Friday, April 29, 2005

Rumor: Could Huawei Buy Marconi?

From Light Reading: Could Huawei Buy Marconi?

"Could Chinese vendor Huawei Technologies Co. Ltd. be lining up a takeover bid for troubled U.K. firm Marconi Corp. plc in the aftermath of BT Group plc's 21CN contract award news?" (see BT Choses Huawei as one of its Major Suppliers of New Equipment)

"Should Huawei make a move on Marconi now, it would not only get the vendor at a knocked-down price, but also buy itself into a number of European carrier accounts, a key goal in its international expansion strategy. Marconi counts the likes of Belgacom, Cable & Wireless plc, Deutsche Telekom AG, Telecom Italia SpA, and Telefónica SA, as well as smaller European operators, among its customers. And the two companies know each other already, having forged a business and product development partnership in January this year." (see Marconi to reveal strategic tie-up with Huawei in China)

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TOM Online Announces Cisco, Macromedia Acquire Strategic Stakes in Indiagames

From TMCnet: TOM Online Announces Cisco, Macromedia Acquire Strategic Stakes in Indiagames

"TOM Online Inc. (Nasdaq: TOMO), China's leading wireless Internet company, announced today that Cisco Systems Inc. and Macromedia Inc. will acquire strategic share interests in Indiagames Ltd., a leading global publisher of mobile games majority owned by TOM Online. This move enhances the India-based mobile games publisher's position for global growth."

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Thursday, April 28, 2005

BT Choses Huawei as one of its Major Suppliers of New Equipment

From The Independent: BT body blow signals an end to Marconi's independence

"BT has chosen the Chinese company Huawei as one of its major suppliers of new equipment, along with Fujitsu. The other winners were the French firm Alcatel, Cisco Systems and Lucent of the US, Ericsson, Siemens and Ciena.
These eight companies will now supply BT with the equipment it needs to transform the UK's main telecoms network into a system carrying voice calls and data using internet technology instead of the traditional local exchange-based switching systems.
Dubbed by BT the "21st Century Network" the project will involve the telecoms group spending £10bn over the next five years merging six network technologies into one so that a variety of services can be delivered more quickly and cheaply for consumers."

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Approval of Google's Plans to Expand Mainland China Operations

From Approval of Google's plans to expand Mainland China operations will intensify local competition

"Chinese authorities have green-lighted Google's plans to open the company's first office in Mainland China, which will allow the world's largest search engine to further localize its operations, but will also significantly intensify competition in China's online search market, analysts said."

"Although Google has operated a Chinese language search engine since September of 2000, the company had previously been forced to run its China business out of an office in Hong Kong, which hindered its ability to market advertising services via its search engine to Mainland Chinese companies. Google's businesses in China have mainly been limited to self-help advertising services such as Google AdWords and Google AdSense.
Although Google has yet to disclose where the company will set up its new Mainland China office, local newspaper 21st Century Business Herald reported the search engine would set up shop in Shanghai. In addition, the paper reported that Google had hired Victor Koo, the former COO of NASDAQ-listed Sohu, to head up the company's Mainland operations."

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Wednesday, April 27, 2005 Reports First Quarter 2005

From ChinaTechNews: Sohu Revenue Slips

"Net income for the first quarter of 2005 was US$5.71 million or US$0.15 per fully diluted share. This compares to net income of US$6.50 million or US$0.17 per fully diluted share for the fourth quarter of 2004 and US$10.93 million or US$0.27 per fully diluted share for the first quarter of 2004."

"Sohu's advertising revenue for the first quarter of 2005 totaled US$14.86 million, a 35% year-on-year improvement and 6% decline quarter-on-quarter. Advertising revenue, consisting of US$12.13 million in brand advertising and US$2.73 million in sponsored search, accounted for 63% of total revenues in the first quarter of 2005. Advertising gross margin was 76%, compared to 80% in Q4 2004 and 75% in Q1 2004."

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China’s 3G Standard TD-SCDMA Blooms

From Red Herring: China’s 3G Standard Blooms

"Beijing’s efforts to promote China’s homegrown third-generation (3G) wireless standard (TD-SCDMA - time division-synchronous code division multiple access) look increasingly likely to bear fruit, participants and industry analysts said at the conclusion of the International TD-SCDMA Summit Wednesday in Beijing."

"A total of 20 different TD-SCDMA handsets from 14 vendors have already been built. Those vendors include domestic Chinese brands Ningbo Bird, Hisense, Putian, and Yinghuada; Taiwan-based DBTel; and Korean heavyweight Samsung. "

"Most industry watchers speculate that barring any disasters with the ongoing trials, China’s State Council will issue 3G licenses, including at least one specifically for TD-SCDMA, no later than early 2006."

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Henry Blodget Doesn't Like Chinese Internet Stocks

From Go Work in China, Immediately. But don't buy any stocks from there.
By Henry Blodget

"If one were able to invest in the growth of the Internet in China, instead of in individual companies, this would be a much safer bet. China has, by and large, missed out on the worldwide development of the television, radio, film, and newspaper industries, so the Internet should rapidly garner an even larger share of media and communications usage and spending in China than in the West. This said, the China Internet leaders do not appear to be as dominant as, say, Yahoo!, eBay, and Amazon were at the beginning of the industry's development in the U.S., and the Internet is a winner-take-most game. The "Yahoo! of China" and "Google of China," in fact, might end up being Yahoo! and Google, which would make Sina, et al., the equivalents of Lycos and Excite. So, unless you are willing to construct a diversified basket of stocks that tracks the growth of the Internet medium in China, as opposed to particular companies, you should just hang on to your wad. "

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China Net Investor: Henry Blodget, the disgraced bubble-era analyst, is now a columnist for the online magazine Slate. He has written recently about business and investment in China: Go East, Young Man Where's My $58 Million, Madame Wu? Caged Hedgehogs, Car Smugglers, and Guanxi The Real "Great Leap Forward" What To Do in Shanghai … The Empty Village How To Solve China's Piracy Problem The Best China Investment Strategy

Hua Yuan Science & Technology Association Announces Silicon Valley's Largest China-focused Conference

From Hua Yuan Science and Technology Association (Press Release): 'China Goes Mainstream,' Hua Yuan Science & Technology Association Announces Silicon Valley's Largest China-focused Conference YOU ARE INVITED

" Hua Yuan Science and Technology Association (HYSTA), the leading association for Chinese professionals in Silicon Valley, announced today that its 2005 Annual Conference titled "Going Mainstream - China in 2005 and Beyond" will be held at Santa Clara Convention Center on Saturday, May 7, 2005. "

"The HYSTA conference this year brings together CEOs of China's technology companies and Silicon Valley's leading entrepreneurs, venture capitals and executives for an exciting day of discussion about business and investment strategy in China, and China's impact on the world."

