Mobile / Wireless
- KDDI Corp. (OTC:KDDIF) said net income for the year ended March 31 was 212.5 billion yen (US$2.3 billion), 5.6 percent below forecast. Mobile phone sales costs increased, the Tokyo-based company said in a statement to the Tokyo Stock
- Boingo Wireless, a global Wi-Fi services provider, announced a tie-up with NTT Communications (NTT), one of the largest telecommunications services provider in Japan. Boingo customers can now access 1,600 additional Boingo hotspots in Japan through the company’s collaboration with NTT. Boingo now provides Wi-Fi services at more than 6,500 centers in Japan and more than 125,000 globally. Boingo enables customers owning smartphones or laptops to conveniently connect to the internet at any Boingo hotspot across the world. Demand for Wi-Fi services is set to explode with the launch of Apple’s (AAPL) iPad and other similar devices in addition to rapid growth in smartphone penetration in almost all countries.
Media, Entertainment and Gaming
- SoftBank Corp. (OTC:SFTBF) announced the acquisition of two music business subsidiaries currently owned by electronic products manufacturer JVC Kenwood Holdings Inc (OTC:KNWCF). Victor Entertainment (OTC:VJAPY) and Teichiku Entertainment, the two companies being acquired are focused on managing copyrights for Japanese musicians. SoftBank might first acquire a majority stake in the two companies before turning them into fully owned subsidiaries in the future. SoftBank aims to strengthen its internet business by leveraging on the music content resources of the acquired companies.
- Nintendo Co. (OTC:NTDOY), the world’s biggest maker of videogame consoles, won reversal of a US$21 million verdict that game controllers for the Wii and GameCube systems violated patents owned by Texas based company Anascape. Anascape’s patent related to controllers that moves images in six general directions. Nintendo successfully argued that the patent was based on an invention that dated to 2000, later than the DualShock controller sold by Sony Corp (SNE). The US Court of Appeals for the Federal Circuit in Washington rejected Anascape’s argument that the invention dates to 1996, before Tokyo-based Sony introduced the DualShock device. Jurors in Lufkin, Texas, previously agreed with Nintendo that the rectangular Wii remote, when not used with the Wii Classic, and the “Nunchuk” controller attached to the remote don’t violate the patent. The rectangular Wii remote is the one that comes with the console. Anascape, based in Tyler, Texas, also had sued Microsoft Corp. (MSFT), maker of the Xbox 360. Microsoft settled the case before trial.
- Nintendo Co., projecting the first drop in annual sales of its DS handheld player, said the forthcoming 3-D model will be the company’s biggest portable product introduction since 2004. Nintendo, the world’s biggest maker of video-game machines, joins Sony Corp. in embracing the 3-D technology that helped the film “Avatar” break box-office records. The 3DS, going on sale this fiscal year, will compete against Sony’s PlayStation Portable and Apple’s iPad in the market for portable game players. Nintendo last month said the new handheld device will allow users to see 3-D images without the need for special glasses. Fils-Aime declined to give further details about the product, saying the company’s announcements at the E3 trade show in Los Angeles in June will focus on the player. Competitor Sony, which has said it will update its software to allow PlayStation 3 machines to run games in 3-D, plans to start selling game titles as well as Bravia televisions capable of showing the format in June. But according to Sony, PS3 users will have to wear special glasses to play 3-D games.
- Konami Corp. (KNM) revised its operating profit guidance for fiscal year ending March 2010. The company cut down its operating profit forecast from 30 billion yen (US$320 million) to 18.5 billion yen (US$198 million), a 62% reduction. According to the company’s news release, the global economic slowdown, the appreciation of the yen and deflation continued to affect the business environment surrounding Konami led primarily to the revised forecast. Meanwhile, sales from its Gaming & System segment were favorable in North America and the segment is becoming a key driving force in its business. As for the Digital Entertainment segment, a major home video game title Metal Gear Solid Peace Walker, the release of which was originally scheduled during the fiscal year ended March 31, 2010, will be offered in April 2010. The membership also increased over the previous fiscal year. Konami is a leading global developer, publisher and manufacturer of electronic entertainment properties targeting the home video game market.
