• Domestic shipments of mobile phones and personal handyphone system handsets in Japan rose 17.1 percent year on year to 3.147 million units in May, up for the second straight month. With the economy recovering, mobile phone carriers launched new models for spring during the month. Still, the latest reading was about 10 percent below that seen in May 2008, before the onset of the global financial crisis. A JEITA official said as consumers continue to replace their mobile phones over a longer cycle, shipments are unlikely to expand quickly.
• Sanyo Electric is to sell its loss-making chip unit to ON Semiconductor for about 33 billion yen (US$373 million), turning its focus to environmentally friendly technology. The companies plan to complete the combined cash and stock transaction by the end of the year. Sanyo will refocus by pouring US$1.8 billion into its rechargeable battery and solar cell businesses over the next three years. With its ninth acquisition in a decade, ON Semiconductor, spun off from Motorola Inc in 1999, expects to become a top 20 global player. The company will try to turn Sanyo Semiconductor profitable by investing in new equipment and pushing sales in Europe and the U.S. to make use of spare capacity at Sanyo. Sanyo is a small player in the global chip market, but its semiconductor unit is strong in analog chips, especially for visual and audio products. Analog chips, a majority of which are power management chips, are used in products that involve data such as electrical input, sound waves and pressure, which cannot be broken into ones and zeros, the stuff of digital signals.
• Japanese telecommunication operator NTT, has agreed an all-cash deal to buy Dimension Data, valuing the UK-listed South African information technology services group at pound 2.1 billion (US$3.2 billion), in a move to expand NTT’s overseas revenue. NTT is offering 120 pence (US$1.84) per share, for Dimension which represents 18 percent more than the target's last closing price. NTT is keen to move beyond telecoms and offer cloud computing services, in which IT equipment and programs are hosted in remote locations. The group has a network of 40 hosted data centres in 31 countries, but has focused mainly on Asia, the US and Europe. Dimension Data, which has 11,500 employees, will provide access to markets in Africa, the Middle East and Australia, as well as more expertise in setting up and operating IT networks. Satoshi Miura, president and chief executive of NTT said “with data centres we can really capitalize on our network assets”
• NEC Corp. aims to generate sales from China to be at 300 billion yen (US$3.5 billion) in fiscal 2012. Led by cloud computing operations, the company sees to twice its Chinese sales from fiscal 2009's 50 billion yen (US$577 million). The company will offer top-of-the-line versions of point-of-sales systems and will also expand its lineup of midrange models. The sees to focus on overseas sales of 1 trillion yen (US$11.5 million) in fiscal 2012.
• SK Telecom Co. raised its smart phone sales target for this year and unveiled plans to roll out a more advanced mobile network service, as the boom in the popularity of smartphones drives demand for wireless data. The mobile operator raised its 2010 smart phone sales target to 2.5 million from an earlier estimate of two million and said it will continue expand its range of smart phones by launching a further 14 in the second half to add to the nine models it started selling in the first half of the year. SK Telecom started focusing on extracting much of its profits from the sale of smart phones. But the rising use of smartphones has also led to a surge in demand for high-speed data. SK Telecom will launch the next-generation mobile network service, called long term evolution, next year and create 15,000 Wi-Fi zones in the country by the end of this year, up 50 percent from its initial plan.
• SK Telecom Co. and Japan's KDDI Corp. and Softbank Mobile Corp. have jointly develop a mobile payment service that would allow mobile phone users in both South Korea and Japan to settle payments with their cell phones anywhere within the two countries. SK Telecom signed a memorandum of understanding on a Korea-Japan mobile payment cooperation with the two Japanese mobile operators. The three mobile phone carriers will develop a new type of technology, called Near Field Communication. South Korea and Japan have been using their respective technologies for mobile payment services. SK Telecom also said NFC-compatible handsets will be available in both countries at the end of this year.
• SK Telecom is planning to establish a LTE (Long Term Evolution) network nationwide by 2013. KT has also sent a RFI (Request for Information) to a LTE equipment company to speed up the LTE investment process. Three Telecommunication companies will select their respective LTE equipment supplier by the end of this year to establish their test network. CEO of SK Telecommunication Jung Man-won announced their plan to early commercialize new generation LTE network to respond aggressively to the increasing demand of high speed data. SK Telecom also sent a RFI to the LTE equipment companies in the evening of the press conference day. SKT has already succeeded in the LTE field test with the femtocell style equipment.