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Tuesday, April 26, 2005

Chinese Online Gaming Sector: Game Pipelines

From Pacific Epoch: Game Pipelines

"While Netease and Shanda are dominating the online gaming industry today, without new hits these companies will be has-beens tomorrrow. A strong development pipeline is critical to the staying power of gaming companies. While The9's 2005 pipeline may be impressive and some have said Kingsoft has the strongest offering of games this year, I would opine that Shanghai based 9you has a gaming repertoire that stands up to any of the heavy hitters in terms of quantity and diversity. "

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Netease Grows On Gaming Success

From ChinaTechNews: Netease Grows On Gaming Success

"Netease (NTES) has reported total revenues of US$39.6 million for the first quarter of 2005, representing a 17.9% increase over US$33.6 million for the preceding quarter, and a 57.6% increase over US$25.1 million for the corresponding period a year ago.

Revenues from online game services for the quarter showed continued strong growth, increasing by 25.9% quarter-over-quarter and 135.3% year-over-year to US$31.7 million driven by the success of Fantasy Westward Journey, which became one of China's most popular MMORPGs. Peak and average concurrent user numbers for the game reached 588,000 and 244,000, respectively, for the month of March 2005."

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China Economic Growth Seen Slowing

From Boston Globe: China Economic Growth Seen Slowing

"The World Bank said Chinese economic growth should slow to 8.3 percent this year and to 7.5 percent in 2006, rates that "largely embody the soft-landing view.
The economy grew 9.5 percent in 2004, the strongest pace since 1996, Chinese data showed."

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India, China poised to feast on US IT complacency

From The Register: India, China poised to feast on US IT complacency

"The technology lead prized by the US, Europe and Japan could come back to haunt the regions as nations such as India and China progress without the shackles of old fashioned hardware and software, according to Sun Microsystems President Jonathan Schwartz.
"My view is that (India and China) don't have to deal with all the legacy systems that Western Europe, the US and Japan do," Schwartz said in an interview with The Register. "There are no mainframes. Microsoft Exchange doesn't have the same presence in the IT landscape. Windows isn't nearly no entrenched."

"As a result, India and China could well dominate something Schwartz sees as the next-wave of computing, which is a scenario that takes millions of networked devices, high bandwidth and web services for granted. While the US is busy paying cheap coders to fix PeopleSoft applications, savvy folks in India could be plowing ahead on a fresh infrastructure."

"Will the next Google or Napster or come out of Beijing while US staffers are busy installing the latest Windows Service Pack? Probably not in the near future. But we'll chat again in ten years."

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China's Largest Independent Mobile Phone Designer Plans IPO

From The Standard: Techfaith seeks US$148m

"China Techfaith Wireless Communication Technology, the mainland's largest independent mobile phone designer, will price a US$148 million initial public offering around May 6, sources close to the deal said Tuesday.
Beijing-based Techfaith was founded in July 2002 by former Motorola employees. Lenovo and NEC each contributed more than 10 percent of its revenue last year, according to a preliminary prospectus."

"Besides Techfaith, Chinese software maker Watchdata Technologies, also plans to raise up to US$80 million by selling four million ADS at US$18-US$20 each. Listings of Techfaith and Watchdata will be tailed by other Chinese firms like Baidu, Alibaba, Kingsoft and Focus Media."

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Fantasies Inspire Chinese Gamers

From BBC News: Fantasies inspire Chinese gamers

"Last year China had almost 100 million internet users; one-fifth of them played online games.
In 2004, the online gaming industry was worth $600m. That may not sound like that much, but it represents growth of 60% over the year before.

A 31 year-old who set up an online gaming company (Shanda Interactive Entertainment Ltd) just six years ago has been named China's second richest man, with an estimated fortune of more than $1bn.

Beijing wants to capture the market, and is setting up a college of internet gaming to train developers to come up with healthy games. "

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Monday, April 25, 2005

UTStarcom CEO Wu Ying On IPTV

From Pacific Epoch: UTStarcom CEO Wu Ying On IPTV

"IPTV will become one of the most important growth points for UTStarcom (Nasdaq: UTSI) in 2005, UTStarcom president Wu Ying told China Business News on April 21. According to Wu, revenues from IPTV will account for 15 to 20 percent of UTStarcom's total revenues in 2005. Overseas revenues accounted for 24 percent of UTStarcom's total revenues in 2004 and will make up about 50 percent of revenues in 2005. Wu said that UTStarcom has signed a contract with Yahoo Broadband in Japan to provide IPTV services to five million users. Meanwhile, UTStarcom will install IPTV equipment for 100,000 users in Florida. However, Wu said that hurdles to the development of the IPTV industry in China are IPTV licenses, content, technology, infrastructure and a lack of capital."

China's Burgeoning Internet Industry - Update from Mary Meeker

From BusinessWeek: Update from Mary Meeker

"These days, Meeker is spending a lot of her time studying China's burgeoning Internet industry. "If you look at the China Internet market, you have five companies that have $1 billion market caps," she told me. "There was a time when Yahoo, Excite, Infoseek, and Lycos all had $1 billion market caps. Two years from now, there won't be five companies with $1 billion market caps. Someone will break away. The companies are in a real battle right now." I asked which ones she's handicapping, but she demurred. Once bitten, twice shy."

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China Mobile: You're Still the One

From ChinaTechNews: China Mobile: You're Still the One

"The value of China Mobile (and to a lesser extent, China Unicom) lies not so much in its mobile phone subscribers, but in its value as one of the only operator in China's mobile information super-highway.

