Asia Takes Broadband Lead

From Light Reading: Asia Takes Broadband Lead

"According to statistics from eMarketer Inc., the U.S. population has the greatest number of broadband homes, with 34.3 million at the end of last year, but its penetration rate is no longer even in the top ten. The leader on that count is South Korea, which has benefited from an aggressive market and strong government support to reach a massive uptake rate of 73 percent."

"Broadband use has especially soared in China, from just 4 million households in 2002 to more than 23 million in 2004. What’s more, only 6.5 percent of Chinese households have broadband, compared with 29.9 percent in the U.S., indicating a much greater potential for growth in the future."

"eMarketer expects the Asia-Pacific region to account for 145.8 million broadband connections by 2008 -- about 65 million more than Western Europe and 70 million more than North America."

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Chinese Universities as R&D Partners for Foreign Tech Companies

From cnet: Setting the stage for China's tech future

"Technology companies collaborate with academic researchers all the time.
So the fact that Intel's recently introduced Pentium Extreme Edition chip boasts an ultrafast compiler that resulted from a research partnership with a major university isn't so surprising.

What is a bit of an eye-opener-—at least for people who haven't paid close attention to corporate R&D trends—-is the identity of Intel's academic partner: not Stanford, MIT or Cambridge, but Tsinghua University in Beijing."

"Tsinghua, often referred to as "the MIT of China," is generally acknowledged as the leader in R&D projects with foreign companies. With good reason: It ranks at or near the top of the field in China in a wide array of tech disciplines, including computer architecture, communications and software."

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Online Game Operator NetEase Prepares for "World of Warcraft'' Arrival

From The Standard: NetEase playing for high stakes

"Later this year the Beijing-headquartered company (NetEase) will release ``TianXia,'' the working title of its first-ever 3-D game, and possibly its most important single product ever."

``We have been developing [the game] for nearly two years, and in terms of graphics we think it will be the best [game] in China,'' NetEase chief operating officer Michael Tong said. ``We expect it to become at least as successful as any of the games we have now.''

" (...)"TianXia'' will be pitted against "World of Warcraft", which has taken six months to top online gaming charts in the United States, Europe and Korea.
Blizzard's mainland partner, The9.com, which completed its Nasdaq IPO last December, paid US$70 million for the license - a huge sum of money for any firm, let alone a mainland company with a short but often troubled history. Early signs are that The9.com could have a hit on its hands in China. More than 500,000 users have signed up since it started beta (pre-launch) testing to the public earlier this year."

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Read more:
The9 Records 500,000 Peak Concurrent Users For World of Warcraft

Asia Will Become Biggest 3G-Telecomm Market in The World

From China Economic Net: Panning for gold in the telecom market

"Asia will become the biggest 3G-telecomm market in the world and the drive force of the 3G's future development will generate in Asia, especially in China, but not in North America or Europe. Such common agreement has been reached by the personages in the telecom field attending this Fortune global forum."

"When the 3G is launched, will the case in the 2G age repeat that the great majority quotas were taken away by the foreign companies? In the 2G ages, because the domestic companies started late, more than 90 percent of the market quotas were occupied by foreign companies such as Motorola, Ericsson, Nokia and Siemens…etc. Almost all the domestic companies became the on-lookers for a more than 200 billion (chinese yuan) market. It's reported that the 3G network construction will arouse a market of nearly one trillion (chinese yuan), and no one hopes that domestic companies are still out of play this time."

"Currently, both the ZTE Corporation and the Quidway Technology Co., Ltd., which respectively has a short history of 20 years and 17 years, have displayed the considerable strength in the GSM, CDMA and 3G fields, and occupied certain market quotas."

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China seeking to register all Internet sites

From Forbes: China seeking to register all Internet sites

"Chinese-run websites have until the end of May to register their sites or face being shut down as part of a new government campaign to police the Internet, a leading portal announced Saturday.

The registration drive is an effort by the Ministry of Information Industry to clamp down on fraud and other 'unhealthy' activity on the Internet, the portal Sohu.com said.
'If you have not registered by June, then your website could be ordered shut down,' the portal quoted an official from the Beijing communications bureau as saying."