• Ships, phones and integrated circuits were South Korea's three major export items last year, helping the economy recover from the global downturn. South Korea sold US$37.2 billion worth of ships last year, the largest portion of the nation's total annual exports. Sales of wired and wireless phones and ICs came next with US$29.5 billion and US$24.3 billion, respectively. South Korea's other top 10 export goods included liquid crystal display devices, oil products, and parts used in vehicles, and television broadcasting and reception, the data showed. The top three export items marked a change from 2008 when oil products led overseas sales. Most of the items remained the same from the previous year. The majority consisted of raw materials and parts.
• Major shareholders of Hynix Semiconductor have proposed that LG Group takes over 5 percent of the company as they seek to sell down their stakes in the company. Creditors-turned-shareholders of Hynix own around 20 percent of the company and plan to offer 5 percent in a block deal later this year. Sale advisers had proposed shareholders offer an additional 5 percent to LG Group and keep their holdings at around 10 percent.
• The number of Internet users in China, already the world's largest online market, has leapt to 420 million. The figure, almost a third of the population, marks an increase of 36 million, more than the population of Canada, since the number of users was last given at the end of 2009. The fresh figures for the world's most populous nation were released by the China Internet Network Information Center (CNNIC) a government-linked industry body, and reflect data gathered through the end of June. Among the factors helping to drive the latest increase was a 31 percent jump in the number of Chinese who shop online, which rose to 142 million. The number of users accessing the Internet via mobile phones, meanwhile, jumped to 277 million due to increasing expansion of the country's third-generation or 3G network.
• The number of 3G users in China has reached almost 22 million at the end of May and new 3G users accounted for a quarter of the total number of new mobile phone users. By the end of the year, the Ministry of Industry and Information Technology expects there will be 60 million 3G users, the Shanghai Daily reports. At the end of May, the 3G user base stood at 21.9 million, up from 8.64 million at end-2009. During May, the number of new 3G users was 2.23 million, 24.4 percent of total new mobile users during the month. China Mobile leads the 3G market with 9.32 million 3G users at end-May, followed by China Unicom with 5.85 million, and China Telecom with 2.32 million 3G customers.
Media, Entertainment and Gaming
· Zynga, a Web 2.0-based social network game developer in the U.S., acquired two companies based in Chengdu City, Sichuan province worth US$3 million. The company has established an office in Beijing and recruited technical staff. Zynga made its entrance into Asia in May 2010 with the acquisition of XPD Media.
• Kingsoft former CEO Lei Jun is back again into position to head its two major businesses namely, the online games and antivirus software. Lei will acquire Beijing-based graphics and antivirus software developer Keniu Network Technology. Lei stepped down as Kingsoft’s CEO as it invested in December 2007 and went in UCWeb as its chairman in April 2008.
• Pansoft Company Limited has completed the acquisition of Beijing ITLamp Technology Co., Ltd ("ITLamp") for approximately US$3.1 million. Approximately US$1.2 million of the purchase price was paid in cash, and the balance will be paid through the issuance of US$1.9 million in restricted Company stock with a three-year vesting period. Unaudited 2009 revenue and net income for ITLamp were US$0.99 million and US$0.40 million, respectively. ITLamp is an IT solution and service provider serving oil companies in the Tarim oilfield, with innovative products such as a digital desktop office platform, a material supply system, and an analytical test system. These products are fully implemented at major sites of clients, including PetroChina Tarim Oilfield Company and Tarim Northwest Exploration Co., Ltd. PetroChina Tarim Oilfield Company is located in the Tarim basin of Xinjiang province.
• Digitimes Research revised its 2010 projections for e-reader shipments in China downwards. Originally, the researcher expected shipments of 1.5 million units this year but has revised this to 900,000 as China Mobile's subsidized sales of e-reading devices have been below expectations. China Mobile originally planned to procure 1 million e-book readers for subsidized sales this year but the company actually bought only 30,000 to 40,000 units in the first half.
• Shenzhen Coship Electronics Co., Ltd. had operating revenue of about 1.09 billion yuan (US$161 million) in the first half of 2010, boosted 13.72 percent year on year. Net loss reached 38.88 million yuan (US$5 million) mainly attributed to dropping gross margin as well as increased expenditures on R&D and employees. The company is mainly engaged in the R&D, manufacture and sales of satellite/cable/terrestrial digital TV receivers, professional head-end IRD, IP set-top boxes, cable modem, GPS products, security products and LED displays. China's consumption of set-top boxes exceeded 72 million units as at the end of 2009. The figure is expected to exceed 90 million as at the end of this year.
Disclosure: Author holds no positions in the stocks mentioned