Super-highway? It sounds so early 90s, when the big buzzword was "information super-highway", but it is still an appropriate metaphor for China Mobile. If you are a wireless content provider like Linktone (LTON) or one of dozens of similar companies, you have to deal with China Mobile. If you want to advertise to Chinese mobile phone users, you have to deal with China Mobile. China Mobile is the operator of the only toll-both to the highway."

"(...) So fear not as you look at China Mobile's subscriber numbers. At 214 million subscribers, they are still impressive, and are not even the end story. As it stands today, China Mobile is holding all the wireless cards."

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The Emergence of Chinese Competitors will Force Consolidation in Telcos Networks Sector

From TheAustralian: Telco shake-up forecast

"The emergence of cut-price Chinese competitors will force consolidation in the telecommunications networks sector in the next three years, according to new Alcatel chief operating officer Mike Quigley."I would be very surprised if we looked three years out and the industry structure was the same as it is today," Mr Quigley told The Australian.

"In terms of the (equipment) vendors community, there are simply too many vendors - I think that is recognised by most analysts and most of us in the industry. We have got all of the traditional existing vendors, plus we have start-ups, there are still companies starting up, and we have the emergence of new players, particularly from China."

(...) in the past few years two large Chinese vendors have emerged -- Huawei Technologies and ZTE. After building their business on the booming Chinese market, and then smaller Asian and developing countries, they are determined to break into developed markets."

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The Future of Mobile Phones in China

From AsiaTimes: The future of mobile phones in China

"China's mobile phone industry, which grew by more than a quarter in both production and sales in 2004, is expected to keep growing strongly in 2005, thanks to rapid expansion of domestic demand and a more favorable macroeconomic environment. But the current state of the industry features both opportunities and challenges."

Article content overview:
- The overall environment
- Higher penetration expected
- Handset manufacturing base
- Domestic-foreign competition
- Future challenges

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Sunday, April 24, 2005

eBay Eachnet Reduces Transaction Fees

From ChinaTechNews: eBay Eachnet Plans Transaction Fee Reductions

"With rising competition in the Chinese online auction sector, eBay Eachnet has announced that it will make a large adjustment to its charging policy, starting May 1.
The transaction procedure fee for all goods will be reduced by 20-60%. At the same time, the online product display fee will be cancelled and the monthly store rent decreased from RMB50 to RMB35."

"(...) these price reductions will likely place more pressure on its two major competitors, and, who are running free services."

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Can China Have Capitalism Without Democracy?

From Slate: China's Biggest Gamble: Can it have capitalism without democracy? A prediction.
By Henry Blodget

"The key test of China's version of capitalism, of course, will be during the bust that inevitably will follow the current boom (some day). If elections were held today, many in China suggest, the current leaders would win the popular vote. On the whole, thanks to the economy, people feel they have done a good job. During the bust, the pressure for change will increase, with or without the press. "

"If China can survive that inevitable economic crisis without a political uprising, we will probably be able to conclude that a dynamic free-market economy need not, in fact, go hand in hand with democracy."

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China Net Investor: Henry Blodget, the disgraced bubble-era analyst, is now a columnist for the online magazine Slate. He has written recently about business and investment in China: Go East, Young Man Where's My $58 Million, Madame Wu? Caged Hedgehogs, Car Smugglers, and Guanxi The Real "Great Leap Forward" What To Do in Shanghai … The Empty Village How To Solve China's Piracy Problem The Best China Investment Strategy

Saturday, April 23, 2005

China's Mobile Phone Market Heating up

From BusinessWeek: China's mobile phone market heating up

"China's homegrown mobile phone handset manufacturers will continue to see operating margins squeezed over the rest of this year as there is no sign that the intense competition will abate soon. The market will get chillier as new competitors crowd in following the recent introduction of a standardized licensing policy for the industry, said Ann Liang, chief analyst for mobile terminals research in Asia-Pacific at market researchers Gartner Inc."

"In 2004, Chinese consumers bought around 68 million handsets, according to Gartner's data. Nokia was the leading vendor with around 20 percent market share, followed by Motorola Inc. with 12 percent.
Ningbo Bird Co. and TCL Corp., the fourth and fifth largest vendors with 8.6 percent and 7.2 percent market shares, respectively, were the two leading domestic vendors."

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Thursday, April 21, 2005

China Lenovo loses No.1 ranking in Asia to H-P

From MarketWatch: China Lenovo loses No.1 ranking in Asia to H-P

"China's biggest personal computer company, Lenovo Group Ltd., lost its top spot as the leading PC vendor in Asia-Pacific excluding Japan in the first quarter of 2005 to Hewlett-Packard Co., according to market research firm IDC Corp."

"Hewlett-Packard moved into top spot from second position as it pushed ahead in several key markets in the region, posting 29% growth in the number of units sold. It had an 11.7% market share, up from 10.2% in the previous quarter.
Lenovo's fall was primarily due to seasonal sluggishness during the Lunar New Year period, as well as high levels of inventories left over from the previous quarter, IDC said.
The company's unit sales rose 20% on year during the first quarter and it remained the market leader in China. Its regional market share, however, slipped to 11%, from 13.5% in the fourth quarter of last year, the research firm said."

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China Closing the Tech Gap?

From CNET: China closing the tech gap?

"China is rapidly becoming a major force in developing new technology, posing a significant economic threat to the United States.
Alternately, the authoritarian country faces key hurdles in its quest to transform into an innovator, including its lack of free speech."

"Both arguments were made here on Thursday at a meeting of the U.S.-China Economic and Security Review Commission, a 12-member panel set up in 2000 to advise the U.S. Congress."

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Shanda, Turbine Deal to Bring Dungeons & Dragons Online to China

From PRNewswire: Shanda, Turbine to Bring Dungeons & Dragons Online to China (Press Release)

"Shanda InteractiveEntertainment Limited (Nasdaq: SNDA), the largest operator of online games inChina, announced today that it will be signing a deal with Turbine, Inc., aleading publisher of online subscription entertainment, to bring Dungeons &Dragons(R) Online to China. Under the agreement, Shanda will hold theexclusive rights in China to operate this first and only 3D massivelymultiplayer online role playing game, or MMORPG based on the world-renownedHasbro and Wizards of the Coast Dungeons & Dragons(R) franchise. The game isexpected to launch in China in the second half of 2005. Financial terms ofthe agreement were not disclosed."

