• Willcom Inc. is seeking financial support from the government-backed corporate turnaround body to rehabilitate its operations. Willcom is keen to draw on credit from the Enterprise Turnaround Initiative Corp. of Japan, which can raise government-guaranteed funds. Softbank Corp. (OTCPK:SFTBF) is considering funneling funds into its capital base, as Willcom mulls tapping ETIC resources. Willcom started out-of-court alternative dispute resolution proceedings and has been asking its creditors to delay repayment schedules for its debts worth 90 billion yen (US$991 million). But Willcom has been having difficulties drawing up its reconstruction plan. The PHS service provider wants to engineer a speedy reconstruction by utilizing ETIC.
• Japan's domestic shipments of cellular phones and personal handyphone system handsets declined 9.9 percent on the year to 3.13 million units in November. The decline followed two straight months of year-on-year increases, which had snapped a 14-month string of decreases through last August. November shipments topped the 3 million mark for the first time in five months thanks to the release of autumn-winter models. But the overall downtrend in demand continued as the prolonged economic slump made consumers less willing to splurge on handsets and newly released models failed to spark strong interest.
• Canadian Solar Inc. (NASDAQ:CSIQ) merged and had a contract of 18 MW distribution with West Holding Ltd of Japan. Canadian Solar will transfer 14 percent of the shares in Canadian Solar Japan, its Japanese subsidiary, to West Holding Ltd, but Canadian Solar retains the remaining 86 percent. West Holding will distribute and sell solar residential rooftop systems designed by Canadian Solar Japan. The sales target for 2010 is approximately 18 MW. Deliveries began in December 2009.
Media, Entertainment and Gaming
• MTV Japan Inc. is launching an interactive game on its social networking site. Featuring Usavic , will be of free of charge to members of the myMTV social networking site for mobile phones beginning Jan. 28. Elements of role-playing games have been incorporated, and Usavich's abilities can be increased by defeating enemies. Players will be able to exchange messages with other players. Some 300 character items will be available for purchase, with the price per item set below 1,000 yen for now. Points acquired during in-game events will also be exchangeable for items.
• Cisco (NASDAQ:CSCO) will restructure its Asia Pacific and Japan operations to support its investments and growth plans in the region. The company will create three theaters, effective February 2010, to enable a more focused strategy and investment of resources to countries within the region. China PRC, Hong Kong and Taiwan, formerly part of the Asia Pacific Theater, will now form a separate Greater China Theater. The remaining countries in Asia Pacific will form the Asia Pacific Theater, while the Japanese operations will continue as the Japan Theater. Greater China Theater will be led by Owen Chan as president and CEO. Chan joined Cisco in 1999 and has been president of the Asia Pacific region for the past five years. Jim Sherriff and Thomas Lam have been named chairman and vice chairman, respectively, of the Greater China Theater.
• Supported by a government sales incentive, flat-screen television sales in December jumped 65.5 percent year on year in volume and 42.7 percent in value in Japan. The government introduced the eco-point sales incentive under an economic stimulus package last year to encourage consumers to purchase energy-efficient air conditioners, refrigerators and TVs for high-quality terrestrial digital broadcasting. In tandem with flat-screen TV sales growth, blu-ray disc and other video recorder sales in December increased 37.6 percent in volume and 27.3 percent in value. But personal computer sales in the month grew only 1.8 percent in volume and declined 2.1 percent in value despite Microsoft Corp.'s (NASDAQ:MSFT) introduction of the new Windows 7 operating system. Digital camera sales decreased in both volume and value on market saturation.
• SK Telecom (NYSE:SKM) is aiming to win two million new smartphone users this year. It plans to introduce 15 smartphone models with the majority of them running on Google's (NASDAQ:GOOG) Android system. Smartphones are one of the bright spots in the tech sector and the market could grow by up to 25 percent in the next three years. Smartphones are increasingly the mobile handset of choice and they're seen as a key growth driver for phonemakers and telco operators alike. Global smartphone shipments grew by four per cent on-year to over 41 million units in the third quarter of 2009. The Asia Pacific region shows the highest growth at 26 per cent and market-watchers expect more mobile users to migrate to smartphones.
