• Sony Corp. (SNE) plans to enter Japan's electronic book market by the end of this year, after deciding to pull out of the market in 2007. The company will launch a new e-book-related product by the end of this year, said Fujio Noguchi, senior vice president of Sony Electronics Inc.
• Fujitsu Ltd. (OTCPK:FJTSY) aims to boost supercomputer sales to US$1 billion in five years to challenge Hewlett-Packard (HPQ) and IBM. The company intends to control 10 percent of the US$9 billion market, from the current 2.2 percent, by tapping rising demand in Germany, France and the U.K., said Masahiko Yamada, president of Fujitsu technical computing solutions. Supercomputers used to map the human genome and forecast weather are also helping companies design cars and aircraft, research drugs and develop financial market strategies. Sales of the machines may grow about 8.6 percent annually during the three years to 2012, four times faster than for conventional servers. Manufacturers are using these tools to become more competitive, Yamada said. Fujitsu has sold supercomputers with as many as 2,600 processors to auto and precision-equipment makers, he said, declining to identify any.
• Eizo Nanao Corp plans to invest US$9 million to form a wholly-owned plant in Suzhou, Jiangsu Province, to manufacture medical-used monitors for the Chinese market. The subsidiary, named Eizo Display Technologies (Suzhou), is scheduled to start operations in Oct. this year, the Japanese company said in a statement. Eizo aims to expand its market share for medical monitors in China to 20 percent, the statement said. The company will implement a system of local procurement, production and sales via this subsidiary. China is a priority strategic market for Eizo, which expects to see rapid growth in the country for medical services and medical devices. Eizo is a leading global manufacturer of high-end visual display products with a wide range of liquid crystal display monitors.
• Sony Ericsson, a joint venture between Japan's Sony Corp. and Sweden's Telefon AB L.M. Ericsson (ERIC) aims to maintain profitability after posting its first quarterly net profit in the three months ended March 31 on the back of lower costs and new product launches. Hirokazu Ishizuka, head of the company's Asia-Pacific region said Sony Ericsson hopes its high-end line of smartphones including Xperia and Vivaz will help improve its bottom line in the quarters ahead. Sony Ericsson has largely struggled to compete with bigger rivals like Nokia Corp. and Samsung Electronics Co. due to a lack of compelling high-end handset models. The company aims to make a comeback with a new line of smartphones using Google's Android operating platform. The handset maker said it will launch its second smartphone, Xperia X10, in South Korea this month.
• AT&T Inc. (T) said that the company has entered into an agreement to sell its domestic Japanese outsourcing business to network solutions provider Internet Initiative Japan Inc. for US$100 million. The sale includes the transfer of approximately 1,600 domestic Japanese business customers and approximately 250 AT&T employees who support these customers. Full-year revenues of approximately US$300 million are expected from the domestic Japanese outsourcing business for 2010. AT&T has set up a new subsidiary to ensure the smooth transition of customers, employees and business operations to Internet Initiative Japan Inc. Following closing, this new company will become a wholly-owned subsidiary of Internet Initiative Japan Inc. This is the second subsidiary AT&T has sold off in less than a month. In May the company sold its integrated solutions unit Sterling Commerce to IBM for approximately US$1.4 billion in cash.
• SK Telecom Co. (SKM) and China Railway No.2 Engineering Group Co. will set up a 13 billion won (US$10.4 million) joint venture in June to develop an advanced technology city in China. The project will be 60 percent owned by SK Telecom and 40 percent by China Railway. It will be a cutting-edge city infrastructure which will be rolled out across a commercial and residential site located along the Jinma River in Cheungdu City, China. The buildings and general infrastructure will be constructed by China Railway, while SK Telecom will join the project from the second half of this year to develop the technological systems. The project is scheduled for completion by 2020.
• KT Corp. (KTC) will team up with Intel Corp. (INTC), Samsung Electronics Co. and other global technology firms to form in June a 320 billion won (US$267 million) joint venture based in South Korea that will sell and lease wireless broadband network equipment. The partnership is expected to help boost wireless services in a market that has experienced fast-growing demand for mobile data usage due to booming interest for smart phones. The telecom firm plans to launch Nexus One, a smart phone based on Android operating system, which is developed by Google Inc.'s. As an indication of the demand for smart phones, KT has sold more than 730,000 units of the model in South Korea since its debut in the local market in November.
• Samsung Electronics Co. and LG Electronics Inc. said their domestic handset sales surged in May from a month ago on the popularity of new models. Samsung sold 985,000 units on the domestic market last month, up from 740,000 in April. The company estimated its May domestic market share at 50 percent. LG's domestic sales came to 412,000 units last month, compared with 325,000 a month earlier, the company said. LG said it claimed 21.3 percent of the domestic market in May. Samsung and LG are the world's second- and third-largest phone makers, trailing Finland's Nokia Corp.