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Chinese telephone companies expected to spend $24 billion to upgrade mobile networks to 3G

From Keralanext: China to go on $24 bln 3G spending spree

"Chinese telephone companies are officially expected to spend an estimated $24 billion to upgrade their mobile networks for data-rich applications in what could become a bonanza for foreign and domestic equipment makers. "

"The estimated 200 billion in spending dwarfs most of the numbers to emerge so far, including a forecast by China's top mobile carrier, China Mobile of $7.25 billion in spending in the first two to three years of 3G roll-out."

"China has spent billions of dollars on its current networks, providing a rare bright spot at the height of the recent telecoms bust for companies like Motorola Inc. , Nortel Networks , Ericsson , Nokia and Lucent Technologies Inc. . But in the upcoming round of 3G spending, the foreign giants will also face competition from a field of hungry domestic suppliers led by Huawei Technologies and ZTE Corp., the nation's top two players."

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Wednesday, April 20, 2005

Shanda to Launch TV Platform Home Entertainment Strategy Soon

From CHINAdaily: Shanda sets sights on TV platform

"The biggest Chinese online games operator Shanda Interactive Entertainment Ltd will launch its home entertainment strategy soon, as the company tries hard to expand its business to other platforms."

"While there are only about 20 million online games players in China, there are 340 million households with a television, so penetration into the TV platform has become the focus of Shanda's home entertainment strategy.
The company has decided to move some of its entertainment branches - including games, music and literature - from the computer platform to the TV platform through a set-top box.
The set-top box is expected to use Intel's processors, Microsoft's operating system and mother boards from the Taiwanese firm Gigabyte. The boxes may be produced by the Taiwanese electronics maker Inventec."

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EBay Looks to China for Growth

From BusinessWeek: EBay Looks to China for Growth

"EBay added more new users in China than from any other country, and it‘s now the No. 1 e-commerce company there. Whitman said eBay would debut PayPal in China soon, and it is already promoting an escrow payment service similar to one in South Korea." Read more

China Net Investor: eBay is planning to spend upward of $100 million in China this year to capture the high ground against local competitor TaoBao (Alibaba).

Read more:
Ebay Aims to Conquer China
Putting a value on China's Alibaba
Report On China's B2B, B2C and C2C Giant Alibaba

Why China is growing so fast

From Asia Times: Why China is growing so fast

"For years, investors and economists have been scratching their heads over China's growth rate. (...) China's $1.3 trillion economy is the second largest in Asia and some say it was largely responsible for keeping the world from sliding into recession in 2001.
(...) figures released by China's National Bureau of Statistics on Wednesday revealed that the country grew an amazing 9.5% from a year earlier to 3.14 trillion yuan ($379 billion) in the first quarter as exports and investment surged. A tremendous achievement indeed. But the question uppermost in the minds of many remains: how has China achieved this miracle?"

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TurboLinux Ranks #1 In China Linux Market

From LinuxElectrons: TurboLinux Ranks #1 In China Linux Market For Fourth Consecutive Year

"Turbolinux once again dominates the China Linux market, according to a report recently released by leading international market research firm IDC, entitled China Linux 2005-2009 Forecast and Analysis. The comprehensive survey, which details market dynamics and development trends for the Linux operating system in China, revealed that Turbolinux experienced significant revenue increases in 2004, as well as further growth in market share in 2003; thus, substantiating Turbolinux's role as the market leader in China for four successive years."

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Tuesday, April 19, 2005

China's GDP grows 9.5% in 1st quarter

From Bloomberg: China's Economy Grows 9.5 Percent, More Than Expected

"China's economy, which accounted for a 10th of global growth last year, expanded more than expected in the first quarter as exports and investment surged.
Gross domestic product rose 9.5 percent from a year earlier to 3.14 trillion yuan ($379 billion), matching the fourth- quarter's gain, the National Bureau of Statistics said in a statement released in Beijing. That exceeded the median 9 percent gain forecast in a Bloomberg News survey of 11 economists. "

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Japan Telecom Expands With UTStarcom

From LightReading: Japan Telecom Expands With UTStarcom

"ALAMEDA, Calif. -- UTStarcom, Inc. (UTSIE), a global leader in IP-based, end-to-end networking solutions and international service and support, today announced an expansion contract with Japan Telecom Co., Ltd., a wholly owned subsidiary of SOFTBANK Corp., for deployment of several million lines of UTStarcom's highly scalable iAN-8000 Multi-Service Access Node (MSAN) solution."

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"Wake up and Face the Flat Earth" - Thomas L. Friedman, Author of the Book "The World is Flat"

From YaleGlobalonline: 'Wake Up and Face the Flat Earth' – Thomas L. Friedman

In an interview, columnist and author Thomas L. Friedman says globalization has outpaced its critics (Discussing his recent book, "The World Is Flat")

"I really dove into some key companies (Wal-Mart, UPS) that are now globalizing and are really the source for understanding globalization. (...) So as you take an item off the shelf in New Haven, Connecticut, another of that item will immediately be made of that item in Xianjin, China. So there's perfect knowledge and transparency throughout that supply chain."

"In "Flat World," I take that theory one step further into what I call the "Dell Theory" – you know, Dell Computers. The Dell Theory says that no two countries that are part of the same global supply chain will ever fight a war as long as they're each still part of that supply chain. Now, the big test case is China and Taiwan. Both are suppliers of the main parts of computers. If they go to war, don't try to order a computer this month because you'll have a real problem."

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Video Clip:
The World Is Flat
In an interview, columnist and author Thomas L. Friedman says globalization has outpaced its critics.

