Media, Entertainment and Gaming
• Toho Co. group operating profit is likely to drop 30 percent on the year to 12.5 billion yen (US$162.61 million) for the nine months ended Nov. 30 as its film production and distribution business slumped. Sales is expected to decline 10 percent to around 138 billion yen. Some Toho movies generated solid sales but its business of distributing in-house films to theaters operated by other firms struggled. In contrast, the year-earlier period was blessed with blockbusters, such as "Confessions" and "Villain," both its own. At Toho-owned theaters, no foreign movies reached 10 billion yen (US$129 million) in ticket and associated sales, a figure necessary to be considered a big hit. Groupwide ticket sales slid about 20 percent. Its theatrical performance business is also believed to have suffered a double-digit operating profit decline due to a drop in group attendance as the March earthquake and tsunami depressed demand for such entertainment.
• Softbank Corp. started marketing more than 20 billion yen (US$261 million) in two-year bonds for sale this week, according to a person with direct knowledge of the matter. The Japanese mobile-phone operator told investors it plans to pay between zero and nine basis points more than the yen swap rate, said the person, asking not to be identified as the information is private.
• Juniper Networks Inc. warned that it expects to report fourth-quarter results below its forecast because of lower-than-expected demand from its main group of customers, telecommunications service providers. The announcement raises questions about how much telcos' spending on networking gear such as routers and switches has slowed, and whether Juniper peers such as Cisco Systems Inc. and F5 Networks Inc. will also feel the squeeze. Acme Packet Inc., a smaller rival, last week cut its current-year guidance, also citing weak demand among service provider customers. Juniper expects to report per-share earnings of 26 cents to 28 cents, missing its downbeat October forecast of 32 cents to 36 cents. It anticipates US$1.11 billion to US$1.12 billion in revenue, below its earlier view of US$1.16 billion to US$1.22 billion.
• Kyocera has completed a share transfer agreement with three investment funds operated by Japan Industrial Partners to acquire all shares of Optrex, a manufacturer of liquid crystal displays and related products. This acquisition will enable Kyocera to further expand its LCD and touchscreen panel business. Effective 1 February, 2012, Optrex will become a wholly-owned subsidiary of Kyocera. Kyocera also expects to further enhance and expand its touchscreen panel business.
• NTT Docomo, KDDI, and Softbank are planning to spend over 1.6 trillion yen (US$21 billion) in fiscal 2012 to meet mobile data demand. Docomo's capital outlay for the financial year ending in March is expected to grow by around 60 billion yen (US$ 781 million) year-on-year to 728 billion yen (US$9.4 million). Originally, Docomo planned to reduce spending but has now decided to raise spending, according to the Nikkei. Docomo will expand the number of base stations for high-speed services. KDDI is reversing a trend of declining investments in mobile services as the company will spend 340 million yen (US$4.4 million) in fiscal 2012, up 4 percent from fiscal 2010. Meanwhile, Softbank will increase mobile-related investments by around 50 percent to about 600 billion yen (US$7.7 million) as the company will fully introduce high-speed PHS services in February.
• Elpida Memory Inc. reported that it is in talks with Toshiba Corp. to integrate operations. Japan’s government may push some form of integration between the companies to maintain competitiveness against the chip industry in South Korea, citing industry officials it didn’t identify. Elpida and other makers of the most-common chip in computers lost a combined US$14 billion in the past three years, in part because prices plunged to a record low last year.
• Howard Stringer, head of Sony Corp., is to step down as the firm's president but remain chief executive and chairman.
• SK Group said its manufacturing affiliates' 2011 sales are estimated to have jumped nearly 50 percent from a year earlier due to increased sales in overseas markets. Sales of SK Group's manufacturing affiliates such as SK Innovation, SK Energy, SKC and SK Chemicals are estimated at approximately 72.3 trillion won (US$62.1 billion) for last year, up 48.5 percent from a year earlier. Strong exports led the overall sales growth. The SK manufacturers' exports jumped 57.6 percent on-year to 45.5 trillion won (US$39.5 billion) or 62.9 percent of its total annual sales. That ratio is the highest ever for the group. It is also up from the previous year's export ratio of 59.3 percent. The dependency on overseas sales is seen to increase further if SK Group's move to purchase Hynix Semiconductor Inc. is finalized.