• Digital Signage, MVNE and SME are the most likely projects that LG Telecom (OTC:LGERF) will pursue this year. The merged LG Telecom said that it will designate 20 new projects which will be different from its existing business focus by the end of this month and begin the preliminary research activities for each project. Among the most likely items, LG Telecom believes that it has strong potential in digital signage by using its IP and 2 million APs to show the advertising contents depending on time, space and target consumers. Also, in the mobile virtual network enabler, it will support its clients to help their own values rather than liming its service to support the communications traffic. By doing so, it will lay the groundwork for the MVNO business to secure the leadership in the future. The first target base is banks and discount stores.
• KT Corp. (KTC) outdid its rivals last year in the number of subscribers to its Internet-based TV and phone services. KT reported that it attracted a net 994,000 customers last year for its real-time Internet-protocol television (IPTV) services, with the company's total subscription base increasing to 1.01 million. The growth of IPTV has outpaced previous new media services. Cable television channels took more than four years to recruit 1 million subscribers, while satellite television service took some 21 months. SK Broadband Co. ranked second in overall IPTV subscribers, drawing in a net 403,000 users. LG Dacom Corp. attracted 316,000 customers. KT also led in Voice over Internet Protocol (VoIP) services last year, narrowing the gap with its leading rival LG Dacom. KT estimated its total VoIP customer base rose to 1.70 million in the end of 2009 from 328,000 a year earlier. The number of LG Dacom's Internet phone service users was 2.14 million, adding 938,000 from a year earlier.
• The government will spend 225.3 billion won (US$200.6 million) in the next five years to transform the industrial city of Daegu into a global mobile cluster that can strengthen South Korea's position in wireless phones. The buildup plan for the city 302 kilometers southeast of Seoul aims to counter challenges posed by Apple's (NASDAQ:AAPL) iPhone and foreign-made smart phones. South Korea currently controls 30 percent of the global market for mobile phones making it one of the top three manufacturers of the product along with Finland and the U.S. The government plans to use the money to enhance research and development infrastructure in mobile convergence needed to make next-generation mobile phones, and create a effective testing environment for prototypes and new products.
• LG Electronics Inc. aims to sell 140 million mobile phones globally in 2010, up 20 percent from last year to become the global no. 2 handset maker by 2012, aided by the rising popularity of smartphones. LG and Samsung Electronics (OTC:SSNLF) aim to achieve a double-digit share of the global smartphone market by 2012. It will launch a lineup of 20 smartphones this year, based on various operating systems, including Google’s Android, Microsoft's Windows Mobile and Linux. The company had a 10 percent share of the global handset market last year.
• Alibaba's (OTC:ALBCF) consumer-focused e-commerce site Taobao.com has partnered with content providers, including Joy.cn. The channel, which has TV show, movie and digital magazine sub-channels, is free of charge for viewers at present and feature ads in some video content, as well as advertising links products on Taobao.com after videos. A Taobao.com will build the platform but will not be involved in providing content or obtaining copyright authorization, while it will partner with content providers using a revenue-sharing model. Taobao.com released an online video channel and redirects users to a taobao.joy.cn page, where they will view Taobao shopping ads before watching content.
• Travel portal Qunar.com released a channel for train tickets that includes information about all Chinese trains as well as newly commenced high-speed lines. Qunar.com and Sohu.com (NASDAQ:SOHU) had a partnership on January 12 to offer a new, joint travel information site through Sohu's Sogou Map Service.
• Google's potential pullout from China will throw much of the country's Internet economy into turmoil, but there could be some beneficiaries. Baidu will immediately benefit if its main competitor vanishes. But analysts say a pullout by Google would also be good news for various Chinese Internet portals such as Netease.com (NASDAQ:NTES), Sohu.com, and Tencent (OTCPK:TCTZF) have their own search engines with negligible market share. Google had 31.3 percent of China's search engine revenue at the end of the third quarter, compared to 63.9 percent for its rival Baidu (NASDAQ:BIDU). The remaining 4.8 percent of the market is divided between several players, including the three portals and Yahoo! (NASDAQ:YHOO) China, which is owned and operated by Alibaba Group.
