giving its annual outlook for the first time. Wafer makers are struggling as chipmakers are banding together to increase their buying power to survive brutal price falls. Sumco also faces increasing competition from South Korean wafer makers who are targeting big clients such as Samsung Electronics Co. (OTC:SSNLF).
Media, Entertainment and Gaming
• Square Enix Holdings Co. (OTCPK:SQNXF) would launch the latest edition of its "Final Fantasy" game series which may help sales of Sony Corp's PlayStation 3 in the key shopping season. Square Enix is developing "Final Fantasy XIII" exclusively for the PlayStation 3 (PS3) for the Japanese market, while in North America and Europe the game will be playable on the PS3 as well as Microsoft’s Xbox 360. "Final Fantasy XIII" will sell for 9,240 yen (US$100) in Japan. The game software maker will launch the new version overseas in spring 2010. Sony and Microsoft are hoping that the launches of long-awaited game titles such as "Final Fantasy XIII" will help drive sales of their game consoles, which are running behind Nintendo's Wii. Both Sony and Microsoft recently cut the prices of their game hardware to spur demand in the run-up to the holiday season.
• Softbank Corp. is likely to raise some 60 billion yen (US$643.92 million) by securitizing the receivables of its cellular phone service business in the July-September quarter. This is down roughly by 15 percent, from the amount generated in the April-June period because of its reduced funding needs after issuing bonds. Softbank securitizes the receivables from mobile phone installment sales at Softbank Mobile Corp. to procure funds. The latest offering of receivables is up 12 percent from the previous quarter via bonds in the six-month period, after not issuing any such notes a year ago.
• NTT DoCoMo makes a bid for a German mobile content distributor. The company’s wholly-owned German subsidiary will offer 6.35 euros (US$9.27) per share in cash for all outstanding shares of net mobile by the end of September. The move would appear to signal a strategic entry in Europe by Docomo, after the failure of its i-mode experiment in 2006-2007. According to Docomo, net mobile’s technology and European presence are considered as significant advantages for the company in strengthening the foundation of its mobile platform business overseas.
• The main engines of growth in South Korea's telecom market from 2010 to 2014 will be services built around broadband technologies such as VoIP, IPTV, and mobile data according to Communications Markets research. VoIP subscribers increased eight-fold from just 0.3 million subscribers in 2006 to 2.5 million in 2008 due to the enactment of VoIP number portability.
• South Korea will allow foreign companies to provide content for IPTV services, rescinding a provision which has stopped companies majority-owned by non-Koreans from offering channels on some of the country's growing platforms. Companies with a foreign stake of 49 percent or more would be allowed to offer content over internet networks by the end of 2009. Foreign broadcasters can join platforms including myLGtv, KT's Mega TV and SK Broadband's Broad&TV, as well as offering internet feeds of their channels to Korean residents.
• The number of IPTV subscribers in South Korea exceeded 700,000 in August. During July, IPTV providers added 4,000 to 5,000 new customers per day but this had recently increased to about 7,000. The Commission attributes the jump in monthly net adds to the government's push to make the services more popular. The government's IPTV subscriber target for this year is 2 million. Three providers offer services like KT, SK Broadband, and LG Dacom. The regulator has also asked the operators to boost investments. KT will invest KRW 345 billion in its IPTV services. SK Broadband will invest KRW 265 billion, and LG Dacom will invest KRW 240 billion in IPTV services.
• The number of high-speed Internet service users in South Korea surpassed the 16 million-mark for the first time in August. The number of broadband Internet service subscribers in the country was estimated to be over 16 million as of the end of August, accounting for 96 percent of total households in the country.
Media, Gaming and Entertainment
• THQ Inc. (THQI) and Windysoft Co., Ltd had an agreement for Company of Heroes Online for the South Korean market. Windysoft will be the exclusive service provider of Company of Heroes Online, managing everything from distribution to customer service and community management. THQ will work closely with Windysoft to provide ongoing technical support and live content for Company of Heroes Online for the Korean market.