• KT Corp. will invest a total of around 1.3 trillion won (US$1.1 billion) in its ultra-fast network service LTE. The telecom firm aims to secure at least 4 million subscribers for its advanced network service by the end of this year. SK Telecom Co. said in June that it expects to attract 10 million LTE subscribers by 2015. South Korean telecom firms are currently competing for 4G network customers. The network runs on LTE technology, which enables ultra high-speed data services that would allow users to download large-sized video content in minutes without the interruptions of earlier technology.
• South Korea's telecommunications regulator had signed an agreement with Google Inc. to help nurture local start-ups and promote their advances into overseas markets. Under the memorandum of understanding, Google will help develop ideas and services and provide start-ups with personnel and funding, the Korea Communications Commission said. Google will also help such start-ups in tapping into overseas markets by providing them with chances to exchange with tech firms in Silicon Valley. Google will make an initial investment of some US$1 million in a venture fund operated by KCC's Korea Internet & Security Agency, according to Moneytoday, a South Korean Internet news provider. David John Collins, vice president of Google's global communications and public affairs, told journalists that Google sees Korea as an important strategic market and seeks long-term investment in the country.
• Samsung Electronics Co. will launch a Web-connected TV using Google's operating system in the second half of this year targeting high-end customers in the U.S. first, an executive said, in a move that will likely help broaden the appeal of its line-up and help combat falling set prices. The head of Samsung's consumer electronics division that oversees businesses across the company's television, home appliance and other consumers goods, told Dow Jones Newswires in a recent interview that Samsung will also start selling Smart TVs that have voice recognition and motion sensing capabilities, which will allow users to search for programs without having to use their remote controls.
• Samsung Electronics Co. had a record operating profit in the fourth quarter on the back of strong sales of smartphones. Operating profit estimated for the October-December period reached 5.2 trillion won (US$4.51 billion), up 72.8 percent from a year earlier, Samsung Electronics said. The preliminary estimate beat a market consensus of 4.81 trillion won (US$4.1 billion) surveyed by Yonhap Infomax, the financial news arm of Yonhap News Agency. For 2011, operating profit is estimated to have hit 16.2 trillion won (US$14 billion). Its fourth-quarter sales increased 12.3 percent on-year to a record 47 trillion won (US$40 billion). For the full year of 2011, revenues were estimated at a record 164.7 trillion won (US$143bmillion), up 6.5 percent from the previous year. Samsung Electronics will unveil its fourth-quarter earnings later this month. Market watchers said that forecast-beating results mainly stemmed from brisk sales of its smartphones and one-off gains, adding that the trend of robust earnings is likely to continue into the first quarter.
• Samsung Group will increase investment and expand jobs this year even in the face of growing economic uncertainty and the economic slowdown. Lee Kun-hee, chairman of group flagship Samsung Electronics Co., said that Samsung will do its part in taking social responsibility to help the country navigate through economic difficulties.
• South Korea's information technology and general machinery industries may post solid growth in 2012 on strong exports, despite the toughening of global economic conditions, a report showed. The IT sector should benefit from ballooning consumer demand for smartphones and tablet PCs, while semiconductors will be helped by a surge in demand for digital TVs in European and Southeast Asian countries that are moving to discontinue analogue broadcasting this year, the KCCI said.China
• Alibaba Group has reduced the size of its debut loan to US$3 billion, the funds which the it plans to use to buy back part of the 40 percent stake held by Yahoo Inc, three sources familiar with the matter told Reuters. Alibaba had initially planned to raise as much as $4 billion, but according to one of the sources, the company could instead tap cash reserves to fund the deal. Yahoo's stake could be worth up to US$13 billion, based on the US$1.6 billion paid for a 5 percent stake in Alibaba Group by Yunfeng Capital, Silver Lake and other investors in November last year. Reuters reported in December that Blackstone Group LP and Bain Capital were preparing a bid for all of Yahoo, with Alibaba among its partners for the roughly US$25 billion deal. Japan's Softbank Corp was also part of the consortium. Alibaba was looking to put together a bank group of six to seven banks by early February, according to one of the sources. The deal structure - the loan is at the China holdco level - is also tricky for some banks to gain internal approvals to join, particularly for large underwrites. Banks prefer to lend to operating companies, where cash flows from the company directly pay the loan. Holdco loans are repaid through dividends, and payments have to be upstreamed from the operating company to the holding company.
