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Copyright © 2009 by Interfax China Ltd. All rights reserved.
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May 16 - May 22, 2009
Volume II, Issue 20
CONTENTS:
INTERFAX TMT CHINA--------------------------------------------------------------------------------------------------------------------- 2
HIGHLIGHTS----------------------------------------------------------------------------------------------------------------------------------- 2
THE WEEK IN REVIEW ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 2
TOP STORY------------------------------------------------------------------------------------------------------------------------------------ 3
CHINA TO INCREASE LOAN ACCESS FOR TECH COMPANIES--------------------------------------------------------------------------------------------------------------------------- 3
HEADLINE NEWS ---------------------------------------------------------------------------------------------------------------------------- 3
GIANT INTERACTIVE TO ESTABLISH NINE GAME DEVELOPERS AS SUBSIDIARIES --------------------------------------------------------------------------------------------- 3
CHINA MOBILE AND SARFT TO LAUNCH TD-SCDMA+CMMB NETBOOKS AS EARLY AS JULY-------------------------------------------------------------------------------- 4
CHINA MOBILE AWARDS 12 COMPANIES TD-SCDMA RESEARCH GRANTS--------------------------------------------------------------------------------------------------------- 4
STATISTICS AND DATA ------------------------------------------------------------------------------------------------------------------- 5
CHINA MOBILE 3G SERVICE USERS NUMBER 514,000 BY APRIL'S END-------------------------------------------------------------------------------------------------------------- 5
CHINA'S ONLINE GAME MARKET TO BE WORTH $9.93 BLN BY 2012 ------------------------------------------------------------------------------------------------------------------ 5
INTERNET AND SOFTWARE ------------------------------------------------------------------------------------------------------------- 6
CHINA TELECOM 3G SERVICE TO INTEGRATE WITH BAIDU------------------------------------------------------------------------------------------------------------------------------ 6
WIRELESS ------------------------------------------------------------------------------------------------------------------------------------- 6
CHINA TELECOM TO OFFER MOBILE SEARCH ON 2G AND 3G NETWORKS IN JUNE-------------------------------------------------------------------------------------------- 6
DATANG TELECOM TO RAISE $176 MLN FOR TD-SCDMA R & D------------------------------------------------------------------------------------------------------------------------- 6
CHINA TELECOM TO INVEST $730 MLN IN INNER MONGOLIA OVER NEXT FIVE YEARS --------------------------------------------------------------------------------------- 7
TELEMATICS MARKET EMERGING IN CHINA --------------------------------------------------------------------------------------------------------------------------------------------------- 7
HANDSETS------------------------------------------------------------------------------------------------------------------------------------- 8
CHINA UNICOM JOINS ANDROID CAMP ---------------------------------------------------------------------------------------------------------------------------------------------------------- 8
GAMING----------------------------------------------------------------------------------------------------------------------------------------- 9
PERFECT WORLD INVESTS IN WEB GAME COMPANY-------------------------------------------------------------------------------------------------------------------------------------- 9
MEDIA ------------------------------------------------------------------------------------------------------------------------------------------- 9
CHINESE FILM DISTRIBUTOR SUES APPLE FOR COPYRIGHT INFRINGEMENT---------------------------------------------------------------------------------------------------- 9
ELECTRONICS AND HARDWARE-----------------------------------------------------------------------------------------------------10
QINGDAO DIGITAL TERRESTRIAL TV OPERATOR OFFERS 30,000 FREE TERMINALS -----------------------------------------------------------------------------------------10
LENOVO RACKS UP $226 MLN LOSS IN FISCAL YEAR -------------------------------------------------------------------------------------------------------------------------------------10
FEATURES------------------------------------------------------------------------------------------------------------------------------------11
CHINA MOBILE FAVORITE TO WIN MOBILE TV RACE---------------------------------------------------------------------------------------------------------------------------------------11
CHINESE TELECOM OPERATORS CAUGHT NAPPING BY TRADITIONAL MEDIA MOBILE SERVICES----------------------------------------------------------------------12
FUTURE REMAINS UNCERTAIN FOR CHINA'S SEMICONDUCTOR INDUSTRY -----------------------------------------------------------------------------------------------------12
INTERVIEWS ---------------------------------------------------------------------------------------------------------------------------------14
CHINA TO OVERTAKE INDIA AS IT OUTSOURCING LEADER IN NEXT FIVE YEARS - KPMG PARTNER -------------------------------------------------------------------14
EMERGING COMPANY PROFILE ------------------------------------------------------------------------------------------------------15
BEIJING TURNA INTERNET TECHNOLOGY CO. LTD.----------------------------------------------------------------------------------------------------------------------------------------15
EVENTS ----------------------------------------------------------------------------------------------------------------------------------------15
MOBILEMONDAY SHANGHAI-------------------------------------------------------------------------------------------------------------------------------------------------------------------------15
OPTINET CHINA 2009-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------16
WIRELESS CHINA INDUSTRY SUMMIT 2009----------------------------------------------------------------------------------------------------------------------------------------------------17
INTERFAX INDUSTRY DATABASES--------------------------------------------------------------------------------------------------18
INTERFAX INDUSTRY DATABASES----------------------------------------------------------------------------------------------------------------------------------------------------------------18
TMT.INTERFAXCHINA.COM WEEKLY BRIEFING
May 16 - May 22, 2009
Volume II, Issue 20
Copyright © 2009 by Interfax China Ltd. page 2
INTERFAX INDUSTRY REPORTS------------------------------------------------------------------------------------------------------18
WEEKLY MONITORS - CHINA ----------------------------------------------------------------------------------------------------------18
RESEARCH SERVICES -------------------------------------------------------------------------------------------------------------------19
CUSTOM RESEARCH -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------19
THE INTERFAX TMT CHINA TEAM----------------------------------------------------------------------------------------------------19
INTERFAX TMT CHINA
INTERFAX TMT CHINA
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HIGHLIGHTS
The week in review
This week, the Chinese government announced new measures to increase the availability of loans to tech companies,
which have dried up in the wake of the economic downturn. The government will set up non-profit third-party
institutions with the express purpose of guaranteeing loans given to technology companies and encourage regional
governments and high-tech parks to launch backup funds to reduce the risks faced by banks providing loans to small and
medium-sized technology companies.
Game company Giant Interactive announced it would bring nine independent game development teams into its fold by
establishing them as subsidiaries, thereby giving it more control over their actions.
China Mobile and the State Administration of Radio, Film and Television (SARFT) are in talks over jointly launching
netbooks with TD-SCDMA and CMMB (China Mobile Multimedia Broadcasting) technology, the first batch of which will
be released between July and September this year.
The operator also announced it would provide funding of $87.77 million to 12 mobile phone and chip manufacturers for
the research and development of terminal devices based on the homegrown TD-SCDMA standard.
This week, we have features looking at the race for dominance in the mobile TV sector, the challenge faced by telecom
operators in mobile news services from traditional media groups, and the uncertain outlook for China's semiconductor
industry.
In this week's interview, Egidio Zarrella, global head and partner of KPMG's IT advisory, tells Interfax how China is set to
overtake India to become the world's leading IT outsourcer in the next five years.
Please note that their will be no report due to next week's Dragon Boat Festival public holiday in China, which
falls on May 28 and May 29. Stories from that week will be included in the following week's report.
TMT.INTERFAXCHINA.COM WEEKLY BRIEFING
May 16 - May 22, 2009
Volume II, Issue 20
Copyright © 2009 by Interfax China Ltd. page 3
TOP STORY
China to increase loan access for tech companies
By Hua Jinglei
The Chinese government will take measures to encourage commercial banks to extend more loans to technology
companies, the China Banking Regulatory Commission (CBRC) announced on May 19.
The government will set up non-profit third-party institutions with the express purpose of guaranteeing loans given to
technology companies. It will also encourage regional governments and high-tech parks to launch backup funds to reduce
the risks faced by banks providing loans to small and medium-sized technology companies.
"Small and medium-sized technology companies have been hit by the global economic downturn as a large
number of them focus more on overseas markets than at home," a source with China's largest commercial
bank, the Industrial and Commercial Bank of China (ICBC), who wished to remain anonymous, told Interfax.
According to the source, it has been difficult for small and medium-sized technology companies to obtain bank loans due
to the high rate of failure among such companies following the economic downturn.