Monday, April 18, 2005

China's Consumer Electronics Maker TCL Reports Drop in Profit

From China's TCL Corp. Reports Drop in Profit

"TCL Corp., one of China's largest consumer electronics makers, on Tuesday reported a 57 percent drop in 2004 net profit as earnings were dragged down by losses from its joint ventures with French partners (Thomson SA.; Alcatel SA).
TCL's net profit for 2004 fell to 245.2 million yuan (US$29.7 million; euro22.9 million) from 570.6 million yuan (US$69 million; euro53 million) in 2003, the company said. TCL, which is based in Huizhou in southern China's Guangdong province, recorded 40.3 billion yuan (US$4.9 billion; euro3.8 billion) in core revenues last year, 42 percent higher than in 2003. But an 80 percent surge in its operating and management expenses cut into its earnings, the company said. It said it expects to record a loss in the first quarter of 2005."

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UTStarcom Announces Infrastructure Contracts With China Netcom and China Telecom

From UTStarcom Press Release: UTStarcom Announces Approximately $20 Million in IP-Based PAS Expansion Contracts With China Netcom

UTStarcom, Inc. (Nasdaq: UTSI), a global leader in IP-based, end-to-end networking solutions and services, today announced that it has signed infrastructure contracts valued at approximately $20 million with China Netcom Group (CNC) to expand the operator's existing IP-based PAS (Personal Access System) (iPAS(TM)) networks in the Henan and Liaoning provinces, as well as in metropolitan Beijing and Tianjin.

From UTStarcom Press Release: UTStarcom Signs Approximately $50 Million in Contracts With China Telecom for Expansion of IP-Based PAS Networks

UTStarcom, Inc. (Nasdaq: UTSI), ... , today announced that it has signed infrastructure contracts valued at approximately $50 million with China Telecom Corporation (CTC). These contracts will expand the operator's existing IP-based PAS (Personal Access System) (iPAS(TM)) networks in the Shanxi, Jiangxi, Zhejiang, Jiangsu and Guangdong provinces in eastern China, as well as in metropolitan Shanghai.

Huawei to Set Up Regional HQ in Hungary

From Chinese IT Company to Set Up Hungary HQ

"China's Huawei Technologies announced plans to set up its regional commercial headquarters in Budapest, a business daily reported Monday. Huawei, the largest Chinese telecommunication equipment maker, also plans to launch production in Hungary in the midterm, the Vilaggazdasag newspaper reported. Huawei employs 24,000 people worldwide."

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Sunday, April 17, 2005

An alliance between China and India could change the global IT landscape

From InformationWeek: An alliance between China and India could change the global IT landscape

"Talks between the prime ministers of China and India last week to forge closer ties between the two countries could hasten the region's emergence as an IT powerhouse and center of innovation. Such ties also could yield benefits for companies looking to tap offshore workers--and spawn tougher rivals for U.S. IT vendors."

"From the West's viewpoint, a possible downside to pairing the Chinese dragon and the Indian tiger is the potential for them to set IT standards and agendas that force the rest of the world to follow their lead."

"A Sino-Indian alliance also could spawn a non-Western PC vendor to challenge the dominance of Hewlett-Packard and Dell. The obvious candidate for that is China's Lenovo Group Ltd., which is acquiring IBM's PC and laptop business for $1.25 billion, including offices in India housing IBM's PC business."

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China's e-commerce industry expected to grow at over 50 pct every year

From English.eastday: China's e-commerce industry expected to grow at over 50 pct every year

"China's e-commerce, in a crucial stage of development, is to grow at over 50 percent every year, said Song Ling, chairman of China Electronic Commerce Association."E-commerce has become an important part of people's life and also a strong driver of China's market economy," said Song at the eighth China International E-commerce Conference held here Sunday."

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Earnings ahead for China Nets - NetEase, Sina, Sohu

From MarketWatch: Earnings ahead for China Nets

"NetEase's (NTES) Fantasy Westward Journey game has been leaping up the charts, helping to give shares a solid run. According to Pacific Epoch numbers, it cruised past Shanda's World of Legend and Optisp's Legend of Mir III to be the most popular massive multi-player online role playing game in China in March. ... NetEase will report first quarter earnings on April 26."

"China's No.2 portal Sohu (SOHU) will report its first-quarter results on April 27. Last week it announced plans to pay $9.3 million in cash for Go2Map, an online mapping service that covers 14 of China's biggest cities. While Go2Map does not yet provide the satellite photo granularity of Google Maps, it shows Sohu is thinking along the same lines as U.S. giants Google and Yahoo.
While most of the market has been waiting for search engine Baidu's long touted IPO, Sohu has been busy working on its own search service, Sogou. Sohu is apparently using its traditional online advertising sales channels to push listings on Sogou, so search related ad revenue might surprise a few of Sohu's detractors, as of which there are many, when the company reports results."

" ... China's biggest portal Sina (SINA) will announce first quarter results on May 5, while most of China is still on holiday for the May Day week. As Sina stock continues to drift, management at the Chinese portal likely breathed a collective sigh of relief when Shanda CEO Chen Tianqiao told press he will not seek a board seat, despite controlling a 19.5% stake in Sina."

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Asia's Phone Companies with Attractive Valuations

From International Herald Tribune: Around Asia's markets: Rebound is forecast for phone companies

"Telephone companies like Indosat have become Asia's cheapest stocks relative to earnings after trailing a benchmark regional index for the past seven quarters. Some investors expect the shares to rebound. "They will outperform for a while," said Ambrose Chang, chief investment officer at Daiwa SB Investments HK in Hong Kong. "Valuations are attractive."
Chang favors shares of China Telecom, the nation's biggest fixed-line carrier"

"Telephone stocks are valued at an average of 14.3 times earnings during the past 12 months, a Morgan Stanley Capital International index of 26 companies in the region shows. This ratio is the lowest of the 10 industry groups in the Asia-Pacific index by Morgan Stanley."

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Saturday, April 16, 2005

China-India Entente Shifts Global Balance

From China-India Entente Shifts Global Balance

"The global deployment of high-speed internet communication renders geography almost irrelevant: anything that can be done digitally can be done equally well from any location on the globe. For example, software development is no longer confined to Seattle or Silicon Valley; it can be produced in Bangalore for customers in Silicon Valley just as easily as it can be produced in the Valley itself. By the same token, express delivery by FedEx or UPS and supply-chain management allow products to be manufactured and delivered to any spot on the planet within 36 hours.
As a result of these developments, China has overwhelmingly become the location of choice for global manufacturing, and India is fast becoming the preferred place for production of software and the handling of outsourced business services. Not only that, but both countries are also racing not to the bottom, but to the top of the value-technology chain. They can do the most sophisticated technology at a fraction of the costs in the West and developed Asia."

