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The following is excerpted from IRG's weekly stock report:

• • •

Internet

  • Alibaba Group chairman Jack Ma said the company will maintain its managerial independence no matter what happens to the 39 percent stake that Yahoo Inc. (NASDAQ:YHOO) holds in the group, and added that Alibaba is very well prepared should Yahoo choose to sell its stake. Ma recently warned employees that the company should be prepared for a winter, due to the tough economic situation facing small to medium Chinese exporters. Such companies, which are the main customer base for the company, are currently facing tough times due to a falling U.S. dollar, rising oil prices, and rising domestic labor costs. The company expects there may be increased churn in its main customer base of exporters this year.
  • Alibaba.com has launched an import-to-China service as it faces slowing growth in its traditional business of catering to the nation's exporters. The new service aims to help foreign companies sell products on the mainland and more than 1,600 members have signed since it was softlaunched 1 1/2 months ago.
  • Google (NASDAQ:GOOG) and Top100.cn, a mainland music website, jointly launched a music search service to give users access to free downloads of licensed songs. The service poses a challenge to Baidu.com (NASDAQ:BIDU), which dominates the mainland's internet search market but has, along with other local search providers, faced lawsuits accusing it of facilitating copyright violations through downloads of unlicensed music. Despite having a more than 60 percent share of the global search engine market, Google only has a 25.9 percent market share on the mainland while Baidu has 60.1 percent. Downloads of unlicensed music and videos are rampant in China, the world's biggest internet market by number of users.

Mobile/Wireless

  • Celltick has launched a new mobile media service over China Unicom's (NYSE:CHU) network, starting with the 2008 Olympic Games. Designed and implemented as a managed service through Celltick's LiveScreen Media platform, the service provides official Olympics-related content directly from Xinhua News, the official news agency in China, including the latest news, results and anecdotes and accompanied by topical games and applications. The service will also include content relating to news, lifestyle, fun, business and entertainment. With LiveScreen Media, mobile operators can nonintrusively deliver segmented content, rich media and advertising to a virtually unlimited number of users.

Telecommunications

  • China Mobile (NYSE:CHL) has purchased 40,000 phones running on China's domestic third generation wireless technology for use during the Olympic Games, including some to be given to volunteers. China Mobile purchased handsets from providers including ZTE, Lenovo, and Guangzhou New Postcom Equipment. China's domestic standard, called Time Division Synchronous Code Division Multiple Access (TD-SCDMA), is being developed as a local alternative to 3G standards already widely in use around the world.
  • China Telecom (NYSE:CHA) has set itself a tough three-year target of reaching a 100 million mobile telephone user base for the CDMA service it has acquired from China Unicom. Adding to the challenge, said analysts, would be intense competition in the mobile market and poor infrastructure in the high growth rural area that it plans to target. Under a major government-led restructuring programme aimed at creating three full-service telecommunications operators, China Telecom has agreed to acquire the CDMA mobile business from rival China Unicom. It will take over the business as early as October.
  • China Mobile is planning to extend trials for its high-speed mobile-telephone services as the government prepares to grant permits for faster wireless networks in the world's biggest phone market. China Mobile, which has invested more than $2 billion to develop its TD-SCDMA business, may face more competition from rival third-generation technologies when a governmentmandated reorganization of the phone industry is completed later this year. The government will award three licenses for 3G services after the country's phone carriers merge their assets to form fewer firms under the revamp.
  • China Unicom lately said in a statement that it had clinched a deal with China Telecom to stop developing CDMA/GSM dual-mode cell phones. Industry experts say that such move means China Unicom will stop operation of CDMA/GSM dual-mode telecom service and the dual-mode cell phone makers from now on will have to turn their heads to China Telecom.
  • Huawei Technologies has won a contract from China Telecom to build China's first 40G Wavelength Division Multiplexing transmission network between Shanghai and Wuxi to provide an ultra-high-capacity 80 wavelength x 40G network capable of 10G/40G hybrid transmission. The proliferation of internet services has put an increasing demand on bandwidth.
  • Huawei Technologies announced that its UMTS and GSM transceivers shipments recorded over 100 percent growth in the first half of 2008 as compared to the same period last year. In the GSM space, Huawei delivered 800,000 TRXs, more than the total number of shipments for the whole of 2007 in the first six months of 2008. 400,000 TRXs were delivered in China and India alone. To date Huawei has secured 111 UMTS/HSPA commercial contracts and continues to lead the market with 25 new contracts in first half of 2008.
  • China Mobile has selected Motorola (MOT) for multiple on GSM network upgrades and expansion in the first half this year, with a total value of $431 million. The new contracts will help consolidate Motorola's global leading position in GSM network solutions and will also further enhance the cooperation between Motorola and the Chinese telecom operator. The cooperation, in turn, will help China Mobile to further expand its network coverage and manage its GSM network more effectively, maximize its investment returns and provide subscribers with better service. These contracts also enable China Mobile to deliver enhanced and value-added multimedia functionality and services in 16 provinces in the country.
  • Beijing plans to build the largest wireless city in China with an investment of 1.6 billion yuan ($233.2 million). In late June, Beijing started the first phase trial of its wireless city program network, providing locals and travelers from both home and abroad with Internet access in the city's urban areas via a wireless network. The first phase of the construction mainly aims to serve the 2008 Beijing Olympic Games and city management. The second phase, which is expected to be completed by the end of 2009, aims to provide high speed Internet access within the city's Fifth Ring Road, and the third phase of construction aims to have the city's rural areas covered by Wi-Fi by the end of 2010.

Semiconductor

  • Qualcomm (NASDAQ:QCOM) and Shanghai HuaQin Telecom Technology have entered into a subscriber unit license agreement. Under the terms of the royalty bearing agreement, Qualcomm has granted HuaQin a worldwide license under its patent portfolio to develop, manufacture and sell CDMA2000 subscriber units and modem cards (including printed circuit board assemblies for sale to other device suppliers). The royalties payable by HuaQin are at Qualcomm's standard rates.
  • Yingli Green Energy (NYSE:YGE) announced the re-election of Mr. George Jian Chuang, the election of Professor Ming Huang and Professor Junmin Liu as directors of the Company and the retirement of Mr. Shujun Li and Mr. Jiesi Wu from the board. The new directors were elected by the shareholders at the Company’s 2007 annual general meeting.
Source: Chinese Tech Stock Weekly Summary (8/4-8/10)