"In most cases, the credit limit offered by ICBC to small and medium-sized companies, including technology companies,
is RMB 30 million ($4.39 million). We are currently reassessing this in light of the CBRC announcement," the ICBC
source said.
Want to comment on this story or others? Visit the Interfax TMT China Subscriber Forum at
http://tmt.interfaxchina.com/forum.
HEADLINE NEWS
Giant Interactive to establish nine game developers as subsidiaries
By Hua Jinglei
Nasdaq-listed Chinese online game operator Giant Interactive Group Inc. is to bring nine independent game development
teams into its fold by establishing them as subsidiaries, an employee with Giant Interactive told Interfax on May 19.
"Giant Interactive will set up qualified game R & D teams as companies under it, instead of simply investing in them,"
Sun Geyang, Giant Interactive's PR executive, said.
According to Sun, Giant Interactive will hold controlling stakes of 51 percent in the subsidiaries, while the game R & D
teams will hold the remaining 49 percent stakes.
"The R & D teams themselves will be responsible for the operation and management of the subsidiary
companies. However, Giant Interactive will retain control over the subsidiaries by providing support and
regularly evaluating their performance," Sun said.
Zhao Xufeng, an industry analyst with iResearch, told Interfax that Giant Interactive is reducing its R & D investment
risks by setting up the subsidiaries.
"Stricter provisions regarding each shareholder's responsibility will provide Giant Interactive with more stability and
capital security in its game R & D investment," Zhao said.
Giant Interactive will continue to evaluate game R & D projects and set up more such subsidiaries, according to Sun.
Want to comment on this story or others? Visit the Interfax TMT China Subscriber Forum at
http://tmt.interfaxchina.com/forum.
TMT.INTERFAXCHINA.COM WEEKLY BRIEFING
May 16 - May 22, 2009
Volume II, Issue 20
Copyright © 2009 by Interfax China Ltd. page 4
China Mobile and SARFT to launch TD-SCDMA+CMMB netbooks as early as July
By Cindy Geng
China Mobile and the State Administration of Radio, Film and Television (SARFT) are in talks over jointly launching
netbooks with TD-SCDMA and CMMB (China Mobile Multimedia Broadcasting) technology, the first batch of which will
be released between July and September this year, a source at China Mobile told Interfax on May 20.
"SARFT and China Mobile cooperated over TD-SCDMA and CMMB phones during the Beijing Olympics. Because of
this, talks have been progressing well," the source in China Mobile's marketing department said. "We have reached an oral
understanding, and some PC manufacturers have already started producing TD-SCDMA plus CMMB netbooks."
Liu Tingjun, deputy general manager of China Satellite Mobile Broadcasting Corp., the subsidiary of SARFT in charge of
the national operation of CMMB, confirmed at a press conference on May 19 that his company is in talks with China
Mobile over integrating CMMB chips into TD-SCDMA netbooks.
"CMMB has covered 175 cities in China and will expand to cover 333 cities by the end of the year," the China Mobile
source said.
Want to comment on this story or others? Visit the Interfax TMT China Subscriber Forum at
http://tmt.interfaxchina.com/forum.
China Mobile awards 12 companies TD-SCDMA research grants
By Hua Jinglei
China Mobile will provide funding of RMB 600 million ($87.77 million) to 12 mobile phone and chip manufacturers for
the research and development (R & D) of terminal devices based on the homegrown TD-SCDMA standard, China
Mobile announced on May 17.
According to the announcement, the 12 companies include nine mobile phone manufacturers, namely Motorola Inc.,
Samsung Corp., Yulong Computer Telecommunication Scientific Co. Ltd., Dopod Communication Corp., LG Electronics
(China) Co. Ltd., ZTE Corp., Hisense Group, Guangzhou New Postcom Equipment Co. Ltd. and Huawei Technologies
Co. Ltd. along with three chip makers, namely T3G Technology Co. Ltd., MediaTek Inc., and Spreadtrum
Communications Co. Ltd.
As China Mobile stipulated that chip makers and mobile phone manufacturers pair up in the R & D project, T3G will
work with Motorola, Samsung, Dopod and Huawei while MediaTek will work with Yulong, ZTE and LG. Spreadtrum
will collaborate with Hisense and New Postcom.
Motorola, Samsung, Yulong, Dopod and LG, together with their chip maker partners, will receive combined funding of
RMB 310 million ($45.35 million) from China Mobile for R & D of high-end TD-SCDMA mobile phones. The remaining
mobile phone manufacturers, together with their chip maker partners, will be responsible for R & D of low-end TD-
SCDMA mobile phones and will receive combined funding worth RMB 290 million ($42.42 million) from China Mobile,
the announcement said.
When contacted by Interfax on May 18, Zhou Xinfang, Spreadtrum's spokeswoman, declined to reveal the precise amount
her company will receive from China Mobile.
While Nokia Corp. was not selected by China Mobile as one of the mobile phone manufacturers, Cherry Gong, a
public relations executive from Nokia China, told Interfax on May 18 that Nokia will continue to invest in TD-
SCDMA mobile phone development
"Nokia previously cooperated with China Mobile on TD-SCDMA mobile phone development. Our first TD-SCDMA
mobile phone, which runs on Symbian's S60 operating system, will be launched before the end of this year," Gong said.
Interfax commentary: Nokia's leading position in the Chinese market may be challenged by other mobile phone
manufacturers, in particular, those from South Korea, which have seen their market shares increase rapidly. China
Mobile's dominance in China's telecommunication market will not be broken in the short term, meaning the TD-SCDMA
TMT.INTERFAXCHINA.COM WEEKLY BRIEFING
May 16 - May 22, 2009
Volume II, Issue 20
Copyright © 2009 by Interfax China Ltd. page 5
standard is likely to be the most-used 3G standard in China. As such, Nokia's hesitation to launch TD-SCDMA mobile
phones may lead to pressure from both China Mobile and rivals who got into TD-SCDMA earlier.
Want to comment on this story or others? Visit the Interfax TMT China Subscriber Forum at
http://tmt.interfaxchina.com/forum.
STATISTICS AND DATA
China Mobile 3G service users number 514,000 by April's end
China Mobile's 3G TD-SCDMA service users numbered 514,000 as of April 30, 2009, China Mobile announced on
May 20.
This marks the first time the operator has officially announced user numbers of its TD-SCDMA services since launching
them under its "G3" brand at the beginning of this year.
China Mobile previously revealed that it will spend a total of RMB 58.8 billion ($8.6 billion) in 2009 on constructing
around 60,000 TD-SCDMA base stations in 238 cities, in order to improve the signal quality of its 3G services.
All three of China's telecom operators saw their growth in user numbers slow in April, according to their
respective reports released on May 20.
Over the month, China Mobile added 5.82 million mobile users, while China Unicom and China Telecom saw their
mobile user numbers increase by 1.4 million and 1.87 million from March, respectively.
Both China Unicom and China Telecom's fixed-line subscribers decreased in April, shedding 0.17 million and 1.9 million
to 109 million and 202 million, respectively.
The user bases of China Telecom and China Unicom's broadband services continued to increase slightly in April, up by
0.72 million and 0.54 million to 47.49 million and 33.15 million, respectively.
The table below details the three operators' subscriber numbers as of the end of April 2009.
Subscriber breakdown of major Chinese operators, April 2009
Service Cumulative
subscribers by Apr 30,
2009 (mln)
Net addition in Apr
(mln)
Monthly change
(%)
Net addition
in March/Feb/Jan/Dec
(mln)
China Mobile 483 5.823 1.21 6.49/6.75/6.67/7.07
GSM service 482.49 -** -** 6.49/6.75/6.67/7.07
TD-SCDMA service 0.514 -** -** -**
China Unicom GSM service 138.833 1.14 0.82 1.85/1.64/0.84/0.42
China Unicom telephone service 108.996 -0.171 -0.16 0.22/-0.5/-0.13/-*
China Unicom broadband service 33.154 0.54 1.63 0.93/0.64/0.97/-*
China Telecom CDMA service 34.71 1.87 5.39 2.21/1.7/1.02/-0.06
China Telecom telephone service 202 -1.9 -0.94 -1.83/-1.55/-0.97/-2.02
China Telecom broadband service 47.49 0.72 1.52 0.87/0.87/0.76/0.7
Source: China Mobile, China Unicom and China Telecom
* Net addition figures taking into account former China Netcom subscribers
** Separate figures for China Mobile's GSM and TD-SCDMA service subscribers are not available
China's online game market to be worth $9.93 bln by 2012
China's online game market will grow by 20 percent per year until 2012, when it will be worth RMB 68 billion ($9.93
billion), according to a report by a research firm released on May 19.