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Friday, April 15, 2005

China's Dueling Wireless Players: China Mobile vs. China Unicom

From BusinessWeek: China's Dueling Wireless Players

"The two major players in the world's largest wireless services market are China Mobile (CHL) and China Unicom (CHU). Listed on the Stock Exchange of Hong Kong and the New York Stock Exchange in October, 1997, China Mobile has 64% market share in mainland China."

"China Mobile's smaller rival, China Unicom, captures the market's remaining 36%. Apart from its GSM and CDMA wireless networks, China Unicom owns a fiber backbone that provides long-distance and Internet/data services."

"BUY VS. HOLD. We believe valuations for China Mobile are attractive, with the stock trading at a price-earnings ratio of 11.3, enterprise value (EV)-to-earnings before interest, taxes, depreciation, and amortization (EBITDA) of 4, and a dividend yield of 2.8%, for 2005. China Unicom has a p-e of 17.3, EV/EBITDA of 4.7, and a dividend yield of 1.9%. In our view, China Mobile's strong free cash-flow generation could allow it to comfortably absorb its 3G capital expenditures and also let it enhance value by redistributing cash to shareholders in a higher dividend payout. Therefore, we have a buy recommendation on China Mobile and a hold opinion on China Unicom."

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Nortel Faces Threat from Chinese Rivals

From Ottawa Citizen: Nortel faces threat from Chinese rivals

"Nortel Networks faces new trouble from Chinese competitors in the booming Asian market.
An analyst said yesterday that ZTE, Huawei and other telecommunications equipment makers are supplying financing in large amounts to win business -- a potent addition to an arsenal that already includes significant cost advantages in raging pricing wars."

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More from Henry Blodget - The Best China Investment Strategy

From Slate: The Best China Investment Strategy - Forget about it.
By Henry Blodget

"You can't take it anymore. All this yammering about how much money everyone is making in China. (You don't know anyone actually making money in China, but from what you read, hear, and see, you gather everyone is.) Real estate, cell phones, video games, chewing gum, cement—1.3 billion people, it seems, are in the process of striking it rich. And China is not some silly hallucination like the Internet. China is … China—the next great economic superpower, the biggest growth story in the history of the world. You can't afford to miss it."

"'ve probably been daydreaming about the fortune to be made in China stocks.
Well, keep dreaming."

"You still want to know how you, Joe Laowai, can put some money to work in the latest-greatest-surefire investment scheme the world has ever seen. You'll probably be sorry, but it can be done—with difficulty."

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China Net Investor: Henry Blodget, the disgraced bubble-era analyst, is now a columnist for the online magazine Slate. He has written recently about business and investment in China: Go East, Young Man Where's My $58 Million, Madame Wu? Caged Hedgehogs, Car Smugglers, and Guanxi The Real "Great Leap Forward"

Wednesday, April 13, 2005

China mobile phone market grew 14 percent last year

From Xinhua: Mobile phone sales rise 14%

"China mobile phone market grew 14 percent last year as global giants Nokia and Samsung fought back against a field of stumbling domestic players, data released Wednesday showed.
Mobile phone makers sold 68 million units last year in China, the world’s biggest market, accounting for about 12 percent of global unit sales last year, according to Gartner."

"The nation’s biggest domestic player, Ningbo Bird Co., saw its share drop to 8.6 percent from 10 percent, while the number-two domestic firm, TCL Communication Technology Holdings Ltd., fell to 7.2 percent from 9.7 percent.
Bird, TCL and a field of other domestic players posted steady gains against the foreign companies, boosting their collective share to 40 percent of the market in 2004 from just 4 percent five years before, according to Gartner.
But the foreign companies have fought back, introducing a new range of cheap models aimed at the market spectrum where domestic players had made major inroads."

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China's Weak Link - the Country's Stock Markets

From China's weak link

"Along with the banks, the capital markets are the weakest parts of a Chinese economy renowned for rapid economic growth and the prowess of its manufacturing industry. If China fails to get this right, shareholder capitalism could be delayed for another generation. Pensioners would lack a reliable source of income, and capital for dynamic Chinese companies - the ones that should be taking the economy to the next level of development with investments in high technology and services - will remain all too scarce."

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China's Kingsoft plans Nasdaq IPO

From Reuters: China's Kingsoft plans Nasdaq IPO worth up to $300 mln-source

"Leading Chinese software and online gaming firm Kingsoft Corp. plans to raise US$100-$300 million in a Nasdaq IPO in the third quarter of this year, a source familiar with the situation told Reuters on Wednesday."

"Rival Shanda Networking Co. Ltd. (SNDA.O) , which last year raised US$152 million in a Nasdaq IPO, operates two of the three most popular online games in China, according to IDC. The research firm said Kingsoft's JX Online game was the sixth-most popular game in China last year."

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Shanda and Universal Music Team Up to Launch a New Digital Entertainment Service

From Yahoo News: Shanda and Universal Music Team Up to Launch a New Digital Entertainment Service to Music Consumers in China (Press Release)

"SHANGHAI, China, April 13 /Xinhua-PRNewswire/ -- Shanda Interactive Entertainment Limited (Nasdaq: SNDA), the largest operator of online games in China, today announced a strategic partnership with Universal Music, the world's leading music company. Pursuant to a memorandum of understanding, Shanda will have access to Universal Music's online music repertoire, which will be offered to Shanda's millions of users ... "

Press Release

The Coming Age of Chinese Multinationals

From The coming age of Chinese multinationals

" ... oil giants are clearly ahead of the curve of China Inc in terms of international expansion, but several others are not far behind. Take China Mobile and China Unicom for example. They hold sway over China's mobile communication market because private companies are barred.
China is already the biggest mobile phone market. By February 2005, it had 340 million connections. With billions in cash and 330 million consumers on hand, China Mobile and China Unicom can go a long way. Perhaps one day word will spread that Qwest and French Telecom have been sold. The buyers? China Mobile and China Unicom? After the IBM-Levono deal, anything is possible."