• The price of mobile gaming content has exceeded 3,000 won (US$2.40). Industry insiders said that leading mobile game developers like Com2us and Gamevil launched their new game contents at 4,000 won (US$3.30). Most of the contents are roll playing game which requires huge investment in the development. With the price has gone up by 30 percent, the developers witness a huge success. As they made a smooth entry to the increase of the price, many developers will change the pricing policy. Com2us and Gamevil released their new mobile PRG game, The Chronicles of Inotia 2 and Zenonia 2, respectively, at 4,000 won (US$3.30). The Chronicles of Inotia 2 successfully drew the attention of mobile game lovers, hitting 210,000 in downloads only in just 40 days since the launch. The game which took a year and 8 months for the development boasts a huge size of 4.3MB. The installation file has been condensed, therefore, requiring the extraction to install. The size of the download file is 2.3MB, equivalent to the existing gaming content.
• Major shareholders for Hynix Semiconductor Inc. have started the sale process for a US$2.75 billion stake in the memory chip maker and are planning to pick a preferred buyer by the end of this year. Korea Exchange Bank (KEB) will endorse the sale plan and would issue an invitation for bids this week. The financial firms including KEB hold a combined 28.1 percent stake worth about 3.4 trillion won (US$2.75 billion). Credit Suisse and a consortium of Woori Investment & Securities and Korea Development Bank are lead managing the sale. The buyer of the stake will gain control over the world's No. 2 maker of memory chips, which trails only Samsung Electronics Co Ltd.
• Samsung Electronics Co. has retained the top position in the French mobile phone market, further widening a gap with its rival Nokia Corp. (NOK). Samsung phones grabbed the record-high market share of 43.7 percent in France during the week from Aug. 24-30. Samsung clinched the top spot in the French market with 36.1 percent, followed by Finland's Nokia with a 21.7 percent share. The market-share gap between the two mobile phone makers widened to 14.4 percentage points in July, from 9.5 percentage points in May. Samsung Electronics has held top position in the French market since 2005.
• Samsung Electronics announced that it had no intention of pursuing an acquisition of SanDisk Corp. (SNDK) in the future. The US$5.9 billion deal was dropped definitely. There had been no progress. SanDisk spurned an unsolicited buyout offer from Samsung for US$26 per share, undervalued the company. Samsung dropped its bid in October. If the deal had gone through, Samsung would have secured advanced technology and a tighter grip on the market for NAND flash memory chips, where it competes with Japanese rival Toshiba. Since then Samsung renewed its NAND flash chip licence with SanDisk for seven years at a lower royalty.
• Haansoft will provide Sun Microsystems' (JAVA) open software and enterprise software based on the strategic relationship with the Korean operation of Sun Microsystems. The company will have to provide Sun's Java Webserver, GlassFish, Sun's DBMS as well as server solutions for the account management and the cloud computing. By doing so, Haansoft will be able to complete a full lineup of open software for the enterprise information system.
• South Korea will spend 189.3 trillion won (US$151.5 billion) over the next five years to strengthen its competitiveness in the information technology (IT) sector. The Presidential Council for Future and Vision said funds will be injected into five core areas, covering IT conversion, software, leading IT industries, broadcasting and communication, and Internet infrastructure. State funds will be spent to help small- and medium-size enterprises conduct research and development, with 109.7 trillion won (US$88.4 billion) worth of private investments to be allocated for production and industrial infrastructure. If investments are carried out according to plan, the country's growth potential may go up by 0.5 percentage point as a result of the increased spending. Efforts will be made to merge traditional manufacturing businesses such as ships, automobiles and energy production with cutting-edge advances in IT to enhance competitiveness.
• Alibaba Group (OTC:ALBCF) Chairman Jack Ma sold a total of 13 million shares of business-to-business e-commerce website Alibaba.com.
• Baidu (BIDU) begun switching more than 800,000 words keywords to its new professional version bid ranking system, "Phoenix Nest”. Baidu will switch over to the new system within two weeks. The keywords will only be available through "Phoenix Nest" after the transfer is complete.