China's online game industry generated RMB 20.8 billion ($3.05 billion) in revenue in 2008, growing by 52.2 percent year-
on-year, according to the iResearch report. Over 80 percent of this came from massively multiplayer online games, with
the remainder coming from Web and mobile games.
TMT.INTERFAXCHINA.COM WEEKLY BRIEFING
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Copyright © 2009 by Interfax China Ltd. page 6
The report also said that China, the world's second-largest online game market, differs from that of the world's largest and
third-largest - the United States and South Korea - in that it is far more reliant on domestic players than overseas sales.
The report said this meant the industry is particularly well prepared for weathering a global recession.
China currently has 55.5 million online game players, according to iResearch. Online game playing grew the fastest among
under 18s and over 40s in 2008, the report said.
INTERNET AND SOFTWARE
China Telecom 3G service to integrate with Baidu
Baidu.com, China's most popular search engine, announced on May 18 that it has partnered with China Telecom to pre-
install Baidu applications in China Telecom's Best Tone mobile search service.
According to the announcement, Best Tone will give users access to Baidu's services, including Web, music and image
searches, news and message boards. Best Tone will be preinstalled on China Telecom's custom-ordered 3G handsets, and
made available to other China Telecom customers for download.
According to the announcement, Baidu and China Telecom will seek further opportunities for cooperation.
China had over 100 million mobile search users in 2008, according to statistics from iResearch, and the figure is set to
grow steadily to 312 million by 2011.
WIRELESS
China Telecom to offer mobile search on 2G and 3G networks in June
China Telecom will roll out mobile search services for both its 2G and 3G networks nationwide in June, a senior official
with the operator's mobile search partner told Interfax on May 19.
"The service is currently available in Shanghai and Chengdu and will be expanded to other cities in China in June," Wang
Congqing, CEO of mInfo Inc., which is providing technology and content for China Telecom's mobile search service,
said.
According to Wang, the mobile search function will be integrated into China Telecom's new SIM cards. Mobile phone and
personal handy-phone system (PHS) users can use the service to search localized information on traffic, weather,
restaurants and entertainment. The service will also be available via text message.
On May 18, China Telecom announced it was partnering with Baidu.com to offer the search engine's services,
including mobile search, to China Telecom customers.
"The cooperation between China Telecom and Baidu only provides mobile search services on China Telecom's 3G
network, while the mobile search service China Telecom is to launch in cooperation with mInfo can also be used by China
Telecom's 2G mobile phone users, as well as PHS users," Wang said.
The mobile search service provided by China Telecom and mInfo will be free of charge, according to Wang, although he
declined to reveal the financial side of the deal between mInfo and China Telecom.
Datang Telecom to raise $176 mln for TD-SCDMA R & D
Datang Telecom Technology Co. Ltd., one of the primary developers of China's TD-SCDMA 3G standard, will raise up
to RMB 1.2 billion ($176 million) to fund TD-SCDMA product research and development, the company announced on
May 18.
TMT.INTERFAXCHINA.COM WEEKLY BRIEFING
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Copyright © 2009 by Interfax China Ltd. page 7
Datang Telecom will issue up to 140 million shares through a private placement to raise the money, which will be used to
finance R & D of TD-SCDMA data cards and data fusion technology and products, according to the company
announcement. The funding will also be used to develop bank cards based on the standard developed by Europay,
MasterCard and Visa.
Datang Telecom plans to spend RMB 96.01 million ($14.04 million) on data card R & D, RMB 191.72 million
($28.04 million) on data fusion technology and RMB 172.02 million ($25.16 million) to develop the bank cards.
Datang Telecom is under great capital stress, Xiong Yuncai, an industry analyst with Guolian Securities, told Interfax. The
company's asset-to-liability ratio exceeds 80 percent and most of its debts are bank loans.
"It is wise for Datang Telecom to finance its R & D projects through a private share placement, which is expected to ease
its current financial pressure. In addition, the data card business is an ideal field for the company to enter since it is strong
in smart card production and the outlook for 3G data cards is promising," Xiong said.
China Telecom to invest $730 mln in Inner Mongolia over next five years
China Telecom has signed an agreement to invest RMB 5 billion ($730 million) in the Inner Mongolia Autonomous
Region over the next five years, according to a company announcement on May 18.
According to the agreement, China Telecom will construct a 3G CDMA2000 1x EV-DO network, a fiber optic
transmission network and a mobile broadband network in the region. China Telecom and the local government will also
launch six projects and build innovation and research service platforms for enterprises to better adopt telecom and IT
technologies.
China Telecom also plans to expand its sales channels and distributors in Inner Mongolia, which will directly create over
20,000 jobs annually.
Telematics market emerging in China
A telematics market is emerging in China, which will provide telecom operators, software developers and content
providers with a new revenue source, an industry analyst told Interfax on May 21.
Telematics, by the industry's definition, refers to the combination of global positioning satellite (GPS) tracking and other
wireless communications for use in automobiles, allowing automatic navigation, roadside assistance and remote
diagnostics.
"China, the largest automobile producer in the world, has also grown into a large automobile consumer, with
annual automobile consumption growth of over 7 percent," Jason Huang, industry analyst with consulting firm
Frost & Sullivan, said.
According to Huang, the fast-growing automobile market is stimulating the telematics market in China, with an increasing
number of automobile manufacturers planning the launch of telematic services in the country.
"In March this year, Toyota Motor Corp. became the first automobile company to launch a telematics service in China
with its 'G-Book' telematics system, which comes pre-installed in its Lexus RX350. More automobile manufacturers will
follow suit in China over the next two years, such as General Motors China and Nissan Motor Co.," Huang said.
Telecom operators, software developers and content providers will play an increasingly important role in the development
of a telematics market in China, although the market will initially be led by automobile manufacturers, according to
Huang.
Traffic information service providers are emerging in China. Companies such as NavInfo Co. Ltd., AutoNavi Software
Co. Ltd. and China TransInfo Technology Corp. (CTFO) are exploring the market by either cooperating with automobile
manufacturers or seeking partnerships with telecom operators.
NavInfo and AutoNavi have so far cooperated with Toyota to provide the latter with navigation maps and real-time
traffic data for its telematics services in Beijing, Shanghai, Guangzhou and Shenzhen, while CTFO is talking with China
Telecom and China Unicom over the provision of real-time traffic data.
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Copyright © 2009 by Interfax China Ltd. page 8
Nevertheless, the market is in its early stages, with the concept of telematics still new to Chinese companies.
"A mature telematics market will constitute three groups of market players in terms of their functions in the industry
chain. The primary tier will consist of software and digital map developers and content providers. Telecom operators and
telematics service providers will form the secondary tier," Huang said.
"The first-tier market players will provide content-integrated software to the secondary-tier players, who will
generate the services. Automobile manufacturers will form the third tier, integrating telematics services into
their automobiles with the help of telecom operators and service providers, which will be sold to end
consumers," Huang continued.
Huang said that during the preliminary stages of China's telematics market development, there will be competition
between automobile manufacturers and telecom operators over control of the industry chain. However, he said the two
parties will eventually negotiate a reasonable split of revenues and control, as each party is essential to the development of
a telematics market.
"The most likely business model of telematics in China will see telematics service providers responsible for user
management and billing, while they will share revenues with the other participants in the industry chain," Huang said.
Interfax commentary: Although Chinese telecom operators are well aware of the emerging telematics market, they have
been distracted by the development of 3G services, though they are bound to enter the telematics field with gusto sooner
or later. Although the analyst believes that the most likely business model for telematics in China will see telematics
services providers taking care of user management and billing, as systems become more complex, it will be telecom
operators who have the expertise to manage the consumer end of the market.
HANDSETS
China Unicom joins Android camp
China Unicom announced on May 17 that it has become a member of the Open Handset Alliance (OHA) to improve
development of handsets and applications based on Google's Android operating system.
"Our UniPlus mobile OS will be based on Android. The first UniPlus phone has been manufactured and is undergoing
tests," Luo Qiuyan, a China Unicom marketing official, told Interfax.
China Unicom said in the announcement that its OHA membership will allow it to develop applications such as
typing software and mobile voice search services based on Android.