"There are dozens of relatively new, entrepreneurial Chinese companies more than eager to trot the globe. These include TCL, Huawei, Haier, Galanz, Chonghong, Ningbo Bird, Kelon and Konka, among others. They are all manufacturers, still growing, and wanting to expand beyond China. TCL, Chonghong and Haier focus on white goods and consumer electronics. They have now added telephone handsets to their product list. Huawei and Ningbo Bird focus on handsets or telecom networks. One out of three handsets in the world is produced by Ningbo Bird and TCL and other Chinese companies."

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Sohu Partners With Taobao

From PacificEpoch: Sohu Partners With Taobao

"Sohu (Nasdaq: SOHU) and Alibaba's C2C website Taobao announced a strategic alliance on Tuesday. The two companies will work together to integrate their user bases and promote e-commerce in China. Taobao will also advertise on Sohu's websites [Sohu said in its fourth quarter report that it had signed an exclusive advertising deal with Taobao, .ed]."

China's Buys Go2Map

From China's Buys Go2Map

"Chinese Internet company Inc. said Tuesday it has agreed to acquire Go2Map, an online mapping service provider in China, for $9.3 million in cash., which operates China's leading Web portal, said the acquisition of Go2Map would let it quickly establish a position in mapping technology to let people search online for offices, restaurants, and transportation information.

Go2Map's database covers 200 cities across China, and it also sells software and map information resources, said. It also provides Web surfers a free online mapping inquiry system in 14 cities."

Baidu, China Telecom Yellow Page in alliance

From SearchEngineWatch: Local Search Goes to China

"The local search boom is truly global in scope., the large web search engine from .CN that Google is a minority investor in has announced a partnership deal with the China Telecom Yellow Pages.
Hmm, you've got to think that Google Local China and Yahoo Local China are coming soon. Mobile versions too!"

News Release:
Baidu Joins Hands with China Telecom Yellow Page

James J. Cramer on Investing in China

From The China Hedge
By James J. Cramer
James J. Cramer is a markets commentator for CNBC and

"One day, perhaps, the Chinese will recognize that market size doesn't trump transparency and -- let's call a spade a spade -- honesty when it comes to returning some of the fruits of their labor force to shareholders. Right now, though, the risks that you will be beaten once by the Chinese at your job, and then again by Chinese accounting chicanery, make owning anything other than an ETF too dangerous for all but true financial thrill seekers."

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Companies mentioned: 51Job Inc., Shanda

Tuesday, April 12, 2005

Bear Stearns on The9 - Reiterating Outperform: WOW Economics Healthy for The9

From billsdue (weblog): Bear Stearns Report on The9

Key Points
"REITERATE OUTPERFORM: We maintain our Outperform rating on The9 Limited and reiterate our YE2005 target price of $32, based on a 40x 2005 P/E multiple.

WOW ON TRACK: Preliminary milestones leading up to The9's commercial launch of World of Warcraft (WOW) have been or will soon be met.

POSITIVE NEWS FLOW EXPECTED SOON: We consider the current price level an ideal entry point, and expect positive news flow related to WOW and its Open Beta to catalyze the share price upwards shortly. While end-user demand for WOW remains an unknown, the +1mn applicants for a limited number of Closed Beta accounts lend support to our view that the Open Beta will be exceptionally strong."

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China sees rapid growth in online search services

From Xinhua: China sees rapid growth in online search services

"The report released at a meeting on the development of China's search engine industry held in Xiamen City, eastern Fujian Province, showed that the market of the online service hit 1.25 billion yuan (151 million US dollars) in 2004, rising 81 percent from the previous year.

The report also predicted that the market of online searching engine in China would reach 2.3 billion yuan (278 million US dollars) this year, and might rocket to 5.62 billion yuan (680 million US dollars) by 2007."

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How To Solve China's Piracy Problem

From Slate: How To Solve China's Piracy Problem
By Henry Blodget

"In China, piracy is so entrenched that even the pirates complain about it. According to an article by Anne Stevenson-Yang and Ken DeWoskin in the March issue of the Far Eastern Economic Review, Chinese storekeepers who sell fake DVDs for 10 yuan gripe about street vendors selling them for seven. And the street vendors complain about competitors offering two-for-one specials.

But it's not just DVDs that are being ripped off, of course. It's everything. According to some estimates, as much as a third of China's GDP comes from piracy and counterfeiting, including more than 90 percent of the country's software and 95 percent of its video games."

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Monday, April 11, 2005

Huawei Picks BroadLight PON Tech

From "Huawei Picks BroadLight PON Tech"

"BroadLight, Inc. today announced that Huawei Technologies has incorporated BroadLight’s complete, end-to-end PON product solution for their PON product offering. Huawei has selected BroadLight for both its central office and customer premise equipment which consists of ITU-T PON controllers, transceivers and software and is expected to deploy its new PON products in volume throughout the world. "

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Tuesday, April 05, 2005

China Economy Expected to Grow 8.5 Percent

From BusinessWeek:

"China's economy will grow at a robust annual rate of 8.5 percent this year and may pick up further steam in 2006-2007 due to strong investment, the Asian Development Bank said in a report issued Wednesday."

"... But the Manila-based bank said it expects the economy to grow at even faster rates of 8.7 percent in 2006 and 8.9 percent in 2007 due to strong investment in many construction projects still in the pipeline."

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Monday, April 04, 2005

Putting a value on China's Alibaba - The price of buying into China is rising

From MarketWatch: Eyeing China's Alibaba: The price of buying into China is rising

"Alibaba owns two of the largest B2B marketplaces in the world; has a joint-venture partnership with Softbank in a popular Chinese online auction business, called Taobao; and owns a Chinese online payment system, called AliPay. Hmm, sounds like eBay's Asian twin to me. "

"After all, China is a monster opportunity. Sure, the inhabitants may not have the same consumer addictions as the U.S. consumer. Personal consumption in the U.S. is 71 percent of GDP vs. 42 percent in China, according to Morgan Stanley. But there are 1.3 billion people in China, and for better or for worse -- they're on the cusp of becoming the next me-too, want-it-all, consuming society.
Yet for all that opportunity the combined market cap of Chinese Internet companies is a fraction of the U.S. Internet companies. The big three -- Yahoo, Google, eBay - have a combined market cap of $150 billion. The current big three in China -- Shanda, Sina and NetEase -- are worth a combined total of $5 billion, with Shanda accounting for $2.2 billion of that."