• Xueersi.com received second-round funding of US$40 million from Tiger Global Management and KTB Ventures, which will be allocated for the production of improved educational environment, modern teaching equipment and more qualified teachers. Xueersi.com has more than 30 service centers and over 70 training schools in cities including Beijing, Shanghai and Wuhan. The school's staff and students number in the thousands and hundreds of thousands, respectively, every year.
• China's government directed the music sites to ask for approval from censors for all foreign songs they distribute on the Internet. The Ministry of Culture's measure is the latest effort by the government to try to assert control over the Internet, which has some 338 million users in China, more than in any other country. This will solve cases like the intermingling of good and bad content and the large quantity of imported music without approval, as well as copyright violations and a general lack of supervision and regulation over market behavior. Groups representing record labels hoped the move would lead to tougher action against piracy, which is rampant in China. The International Federation of the Phonographic Industry, which represents music companies, estimates that music sales in China totaled just US$82 million last year and 99 percent of the music accessed in China is unlicensed.
• Google (GOOG) is bringing its China team with its global management structure, with Daniel Alegre, manager for engineering and sales operations. Kai-Fu Lee, head of its Greater China operations, resigned and will be replaced by Boon-Lock Yeo over engineering responsibilities and John Liu for vice president of sales and operations. Lee was in Google in 2005 from Microsoft Lee would launch a venture business platform to offer funding to China's young entrepreneurs. Lee would set up an angel fund to support the country's young technology start-ups. Google and Apple got funding from similar sources in their initial stages.
• China saw a 3G mobile phone sales volume of 600,000 in the first seven months of 2009, accounting for 0.64 percent of the total. Samsung Electronics and LG Electronics ranked first and second in the Chinese 3G mobile phone market, with market shares of 21.3 percent and 20.3 percent, respectively. The followers were Sony Ericsson 18.7 percent, Coolpad 12.6 percent, ZTE (OTCPK:ZTCOF) 9.9 percent, Nokia 3.5 percent, and Motorola (MOT) 3.7 percent.
• Chinese mobile phone manufacturer ZTE Corp. remained No. 1 among its rivals in terms of the total number of CDMA handsets shipped within China with 730,000 units. LG Electronics Corp. (OTC:LGERF) and Huawei Technologies Co. Ltd. ranked second and third in terms of domestic CDMA handset shipments in July with 614,000 units and 307,000 units respectively. Haier Group (OTCPK:HRELF) and Motorola Inc. ranked the fourth and fifth with shipments of 256,000 units and 66,000 units. Chinese handset manufacturers did not rank among the top five in terms of domestic GSM handset shipments in July. During July, Sony Ericsson ranked second by total number of domestic GSM handset shipments with 1.75 million units, trailing Nokia, which shipped 3.97 million units. Samsung, Motorola and LG ranked third, fourth and fifth with 1.08 million, 961,000 and 506,000 units shipped during the same time, respectively.
• Research in Motion Ltd. (RIMM) has established its Chinese headquarters in Beijing and named Gregory Shea as president of China operations. The Beijing office is RIM's first office in China. RIM sees great potential for growth in China and must expand its domestic presence in the country to develop more Chinese partners. RIM and China Mobile established a partnership to provide BlackBerry service bundles and equipment to corporate subscribers in China. China Telecom entered into talks with RIM at the beginning of the year and that the two parties were close to reaching an agreement for the release of BlackBerry services and products in China. Gregory Shea joined RIM in July 2008 as vice president for Government Affairs for the Asia Pacific region.
• China Mobile Ltd. (CHL) has begun working on listing its shares in the domestic market. The carrier hopes regulators will allow the listing soon. Authorities are working on rules that will facilitate listings of so-called red-chip companies, or overseas-incorporated Chinese firms. China Mobile is stepping up efforts to offer its shares to investors in the world’s fastest-growing major economy, where a US$586 billion stimulus is helping to compensate a slump in export demand from the U.S. and Europe. Chinese regulators are making preparations for greater international participation in its stock market, the second biggest in Asia. The China Securities Regulatory Commission held an internal meeting in July to discuss setting up an international board on the Shanghai exchange on which overseas companies will trade for the first time.