Dr. Li Kai-fu, vice president of Google, said that Google will cooperate with China Unicom and launch a range of mobile
search services on the operator's upcoming Android-based OS.
Interfax previously reported that China Unicom is working on its UniPlus mobile OS, although it was still in the early
stages of development. Telecom analyst Fu Liang said that the best way for operators to create a successful mobile OS is
to partner up with a third-party mobile OS developer to integrate their services and applications.
Li Gang, vice president of China Unicom, said in the announcement that Android is the most open platform for mobile
devices that telecom operators, handset manufacturers and application developers can cooperate on to launch products
more quickly and effectively reduce costs.
Android is a mobile terminal OS based on the open source platform Linux and was the brainchild of the OHA, an alliance
formed by Google, China Mobile and another 33 companies in November 2007. China Unicom is the 48th company to
become a member of the alliance.
TMT.INTERFAXCHINA.COM WEEKLY BRIEFING
May 16 - May 22, 2009
Volume II, Issue 20
Copyright © 2009 by Interfax China Ltd. page 9
GAMING
Perfect World invests in Web game company
Nasdaq-listed Chinese online game operator Beijing Perfect World Co. Ltd. has invested RMB 15 million ($2.19 million)
in a Web game developer and operator, the company announced on May 18.
Chengdu Ye Net Science and Technology Development Co. Ltd., which runs 10 Web games on its Web site,
webgame.com.cn, was the recipient of the investment, which Chi Yufeng, CEO of Perfect World, said would diversify his
company's product pipeline and expand its online community services.
"The rate of mergers and acquisitions in China's online game market will increase as fast-growing online game
operators gain sufficient capital to purchase smaller companies," Zhao Xufeng, an industry analyst with
iResearch, said.
According to iResearch, China's online game market will continue to grow by 20 percent per year until 2012, with total
revenues generated by online gaming operators set to reach RMB 68 billion ($9.93 billion) in the same year.
On May 18, Perfect World announced that it generated total revenue of $62 million in the first quarter of 2009, up 40.2
percent year-on-year, and net profit of $31.5 million for the period, up 36.1 percent year-on-year.
MEDIA
Chinese film distributor sues Apple for copyright infringement
A Chinese film distributor has sued Apple Inc. for copyright infringement, the lawyer who filed the lawsuit told Interfax
on May 18.
Unauthorized digital copies of seven popular films, including the well-known Chinese-produced "Chi Bi," Walt Disney's
"Bolt" and a South Korean animated movie "Backkom," have been found on some Apple products at the time they were
sold by one of the company's authorized resellers, Chengdu Xinya Communication Technology Co. Ltd., Zhang Honglei,
a lawyer with Zhenxu Law Firm in Kunming City of Yunnan Province, said.
Zhang said that he has recently filed a complaint in the Intermediate People's Court of Kunming City on behalf of
Shanghai Skynet Asia Culture Communication Co. Ltd., which holds the exclusive rights to distribute Backkom in China.
Skynet Asia Culture Communications has asked for RMB 500,000 ($73,139) in compensation from the two companies. It
has also demanded that Apple and Xinya Communication Technology stop distributing the movies on Apple hardware
and offer an apology on both Apple's Web site and in major Chinese media, Zhang said.
"Although there is no specific rule in China's Copyright Law to directly regulate such copyright infringement,
Apple should take responsibility for its authorized reseller since the latter was found to be involved in copyright
infringement," Zhang said.
The court has accepted the lawsuit and is now reviewing it, Zhang said.
No one at Apple or Skynet Asia Culture Communications was available for comment when contacted by Interfax. Zhang
has also not received any official response from Apple.
TMT.INTERFAXCHINA.COM WEEKLY BRIEFING
May 16 - May 22, 2009
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Copyright © 2009 by Interfax China Ltd. page 10
ELECTRONICS AND HARDWARE
Qingdao digital terrestrial TV operator offers 30,000 free terminals
Qingdao Guangdian Mobile Digital TV Co. Ltd., the exclusive digital terrestrial TV operator in Qingdao City in northern
China's Shandong Province, will distribute 30,000 digital terrestrial TV terminals for free to car owners in order to foster a
user base among private individuals, a senior company employee told Interfax on May 22.
"We will offer the first batch of 10,000 digital terrestrial TV terminals to private car owners in three months, and the
second batch of 20,000 units will be distributed over the next two years," Shi Xianggao, general manager of the company,
which operates digital TV networks for public transport in the city, said.
Qingdao Guangdian Mobile Digital TV purchased the terminals from its partner, Hisense Group, at a much lower price
than the terminal's market price of RMB 2,000 ($292.56), according to Shi.
Private car owners in Qingdao can apply to Qingdao Guangdian Mobile Digital TV to receive one of the free
terminals, which will give them access to nine free TV channels, including those of national state broadcaster
CCTV and regional operators.
In addition to the nine channels it currently broadcasts, Qingdao Guangdian Mobile Digital TV also plans to provide
stock market information via its digital terrestrial TV service. Although the service is provided for free at present, the
company may consider charging users a monthly subscription fee after one year, Shi said.
Qingdao Guangdian Mobile Digital TV started broadcasting digital terrestrial TV based on the Chinese standard, DVB-
TH, during the Beijing Olympics held in August last year. As of May 18, the company has installed over 2,000 digital
terrestrial TV terminals in public transportation and private cars, according to Shi.
Besides Hisense Group, Qingdao Guangdian Mobile Digital TV has also launched partnerships with local commercial
banks and insurance companies concerning the operation of digital terrestrial TV in Qingdao.
Lenovo racks up $226 mln loss in fiscal year
Lenovo Group Ltd., China's largest PC manufacturer, filed $226.39 million in losses for the fiscal year ending March 31,
2009, compared to a profit of $470 million in the previous fiscal year, the company announced on May 21.
During the period, Lenovo's total revenues slid by 8.9 percent year-on-year to $14.9 billion.
Lenovo's Greater China business unit, which covers mainland China, Hong Kong, Macao and Taiwan, was the only part
of the company's business to report a profit, which amounted to $354.18 million.
It also revealed in the report that growth of its global PC sales slowed to 2 percent year-on-year by volume for the period.
Its market share fell to 7.6 percent, ranking fourth globally.
Yang Yuanqing, Lenovo's chairman, admitted in a statement that Lenovo's weak implementation of its strategy
in the fiscal year led to the dramatic decline in profit.
Since the beginning of 2009, Lenovo announced two rounds of restructuring in order to save costs and increase its focus
on emerging markets. The restructuring programs cost a total of $146 million, according to Lenovo.
Yang Xiaopeng, an industry analyst with CCID Consulting, said that Lenovo's restructuring programs will strengthen the
company's performance in emerging markets, although Lenovo will continue to suffer in the current fiscal year.
"Since the market demand for high-end computers continued to shrink since last year, Lenovo should take steps to focus
more on low-end PCs and target individual and small and medium-sized enterprise users," Yang said.
TMT.INTERFAXCHINA.COM WEEKLY BRIEFING
May 16 - May 22, 2009
Volume II, Issue 20
Copyright © 2009 by Interfax China Ltd. page 11
FEATURES
China Mobile favorite to win mobile TV race
By Hua Jinglei
China's three telecom operators are accelerating their plans to roll out mobile TV services in order to gain ground in the
forthcoming 3G era, with China Mobile the favorite to win among both analysts and consumers.
Although the 3G networks deployed by operators have the potential to provide streaming TV services, all three operators
plan to rely mainly on the China-developed China Multimedia Mobile Broadcasting (CMMB) mobile TV standard to
deliver their mobile TV services to both their 2G and 3G customers.
"All three telecom operators are accelerating their mobile TV businesses, but China Mobile still has the biggest
chance of dominating the market," Michael Chang, an industry analyst with market research firm In-Stat, said.
According to Chang, the government's preference for TD-SCDMA as a 3G standard and CMMB as a mobile TV standard
will drive China Mobile's mobile TV business. "It is the Chinese government's wish to develop CMMB mobile TV. At
present, only TD-SCDMA+CMMB mobile phones can obtain network access licenses from China's Ministry of Industry
and Information Technology (MIIT), which gives China Mobile a head start in CMMB mobile TV operation," Chang said.
On May 19, China Mobile became the first telecom operator to sign a deal with China Satellite Mobile Broadcasting Co.