• Samsung Electronics Co. Ltd. is set to ship 1 million confirmed orders for its Galaxy S smartphone, which debuts in Europe. Samsung mobile communications executive DJ Lee hopes Galaxy S, which packs a large, vibrant screen and speedy processor, will help it to capture some badly needed buzz. Samsung controls a little more than one-fifth of the overall global mobile phone market behind market leader Nokia, and is eager to make strides in a premium segment dominated by the likes of Apple's iPhone and RIM's Blackberry line. Samsung's share of the smartphone market is in the single digits. Galaxy S, a device which operates on Google's Android operating system, will have to appeal to both business consumers, who tilt heavily towards Blackberry devices, as well as retail customers.
• Hynix Semiconductor Inc. would acquire shares of its Chinese unit from partner Numonyx for 522 billion won (US$437 million). The deal is to buy out Numonyx's entire stake in a Chinese production plant, majority owned by Hynix, following Micron Technology's acquisition of Numonyx. The transaction is expected to take about three months to close, pending the Chinese government's approval.
• Hynix Semiconductor Inc. will raise its 2010 investment to 3.05 trillion won (US$2.56 billion), joining a string of technology companies boosting spending on reviving global demand. Hynix's board approved the new investment plan designed to better meet rising demand and expand its gap with second-tier chipmakers, the company said in an e-mailed statement. Its earlier annual spending was set at 2.3 trillion won (US$1.9 billion). Hynix joins global technology companies, including Samsung Electronics Co. in lifting capital spending as higher corporate spending on the economic recovery and new product launches are expected to push up demand for key components such as memory chips.
Media, Gaming and Entertainment
• South Korea plans to make online games a key driver for their economy. With more than nine in 10 homes enjoying broadband access, South Korea is one of the most wired countries in the world. Online game is more than child's play in South Korea. It is a national sport. Tournaments are held in lavish, high-tech stadiums, with every move and explosion broadcast nationally on dedicated TV channels. Top players are equivalent to American basketball stars in terms of pay and fame.
• According to the Content Management Institute, the development of Korean online games, which was once been said as the world best, is declining rapidly. A diverse genre of games based on innovative ideas is a thing of the past and the number of new online games has been plummeting the last few years. The number of online games that applied for rating dropped dramatically with the number of PC online games declining by as much as 30 percent. Game companies have been leaning towards developing current large scale games instead of creating new ones with the onset of outsourcing high technologies to other countries.
• Chinese lifestyle information website Ganji.com announced that it has gained joint investments of US$20 million from Nokia Growth Partners and BlueRun Ventures. The company will enhance the applications of its lifestyle information on the mobile Internet. Paul Asel, managing partner of Nokia Growth Partners, told local media that they believe that with the extensive coverage of the 3G network in China and the launch of the next-generation smartphones, location-based information services will become a key mobile Internet application in China.
• NetEase.com Inc. (NTES) reached an email user base of more than 310 million in 2009, having seven email brands and accounting for 70 percent of the Chinese email market. Other mainstream email service providers include Tencent Holdings Ltd., Gmail, and 139. The size of China's individual email user base hit 218 million last year, and the nation had 531 million active individual email accounts. It had an email penetration rate of 80.6 percent, and it was still one of the widest used Internet services among Internet users. China hit a cellphone mail user base of 47.30 million last year, with a 97.1 percent surge year on year and making up 21.7 percent of the nation's total email users. The number was expected to grow to 220 million by 2012, taking 65.1 percent of the total.
• The BlackBerry Partners Fund is expanding of its investment activities with the launch of a US$100 million affiliate fund focused on mobile investment opportunities in China. BlackBerry Partners Fund China is a new joint venture between China Broadband Capital Partners, a venture capital and private equity manager focused on media and communications investments in China since 2006, and BlackBerry Partners Fund. The new fund will invest exclusively in opportunities supporting the emerging mobile ecosystem in China. The new fund is expected to close on August 2010.
• Hurray Holdings (HRAY) has entered into an agreement to take over its controlling shareholder Shanda Interactive's online audio business in exchange for 415.38 million newly issued shares while selling Shanda its recorded music and wireless value-added services businesses for US$36.94 million in cash, the two jointly announced. The transaction is expected to be completed in the third quarter of this year. Hurray will be renamed after the online video site Ku6.com which will comprise its main business. Ku6 founder and CEO Li Shanyou will take over the newly formed company, the report said. The report named the online audio business to be bought from Shanda as Shanghai Yisheng Broadcasting Platform.