• China's Internet users hit 384 million by the end of 2009 due to the expansion of Internet access and a rapid increase of mobile phone Internet users. The numbers registered a 28.9 percent jump since the end of 2008, while the mobile Internet users increased by 120 million to reach a total of 233 million. More people have chosen to access the Internet through mobile phones since the Chinese Government issued third-generation (3G) licenses to major telecom operators in January last year, which enables high-speed connectivity to the Internet. Internet usage in rural areas also registered a new high as it reached 106.8 million by the end of 2009, an increase of 26.3 percent from 2008. The most frequent online practices included listening to music, reading news, and doing searches.
• Chinese mobile entertainment producer Linktone has entered into a definitive agreement to acquire a controlling interest in Letang, a private Chinese company specializing in the development of mobile games and PC online games. Letang offers a portfolio of games that can be played on the major global mobile phone operating systems and platforms including Flash, Symbian, KJava, MTK, Android, BlackBerry and iPhone. Linktone has agreed to pay up to US$9.15 million in cash to acquire 50.01 percent of the equity of Letang. Letang will receive US$2.56 million in cash at the closing of the acquisition, with the remainder of the consideration payable upon the achievement by Letang of certain financial milestones during years 2010 and 2011.
• The mobile value added services (MVAS) market has been growing at 29% per annum. Growth in this sector is being boosted by increasing mobile penetration, growing popularity of mobile entertainment, rising income levels, declining ARPU and introduction of 3G.
• China has a booming video gaming industry with mobile gaming revenue predicted to grow at a 51.5 percent CAGR between 2009 and 2014, reaching US$2.5 billion in revenue despite current market barriers. Waiting for a 3G boost examines the state of mobile gaming in China, paying particular attention to the role of mobile data networks, the lessons of the overall gaming industry in the country, and the need for more gaming-friendly handsets. Apart from the growing game download business, the biggest opportunities in China reside in online multiplayer and casual mobile gaming; however, mobile gaming market development has so far been hindered by handset capabilities and data access costs.
• Artificial Life Inc (OTCPK:ALIF) has signed a partnership agreement with China Unicom (NYSE:CHU) which will see Artificial Life launch a wide selection of Java mobile games in collaboration with its subsidiary, China Unicom SK Telecom. China Unicom has subsidiaries in 31 provinces across China and serves 133 million GSM subscribers. China Unicom SK Telecom, a sister company of China Unicom, has the responsibility to handle all value-added services (VAS) contents including mobile news, premium ringtones, emoticons for short message service (SMS), mobile games, WAP VAS, as well as applications on the Apple’s iPhone. Artificial Life's initial launch will include titles such as Red Bull Air Race World Championship. Over the course of the next several months, Artificial Life will follow up this initial launch with many more mobile game titles for many devices including the iPhone.
• China will provide US$211 million as loan to state-run mobile operator Teletalk to develop its upcoming 3G networks. The loan agreement will be signed at state level. The Chinese government will provide the loan through China Exim Bank at 2 percent interest rate in the next two years. The loan repayment time might be 20 years in line with discussions. Teletalk will have to import all equipment for its 3G-expansion project from China-origin vendors, while CMEC will have the authority to select the vendors. China Exim Bank and the Ministry of Finance of Bangladesh signed a general loan agreement on a preferential buyer's credit worth US$211 million. The deal expired in August 2008 without any payment.
• China Mobile (NYSE:CHL) will complete its two year TD-SCDMA user target of 50 million by the end of this year. Wang will complete TD-SCDMA network construction this year, a year ahead of schedule, and that China Mobile had 5.51 million TD-SCDMA subscribers as of late 2009. The company targeted 30 million users in 2010.
• ZTE Corp. (OTCPK:ZTCOF) plans to raise HK$2.62 billion (US$342.37 million) through a private share placement. ZTE will issue a maximum of 58.29 million shares to 10 investors for trade on the Hong Kong Stock Exchange. Net proceeds will be used to boost ZTE's existing cash flow. The funds will help decrease ZTE's asset-liability ratio, which reached 72.6 percent as of Sept. 30, 2009. The telecom equipment market will face challenges in 2010, as it is likely that China's three telecom operators will cut their investment budgets as national network deployment nears completion. Representatives from both China Telecom and China Mobile have stated publicly that infrastructural investments will decrease over the next few years. The operator may cut investments by 20 billion yuan (US$2.93 billion) in 2010.