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UTStarcom in Demand as Potential Chinese 3G (TD-SCDMA) Infrastructure Partner

From Unstrung: Trio Hush on Chinese 3G

"Lucent Technologies Inc., Motorola Inc., and Nokia Corp. are the only major Western vendors yet to announce a Time Division Synchronous Code Division Multiple Access (TD-SCDMA) (Chinese 3G technology) infrastructure market strategy, with UTStarcom Inc. touted as one of the few remaining high-profile partners for the trio.

"Ericsson last week announced it has teamed with local supplier ZTE Corp. on development of the technology, while Nortel Networks Ltd. has partnered with China Putian. Siemens AG has linked with Huawei Technologies Co. Ltd., and Alcatel has announced a similar deal with Datang Telecom Technology Co. Ltd."

"Meanwhile UTStarcom, in light of its Chinese market experience, is likely to be in demand as a potential infrastructure partner. “Now that Ericsson has teamed up with ZTE, UTStarcom remains one of the potential remaining TD-SCDMA partners for established 3G vendors,” adds Current Analysis’s Jarich."

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Battle of Ideas in Cyberspace - Chinas Online Propaganda Warriors

From Khaleej Times: Battle of ideas in cyberspace

"CHINA, which at one time viewed the Internet with suspicion as West‘s propaganda tool to influence its country‘s youth, has now turned to it to mould public opinion in a subtle and sophisticated way. Beijing has started using ‘cyber agents‘ to spread positive political messages on the Net in an attempt to stem negative propaganda within the country.

Several Chinese cities have recruited officials, adept at PR art, as ‘online propaganda troops‘ to infiltrate chat rooms and other virtual forums to ‘sex up‘ positive opinion about the government and its law-enforcing agencies. By the end of last year, 127 propaganda warriors were reported to have received training in Beijing on ways to create a spin for the government."

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China 3G Standard TD-SCDMA Makes Buzz on Foreign Shores

From Reuters: China 3G standard makes buzz on foreign shores

"A China-developed standard for third-generation (3G) mobile phones (TD-SCDMA) is creating buzz in the West, winning the ears of carriers and equipment makers who want cheaper technology and an inside line to the world's biggest telecoms market."

"The standard, TD-SCDMA, has already picked up varying degrees of interest over the last year from top equipment makers, including Motorola, Nortel Networks, Siemens, Nokia and Alcatel .
Sweden's Ericsson, the world's biggest producer of mobile networks, jumped on the bandwagon last week when it announced a strategic alliance with ZTE Corp., China's second-largest telecoms equipment maker, to develop the technology."

"The focus in 3G remains on the world's two tested standards, WCDMA and CDMA 2000, although pricey 3G technology has been slow to catch on in the marketplace, despite its promise of fast Internet connections, videoconferencing and online gaming."

"Europe has finally begun moving in earnest to build WCDMA-based networks, but analysts said TD-SCDMA is attracting attention from companies eager to please Beijing, as it gears up to build 3G systems, and to find lower-cost alternatives."

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Read more:
Major 3G Service Vendors Cooperate with Chinese Partners to Deliver TD-SCDMA Products
China’s 3G Standard TD-SCDMA Blooms
China’s 3G attack, via Europe - ZTE, Huawei clinching important deals in Europe

Gartner Warns IT Enterprises away from Chinese Dependency

From iTnews: Don't count on China: Gartner

"Gartner this week issued a report encouraging enterprises to reduce any dependency on products and services from north-east Asia. Pundits had warned of unstable relations between China and Japan for the foreseeable future, Gartner said.

Dion Wiggins, a director at Gartner Research, said some 95 percent of the largest 2000 companies in the world had "extensive" interests -- including investments and staff -- in China and Japan.

"Most large global companies will have to adjust their strategies and plans if the China-Japan situation remains volatile. For many companies, it is no longer ‘business as usual’ in north-east Asia," Wiggins said."

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MSN China Portal Launched Today

From Reuters UK: Microsoft opens MSN portal for China Web surfers

"Software giant Microsoft Corp. on Thursday launched MSN China, a Chinese-language Web portal with content provided by Chinese partners, to tap deeper into the world's second-largest Internet market.
The portal will be run through Shanghai MSN Network Communications Ltd., a joint venture Microsoft established on May 11 with government-operated Chinese firm Shanghai Alliance Investment Ltd."