Ltd. (CSMB), the national operator of CMMB, allowing China Mobile's CMMB-enabled handsets to access the CMMB
network, according to Shen Hongbin, general manager of TiMi Technology Co. Ltd., a chip manufacturer and the
developer of CMMB.
As well as reaching a deal with CSMB allowing their handsets to include CMMB functionality, telecom operators will also
need to reach deals with local CMMB network operators to give their customers access to CMMB. Again, China Mobile is
ahead in this respect, having already sealed a deal with Shenzhen Media Group, one of the largest media groups in China
and the exclusive CMMB operator in Shenzhen City in Guangdong Province, on May 14.
The deal goes beyond the basic provision of CMMB services, with Shenzhen Media Group and China Mobile working
together to combine mobile phone, broadband Internet, wireless Internet and digital TV services. In addition, the two
parties will also develop mobile newspaper and value-added services to be delivered through China Mobile's 3G TD-
SCDMA network, according to Zhang Chunlang, director of Shenzhen Media Group's general office.
"It is the first time a Chinese telecom operator has cooperated with a media group over 3G-based new media," Zhang
said.
In another deal, China Mobile and the State Administration of Radio, Film and Television (SARFT) are in talks over
jointly launching netbooks with TD-SCDMA and CMMB technology, the first batch of which will be released between
July and September this year, a source at China Mobile told Interfax on May 20.
Despite the lack of CMMB handsets capable of accessing their 3G networks, China Telecom and China Unicom
are preparing to offer CMMB access to both their 2G and 3G customers.
On May 17, China Unicom began its mobile TV trial based on CMMB. The trial will end in October, from when the
telecom carrier will start charging users subscription fees.
According to a China Unicom customer service representative, China Unicom's mobile TV service will be offered via both
CMMB and its 3G WCDMA network. Besides the broadcasting of TV channels, the service will also allow users to
download videos and access video-on-demand (VOD) programs.
Since the beginning of this year, China Telecom has launched partnerships with a number of content providers for its
mobile TV services offered via its 3G CDMA network. Its first 3G mobile TV channel was launched on May 17 in
partnership with Youku.com, domestic industry portal NetEase reported on May 18.
In addition, China Telecom is negotiating CMMB access for its terminals with CSMB, Interfax was previously told by
Meng Fei, general manager of CSMB's CMMB mobile TV terminal department.
TMT.INTERFAXCHINA.COM WEEKLY BRIEFING
May 16 - May 22, 2009
Volume II, Issue 20
Copyright © 2009 by Interfax China Ltd. page 12
However, China Mobile is still the winning tip among analysts in the mobile TV stakes.
"Chinese mobile phone users favor China Mobile's 3G services, which will serve as another driver for the operator's
mobile TV business," Chang said.
According to a survey by Chinese industry portal Sina on May 17, 75.6 percent of participants said they were aware of the
3G TD-SCDMA standard and favored it over WCDMA and CDMA2000.
Interfax commentary: Although China Mobile is making advances in the provision of CMMB mobile TV, China
Unicom should not be discounted as a serious mobile TV provider due to its WCDMA network, which is technically
superior to China Mobile's TD-SCDMA network. As such, China Unicom actually is competitive in providing streaming
mobile TV services running over its 3G network. However, the government's stance, which favors the TD-SCDMA and
CMMB standards, adds an element of uncertainty to China Unicom's chances in the mobile TV field.
Chinese telecom operators caught napping by traditional media mobile services
By Cindy Geng
Mobile services from traditional print media companies are increasingly eating into the revenue of multimedia message
service-based (MMS) mobile news services offered by China's telecom operators, an expert told Interfax on May 20.
Qian Ling, an expert at the China Mobile Research Institute, said that media groups such as Nanfang Press Corpo.,
Tianjin Daily Press Group, Beijing Daily Group, Yangcheng Evening News Group and Beijing Youth Daily Group all
pose challenges to telecom operators with the mobile versions of their publications.
"Telecom operators face a two-pronged challenge from such media groups. First, traditional media have more attractive,
original content. Second, these groups have formed an industry chain, in which telecom operators are merely the conduits
through which media content is delivered," Qian said.
According to Qian, despite their expertise, the mobile news services provided by telecom operators are not as
attractive as those offered by traditional media groups.
"Although telecom operators have their own free mobile news services delivered via daily MMS messages, the mobile
services from traditional media companies offer better user experiences," Qian said.
He elaborated by pointing to the richer use of images and layout in mobile services from traditional media companies,
their superior user interfaces and their greater degree of interactivity.
According to Qian, many of these services are offered through the third-party platform Goonews developed by
Zhirongweituo Inc. Goonews is an application that users can install on their handsets that gives access to over 300 daily
newspapers. The tool collects data on user behavior for advertising purposes.
Qian said that telecom operators, wary of their MMS-based mobile newspapers being perceived as spam, have
been overtaken by services such as Goonews.
"An industry chain has formed, with traditional media companies as the content providers, and third-party platforms such
as Goonews linking them with advertisers and customers. Telecom operators have, against their wishes, been relegated
and cut out from gaining advertising revenue."
Future remains uncertain for China's semiconductor industry
By Hua Jinglei
Industry watchers are split over whether the release of 3G services in China will stimulate the country's ailing
semiconductor industry.
On May 19, Zhang Rujin, CEO of Semiconductor Manufacturing International Corp. (SMIC), one of the world's biggest
contract semiconductor manufacturers, said at a press conference in Beijing that SMIC will turn around losses and return
a profit as early as the fourth quarter of this year due to increasing demand for 3G-related products in China. The
TMT.INTERFAXCHINA.COM WEEKLY BRIEFING
May 16 - May 22, 2009
Volume II, Issue 20
Copyright © 2009 by Interfax China Ltd. page 13
company started reporting losses from the second quarter of 2007 and recorded a net loss of $178.4 million in the first
quarter of 2009 - its biggest since the slide began.
Zhang added that the global semiconductor market is approaching the bottom of its business cycle, and that China's
semiconductor industry will be the first to recover.
He backed up his claim by citing the rise in recent months of the global semiconductor industry's book-to-bill (BB) ratio,
which measures the relationship between orders received and the amount of product shipped and billed. According to the
Semiconductor Industry Association (SIA), the global semiconductor industry's BB ratio increased each month from
January to March this year, although the April ratio has yet to be released. Despite the increase, the ratio remained at less
than one for the three-month period, indicating that supply is greater than demand.
However, Yang Bin, a semiconductor analyst with CCID Consulting, questioned Zhang's claim that the release
of 3G services would result in increased demand for handsets and therefore semiconductor products.
"Although some expect the demand from telecom operators' purchase of mobile phones for their 3G services will help
drive a recovery in China's semiconductor industry, the impact will not be significant because the demand for 3G mobile
phones will be offset by decreasing demand for 2G mobile phones," Yang said.
Moreover, demand from mobile phone and related devices such as mobile TV terminals account for a small proportion of
the demand for semiconductors, according to Yang.
"Taking the China Mobile Multimedia Broadcasting (CMMB) mobile TV market as an example, revenues from the whole
CMMB mobile TV market only totaled several hundred million renminbi last year, while China's semiconductor sector
generated revenues of RMB 60 billion ($8.78 billion) throughout the year," Yang said.
Despite the rising BB ratio, Yang said the semiconductor industry has worsened since the last quarter of 2008. "China's
semiconductor industry will see a drop in year-on-year revenues for the first time this year. Revenues for the
semiconductor industry will decline by approximately 20 percent globally for the whole of 2009, while the decline will be
between 18 percent and 19 percent for China's domestic semiconductor industry," Yang said.
Yang said that the domestic semiconductor sales volume will shrink by approximately 17 percent year-on-year in
2009.
"China only produces 30 percent of the semiconductor products it consumes domestically - the remaining 70 percent are
imports," Yang said.
According to statistics released by China Customs, China's semiconductor imports declined by 20 percent year-on-year in
the first quarter of this year.
Tom Hackenberg, an industry analyst with IMS Research, was more upbeat in a recent report. He said that the global
mobile handset industry, with growing markets in developing nations, combined with significant development in 3G and
4G technologies and consumer demand for multimedia smartphones, will likely drive demand for digital baseband
solutions in the second half of 2009 and the global RF semiconductor industry to post double-digit growth in 2010.