• China added 17.78 million broadband subscribers in the 12 months ended June 30 2009, making it the country with the largest number of broadband subscribers in the world. It had a total of 93.55 million broadband lines, compared to 86.23 million in the U.S. and 31.08 million in Japan. Helped by broadband growth in China, Asia as a whole was home to 170.34 million broadband lines at the end of the second quarter of 2009. The number of broadband subscribers was up 25.46 percent in South and East Asia and 8.35 percent in Asia Pacific between mid-2008 and mid-2009. Unlike Western Europe and North America, South and East Asia offers plenty of room for subscriber further growth, at least in terms of population without broadband.
• Telefonica (TAR) has increased its stake in Chinese phone operator China Unicom (CHU). The two companies signed a deal which saw China Unicom take a 0.88-percent stake in Telefonica. Telefonica's stake in the Chinese company grew from 5.35 percent to slightly over 8 percent in the deal that would see both companies spending around US$1 billion. China Unicom has acquired 40.7 million shares in Telefonica at a cost of 17.2 euros (US$24.5) a share, while Telefonica bought 693 million shares in Unicom at a cost of US$11.17 each. Telefonica has around 10 percent of the world telecommunications market, overtaken only by China Mobile and AT&T. The Spanish company has followed an expansion policy in recent years, which saw it take Latin America's BellSouth and British company 02.
• Guotai & Junan Securities’ report on the Chinese telecom industry showed signs of an increasing pattern in revenues. China's telecom had revenues of 477.49 billion yuan (US$69.9 billion). The revenues in July rose 3.3 percent and 4.2 percent on month and on year. Mobile services and stabilization of wireline services was 60 percent and 16 percent respectively in its total revenues. Mobile services had revenues of 43.73 billion yuan (US$6.4 billion) in July. Revenues from wireline services maintained in the range of 11.3 billion yuan (U$1.6 billion) and 11.5 billion yuan (US$1.7 billion) for four consecutive months. The dropping trend of user number failed to ease, countermeasures such as network integration and service bundling effectively stopped the revenues from declining too fast.
• Fidelity International Ltd (FIL) recently raised its shareholding in ZTE Corp to 6.07 percent from the previous 5.97 percent. FIL bought 302,400 H shares of Shenzhen-based ZTE for US$1.42 million. The average share price of the transaction was US$4.71 per share.
• Trina Solar Limited (TSL) has obtained a five-year syndicated loan facility to support its East Campus capacity expansion project. The size of the loan facility is at around US$304 million. The lenders are the syndicate of five domestic banks led by the Agricultural Bank of China and Bank of China. The loan will be used to finance the Company's 500 MW capacity expansion project to be completed over the next three years. The first drawdown will occur in September 2009 in accordance with the schedule agreed upon with the lenders. The loan proceeds will be used to fund the Company's capital expenditure targets for the second half of 2009 and will also be immediately used to repay related outstanding loans of approximately US$80 million due on June 30, 2010.
• LDK Solar (LDK) has entered a framework agreement to supply solar wafers to module maker Best Solar. LDK has established a PV engineering company to construct solar power stations, but has not yet engaged in substantial downstream business. Best Solar is wholly owned by LDK Chairman and CEO Xiaofeng Peng and LDK New Energy, which is LDK Solar's controlling shareholder, and has solar panel production facilities in Suzhou, Jiangsu province and Nanchang, Jiangxi province.
• Trina Solar Ltd has borrowed US$304 million from banks led by Agricultural Bank of China (ABC) and Bank of China will invest in a 500MW integrated solar project. Construction will be completed before the middle of 2011, when the project will have an annual capacity of 500MW of ingots, wafers cells and modules, respectively. The company also plans to establish a research and development center for integrated solar project in Jiangsu province.
• China's export-dependent solar panel makers are recovering, same with the major markets in Europe and the U.S.. Trina had a 50-percent collapse in solar panel prices this year due to lower polysilicon raw material costs and strong demand in the global market. Trina Solar earned US$0.71 per share in the second quarter. The company will meet its shipment targets for this year and planned to raise production capacity to between 850 and 950 megawatts by the end of next year.