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The9's Q1: Net Loss of 10.5 mln Yuan - Preparing for "World of Warcraft" Launch

From Forbes: China online game operator The9 Q1 net loss 10.5 mln yuan

"Chinese online game operator and developer The9 Ltd said it recorded an unaudited net loss of 10.5 mln yuan in the first three months of this year compared with a net profit of 3.4 mln yuan in the same period of 2004.

The Nasdaq-listed company said the loss was due to 'incremental costs' related to its new game World of Warcraft and delayed upgrades of joint venture 9Webzen Ltd's game MU."

Read more:
The9 Records 500,000 Peak Concurrent Users For World of Warcraft
The9 commits $74m for WoW
China's Net Gamers: Ready to Rumble

China Telecom Seeks Foreign Strategic Partner

From Herald Tribuen: China Telecom seeks partner for expertise

"China Telecom, China's biggest fixed-line phone operator, said Wednesday that it was seeking strategic partners to expand abroad and to improve corporate governance.

"We need a strategic partner in the long run to help develop our global strategy and improve the company's inner workings," the chief executive, Wang Xiaochu, said at a briefing in Hong Kong after an annual shareholders' meeting. "We don't need their funds."

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Microsoft's Red Menace: IBM-Lenovo Deal Could Threaten Bill Gate's Empire

From Business 2.0: Microsoft's Red Menace
(article is from January 07, 2005 - but still worth reading)

"When IBM announced (...) that it is selling its PC business to China-based PC maker Lenovo, a fair bit of head scratching ensued. But here's an interesting scenario (and let me stress that it's a hypothetical one), courtesy of tech strategy consultant Boris Petrov, that would make the deal pay off in spades: IBM could use Lenovo to spread Linux in the fastest-growing PC market, China."

"Seen in this light, the Lenovo deal could be a way for IBM to try to outflank archrival Microsoft. Of course, today IBM PCs run on Intel chips and Microsoft's Windows operating system. But IBM is also the biggest corporate backer of the open-source Linux operating system. While Linux is quite popular on servers, it has gone practically nowhere in the desktop market. Trying to push Linux-based desktop computers in the United States or other developed markets is a losing strategy. But China and other developing markets are different."

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Read more:
Interview With Lenovo Co-Founder Liu Chuanzhi: With Lenovo, from Legend to IBM
Lenovo Moves Into Global PC Top Ranks
Linux in China: Red Flag Pins Hopes on Asianux 2.0
China's Greatest Tech Myths - IBM-Lenovo deal, Linux, Piracy

China Online Travel Service eLong Posts Q1 Net Loss

From ChinaTechNews: eLong Posts Q1 Net Loss

"eLong.com (LONG) has reported its unaudited financial results for the first quarter ended March 31, 2005. The company recorded a net loss of US$850,000 for the quarter, but total revenues increased 46% year-over-year to US$4.7 million and travel revenues increased 63% year-over-year to US$4.5 million.

Hotel revenues increased 42% year-over-year to US$3.6 million and air ticketing revenues increased 137% year-over-year to US$450,000.
eLong's cash balance, restricted cash, and cash equivalents at the end of the quarter were US$130.3 million, including restricted cash and cash equivalents of US$12.4 million."

China Net Invstor: Barry Diller's InterActiveCorp, which owns US online travel services provider Expedia, owns 51 percent of eLong.

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Barry Diller (IAC) infuses cash to Chinese online travel site eLong

Major 3G Service Vendors Cooperate with Chinese Partners to Deliver TD-SCDMA Products

From DigiTimes: Major 3G service vendors ready to grab a share in China’s 3G market

"With the recent signing of a strategic alliance agreement between Ericsson and China-based ZTE Corporation to develop time division synchronous CDMA (TD-SCDMA) products in China, the world’s leading telecom service companies are poised to take a share of China’s upcoming 3G market, according to sources at Taiwan networking equipment makers.
Ericsson is the fourth of the world’s leading vendors, trailing Siemens (with Huawei), Alcatel (w. Datang Mobile) and Nortel Networks (w. China Putian), to sign a cooperation agreement with a Chinese partner to deliver TD-SCDMA products.

