• Softbank reported its first profit in five years, with the company citing lower marketing costs and increased subscriber growth as the mains reasons for its good performance. The company reported net profit of ¥57.6 billion ($523.5 million) for the year to March, compared with a ¥59.9 billion ($544.4 million) loss a year earlier, with the gain partly ascribed to asset sales totaling ¥194.2 billion ($1.7 billion). Softbank said its Yahoo BB Internet service is gaining on former phone monopoly Nippon Telegraph & Telephone in the high-speed web access market by offering cheaper rates. The company said its sales posted a 33-percent rise to ¥1.1 trillion ($10 billion). Softbank does not provide earnings forecasts. The company is reportedly testing the WiMax wireless broadband system and expanding its faster fiber-optic network. Softbank, which is Japan’s second-largest internet access provider, said it aims to collaborate with affiliate Yahoo Japan, operator of Japan's most-visited web portal.
• Apple Computer in partnership with Softbank announced that it is getting ready to enter the cell phone market with a handset built with iPod music player functionality. The company said the new cell phone will feature the ability to directly download songs from Apple's iTunes Music Store. Initially required to connect to personal computers, early next year, the iTunes Music Store will unveil a new service that allows users to download songs directly to cell phones. Jointly developed with Softbank, a fast-growing Japanese internet and telecommunications group, the agreement is seen as using the power of Apple's brand to compete against mobile market leaders NTT DoCoMo and KDDI Corp.
Media, Entertainment and Gaming
• Nexon Japan announced that Nexon is currently developing a version of its popular online game, Maple Story, for Nintendo's portable game device, the Nintendo DS. Nexon hopes to focus on the Japanese and US markets with the Nintendo DS version of Maple Story. Nexon America, Nexon's subsidiary in the US, has recently hired its CEO and will be starting a major marketing campaign starting this summer. Maple Story currently has 50,000 concurrent subscribers in North America and other English-speaking countries. The Nintendo DS recorded unit sales of 4 million and 5 million in North America and Japan, respectively.
• Toshiba Corp announced its plans to almost double capital investment to 2 trillion yen ($18.1 billion) over the next three years, with the company saying that the 61 percent of the investment will go into semiconductors and displays. The company said it also plans to increase spending on research and development to ¥1.2 trillion ($11 billion) from ¥1 trillion ($9 billion) previously. The company derives some 50 percent of its operating profit from chips. Toshiba said it is boosting spending on semiconductors as price declines and also to take advantage of growing demand for flash memory. The report said about ¥326.4 billion ($3 billion) of the three-year investment plan will be spent on the Westinghouse acquisition. Toshiba said it was waiting for approval from the Committee on Foreign Investments in the United States and hoped to complete the purchase by September. After having disclosed that it would build a fourth factory in central Japan, Toshiba said the new investment would include a fifth factory.
• NHN and Yedang Online announced the signing of a publishing contract for the game Priston Tale 2, which is currently in development, and Audition. Yedang Online disclosed that it has invested some W10 billion ($10.7 million) for the last three years to develop its MMORPG game, Priston Tale 2. Priston Tale 2 uses the Unreal 2.5 engine, known to be one of the best game engines around. The development team is made up of the developers who worked on the first Priston Tale. NHN said it plans to publish the game in both Korea and Japan. Priston Tale is set to start closed beta service in 3Q06 in Korea and commercial service in January 2007.
• Hanarotelecom Inc. reported a 17-percent rise in first quarter revenue compared to the preceding period, ascribing the growth to an increase in broadband revenue via its merger with Thrunet and through continuous growth in voice net additions. The broadband operator said it posted revenue of W432.3 billion ($463.8 million) and operating profit of W16 billion ($17.1 million), with its net loss going down to W6.1 billion ($6.5 million) in the first quarter. Industry analysts noted that Hanarotelecom's shrinking customer base started to show signs of improvement in the first quarter, as industry data shows the company lost some 12,000 subscribers last February compared to 1,600 this March. Hanarotelecom added 73,000 broadband users in April, posting a net subscriber increase for the first time this year, while acquiring 15,300 voice subscribers in the same month.
• KT, the country's dominant telecom operator, and TV station KBS announced the launching of a beta service utilizing WiBro and terrestrial digital multimedia broadcasting (DMB). With the offering, users of the mixed service will be able to watch continuous terrestrial DMB mobile broadcasting by inserting a universal serial bus-type device into dedicated WiBro terminals, which will provide the internet-on-the-move feature. The audio-visual service powered by the converged gadgets is a substantial advance compared to that offered by the current stand-alone DMB devices as it provides two-way applications. Users will be able to check for background information regarding TV programmes broadcast on the hybrid WiBro terminal and also replay past editions of programmes on offer. The two companies said they plan to add later services such as T-commerce, interactive games, or quiz events as well as real-time polls.
• SK Telecom, South Korea's biggest wireless operator, announced its agreement with Warner Music Group, the world's fourth-largest recording company, to set up a joint venture in South Korea. Through its subsidiary, Seoul Records, SK Telecom is setting up a venture, named WS Entertainment. Under the deal, Warner Music and Seoul Records will invest W8 billion ($8.5 million) in WS Entertainment, with Warner retaining a 60-percent stake in the start-up while Seoul Records holds the remaining 40 percent holding. SK Telecom took over Seoul Records in May 2005 by acquiring a 60-percent stake in the outfit with the aim of enhancing its entry into the content industry. A top official of Seoul Records said that audio content from Warner Music would also be available via the telephone services of SK Telecom and its smaller rivals, KTF and LG Telecom.
• Industry observers are saying the South Korean telecom market is going to be affected by the plan of Skype to enter the market by offering an international telephone service at a fraction of the ongoing rates in the next couple of months. Of the country’s companies, KT and Hanaro Telecom are seen as more vulnerable to the entry of Skype. Skype said it plans to deploy two-way VoIP services within the next two months. Users of PC-to-phone calls based on downloadable programmes, dubbed Skype-Out, will have to pay about W20 ($.02) a minute across the world through a pre-paid card, compared to KT, which charges W696 ($0.7) a minute for a call to Japan and W282 ($0.3) for a call to the United States.
A week in tech, May 15-19
By FinanceAsia & IRG on May 19, 2006 4:11PM