Xiong Yuncai, an industry analyst with Guolian Securities, said that it is still too early to predict when China's
semiconductor sector will recover.
According to Xiong, China's semiconductor manufacturing industry is operating at around 60 percent capacity, while the
global average figure for the first quarter of this year was around 50 percent.
TMT.INTERFAXCHINA.COM WEEKLY BRIEFING
May 16 - May 22, 2009
Volume II, Issue 20
Copyright © 2009 by Interfax China Ltd. page 14
INTERVIEWS
China to overtake India as IT outsourcing leader in next five years - KPMG partner
By Hua Jinglei
In five years, China will supplant India to become the first country people associate with IT outsourcing, and will lead the
global market, Egidio Zarrella, global head and partner of KPMG's IT advisory, told Interfax in a recent interview.
"China was still a tiny baby in the global outsourcing market over the last three to four years. However, it is now growing
into a teenager. The rapid growth of China's revenues from IT outsourcing will continue in the next decade, during which
the compound growth rate will be between 20 percent and 25 percent year-on-year," Zarrella said.
According to Zarrella, although China is only beginning to make its presence felt in the global outsourcing industry, its
enormous potential is obvious. "According to a number of rankings, China is gaining ground in areas such as financial
attractiveness, business environment, people and skills, and ranked among the most popular alternatives to India in a
recent survey," he said.
"We see that more companies want global IT outsourcing, not simply from India or China, but from both. Do
you know which country is serving Japan, the world's biggest economies? It's China, rather than India,"
Zarrella said.
Zarrella said government support was the biggest factor behind China's success in the global IT outsourcing market.
"China's emergence as a center for IT and other service industries, is the result of a combination of government focus,
investment and demographics," he said.
In recent years, the Chinese government has drafted a plan to increase spending on research and development to $110
billion in 2020. This is part of its plan to become a world leader in science and technology.
Several cities such as Beijing, Shanghai, Dalian and Hangzhou, have used government subsidies issued under the plan to
promote themselves as outsourcing locations, according to Zarrella.
"Some Chinese IT outsourcing companies have benefited from the government's favorable policies. They told us that they
are working hard with the government support to build up the 'China Sourcing' brand so more work will flow to China,"
Zarrella said.
"There is no need for China to worry about India or for it to follow India's model in IT outsourcing, because
China's outsourcing industry has been shaped by different factors," Zarrella said.
In Zarrella's point of view, China's growth has been founded on the domestic market as well as nearby overseas markets
such as South Korea and Japan. In the current economic downturn, China is continuing to enter new markets, taking
advantages of its strong infrastructure and talent pool, as well as language skills. In contrast, India has relied mainly on
western countries for its outsourcing success.
Regarding outsourcing hotspots, Zarrella believes that three Chinese cities, Dalian, Shanghai and Beijing, are the most
attractive to those looking to outsource work, while the cities of Changsha, Hangzhou, Chengdu, Shenzhen, Guangzhou
and Qingdao are snapping at their heels.
"Gains in China's offshore contracts, largely for IT, are far outpacing those of the global market. This segment's growth is
forecast to soar by 30 percent annually from 2009 to 2013, compared with an impressive, but more modest, 19 percent
growth rate elsewhere in the world," Zarrella said.
However, Zarrella said there are also problems that could hinder China's development into a global IT outsourcing giant.
"Foreign companies are often put off by the complex internal structures of Chinese companies, which is one of the largest
problems for China's IT outsourcing companies," Zarrella said.
"Another problem in China's IT outsourcing industry is the absence of a sense of public relations. As a result, some
foreign companies know little about China's capacity to provide IT outsourcing services," Zarrella said.
TMT.INTERFAXCHINA.COM WEEKLY BRIEFING
May 16 - May 22, 2009
Volume II, Issue 20
Copyright © 2009 by Interfax China Ltd. page 15
EMERGING COMPANY PROFILE
Beijing Turna Internet Technology Co. Ltd.
General information
Established in April 2008, Beijing Turna Internet Technology Co. Ltd. is a Web game developer and operator, which
currently operates one Web game, "RPG San Guo".
Core business
Web game development and operation
Performance roundup
At the end of 2009, Turna started public beta testing of its first Web game, "RPG San Guo". The game's user base has
reached approximately 200,000 to date. The game adopts a free-to-play model, allowing gamers to play for free and only
pay for value-added services such as game missions and virtual items.
Turna is scheduled to start public beta testing of its second Web game, "Shen Gui Shi Jie", in June this year.
It also plans to develop a new Web game by the end of this year.
Contact information
Sector Gaming
Address Room 1009, Huamu Mansion, South Maliandao Avenue, Xuanwu District, Beijing, PRC.
Telephone 86-10-5269 3619
Facsimile N/A
E-mail weishiyao@turna.com.cn
Web site www.rpg3g.com , www.sgplay.com.cn
Date of Establishment April 2008
Source: the company
Q&A
With Yu Boqiang, CEO of Turna.
Interfax: Are you going to cooperate with other game developers and operators?
Yu: Yes, we are negotiating with a South Korean Web game developer to launch one of their Web game products in
China, though according to confidentiality agreements, I can not reveal the title. The negotiations are nearly completed
and the Web game is expected to be launched in China this year.
Interfax: Do you have plans to target overseas markets?
Yu: Yes, we do. Actually, we have already launched "RPG San Guo" in Hong Kong, Macao and Taiwan, as our first step
in tapping overseas markets.
EVENTS
MobileMonday Shanghai
MobileMonday Shanghai (www.mobilemondayshanghai.net) is part of the MobileMonday global organization
(www.mobilemonday.net), the leading mobile industry-related community and event organizer, a non-profit organization
running in over 70 cities across the globe. MobileMonday Shanghai is also a non-profit organization, founded in 2006. It is
the only mobile-centric regular event in the whole of east China, and also covers convergence topics between online and
TMT.INTERFAXCHINA.COM WEEKLY BRIEFING
May 16 - May 22, 2009
Volume II, Issue 20
Copyright © 2009 by Interfax China Ltd. page 16
mobile industries. MobileMonday has become a successful concept in Shanghai since it was launched in October 2006,
and draws between 100 and 150 guests at each meeting. MobileMonday has so far hosted such events as mobile
advertising, mobile user-generated content, mobile TV, mobile payment and transactions, mobile Web 2.0, branded
handsets, mobile IM, mobile gaming, location-based services and much more to come.
Time: Monthly events
Location: Shanghai, China
Hosting Organization: Mobilemonday, in cooperation with Tekes/Finchi and Nokia
Web site: www.mobilemondayshanghai.net
Contact: Mr. Bruno Bensaid
E-mail: info@mobilemondayshanghai.net
OptiNet China 2009
As the nations' premiere event for optical networking since 2001, OptiNet China Conference brings the industry together
and prepares you to meet current and future challenges through a world class educational program. OptiNet offers you
an unparalleled opportunity to learn, exchange knowledge, cultivate relationships and receive insights into the latest
trends, critical issues, innovations and developments in fiber optical communications. Two forums on FTTH and on
Carrier Ethernet staged in conjunction with OptiNet China broadens the scope and delivers audiences complementary
information. Attendees can also explore the latest solutions, components and systems at the accompanying expo.
Date: June 3 - June 4
Location: Presidential Plaza Hotel, Beijing
Hosting Organization: Infoex-World Services Ltd.
Web site: www.optinetchina.com
Contact: Mr. Peter Lee, Event Manager
Tel: +852-28651118
Fax: +852-28651129
E-mail: peter.lee@infoexws.com
Ms. Isabel Shi, Sales Director
Tel: +86-10-62771798
Fax: +86-10-62771799
E-mail: isabel.shi@infoexws.com
TMT.INTERFAXCHINA.COM WEEKLY BRIEFING
May 16 - May 22, 2009
Volume II, Issue 20
Copyright © 2009 by Interfax China Ltd. page 17
Wireless China Industry Summit 2009
At Wireless China you will find the very best and latest high-performance wireless solutions and networking technologies.
What makes this event worth attending? A series of distinct educational forums featuring high-caliber speakers, plus an
unparalleled opportunity to learn what's new for carriers, service providers, device manufacturers as well as users from
multiple vertical industries. You'll receive unique insight into the full spectrum of technical and business information, and
gain knowledge from the experiences of others that can't be found anywhere else. You'll also have the chance to meet
peers, industry leaders and major vendors who are as enthusiastic as you are about the opportunities ahead.