TD-SCDMA is a 3G technology developed by the Chinese, is competing with the WCDMA and CDMA2000 standards for 3G service licenses in China, the sources noted.
Ericsson and its competitors alike are all planning to launch TD-SCDMA related products and equipment in mid-2005, the sources noted."

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China's Innovation Is Setting up the United States for "Sputnik 2005"

From journalstar.com: China's innovation: 'Sputnik 2005'

"Government research dollars have become scarcer over the past several years, Brian Halla said Monday, and that's setting up the United States for what he calls "Sputnik 2005."

That's the term the chairman and CEO of National Semiconductor Corp. uses to describe the moment when Americans "first realize that all the technology innovations are coming from China."

"Halla reminded his audience that the original Sputnik was a wake-up call notifying the United States it had fallen behind in the space race. Within months after the 1957 Soviet launch of the satellite, said Halla, President Dwight D. Eisenhower authorized $1 billion for the space program, and the U.S. was the first to the moon."

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In Walling off Software Market, China Forgets Trade Goes Two Ways

From MercuryNews: In walling off software market, China forgets trade goes two ways

"When it comes to information technology, China is a waking giant. With a total information and communications technology marketplace of almost $100 billion, the Chinese appetite for computers, software and networks has more than doubled since 2000. All things being equal, China's high-tech growth is a good thing. With more than 1 billion people and a rapidly growing economy, China should be a tremendously positive trading partner, and the U.S. information technology industry has championed China's accession to the World Trade Organization.

But to be widely embraced, the door to global trade must swing both ways. Not even considering a piracy rate exceeding 90 percent, China is now considering taking the additional step of rolling back the access that foreign software companies currently enjoy in the Chinese government procurement market.

China is in the process of implementing a ``buy Chinese'' software procurement policy for government systems, which, if implemented restrictively, will dramatically inhibit foreign involvement in software sales to the Chinese government."

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China Gets Blogged - Edwyn Chan's Blog Experiment

From Wired News: Ready or Not, China Gets Blogged

China Net Investor:
Last month, during the anti-Japanese protests in China, Edwyn Chan wanted to let people across the news-starved massive country to keep track of unfolding events and believed this was an opportunity to see whether blogs, which have not yet caught on in China, could translate.
Within four days of launching kangri.blogku.com, he drew upwards of 10,000 people - and the attention of Gong An, the Chinese internet police, who promptly told him to continue as long as he keeps it tame.

"Now the 24-year-old Chan, who has a business degree from New York University, is hoping to build a blog empire in China. His model? None other than Nick Denton, the Rupert Murdoch (without the money) of the weblog set, who started the Gawker Network, operator of meanie gossip rag Gawker; Gizmodo, which feeds gadget lust; and Wonkette, the Dorothy Parker of the web set.
Chan's media network already has three blogs up and running, including Dianziren, which covers consumer electronics; a humor blog called Shuanga; and Jiaexp, a site for gamers. He also has plans for two more: one for women that would be about beauty and cosmetics, the other he hopes could mimic Gawker (except it would be funny)."

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Linktone Posts Impressive Q1 Results

From ChinaTechNews: Linktone Posts Impressive Q1 Results

"Linktone (LTON) has announced its financial results for the first quarter ended March 31, 2005. The company posted net income of $3.2 million for the quarter, compared with $2.8 million for the first quarter of 2004 and with $3.3 million for the fourth quarter of 2004. Gross revenues totaled $15.1 million, up 61% from $9.4 million for the first quarter of 2004 and down from $15.5 million for the fourth quarter of 2004."

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China Net Investor:
Chinese wireless value-added services provider Linktone specializes in the development, aggregation, marketing and distribution of consumer wireless content and applications (ring tones, screen savers, short message service etc.) for access by China's approximate 268.7 million mobile phone users through two mobile network operators, China Mobile and China Unicom.

Zhongguancun - China's Silicon Valley

From MSNBC: Can China build its own Silicon Valley?

