• Casio Computer Co. is expanding its electronic dictionary sales territory and product lineup in the Chinese market with the aim of increasing sales there by 60 percent this fiscal year. Casio will expand its sales network into such major inland cities as Chongqing; Kunming, Yunnan Province; Guiyang, Guizhou Province; and Urumqi in the Xinjiang Uyghur Autonomous Region. It has sold electronic dictionaries in 27 cities, primarily in such coastal cities as Beijing and Shanghai. The company will raise the figure to 35 this fiscal year, with future plans to build a network covering the largest cities in each province. Casio began selling monochrome electronic dictionaries in the Chinese market back in 2005. It recently introduced four expensive color models to tap the rapidly growing ranks of the affluent and middle class. Equipped with LCD screens viewable even in bright light, the devices can withstand being dropped from 1 meter.
• Samsung Electronics Co. might ship 19 million units of smartphones this year, strengthening its presence in the iPhone-dominated market. Samsung Electronics has been introducing its own line-up of smartphones, which offer advanced computing ability and connectivity. The South Korean maker launched its latest Galaxy S. Samsung Electronics could ship 6 million units of smartphones in the first half and 13 million units in the second half, including 5 million units of Galaxy S. Samsung only trails behind Nokia Corp. in terms of handset shipments and controls over 20 percent of the global market share. But it has not produced thus far a smartphone model that can compete against the iPhone. Apple had sold 51.15 million units of the iPhone worldwide since its launch in January 2007.
• NTT DoCoMo will introduce LTE femtocells between 2011 and 2012 as a means of supporting the rollout of its next-generation mobile network. Following its upcoming LTE network launch, the Japanese mobile operator will deploy LTE femtocells to provide an interim solution to gaps in network coverage; the timing will also encourage early adoption of LTE femtocells. DoCoMo first launched its 3G-based femtocell offering, under the FOMA brand, in 2007. By the time DoCoMo launches LTE femtocells, its LTE network will be able to provide coverage to around 30 percent of the population. Yasuda will provide an update on DoCoMo's LTE rollout plans.
• KDDI shareholders are complaining that the market reacted badly to the move of Jcom investment as it damaged KDDI's share price. VP Hirofumi Morozumi said KDDI should aim to improve the corporate value of KDDI and Jcom by carrying out what the company need to do to realize synergies through the investment. KDDI also said the offer price for Jcom shares was reasonable as it was based on a stock value fairly evaluated by third-party experts.
• Japan’s Elpida Memory Inc. and Taiwan's United Microelectronics Corp. will merge with Powertech Technology Inc to produce semiconductor-related production technology. The three parties will be signing an integrated circuit technology cooperation agreement at UMC headquarters in Hsinchu, northern Taiwan. The three companies will co-develop cutting edge through silicon via (TSV) chip production technology, focusing on vertically stacked chips to occupy less space. The three partners will produce the technology for dynamic random access memory (DRAM) chips and logic memory chips targeting the cell phone, gaming console and home appliance markets.
Media, Entertainment and Gaming
• The most popular social game in Japan is not developed by local companies, but Sunshine Ranch, a game themed with vegetable planting and stealing and animal feeding developed by Chinese game developer and operator Rekoo. Nearly half users are playing Sunshine Ranch, whose registered gamers topped 5 million in early June. Rekoo could obtain revenues of more than 1 million yuan (US$147, 230) from the operation of the game per month. Sunshine Ranch was launched on China's dozens of SNS platforms. Its active users exceeded 10 million in renren.com. Rekoo made little money from the immature domestic market. Sunshine Ranch gets average revenue per user of US$47 on the platform of Mixi. Sunshine Ranch also debuted on the platform of DeNA.
• SK Telecom Co. will acquire a 25.77 percent stake in the Malaysian broadband network operator Packet One Networks worth US$100 million. The tie-up is considered a mutually beneficial move that will give Packet One the funds to expand its network while giving the South Korean firm a strong presence in a lucrative emerging market.