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China could overtake US in broadband access this year

From ITworld: China could overtake US in broadband access this year

"At the end of December, the U.S. had 33.9 million broadband subscribers, and China 25.8 million, according to Point Topic.
If those numbers continue to grow at the rates observed by Point Topic during the six months from July to December last year, then China will overtake the U.S. by the end of this year."

"Six of the top 10 countries ranked by broadband market penetration are now European, according to Point Topic. South Korea still leads the world for the proportion of broadband subscribers in its population, closely followed by Hong Kong, but the Netherlands and Denmark are closing the gap, the company said."

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Doomsday Scenario From MarketWatch: How Oil, Housing, and China Could all Crash

From MarketWatch: Rate hikes may create 'perfect storm': How oil, housing, and China could all crash

"As Europe flounders in its self-inflicted bowl of economic soup, and Japan muddles along, China continues to outpace them all, fed by still relatively low interest rates, and international capital searching for growth.
But, even that, will come to an end, at some point, especially if the Federal Reserve raises interest rates further. It's difficult to predict when that magic rate will be hit. But, for those who believe that China's economy addicted to cheap money, the withdrawal syndrome will be painful when it happens."

"According to Intelligence service Chinese "debt is extremely vulnerable to interest rate hikes. As rates rise, that debt will become impossible to maintain, and China will face the beginnings of a financial crisis. Given the makeup of the Chinese financial system, such a development is unavoidable. The only questions regarding the crisis to come are time frame and severity."

"Assuming that the Chinese economy hits what is an inevitable bump in the road, that would mean that somewhere later this year, perhaps in July or August, the traditional time for financial markets to start stumbling and churning, we could be in for another Asian meltdown, as in 1997's Thai Bhat debacle.
That could mean that by October, the usual bad month in the markets, things could be fully underway."

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China Net Investor: I personally don't like doomsday scenarios. ;-)

Rumor: Tencent to Repurchase Shares And Head for Nasdaq

From Pacific Epoch: Rumor: Tencent to Repurchase Shares And Head for Nasdaq

"Chinese IM giant Tencent (0700.HK) has announced that it might repurchase up to 10 percent of common shares, according to a report on According to the report, insiders think this might have a connection with the company's purported plans for a US listing."

China Net Investor: Tencent Technology operates the most popular Internet instant messaging service in China. Tencent develops its business in three strategic directions, consumer IM, enterprise IM and Infotainment.

DBS Vickers on Tencent: Tencent - a major game player in the making

China’s IPTV market will be tough to crack

From asiatele: China’s IPTV market will be tough to crack

"When China’s second largest fixed line player, China Netcom bought its 20% controlling stake in Hong Kong’s dominant fixed line player PCCW early this year, not many details were given about how the two parties would take their partnership going forward.

The only thing that stood out was their plan to explore China’s IPTV market. This strategy was no surprise to industry observers who agree on two facts: that PCCW’s IPTV marketing model works and that Mainland China has the potential to become the world’s biggest IPTV market.

This doesn’t mean that it’s going to be easy for China Netcom and PCCW to make their fortune in IPTV. Everyone trying to get into China’s IPTV market has to wrestle with numerous issues, ranging from competition between broadcasters and telecommunication operators to content piracy and lack of sensible business models. The biggest hurdle, perhaps, is the lack of regulation to support the fledgling industry."

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Sunday, April 03, 2005

China's Giant Pandas Get Broadband

From swissinfo: China's Giant Pandas Get Broadband

"Calling all tech-savvy pandas --China's biggest nature reserve in the foggy mountains of southwest Sichuan province is now wired for broadband. Some might argue that the Wolong Giant Panda NatureReserve, China's largest, is now ready for the world's first panda internet cafe, but the great digital leap forward is aimed more at panda protection."

"The giant panda is one of the world's most endangered species, with an estimated 1,000 living in Sichuan and in northwestern Shaanxi and Gansu provinces."

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Saturday, April 02, 2005

China-IBM Computer Deal Marks a New Era

From YaleGlobal: China-IBM Computer Deal Marks a New Era

In the global IT revolution, China and India join the US – leaving Europe and Japan behind

"The Chinese acquisition of IBM's faltering PC division represents a fundamental in shift the global IT industry, a new division of labor in which the successful players – the United States, China, and India – adopt a more complementary than confrontational approach. The rise of Lenovo in the international scene also helps to underline Japan and Europe's diminished role. "

"Of course, the driving technology of the globalization revolution in this century is IT. Most economic forecasts see the world economy in the next quarter-century being dominated by the US, China, and India, while Germany (and other European economies) and Japan decline. Microsoft and Dell of the US, Wipro and Infosys of India, and Lenovo and Huawei of China are the likely 21st century industrial giants comparable to 20th century global companies such as Rockefeller, Benz, and Mitsubishi."

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Friday, April 01, 2005

IDC Predicts 34.7 pct Annual Growth Rate Till 2009 for China's Online Game Market

From AFX News on Yahoo! Finance: China's online game market to see 34.7 pct annual growth rate till 2009 - IDC

"China's fast-growing online game market is expected to see an annual compound growth rate of 34.7 pct till 2009, IDC said in a research note."

"Government figures showed that China's online game market recorded a total revenue of 2.47 bln yuan ($ 300 mln) last year, up 34.7 pct over the previous year.The research note said telecom operators, who provide Internet access services to game players, booked a revenue of 15.07 bln yuan from the online game business. Among the top 10 most popular online games last year, Shanda Interactive Entertainment Ltd (NASDAQ: SNDA - news), grab two chairs - number one and number three. Another Nasdaq-listed company Inc saw three of its games on the top 10 list while, in which Shanda has a 19.5 pct stake, also had a position."