"“Zhongguancun” doesn’t roll off the Western tongue easily, but it will soon be an address that technology investors must learn. For 25 years, locales from Singapore to the south of France have tried to create their own Silicon Valleys, but the original’s remarkable spirit has never been duplicated. China, however, is putting the finishing touches on its own Silicon Valley — and this time, they may have found the recipe. "

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Top China Mobile Operator Adds 3.2 Million Subscribers in April

From MarketWatch: Top China mobile operator adds 3.2 million subscribers in April

"China Mobile Ltd., the listed arm of China's largest mobile phone operator, said Friday it added 3.232 million new subscribers in April, down from additions of 3.251 million in March.

China is the world's largest telecom market, with about 344 million mobile users at the end of February and a mobile penetration rate of 25.9%."

Read more:
China Mobile: You're Still the One
China's Dueling Wireless Players: China Mobile vs. China Unicom

China's Future: A Nation of Geeks?

From Fortune: China's Future: A Nation of Geeks?

"You already knew that most of your electronic devices are made in China. But it is becoming state-of-the-art in the use of technology too. For instance, China has 350 million cellphone users, according to Information Industry Minister Wang Xudong, who spoke at the FORTUNE Global Forum earlier this week in Beijing. That’s more than any other country in the world. As for the Internet, about 100 million Chinese are already online. That puts it No. 2 behind the U.S. As more and more of its 1.3 billion people get online in the next few years, China will lead the world in this too. And it won’t be long before it becomes the world’s largest market for personal computers (it recently passed Japan to become No. 2)."

"Yahoo’s Terry Semel and eBay’s Meg Whitman, both of whom played prominent roles at the forum, both told me that China could represent the largest part of their business in 10 years. (...) But while Yahoo and eBay are global tech giants, their market leadership in China is not pre-ordained. This country is too entrepreneurial for that. The biggest web portals are local—Sina and Sohu. Both are among the world’s top 10 Internet sites in terms of traffic. And eBay is facing tough competition in China from Taobao, which entered the online auction market later than eBay, but made its listings free, forcing eBay’s prices down. Both now claim to be No. 1 in China, but it’s a hard-fought battle, made more so by Yahoo’s auction joint venture with Sina."

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Campaigners quiz Google on China play - "Will you agree to censor Google ?"

From The Register: Campaigners quiz Google on China play

"Reporters without borders - aka Reporters sans Frontiers (RSF) - has taken Google to task for its baby steps towards setting up business in China. The organisation, which campaigns across the globe for the freedom of the press, and "denounces violations of the human rights", has written to Google's founders, Larry Page and Sergey Brin, demanding a clear indication as to whether or not Google will censor its search results at Beijing's behest."

Letter to Larry Page and Sergey Brin : "Will you agree to censor Google ?"

"We simply ask you to reject self-censorship," (...). "If the Chinese authorities want to block access to certain websites, they must do it themselves. Indeed, they do block many sites. But we would find it extremely disturbing if you yourselves were to participate in the Chinese government's policy of suppressing press freedom."

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China Auction Wars Episode III Part 6 - Revenge of the Taobao

From Forbes: Alibaba CEO says Taobao will dominate China online auctions

"China's online auction market is large enough to support two major players, but Taobao.com will take the lion's share of the segment, Jack Ma, the chief executive of Alibaba.com, told XFN-Asia.

'The market is so big and so complicated, so probably we'll have at least two big players... I think Taobao in the future will get 70 pct (of the market) and EBay definitely will get 20 or 30 pct,' he said."

"At present, Taobao has 7.5 mln product listings, which is 20 times higher than Ebay China's, Ma said. In addition, EBay China must adhere to EBay's global platform, Ma said. This means that any China-specific adjustments to the site must be cleared with EBay in the US, which hinders the company's ability to produce a business truly tailored for the Chinese market. 'I think the global platform for EBay China, that's a bad thing,' he said."
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China Net Investor: eBay's view on the chinese auction market

"eBay Inc dominated China's online auction industry with an estimated 80 pct market share through Shanghai-based Eachnet last year. Whitman (CEO and President of eBay) said the company is adding an 'unprecedented' million regular users a quarter to its China operations."