• Wireless for Enterprise Mobility and Networks
• Wireless City, Public Broadband Access and Hotspots
• Short Range Wireless Solutions
• Emergency Communications, Public Safety and Security
• Wireless Home and Entertainment Networks
• Machine to Machine (M2M) Wireless Connectivity
• Wireless Solutions for Consumer Electronics and Computing
• Wireless + Mobile 2G/3G Integration
• Location-Based Systems and Services
• Next-Generation Wireless with Software Defined Radio
• Vertical Industry Applications – Aviation, Transport, Rail, Energy, Education, Medical and More!
Date: September 16 - September 17
Location: Landmark Hotel & Towers, Beijing
Hosting Organization: Infoex-World Services Ltd.
Web site: www.wirelesschina-summit.com
Contact: Mr. Peter Lee, Event Manager
Tel: +852-28651118
Fax: +852-28651129
E-mail: peter.lee@infoexws.com
Ms. Isabel Shi, Sales Director
Tel: +86-10-62771798
Fax: +86-10-62771799
E-mail: isabel.shi@infoexws.com
TMT.INTERFAXCHINA.COM WEEKLY BRIEFING
May 16 - May 22, 2009
Volume II, Issue 20
Copyright © 2009 by Interfax China Ltd. page 18
INTERFAX INDUSTRY DATABASES
Interfax industry databases
Interfax's industry-specific databases are available as a subscription-based service. Stay abreast of trends in your field by
subscribing to Interfax's databases, and receive monthly updates on the latest key figures and data essential to making
informed decisions.
The following databases are available for purchase in conjunction with the TMT China Weekly:
Production volumes of electronic and information products in China
Revenue, trade and fixed investment figures
Software industry revenue figures
Mobile handset shipments
Comprehensive China telecom industry figures
Updates for these databases will be distributed on a monthly basis. Contact your account manager for further information
regarding subscription options tailored to the needs of you and your company.
INTERFAX INDUSTRY REPORTS
INTERFAX INDUSTRY REPORTS
The following in-depth industry-specific reports are available for purchase:
China Carbon Trading Market up to 2012
Clean & Renewable Energy in China up to 2010
Pharmaceutical Outsourcing in China - Looking Ahead
China’s Online and Mobile Gaming 2008 to 2010
China’s Aluminum Fabrication Industry 2007-2010
China Commodities Report: Grain and Softs 2008
WEEKLY MONITORS - CHINA
WEEKLY MONITORS - China
Keep up-to-date with breaking developments within your target industries in China with Interfax China's authoritative
industry weeklies.
China Investment Weekly
China Pharmaceuticals & Health Technologies Weekly
China Energy Weekly
China TMT Weekly
China Mining and Metals Weekly
TMT.INTERFAXCHINA.COM WEEKLY BRIEFING
May 16 - May 22, 2009
Volume II, Issue 20
Copyright © 2009 by Interfax China Ltd. page 19
RESEARCH SERVICES
Custom Research
Sound China strategy is built upon sound insight.
Fully understanding China's shifting terrain is an absolute prerequisite for success. Our team of business specialists
focuses directly on your needs to conduct in-depth investigations to provide tailored intelligence and analysis.
Utilize our China expertise to ensure a solid foundation for your strategy in a wide variety of applications, including
mergers and acquisitions, China entry, strategic business planning, new product launches and development, investment
and funding analysis, due diligence and market intelligence, among others.
Contact our research team for a full assessment of how we can use our accumulated China industry experience and unparalleled industry network
to your full advantage.
Email: Cynthia.wong@interfax-news.com
Phone: (852) 2537 2263
Fax: (852) 2537 2264
THE INTERFAX TMT CHINA TEAM
THE INTERFAX TMT CHINA TEAM
Contact the Interfax TMT China team at the following e-mail addresses:
Reporters:
Cindy Geng: cindygeng@interfax.cn
Hua Jinglei: jinglei@interfax.cn
Editor:
Adam Skuse: adam@interfax.cn
The information contained here is believed to be fully reliable, but is provided for information purposes only with no warranty expressed or implied.
The user shall fully indemnify and hold harmless Interfax Information Services B.V. and any of its Affiliates against any judgment, liability, loss, cost
or damage resulting from or arising out of the content the information and recommendations contained herein, as they are not to be used or
considered as an offer to sell, or a solicitation of an offer to buy, or related to any omissions, delays, errors or inaccuracies.
###

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TMT_China_Weekly

  • 1. Copyright © 2009 by Interfax China Ltd. All rights reserved. Produced by Interfax China Ltd., Suite 1601, Wilson House, 19-27 Wyndham Street, Central, Hong Kong, China. Telephone: +852 25372262, facsimile: +852 25372264, e-mail: china@interfax.com, http://www.interfax.com May 16 - May 22, 2009 Volume II, Issue 20 CONTENTS: INTERFAX TMT CHINA--------------------------------------------------------------------------------------------------------------------- 2 HIGHLIGHTS----------------------------------------------------------------------------------------------------------------------------------- 2 THE WEEK IN REVIEW ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 2 TOP STORY------------------------------------------------------------------------------------------------------------------------------------ 3 CHINA TO INCREASE LOAN ACCESS FOR TECH COMPANIES--------------------------------------------------------------------------------------------------------------------------- 3 HEADLINE NEWS ---------------------------------------------------------------------------------------------------------------------------- 3 GIANT INTERACTIVE TO ESTABLISH NINE GAME DEVELOPERS AS SUBSIDIARIES --------------------------------------------------------------------------------------------- 3 CHINA MOBILE AND SARFT TO LAUNCH TD-SCDMA+CMMB NETBOOKS AS EARLY AS JULY-------------------------------------------------------------------------------- 4 CHINA MOBILE AWARDS 12 COMPANIES TD-SCDMA RESEARCH GRANTS--------------------------------------------------------------------------------------------------------- 4 STATISTICS AND DATA ------------------------------------------------------------------------------------------------------------------- 5 CHINA MOBILE 3G SERVICE USERS NUMBER 514,000 BY APRIL'S END-------------------------------------------------------------------------------------------------------------- 5 CHINA'S ONLINE GAME MARKET TO BE WORTH $9.93 BLN BY 2012 ------------------------------------------------------------------------------------------------------------------ 5 INTERNET AND SOFTWARE ------------------------------------------------------------------------------------------------------------- 6 CHINA TELECOM 3G SERVICE TO INTEGRATE WITH BAIDU------------------------------------------------------------------------------------------------------------------------------ 6 WIRELESS ------------------------------------------------------------------------------------------------------------------------------------- 6 CHINA TELECOM TO OFFER MOBILE SEARCH ON 2G AND 3G NETWORKS IN JUNE-------------------------------------------------------------------------------------------- 6 DATANG TELECOM TO RAISE $176 MLN FOR TD-SCDMA R & D------------------------------------------------------------------------------------------------------------------------- 6 CHINA TELECOM TO INVEST $730 MLN IN INNER MONGOLIA OVER NEXT FIVE YEARS --------------------------------------------------------------------------------------- 7 TELEMATICS MARKET EMERGING IN CHINA --------------------------------------------------------------------------------------------------------------------------------------------------- 7 HANDSETS------------------------------------------------------------------------------------------------------------------------------------- 8 CHINA UNICOM JOINS ANDROID CAMP ---------------------------------------------------------------------------------------------------------------------------------------------------------- 8 GAMING----------------------------------------------------------------------------------------------------------------------------------------- 9 PERFECT WORLD INVESTS IN WEB GAME COMPANY-------------------------------------------------------------------------------------------------------------------------------------- 9 MEDIA ------------------------------------------------------------------------------------------------------------------------------------------- 9 CHINESE FILM DISTRIBUTOR SUES APPLE FOR COPYRIGHT INFRINGEMENT---------------------------------------------------------------------------------------------------- 9 ELECTRONICS AND HARDWARE-----------------------------------------------------------------------------------------------------10 QINGDAO DIGITAL TERRESTRIAL TV OPERATOR OFFERS 30,000 FREE TERMINALS -----------------------------------------------------------------------------------------10 LENOVO RACKS UP $226 MLN LOSS IN FISCAL YEAR -------------------------------------------------------------------------------------------------------------------------------------10 FEATURES------------------------------------------------------------------------------------------------------------------------------------11 CHINA MOBILE FAVORITE TO WIN MOBILE TV RACE---------------------------------------------------------------------------------------------------------------------------------------11 CHINESE TELECOM OPERATORS CAUGHT NAPPING BY TRADITIONAL MEDIA MOBILE SERVICES----------------------------------------------------------------------12 FUTURE REMAINS UNCERTAIN FOR CHINA'S SEMICONDUCTOR INDUSTRY -----------------------------------------------------------------------------------------------------12 INTERVIEWS ---------------------------------------------------------------------------------------------------------------------------------14 CHINA TO OVERTAKE INDIA AS IT OUTSOURCING LEADER IN NEXT FIVE YEARS - KPMG PARTNER -------------------------------------------------------------------14 EMERGING COMPANY PROFILE ------------------------------------------------------------------------------------------------------15 BEIJING TURNA INTERNET TECHNOLOGY CO. LTD.