• Baidu Inc said on it broke ground on a new building in the southern city of Shenzhen that would hold its mobile Internet research and development offices and south China and international headquarters. The building will be completed by 2015.
• InfoSpace Inc said it would buy TaxACT for US$287.5 million in cash as it looks to branch out from its core Internet search business and get into the growing online tax preparation market. Iowa-based TaxACT was the first software to offer basic tax preparation assistance online for free. The acquisition will give InfoSpace a presence in the US$20 billion tax preparation market. Online tax preparers, dominated by Intuit Inc, have been drawing clients away from shop-front tax preparers like H&R Block, Jackson Hewitt and Liberty Tax by giving consumers a cheaper way to file their own tax returns. The Benchmark Co analyst Clayton Moran estimates TaxACT has about 17 percent of the online tax preparation market.
• Chinese video websites' advertisement business is likely to explode over the next two to three years, said analysts. Data published by Analysys International shows that earnings of China's online video ads hit 1.48 billion yuan (US$235 million) in the third quarter of 2011, up 139.0 percent year on year and 48.1 percent quarter on quarter. But in face of their sky-high expenditure on copyrights, Chinese video websites are generally conservative over their profiting prospects in the short term. On one hand, a reasonably solid market base for local video websites' advertisements has been put in place, which can be traced back to their increasing proportion of overall Internet ads, up to 15 percent in 2011 from the 10 percent in 2010, and China's booming number of netizens. On the other, a number of TV advertisers have started to shift to Internet advertising after the State Administration of Radio Film and Television banned the insertion of ads in TV plays from January 1, 2012. Exuberant over the news, Chinese video websites rushed to make advertising their key focus in 2012, with revenues of the mainstream websites projected to be double those of last year.
• China's Ministry of Industry and Information Technology has released new regulations covering competitive practices in the country's Internet industry, saying they will help protect the rights of both companies and users. The new rules bar companies from infringing on the legal rights and interests of other online service providers, such as by maliciously interfering with services from other companies on a user's device, the MIIT said.
• China Unicom is adding a record number of high-speed wireless subscribers and gaining market share by pushing smartphones that cost 80 percent less than iPhone. China Unicom started selling handsets from local manufacturers Huawei and ZTE that cost less than 1,000 yuan (US$158), or about half a month’s salary for an urban worker. The nation’s monthly urban disposable income was 1,811 yuan per capita through the first nine months of last year, according to the national statistics bureau. A 16-gigabyte iPhone 4S costs 4,988 yuan at Apple’s online store, or more than two months’ wages. Last year’s introduction of cheaper models from Huawei and ZTE spurred a 44 percent jump in monthly 3G subscriber signups in June compared with January. The top three carriers -- China Mobile, China Unicom and China Telecom Corp., added a record 8.34 million subscribers in September. The carrier started selling 1,000-yuan smartphones in May and by August, it was adding more than 2 million 3G subscribers a month, culminating in a record 3.38 million in November.
• China Mobile has commenced construction on what will be the world's largest call center, a 20,000-seat facility in the city of Luoyang. The world's largest mobile operator has allocated 4 billion yuan (US$633.3 million) for construction of the call center, People's Daily reported. When complete, the 500,000 square meter facility is expected to employ at least 60,000 total staff. The build forms part of China Mobile's plan to centralize and improve the operating efficiency of its nationwide call center operations.