Read more:
China's Online Auction War Rages On: 1pai General Manager Zhen Zhaodong Resigns
eBay Targets China as its Biggest Market Within a Decade
Putting a value on China's Alibaba
Ebay Aims to Conquer China but Homegrown Rival Taobao Tries to Repel the Invasion

China's Big Three Telecom Equipment Vendors Eye IPTV

From Lightreading: China's 'Big Three' Eye IPTV

"The good news for North American and European equipment vendors: Chinese megavendors (Huawei, ZTE and UTStarcom) have yet to conquer IPTV. The bad news: They're working on it."

"Furthest along perhaps is UTStarcom with its mVision end-to-end IPTV platform. The U.S.-based company has one announced IPTV deployment, a 12,000 subscriber initial deployment for the CLEC SmartTel Communications in Florida and Alabama. The company told analysts Wednesday it has 40 Chinese trials going and a “cumulative $100 million in IPTV contracts.”"

"Early this year, ZTE signed a contract worth more than $20 million with Atlas Interactive, India's largest IPTV carrier. ZTE, which includes Microsoft's middleware in its telco TV offering, will reportedly supply the infrastructure, software and integration services needed to deploy a new IPTV network in India, in a deal valued at $1 billion."

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Chinese Equipment Vendor Huawei on a Roll - Deepens DSLAM Penetration

From Lightreading: Huawei Deepens DSLAM Penetration

"Chinese equipment vendor Huawei Technologies Co. Ltd. is on a roll these days and the threat it poses to incumbent equipment vendors is clear from the latest analyst figures. In the battle for market share, Huawei is rapidly closing in on vendors like Alcatel, the long-time DSLAM equipment leader.

In its "Broadband Quarterly Shipments Analysis," Dittberner Associates Inc. reports Huawei’s DSLAM port shipments increased during the first quarter by 21.77 percent compared with the fourth quarter of last year, despite the overall market remaining flat.

That growth came at Alcatel's expense, as its shipments fell by 19.37 percent during the same period, and boosted Huawei to the number 2 position in the market."

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China's Mobile Giants Squeeze Tencent Earnings

From The Standard: Mobile giants squeeze Tencent earnings

"Tencent Holdings, providers of China's most popular instant messaging software QQ, reported an 8.9 percent fall in first-quarter net profit due to the stoppage of a mobile phone messaging service and higher selling costs."

"Tencent dropped ``161 Mobile Chat,'' a service offered to China Mobile's subscribers, at the start of the year after the mobile operator demanded to replace the previous revenue-sharing arrangement with a system in which Tencent would receive only a fixed fee.
Also starting this year, China Unicom will increase charges on messaging services from 12 percent of gross revenues to 20 percent, said Tencent chief financial officer Patrick Tsang, further adding pressure on its MVAS business."

"Revenues from fee-paying Internet value-added services (IVAS) such as QQ increased 42.5 percent to 149.1 million yuan in the first quarter to help offset the decline in MVAS sales. Overall, first-quarter revenues increased 16.7 percent to 300.5 million yuan on a year ago, though they were down 4.5 percent quarter on quarter."

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China's Online Auction War Rages On: 1pai General Manager Zhen Zhaodong Resigns

From Pacific Epoch: 1pai GM Zhen Zhaodong Resigns

"Yahoo founder Jerry Yang announced at an employee conference on May 13 that 1pai general manager Zhen Zhaodong will resign soon, reports China Business News quoting an 1pai insider. 1pai is Yahoo China and Sina's (Nasdaq: SINA) online auction joint venture. Zhen confirmed the report with China Business News. (...) An insider revealed that Yang believes 1pai's development has been too slow. According to 1pai statistics, total active listings have surpassed 700,000 items and the value of daily transactions was over two million Yuan in February 2005."

China Net Investor:
"To take on EBay in the world's most populous nation, Yahoo formed 1Pai.com in January 2004 with Shanghai-based Sina Corp. (China's biggest Internet portal). But so far 1Pai has been a distant third in China's auction market. The largest challenger to EBay in China is Taobao.com, an auction site founded 16 months ago by China's B2B giant Alibaba.com and Softbank of Japan.