- Toshiba Corp. (OTC:TOSBF) announced plans to roll-out a tablet PC late this year. The new device is expected to compete with Apple’s iPad and will run on both Microsoft’s Windows 7 and Google’s (GOOG) Android operating systems. The company will also price the Android device lower than the Windows-based model. Competition in the tablet PC market is heating up with HP and Dell also expected to release new devices in 2010.
- After the withdrawal of Korean partner SK Telecom (SKM) Saigon Postel will operate Vietnamese mobile operator S-Fone from the middle of this year. The business cooperation contract has been changed into joint venture operation by SK Telecom and Saigon Postel. According to managing director Ho Hong Son, SK Telecom will be a shareholder in the new JV after the proposed change and Saigon Postel will manage the network. Before 2011, SK Telecom will only hold a minority stake in the JV and capital invested by SK Telecom will be returned by Saigon Postel.
Media, Entertainment and Gaming
- South Korea might broadcast the upcoming South African World Cup and the other major sporting events in 3D format in the country. The move is expected to favor Korea’s large television manufacturers like Samsung (GM:SSNLF) and LG (LPL) who have outlined aggressive plans to manufacture and distribute 3D television sets in the next 2 years. The government will also drastically loosen regulations on the telecom industry and specifically on the smartphone market to boost the telecom growth in the country.
- The Korean government announced a new action plan to de-regulate the software and information industries by June 2010. South Korea’s IT and software development industry has not taken off in spite of an extensive ICT infrastructure primarily because of an unfavorable policy environment. However, the Korean government’s move to de-regulate and liberalize the industry might put industry growth on the fast-track.
- South Korean Ministry of Knowledge Economy will invest 60 billion KWR (US$54 million) in the next 5 years to build a robust infrastructure for its analog chip industry. The move is aimed at encouraging Korean companies to expand their presence in the global semiconductor market. Currently, the US$3.5 billion domestic market for analog chips is mainly dominated by imports from US, Europe and Japan. The ministry will also support training and development of human capital in this field and hopes to transform the current ‘net imports’ situation.
- Strategy Analytics forecasts a 7-fold growth in sales of mobile handsets that use TD-SCDMA, China’s 3G network standard in the current year. While the analytics firm did not provide total sales estimates, analysts say that the number could grow from the current 3.4 million handsets to around 21 million by the end of 2010, more than the number of iPhones sold globally in 2009. 3G services have been slow on the uptake in China because of the network’s teething problems immediately after roll-out and the lack of a wide range of product offerings. China Mobile, the world’s largest telecom company by subscriber base is marketing its 3G services aggressively in an attempt to boost flagging growth rates in the Chinese telecom market.
- A survey conducted by China Reality Research, an affiliate of financial firm CLSA, revealed a lackluster response to 3G telecom services in spite of heavy marketing by the three mobile companies in China. The survey found almost 71% of 2G mobile users unwilling to upgrade to 3G while only about 10% of the survey respondents expressed keenness to subscribe to 3G. A majority of the respondents also felt that 3G pricing is also expensive.
- Thursday’s earthquake in Western China caused extensive damage to three mobile networks and also crashed the local fixed line network. China Telecom’s (CHA) fixed line network in the region is expected to remain offline for sometime because of severed cables in numerous places. In addition, a number of CDMA based stations belonging to China Telecom, China Unicom (CHU) and China Mobile (CHL) also went down. The mobile companies have rushed emergency teams to restore connectivity in the region.
Media, Entertainment and Gaming
- Chinese gaming company NetDragon (OTC:NDWTF) announced financial results for the fourth quarter of 2009. The company recorded revenues of 134.19 million yuan (US$19.64 million) and net income of 1.43 million yuan (US$210,000). The figures reflect a 1.7% and 92.6% drop over the same period in last year. The company attributed the slump in performance to growing competition in the Chinese market. For the full year 2009, revenues stood at 621.84 million yuan (US$91 million) an increase of 4.3% over 2008 and net income of 87.11 million yuan (US$12.75 million), a fall of 63.6% over the previous year.