• China's sales of smartphones reached 10.57 million units in the first three months of this year on domestic market, surging 46.0 percent over the previous quarter. China's cell phone market rebounded vigorously, particularly the sales growth of smartphones. Telecom operators and terminal-device manufacturers rolled out abundant popular and distinctive 3G smartphone models, and adopted more targeted marketing measures. The development of mobile Internet market and increased number of cell phone applications make smartphones the top choice of users. Carriers' customization and enhanced competitiveness of smartphones offer more choices to users, and extend the market from high-end users to mid- and low-end user.
• China's telecom industry turnover was up 21.7 percent from a year ago. Revenue from major business increased 5.7 percent from the comparable period of 2009; that from mobile telecom, CNY 193.88 billion, jumping 11.5 percent; and that from fixed-line telecom was down 4.8 percent. Mobile telecom contributed 68.1 percent to the total revenue in the telecom industry in the January-April period, expanding from 64.61 percent a year earlier, due to a steep rise in the number of mobile phone users. In the four months, the number of mobile phone users in the country hiked 39.127 million, while that of fixed-line phone users decreased 6.139 million.
• China Mobile (CHL) has announced adjustments to its executive team and Li Yue, former deputy general manager of China Mobile, was promoted to general manager of the company, replacing Wang Jianzhou. Wang will continue to be China Mobile's chairman and party secretary. China Mobile's new general manager Li, aged 51, has rich experience in the telecom industry. He took the position of deputy general manager of China Mobile from April 2000. Prior to that, he held several executive positions, including vice director for Tianjin Postal and Telecommunication Administration and general manager for China Mobile Tianjin.
Media, Entertainment and Gaming
· Shanda Interactive (SNDA) game subsidiary Shanda Games plans to begin large-scale closed beta testing of its licensed Dungeons and Dragons-themed 3D action MMORPGDragon Nest on June. The company also said it will start open beta testing after the 2010 FIFA World Cup South Africa. The tournament will end July. Shanda's release schedule for the summer, including 2D martial arts MMORPG The Age II in June and 2D MMORPG WoooL: Legend of Heroes, which will enter unlimited closed beta testing at the end of May.
· Shanda Games Limited is on the point of bringing its newly-acquired flash game unit Mochi Media to China. Mochi Media is set to come up with a flash game platform tailored to China's online game developers in June, said head for Mochi Media China, describing the to-be-launched web2.0 flash game development platform as part of Shanda Games' plan to replicate the business model of Mochi Media in the world's biggest Internet market this year. The Mochi Media China platform, regarded as an extension of the Mochi Media platform in China, will help introduce products from local flash game developers to market abroad. Based in Shanghai, Shanda Games spent US$80 million buying Mochi Media this January, furthering its expansion in the global market.
· Shanda Interactive Entertainment made net income of US$33.6 million in the first quarter of 2010, a decline of 36 percent year-on-year and 38 percent quarter-on-quarter, bringing fourth quarter earnings per diluted share to US$0.48. Shanda had net revenues for the quarter of US$193.1 million, down 11 percent sequentially and up 19 percent annually, of which Shanda Games contributed US$167.5 million, a decline of 14 percent from the previous quarter but up 10 percent from the comparable period last year. Shanda's 51 percent-owned music production, artist development and wireless value-added services provider Hurray Holdings had a net loss of US$10.4 million for the quarter, representing loss per share of US$0.37.
• CDC Software (CDCS) expects double-digit growth in application sales in Q2 due to strong expansion in on-premise solutions and cloud sales. The company's application sales are comprised of license revenue and new total contract value for Software-as-a Service (SaaS). Based on preliminary financial projections, CDC Software predicted its non-GAAP earnings per share will reach US$1.15-1.25 and total revenue, US$220-230 million. The company predicted that the SaaS revenue would hit US$18.9 million in 2010 and US$48 million in 2011. CDC Software has been on a SaaS strategy including acquisitions of SaaS companies, Strategic Cloud Investment Program (SCIPP) and the impending internally developed SaaS solutions.
• China's software industry saw its revenue rise 36.7 percent year on year. Operating revenue was up 28.7 percent compared with that of the same period last year. Value-added services income from the information technology sector was 38.1 percent more than that of the same period a year ago. Revenue from the design and development of integrated circuit increased 63 percent year on year in the first four months of this year. China's software industry exports surged 22.4 percent year on year to US$6.95 billion in the first four months this year.
• Canon Inc. (CAJ) expects sales in China to top US$10 billion in seven years. The company also expects to beat its 2010 operating profit outlook of 360 billion yen (US$3.9 billion), thanks to recovering economies and robust sales. Canon expects to see sales in China grow 10 percent and expects overall sales to grow 6.6 percent to 25.7 million units. Sales in China are expected to account for 10 percent of Canon's total sales within two years, and the company aims for top-line growth of 30 percent annually in the near term. Canon also predicted that China will surpass the U.S. to become the largest camera market as early as 2015.
Disclosure: Author holds no positions in the stocks mentioned