• Etisalat signed a strategic partnership agreement with Korea Telecom to jointly develop new age telecomm solutions and collaborative services for customers. Etisalat and Korea Telecom will establish respective administrative offices to supervise and execute the key milestones of the MoU by sharing skill-set, intellectual capital and industry expertise, towards developing cutting edge products and services. This collaboration will focus on creating innovative solutions for global roaming on Wi-Fi, machine to machine telecommunication (M2M), IPTV and managed services, benefiting domestic as well as international business customers of both companies.
• Alibaba.com acquires Vendio Services Inc. to widen its overseas operations by allowing Alibaba to access more than 80,000 merchants of Vendio’s e-commerce services. Alibaba is challenging eBay and Amazon.com for international online buyers and sellers after dominating the e-commerce market in China. Chief Executive Officer David Wei will accelerate overseas revenue to a third of Alibaba’s total within five years, from about 2 percent as of May 2009. The transaction is expected to be completed next month. Mike Effle will be the chief executive officer of the business. The acquisition is part of a US$100 million investment plan for Alibaba’s AliExpress.
• Huayi Brothers Media Co. Ltd. has invested 149 million yuan (US$21.9 million) to purchase a 22 percent stake in Beijing Ourpalm Co. Ltd., a mobile phone game developer and distributor in China. After the deal, Huayi Brothers will become the second-largest shareholder of Beijing Ourpalm. Beijing Ourpalm, which was set up with a registered capital of 10 million yuan (US$1.5 million) in 2004, is engaged in developing mobile phone games, web games and community online games. The company's revenue was 25.2 million yuan (US$3.7 million) from January to March this year, and net profit was 8.7 million yuan (US$1.3 million). Beijing Ourpalm has developed some mobile phone games based on famous domestic TV dramas.
• Mobile handsets shipments by Chinese manufacturers are forecast to hit 380 million units this year. ZTE will account for 75 million units, Huawei Technologies will account for 41 million, and TCL will account for 15 million units. Overseas markets represent the majority of the three companies' shipments.
• China Unicom garnered new 3G service subscribers of 1.02 million in May, adding the total of the 3G users of the telecom operator to 6.528 million. China Unicom's 3G service subscribers in January-May. China Unicom's 2G users boosted 763,000 to 148.76 million. The carrier's fixed-line service subscribers declined 510,000 to 101.13 million, and its broadband users boosted 828,000 to 42.93 million.
• Public Mobile and ZTE have secured a US$350-million financing deal with the Export-Import Bank of China, paving the way for an expanded wireless network in the Windsor to Quebec City corridor. The deal will fund equipment and services provided by ZTE Corp. to Toronto-based Public Mobile, adding new capital to a pre-exisitng vendor financing agreement the two parties hold. Public Mobile launched its initial services last month. The new carrier is targeting the lower-end of the market place with its US$24-a-month entry-level plan for local calling. The company partnered with ZTE, a major Chinese telecom equipment maker, in its bid to expand its wireless network. Constructing that network has already generated 100 high-tech jobs in Ontario and Quebec.
• Nepal Telecom (NT) has announced to establish optical fiber connection with China by mid-July 2011. Officials at the state-owned telecom giant are currently holding negotiations with China Telecom to establish optical fiber connection between the two telecom operators as per the Memorandum of Understanding (MoU) signed two years ago. NT is also working out economic aspect of share and use of the optical fiber network. NT has already established optical fiber connection with the southern neighbor India. This has enabled the NT to send and receive data toward Hong Kong, Korea, Japan and other countries through India. The cost of telecommunication service in Nepal will drop significantly once the optical fiber connection with China comes into operation as this will provide NT an alternative route to send and receive data through physical network of China Telecom.
• China Mobile boosted new mobile customers by 4.77 million as it brought its total to 548.9 million subscribers. There were 9.32 million subscribers who used 3G network services in May. Cumulative net additions were 26.7 million.
• China Telecom Co Ltd added 3.02 million CDMA users, same as in April. By the end of May, the Chinese carrier's CDMA subscribers totaled 71.5 million. The number of broadband subscribers last month increased by 800,000 to 57.45 million, after adding 810,000 in April. The total number of fixed-line users decreased by 1.07 million to 181.96 million in May. The number of fixed-line users dropped 1.2 million.