Read more:
eBay Targets China as its Biggest Market Within a Decade
Putting a value on China's Alibaba
Ebay Aims to Conquer China but Homegrown Rival Taobao Tries to Repel the Invasion

PiperJaffray and Goldman Sachs On Shanda's Q1

From billsdue (weblog on Chinese gaming market): Research reports On Shanda's Q1

Piper Jaffray (Raises 12 month target to 59):
"It is hard to find a stronger pipeline anywhere else in the online game sector in China (or elsewhere), and it is hard to find a more solid business model than Shanda's. Margins keep improving every quarter while the company's operating expenses are becoming smaller as a percentage of revenues. As such, we feel more confident in our position that Shanda should be asolid holding for China investors, possibly comprising their largest holding." Download report

Goldman Sachs (Raises 12 month target to 39):
"We still view all the Chinese game operators as at risk of slower qoq revenue growth in 2Q and 3Q due to their users migrating away to WoW. However, we believe Shanda should be well placed to reignite growth post WoW (World of Warcraft - to be launched soon by online game operator the9)" Download report

Telecom's China Syndrome - The Emergence of China's Big Three (Huawei, ZTE, UTStarcom)

From LightReading: Telecom's China Syndrome

"The emergence of China's Big Three (Huawei, ZTE, UTStarcom) is ratcheting up the fear, uncertainty, and doubt among established incumbent vendors – and there's no denying that a clear and present danger exists, especially for vendors that have slipped into the second tier of suppliers. Buyer perceptions of China's telecom vendors continue to improve, as demonstrated in the 2005 Telecom Equipment Market Perception Study published this spring by Heavy Reading; and the ability of China's vendors to compete aggressively on price can seem limitless."

"But there are, in fact, limits to how far China's vendors can go in their price aggression. (...) While Chinese vendors often set their prices 25 to 50 percent below incumbent vendors' to win reference customers abroad, the cost advantage held by China's vendors on the labor front is significantly less than that. This report confirms the general view that China's vendors are sacrificing profitability for market share.
Clearly, they cannot continue to do so indefinitely: It's not in their best interests, nor in the interests of the Chinese government, to subsidize foreign telecom carriers. Moreover, as China's vendors increase their sales and marketing personnel in industrial markets, their labor-cost advantage will begin to deteriorate. The bottom line is that the Chinese cannot indefinitely rely on a low-cost strategy to seize business in developed markets."

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BlackBerry Maker RIM Aims for China Launch

From Cnet news: BlackBerry maker aims for China launch

"Research In Motion is aiming to launch commercial service in China by year's end amid a rapid expansion in Asia, the company's co-CEO said Tuesday.
The maker of the BlackBerry wireless e-mail devices said last October that it had signed a memorandum of understanding with China Mobile to offer its service in China, the world's biggest cellular market with nearly 350 million subscribers.

"I think the table stakes are now where they need to be" in China, co-CEO Jim Balsillie said in a phone interview from Beijing, where he was attending an industry event.
"You should keep your eye closely on what's going to happen with tests... this summer and later this year--aggressive launches."

He declined to say if RIM had signed a definitive agreement with China Mobile, the world's largest mobile carrier by subscribers, since October when the memorandum of understanding was announced."

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China's e-Commerce Enters "Golden Age"

From Asia Times: e-commerce enters "golden age"

"Song Ling, president of the China e-commerce Association, said growth of the online trading business has increased by an average of 40% over the past three years. Song is also optimistic for the future, predicting an average annual growth rate of 50% over the coming three years. According to Song, the robust growth of China's Internet population, especially broadband Internet users, is a fundamental driving force in the explosive growth of e-commerce."

"According to the China Internet Network Information Centre, China's Internet users totalled 94 million individuals by the end of 2004, including 6.1 million broadband Internet users. It is estimated the number of broadband Internet subscribers will grow to 176 million in 2010. (...) According to CNNIC's (China Internet Network Information Centre) statistics, more than 40 million people conducted transactions on the Internet in 2004, compared with 10.65 million in 2001. More than 60% of people say they will try online trading this year."

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Presentation from Morgan Stanley (Mary Meeker) on China's Internet

Interesting presentation from Morgan Stanley on the top players in China's Internet arena.