• China Telecommunications Corp. will expand into more European markets after starting its first overseas wireless service in the U.K. The service, aimed at Chinese residents, will begin in the U.K. by the end of March and expand to Germany and France if it’s successful, Ou Yan, managing director for China Telecom Europe, said. There are 2 million Chinese living in Western Europe, Liu Changhai, the China Telecom executive responsible for regional development said. In the U.K., China Telecom will target the at least half a million Chinese citizens living in the country and the tourists that will flock to the Olympic Games in London in June. In China, intensifying competition has led companies including China United Network Communications Group Co. to cut international roaming fees by as much as 90 percent.
• China Telecom chief executive Wang Xiaochu said the company aims to sell 45 million CDMA smartphones in 2012, approximately 56% of the targeted 80 million units of CDMA handsets, reports mainland media CCID. Wang said China Telecom will initially focus on mid-tier smartphones priced between 700 yuan and 2000 yuan (US$111 - US$317) that supports multiple operating systems, and will target four main market segments including university, industrial and commercial districts, tier-two and tier-three cities, and enterprise application. The operator, China’s smallest mobile carrier by subscribers, sold 34 million smartphones in 2010, three times more than in 2009. At present there are over 1,100 models of CDMA handsets available in China, of which 3G handset and smartphone models have exceed 400 and 100, respectively. China Telecom, which had 33.4 million 3G subscribers by November, saw a robust growth in its 3G subscribers in 2011. The operator added 18.9 million new 3G users in the first 11 months of 2011, and signed up over 2 million new users each month since July, helped by the introduction of the 1000 yuan smartphones.
• China Mobile is planning to invest US$1.5 billion over four years in its Pakistani subsidiary CMPak. China Mobile is hoping to increase its 3G market share in Pakistan, ChinaTechNews.com reports citing CMPak chief executive Fan Yunjun.
Media, Entertainment and Gaming
· Figures released at the 2011 China Games Industry Annual Conference (GIAC) held in Northwest China's Shaanxi province on January 9 show the sales revenues of China's online game market reached 42.85 billion yuan (US$6.8 billion) in 2011, up 32.4 percent from 2010. According to the latest data, revenues of China's original network games registered an increase of 40.7 percent to 27.15 billion yuan (US$4.3 billion), accounting for 63.4 percent of the total revenues in online game markets. The mobile games market witnessed vigorous growth in 2011, representing a major driving force for the overall development of the online games market. Its sales revenues reached 1.7 billion yuan (US$269 million), up 86.8 percent year on year, and the sales revenues of the console games market surged 301.3 percent to 61 million yuan (US$ 9.7 billion).
• TCL had a 57.08 percent year-on-year increase in sales volume of LCD TVs of 1.56 million units in December. The sales volume of the company's LED backlight TVs surged 244.26 percent to 942,106 units, and the sales volume of cell phones increased 5.06 percent year on year to 4.47 million. In 2011, the company sold 10.86 million LCD TVs, an increase of 45.48 percent year on year, including 4.68 million LED back light liquid crystal TVs, which surged 455.14 percent year on year. The sales volume of cell phones registered a rise of 20.41 percent year on year to 43.62 million.
• The journey of industry restructuring and transformation has just been at the beginning for China's solar PV industry. Boosted by the country's major initiatives to develop clean energy, the sector is now facing an acute problem of overcapacity, particularly as the ongoing European debt crisis and policy changes have dampened global demand for solar PV products. The export-oriented pattern of China's solar PV industry creates great risks for domestic solar panel producers, and Chinese manufacturers should work to expand domestic market to reduce reliance on foreign demand, according to Ding Wenwu, an official with the Ministry of Industry and Information Technology (MIIT). The year of 2011 has witnessed plunging product price for the solar PV industry from downstream to upstream, which has caused substantial losses to most Chinese solar PV firms and suspensions of production have spread, especially for the polysilicon plants.