- The9 (NCTY) announced a major restructuring of its business operations. The company has now restructured itself into three business units. One of the units will focus on online games and will combine the company’s previous game operations, development and marketing teams. The second unit will focus on conducting investments in North America and the third unit will develop new internet applications. The North American business unit will also absorb the company’s recently acquired game developer, Red 5 Studios.
- 58.com, an advertising portal based in China, announced that it has secured US$15 million of equity financing. The current round of investment was led by Softbank Asia Infrastructure Fund (SAIF) and DCM. The company, which became profitable in 2009, received first round investment also from SAIF in 2006.
- Kingsoft is reported to be facing HR problems amidst speculation that the company’s entire public relations team correctively resigned this week.It is speculated that the PR team had problems with the marketing department’s middle management. The exit of these employees might not be connected to the rumored dismissal of the company’s Liehuo Studio.
- Shanda Games (GAME) announced that it has licensed ‘Luvinia Online’ to Japanese game operator Gameon Company for about US$1 million. Shanda is also reported to have entered into license agreements with game operators in the US, Korea, Taiwan, Hong Kong and Russia. Luvinia is a 3D MMORPG developed by Shanda’s subsidiary, Simo Technology.
- Tencent Holdings (OTC:TCTZF), a leading provider of Internet Services and mobile value-added services in China, announced the acquisition of a 10.26% stake in Russia’s Digital Sky Technologies for US$300 million. Digital Sky Technologies is a Russian holding company with interests in the Internet business across the world. Digital had picked up a 3.5% stake in Facebook for US$300 million and also led an investment of US$ 180 million in gaming company Zynga last year. Tencent is the largest internet services firm by market capitalization in China. Incidentally, Tencent and Digital are reported to be competing to acquire AOL’s messaging service ICQ.
- Alibaba Group (OTC:ALBCF), which controls Alibaba.com and Taobao, announced that it has won a license to provide small loans to businesses in China. The company also announced investment of 5 billion yuan (US$730 million) over the next five years to expand the operations of Alipay, the country’s largest online payment service. The company has already facilitated loans of more than 6 billion yuan (US$878 million) through its ecommerce portal Alibaba.com.
- China solar technology company Daqo Group will locate its new silicon wafer manufacturing facility in Wanzhou district of China. The plant is expected to cost 3 billion yuan (US$440 million) and will generate revenues of 10 billion yuan (US$1.46 billion) annually. The company also plans to price its subsidiary Daqo New Energy’s U.S. IPO at about US$10 per share.
- Photvoltaic products manufacturer Yingli Green Energy (YGE) expects to start trial production in its new 100 MW solar cell project in Hainan by the end of the current month. The company expects to ramp up production by the end of June. Yingli might also invest 1.8 billion yuan (US$263 million) to complete the second phase of the project with capacity of 200 MW. The company had previously announced revenues of US$371 million and net loss of US$6.6 million for fiscal year 2009.
- Solargiga Energy Holdings announced revenues of 658.7 million yuan (US$96 million), a drop of 56% over 2008, and net loss of 98.1 million yuan (US$14.35 million) for fiscal year 2009. Net profit in 2008 was 83.4 million yuan (US$12.2 million). The company attributes the slump in performance to inventory write-downs driven by falling selling prices during the year. Sales of the company’s mono-crystalline silicon products went down by 52%. The company plans to double its current capacity by completing the construction of a new production plant that can manufacture 100 MW solar modules, 4,000 metric tons of mono-crystalline solar ingots and 500 metric tons of multi-crystalline silicon ingots.
- LDK Solar (LDK), a multi-crystalline wafer maker, announced that it has inked a new agreement with German-based Phoenix Solar AG. The company will supply 20 MWs of solar modules to the German alternative energy firm for an undisclosed contract amount. The company had previously reported net loss of US$7.3 million for the fourth quarter of 2009 on revenues of US$304.6 million.
Disclosure: Author holds no positions in the stocks mentioned.