• China's three telecom operators, China Mobile, China Unicom, and China Telecom (NYSE:CHA) made a direct investment of 160.9 billion yuan (US$23.6 billion) in 3G network building, setting up 325,000 base stations in 2009. It created 260,000 jobs, and a further 670,000 job indirectly. The number of 3G users in China topped 13.07 million. This figure was expected to exceed 15 million by the end of 2009.
• China Telecom will pump 8 billion yuan (US$1.2 billion) to accelerate the construction of the Internet, 3G wireless network, broadband, information service, and informationization network in Jilin Province in the next three years. China Telecom will focus on informationization infrastructure construction, informationization service platform, information-based government administration, and 3G application and construction in the province. The local government will support the company in terms of pipeline projects, cell tower site selection, power supply. The government will boost the company to promote its product BizNavigator and online payment service. The company will pay more efforts to upgrade the local industrial structure, cultivate emerging industries, and push the province's economic and social development.
• Huawei will invest more than US$50 million in Turkey over the next three years with a new research and development center in Istanbul. Huawei plans to inaugurate the research & development center in Umraniye district in Istanbul. Huawei released a written statement and said this would be the company's 15th research & development center in the world, noting 350 Turkish engineers are planned to be assigned to the center in three years. The center was an indication of the importance attached to Turkey adding that the investment would make important contributions to the Turkish economy and society. Huawei is the solution partner of Turkey's mobile phone operators Turkcell, Vodafone and Avea to build their 3G networks.
Media, Entertainment and Gaming
· Shanda Interactive Entertainment (NASDAQ:SNDA) appointed of Mr. Xu Chaojun as its Chief Operating Officer. Mr. Xu served as vice president of Oak Pacific Interactive from 2006 to 2009 and was aco-founder of Chinaren.com
· Goldcool has licensed its in-house developed 2D MMORPG Zhu Hou Online to Korean-based online game company IMI. The cooperation is Goldcool's first game export since Shanda division Shanda Games (NASDAQ:GAME) has acquired Goldcool and the rights to publish Goldcool games overseas. The company has high expectations for Goolcool's 3D game Magic World Online II and it is currently negotiating for operating rights to the game.
· Shanda Games is likely to transform into an online game media platform firm and strengthen its game built-in advertisements in the future. Shanda Games would come up with the game operation platform scheme, which aims to become a world game market over the long run. A merger of U.S. Mochi Media, a world leading game and in-built ad platform operator, clarifying further its under-way transformation plan. The US$80 million dollars of Mochi Media merger expenses all came from its 18 Fund, which has hailed 1.2 billion yuan of investments in local online game teams or corporations. Pursuant to the agreement, Shanda Games will pay San Francisco-based Mochi US$60 million in cash and US$20 million in shares of the Chinese firm. Shanda Games plans to complete the deal in the first quarter of this year. Shanda Games will use Mochi's network to attract more players of causal games to Shanda's profitable massive multiplayer games. 18 Fund was launched by Shanda Games in July 2007.
· Phoenix New Media is aiming for an initial public share offering by as early as the end of this year. The company would float its shares in either Hong Kong or on New York's Nasdaq bourse. The company had been profitable for four years, with annual profit growth at roughly 100 percent, said Liu, who has served in chief executive for four years after spending four years at parent Phoenix Satellite Television, a China-focused broadcaster based in Hong Kong. Phoenix New Media's website is among the top five news portals in China in terms of page views, data from research firm ACNielsen showed. Advertising income, which accounted for half of Phoenix New Media's revenue, was expected to jump by triple-digits this year on the back of China's recovering economy. Phoenix New Media, which was founded in 2005, received a US$25 million investment last November from a group, including units of Intel and Bertelsmann.
• CDC Software Corporation (CDCS) would purchase an up to 51% stake in Vitova Ltd. CDC Software has priority right to buy Vitova 's Beijing unit, UNIS Vitova. Upon the accomplishment of the acquisition, Vitova will be part of CDC Software's franchise partner project, which was set up in 2006 and helps CDC Software select strategic partners in designated regions. The company has had seven franchise partners in India, China, South America, Spain, as well as Mexico. Vitova is an enterprise content management provider based in Hong Kong. After being purchased, its solutions will be sold under the "CDC DMS" brand. Moreover, Vitova will integrate its DMS software to the buyer's Ross, ERP, CDC supply chain, Pivotal CRM, and CDC senior human resource management solutions. CDC Software will also launch Vitova solutions by making use of the SaaS model.