Media, Entertainment and Gaming
· China's seven state-backed media companies including People's Daily, China Film Group Corp. and Shanghai Media Group merged with People's Daily online news portal people.com.cn to operate and the newly-launched news-focused search engine goso.cn. The portal belongs to the 10 news websites that the government aims to publicly float on domestic markets.
· China clamps down on online gaming market. Web users in China will have to register their names before playing games online as part of the nation's first official set of rules governing the booming market. The regulations, which also require online game companies to self-censor, will come into force on Aug. 1 and apply to all domestic and imported role-playing and social networking games. The measures, launched by the Ministry of Culture, aim to curb soaring rates of Internet addiction in China, particularly among minors. China's online games sector is booming thanks to the growth of the nation's web community. Cheap computer products and relatively inexpensive Internet access have also fuelled the trend. Analysys International predicts that by 2012, the market will nearly triple from 2009 levels to about 73 billion yuan (US$11 billion), with more than 270 million players. Online users who want to play a game will have to go through a registration process with a valid ID, and game providers will also be banned from offering unsuitable games to minors.
· China Central Television (CCTV) has secured more than 1 billion yuan (US$147 million) in advertising revenues related to its broadcasts of the 2010 soccer World Cup in South Africa. Of the total, more than 800 million yuan (US$117.8 million) came from its TV broadcasting while 100 million yuan (US$ million) was generated by online broadcasting. The station spent around US$120 million to acquire broadcasting rights to the game from Federation Internationale de Football Association. The State Administration of Radio, Film and Television (SARFT) issued a notice in January 2000 limiting the broadcasting license negotiation and purchase rights of international sports games to CCTV only.
· Tencent Inc. and Shanda Interactive welcomed China's new game regulatory measures that are aimed for healthier industry development. China Ministry of Cultural released a temporary regulation file concerning the qualification, contents assessment, operation supervision, legal liabilities for online game firms. A 10 million yuan registered-capital bottom is required for online game runners. While taking up 25.3 percent and 21 percent market shares, the two sector giants took it easy for the new rules, but for the numerous mid- and small-sized game developers, which relies much on joint-operation, the higher threshold does weigh on their entry into the sector. The tough threshold is surmountable as over the long run, it could encourage cooperation between under-scale game involvers and reduce competition of highly-homogenized products. China's online game market has generated 7.819 billion yuan of incomes for relative firms, up 4.1 percent since quarter four of 2009.
• The sales of electronic books in China might go beyond 3 million units in this year. Hanwang Technology and international companies such as Amazon, Sony, Lenovo have stepped into the e-book market. Some middle- and low-end domestic manufacturers entered the market with their relative lower prices. It is not the price that determines the sales of e-book but the content. China's total e-booker reader sales volume was 249,100 units in the first quarter this year, and 66.04 percent of them were sold by Hanwang Technology.
• China's electronic manufacturing industry grew by 17.7 percent year-on-year in May 2010 with the output of mobile phones in the country increasing by 36.7 percent year-on-year in the first five months of 2010. From January to May 2010, the Chinese electronic manufacturing industry grew by 20.8 percent year-on-year. Of major electronic products, the output of microcomputer devices increased by 45.3 percent; the output of notebooks increased by 44.8 percent; the output of mobile phones increased by 36.7 percent; the output of integrated circuits increased by 85.6 percent; the output of color TVs increased by 20.2 percent; and the output of LCD TVs increased by 41 percent. The delivery value of export electronic products made in China continued to grow. Of major electronic products, the export of integrated circuits increased by 90.2 percent year-on-year; the export of color TVs increased by 36.9 percent; and the export of automatic data processing devices increased by 41.8 percent.
• Kingdee International Software Group announced the acquisition of Shenzhen based professional collaborative software provider Firstsoft for 10 million yuan (US$1.5 million). Collaborative software refers to application software that can help individuals or organizations realize communication and collaboration. Its coverage is far beyond the range of previous office automation software. The Chinese collaborative software market increased by 48.7 percent year-on-year.
Disclosure: Author holds no positions in the stocks mentioned