A week in tech, June 30 - July 6

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A round-up of all the latest tech news.

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• The Japanese arm of Google Inc. announced the launching of a content-linked video advertising service adding one more to its varied offering of online services. The search-linked video advertising service known as Click-to-Play automatically updates the Google Japan site and distributes the most appropriate video ads. The Click-to Play service, which utilizes Google's AdWords search-linked technology, distributes video ads to sites linked to keywords or page content as specified by the advertiser.

Media, Gaming and Entertainment
• Three Japanese cable companies announced their agreement in a bid to deliver on-demand programming to more than 600,000 subscribers. The three companies – Chubu Cable, C-Tech, and CTY – are running a trial of the system, which is based on software and equipment from SeaChange International, ahead of full commercial deployment scheduled later this year. The trial includes services such as on-demand movies, music videos, and local programming. SeaChange said it had developed the subscriber-navigation solution using its VODlink application platform, which is integrated into the customer's digital set-top box. The entire on-demand process is automated and integrated with third-party electronic program guides and browsers.

• Warner Entertainment Japan, a subsidiary of US media giant Time Warner, plans to acquire more Japanese films and increase local production of movies in response to the growing popularity of domestic films. A top official of the company said the company hopes to form alliances with publishers to produce movies from best-selling novels, a business model that has proven successful around the world. The company said it is also looking for growth to Warner's Asian and Western movies, as well as acquisition of other company's films overseas, which it wants to distribute exclusively in the Japanese market. The official said the industry could not increase the number of moviegoers if it does not get access to more theaters. Warner Mycal, a joint venture between the Time Warner Group and domestic supermarket chain Mycal Corp., a subsidiary of retailer Aeon Corp, opened Japan's first cinema complex in 1993. Of the 2,926 screens nationwide, 1,954, or two-thirds, were part of a multiplex in 2005, according to the Motion Picture Producers Association in Japan. But like any other countries where broadband is common, Japan also suffers from Internet piracy. The official noted that unlike in the U. S., people who buy pirated films in Japan are not subject to penalties and thus the government needs legislation to curb the problem.

• Matsushita Electric Industrial announced that it has doubled its production capacity for plasma display panel televisions at its factory in Amagasaki, Hyogo Prefecture, in a bid to respond to surging global demand for flat-panel TVs. The company said that with the plant having initiated production on a full-fledged basis, its annual output capacity has reached 3.4 million units, which is about 2.3 times the previous capacity of 1.5 million units. By increasing the production capacity at the plant, Matsushita said its total annual production capacity including the Shanghai plant and the factory in Ibaraki, Osaka Prefecture has stood at 5.5 million units. The figure includes the production at its Shanghai plant and the factory in Ibaraki, Osaka. With a total investment of ¥180 billion ($1.5 billion), Matsushita is building the world's largest plasma display panel factory next to the Amagasaki plant. It aims to begin operations at the new factory in July 2007.

• BT Group and KDDI revealed their plans for a joint venture that will enable them to provide and manage global communications networks for leading Japanese companies. The venture is expected to be launched in August and will provide and manage voice and data networks for leading Japanese companies and their operations across the world. The alliance is forecasted to generate revenues of $1 billion within three to five years. According to industry observers, BT has been seeking to reestablish itself as a force in Japan after selling its minority stake in Japan Telecom to Vodafone in 2001.


• Sources say that interest in subscription and service terms and conditions is intensifying as KT readies to launch the Wi-Bro wireless internet service in a few weeks. Other than the launch, the concern remains about the price of PCMCIA (Personal Computer Memory Card International Association) cards, which are expected to be set higher than earlier estimated. Estimates put the price as hitting as high as W300,000 ($316), making the price of PCMCIA cards higher than wireless LAN cards. For commercial service, cards will be switched to Universal IC smart cards (UICCs) KT developed last month. The new UICC is capable of integrated management of personal information for financial services as well as certification of Wi-Bro. The company said the card is an essential part of KT's content differentiation strategy.

• SK Communications, operator of South Korea's third-largest internet portal service provider, announced its entering into an agreement with Germany’s Tonline, a subsidiary of Deutsche Telekom, to launch a version of its popular Cyworld social networking service in Europe. Tonline is considered to be Germany’s biggest Internet service provider. The partnership will allow the two firms to launch a joint European office in Germany and introduce European Internet users to its Cyworld social networking blog. SK Communications is the Internet business unit of SK Telecom, South Korea's largest mobile phone operator with 19 million subscribers. The Deutsche Telekom affiliate has 14 million subscribers in German-speaking European nations. Germany is reputedly home to some 50 million internet users in Europe and has a well-equipped Internet infrastructure. SK said it plans to provide the service for free until it sees success, and then gradually start charging for services.

Media, Entertainment and Gaming
• NCSoft revealed its move to lay off 70 of 300 employees in its US operation based in Texas, as performances of its games have slowed down this year in the world's largest market. The publisher of popular online games `”Lineage”, ”Guild Wars”, and ”City of Heroes” said that it is restructuring the US office by reducing members of its workforce, who are mostly support staff, for the first time since it first made inroads into North America in 2001. NCSoft has been considered a dynamic game company in the US with the worldwide successes of its multiplayer online games. The company posted 339 billion won ($357.4 million) in global sales last year with an operating profit of W76 billion ($80.1 million). Such performance is said to have been the main reason why other South Korean game firms, like Webzen, ventured into the US market. NCSoft disclosed that its profits are likely to decline this year after it has failed to achieve huge success with its games. In its report to investors, NCSoft said it is looking to an operating profit of W57 billion ($60.1 million), which represents a 25 percent decline from 2005.

• Webzen, a video game company announced that it has secured a deal that will have Microsoft Corp.'s newly acquired Massive Inc. advertising unit place promotions in two of its upcoming titles. The agreement marks the first for Webzen and signals Massive’s entry into the Asian market. Massive sells advertising to companies such as Coca-Cola and Honda Motor and helps them place their online promotions in slots created by game makers. The company's technology allows advertisers to run their online campaigns in specific geographic areas and for specific periods of time, rather than buying a spot that is written into the game software. Industry observers forecast the new advertising medium to grow into a global market valued at more than $3 billion. Games included in the deal are the upcoming PC versions of the massively multiplayer online first-person shooter (MMOFPS) Huxley and the urban action MMOG All Points Bulletin. Both games are slated for worldwide release and will include in-game advertising in each territory. Financial terms of the deal were not disclosed.

• The country’s top information official has confirmed that major South Korean cell phone makers' royalty obligations to Qualcomm will partially expire in August. US-based Qualcomm holds patents for CDMA, which refers to the world’s second generally used mobile platform that enables wireless telephony services. The report noted that Samsung Electronics' contract with Qualcomm indicates it will finish in 2006 for sales on the domestic market and 2008 for exports. LG Electronics is also believed to have signed an almost identical contract in 1993 with Qualcomm. According to data compiled by the country’s Ministry of Information and Communication, Qualcomm has collected up to $2.6 billion in CDMA technology fees in Korea starting in 1995 through last year. Qualcomm contended that South Korean mobile phone manufacturers will have to continue to pay royalties beyond this August.

• LG. Philips LCD announced a $95 million investment on a new plant in China’s Pearl Delta region. The South Korean company said the new plant will work on module production, which forms the last part of the TFT-LCD production process. There will be two factories in the site: one on the producing of TFT-LCD modules and the other on the manufacturing of cells and modules for smaller TFT-LCDs that are used in cell phones or other portable electronics. The factory is the second module production complex in the country for LG. Philips.
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