Companies mentioned: Shanda, NetEase, Sina, Tencent, Ctrip, Sohu, Tom Online, 51job, chinadotcom, KongZhong, Linktone

Summary:
• Internet serving important role in helping modernize China and
drive efficiencies
• Still, small revenue / profit levels for China Internet companies
• Like US in mid-1990s, we are at the beginning…but, in many
respects, for China, impact may be greater
• Lots of opportunity with lots and lots of risk
• Andy Xie notes that… “In the middle of most small towns in
Europe or the US stands a church; in China, it is usually a
Kentucky Fried Chicken or a McDonald’s or both...”

Download presentation

China's Shanda Q1 2005 Net Revenue up 118.3 pct year-on-year to 497 mln yuan

From Forbes: China's Shanda Q1 2005 net revenue up 118.3 pct year-on-year to 497 mln yuan

"Internet gaming firm Shanda Interactive Entertainment Ltd said net revenues rose 118.3 pct for the first three months of 2005 to 497 mln yuan from a year earlier, driven by strong growth in its gaming business.

In a statement, Nasdaq-listed Shanda said online gaming revenues for the first quarter increased 96.7 pct year-on-year and 13.2 pct from the previous quarter to 441.6 mln yuan.

In February, Shanda bought 19.5 pct of web portal operator Sina Corp's outstanding shares and the following month Shanda announced a strategic partnership with Baidu.com Inc, a Chinese language search engine developer and operator. Shanda said it also formed a strategic partnership in April with Universal Music, pursuant to a memorandum of understanding, to offer Universal's online music to its users through streaming, and in the future on a downloadable basis over its entertainment portal."

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China Should Hold off on 3G Telecom Rollout but Delay Unlikely

From Forbes: China Should Hold off on 3G Telecom Rollout but Delay Unlikely

"China should hold off on rolling out a third-generation (3G) mobile telecommunications network, at least until after industry restructuring, but it is unlikely to do so, CLSA head of telecoms Francis Cheung said."
'China first needs a wholesale restructuring of the industry, the reason being because 3G is too expensive,' he said."

"'China has four operators - China Mobile, China Unicom, China Telecom and China Netcom - if everyone gets a 3G license there's four 3G networks,' he said. Telecom and Netcom would seek 3G licenses because of an expected deterioration in fixed-line profitability, he said.
Unicom already has two networks, GSM and CDMA, and is 'not doing well with either one of them, so it should sell one of these networks to China Telecom or China Unicom,' he said."

"Cheung said there is no first-mover advantage in mobile telecoms technology and argued that the reverse may be the case.
'China came to 2G very, very, late, and because they came late they got all of the equipment cheap and all of the handsets cheap,' he said. 'That's one of the reasons they went from 1 mln (subscribers in 1995) to 330 mln today. There's not a lot of advantage in being first; there is a lot of risk with being first.' "

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eBay Targets China as its Biggest Market Within a Decade

From Forbes: eBay targets China as its biggest market within a decade

"At a Beijing financial forum, Whitman said if the company executes its strategy properly, 'China could be eBay's largest local market in a five-to-10 year period'.
The online auction market in China is booming, with industry experts forecasting the volume of transactions to surge 75 pct to 3.37 bln yuan this year from last year and to reach 8.06 bln yuan by 2006."

"eBay Inc dominated China's online auction industry with an estimated 80 pct market share through Shanghai-based Eachnet last year. Whitman said the company is adding an 'unprecedented' million regular users a quarter to its China operations."

"She said the company's online purchasing system PayPal could also help address problems of credit risk and security problems that constrain online transactions."

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The9 Records 500,000 Peak Concurrent Users For World of Warcraft

From Pacific Epoch: The9 Records 500,000 Peak Concurrent Users For WoW

"The9 (Nasdaq: NCTY) announced on Friday that its licensed 3D online game World of Warcraft (WoW) recorded 500,000 peak concurrent players one week after open beta testing started on April 26. According to The9, WoW's 96 server groups were full several hours after open beta testing started and during peak times, had nearly 2,000 players queued up. The9 is currently preparing the fourth district of the game."