----------------------------------------------------------------------------------------------------------------------------------------15 EVENTS ----------------------------------------------------------------------------------------------------------------------------------------15 MOBILEMONDAY SHANGHAI-------------------------------------------------------------------------------------------------------------------------------------------------------------------------15 OPTINET CHINA 2009-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------16 WIRELESS CHINA INDUSTRY SUMMIT 2009----------------------------------------------------------------------------------------------------------------------------------------------------17 INTERFAX INDUSTRY DATABASES--------------------------------------------------------------------------------------------------18 INTERFAX INDUSTRY DATABASES----------------------------------------------------------------------------------------------------------------------------------------------------------------18
  • 2. TMT.INTERFAXCHINA.COM WEEKLY BRIEFING May 16 - May 22, 2009 Volume II, Issue 20 Copyright © 2009 by Interfax China Ltd. page 2 INTERFAX INDUSTRY REPORTS------------------------------------------------------------------------------------------------------18 WEEKLY MONITORS - CHINA ----------------------------------------------------------------------------------------------------------18 RESEARCH SERVICES -------------------------------------------------------------------------------------------------------------------19 CUSTOM RESEARCH -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------19 THE INTERFAX TMT CHINA TEAM----------------------------------------------------------------------------------------------------19 INTERFAX TMT CHINA INTERFAX TMT CHINA Welcome to the Interfax TMT China weekly briefing, a premium service bringing you the latest news and analysis on all sectors covered by tmt.interfaxchina.com. As well as this weekly briefing, Interfax TMT China also offers tailored sector reports, delivered as weekly emails, which allow you to focus on the breaking stories and industry insights that are most relevant to you. Visit http://tmt.interfaxchina.com/subscribe for more information, or contact our sales team by email at enquiries@interfax.cn or by phone at (852) 2537-2262 for help in tailoring your subscription. For real time updates, subscribe to Interfax TMT China's RSS feeds at http://tmt.interfaxchina.com/rss. Join the conversation with other industry insiders by following Interfax TMT China's Twitter feed at: http://twitter.com/InterfaxTMT or by visiting the Interfax TMT China Subscriber Forum at http://tmt.interfaxchina.com/forum. HIGHLIGHTS The week in review This week, the Chinese government announced new measures to increase the availability of loans to tech companies, which have dried up in the wake of the economic downturn. The government will set up non-profit third-party institutions with the express purpose of guaranteeing loans given to technology companies and encourage regional governments and high-tech parks to launch backup funds to reduce the risks faced by banks providing loans to small and medium-sized technology companies. Game company Giant Interactive announced it would bring nine independent game development teams into its fold by establishing them as subsidiaries, thereby giving it more control over their actions. China Mobile and the State Administration of Radio, Film and Television (SARFT) are in talks over jointly launching netbooks with TD-SCDMA and CMMB (China Mobile Multimedia Broadcasting) technology, the first batch of which will be released between July and September this year. The operator also announced it would provide funding of $87.77 million to 12 mobile phone and chip manufacturers for the research and development of terminal devices based on the homegrown TD-SCDMA standard. This week, we have features looking at the race for dominance in the mobile TV sector, the challenge faced by telecom operators in mobile news services from traditional media groups, and the uncertain outlook for China's semiconductor industry. In this week's interview, Egidio Zarrella, global head and partner of KPMG's IT advisory, tells Interfax how China is set to overtake India to become the world's leading IT outsourcer in the next five years. Please note that their will be no report due to next week's Dragon Boat Festival public holiday in China, which falls on May 28 and May 29. Stories from that week will be included in the following week's report.
  • 3. TMT.INTERFAXCHINA.COM WEEKLY BRIEFING May 16 - May 22, 2009 Volume II, Issue 20 Copyright © 2009 by Interfax China Ltd. page 3 TOP STORY China to increase loan access for tech companies By Hua Jinglei The Chinese government will take measures to encourage commercial banks to extend more loans to technology companies, the China Banking Regulatory Commission (CBRC) announced on May 19. The government will set up non-profit third-party institutions with the express purpose of guaranteeing loans given to technology companies. It will also encourage regional governments and high-tech parks to launch backup funds to reduce the risks faced by banks providing loans to small and medium-sized technology companies. "Small and medium-sized technology companies have been hit by the global economic downturn as a large number of them focus more on overseas markets than at home," a source with China's largest commercial bank, the Industrial and Commercial Bank of China (ICBC), who wished to remain anonymous, told Interfax. According to the source, it has been difficult for small and medium-sized technology companies to obtain bank loans due to the high rate of failure among such companies following the economic downturn. "In most cases, the credit limit offered by ICBC to small and medium-sized companies, including technology companies, is RMB 30 million ($4.39 million). We are currently reassessing this in light of the CBRC announcement," the ICBC source said. Want to comment on this story or others? Visit the Interfax TMT China Subscriber Forum at http://tmt.interfaxchina.com/forum. HEADLINE NEWS Giant Interactive to establish nine game developers as subsidiaries By Hua Jinglei Nasdaq-listed Chinese online game operator Giant Interactive Group Inc. is to bring nine independent game development teams into its fold by establishing them as subsidiaries, an employee with Giant Interactive told Interfax on May 19. "Giant Interactive will set up qualified game R & D teams as companies under it, instead of simply investing in them," Sun Geyang, Giant Interactive's PR executive, said. According to Sun, Giant Interactive will hold controlling stakes of 51 percent in the subsidiaries, while the game R & D teams will hold the remaining 49 percent stakes. "The R & D teams themselves will be responsible for the operation and management of the subsidiary companies. However, Giant Interactive will retain control over the subsidiaries by providing support and regularly evaluating their performance," Sun said. Zhao Xufeng, an industry analyst with iResearch, told Interfax that Giant Interactive is reducing its R & D investment risks by setting up the subsidiaries. "Stricter provisions regarding each shareholder's responsibility will provide Giant Interactive with more stability and capital security in its game R & D investment," Zhao said. Giant Interactive will continue to evaluate game R & D projects and set up more such subsidiaries, according to Sun. Want to comment on this story or others? Visit the Interfax TMT China Subscriber Forum at http://tmt.interfaxchina.com/forum.
  • 4. TMT.INTERFAXCHINA.COM WEEKLY BRIEFING May 16 - May 22, 2009 Volume II, Issue 20 Copyright © 2009 by Interfax China Ltd. page 4 China Mobile and SARFT to launch TD-SCDMA+CMMB netbooks as early as July By Cindy Geng China Mobile and the State Administration of Radio, Film and Television (SARFT) are in talks over jointly launching netbooks with TD-SCDMA and CMMB (China Mobile Multimedia Broadcasting) technology, the first batch of which will be released between July and September this year, a source at China Mobile told Interfax on May 20. "SARFT and China Mobile cooperated over TD-SCDMA and CMMB phones during the Beijing Olympics. Because of this, talks have been progressing well," the source in China Mobile's marketing department said. "We have reached an oral understanding, and some PC manufacturers have already started producing TD-SCDMA plus CMMB netbooks." Liu Tingjun, deputy general manager of China Satellite Mobile Broadcasting Corp., the subsidiary of SARFT in charge of the national operation of CMMB, confirmed at a press conference on May 19 that his company is in talks with China Mobile over integrating CMMB chips into TD-SCDMA netbooks. "CMMB has covered 175 cities in China and will expand to cover 333 cities by the end of the year," the China Mobile source said. Want to comment on this story or others? Visit the Interfax TMT China Subscriber Forum at http://tmt.interfaxchina.com/forum. China Mobile awards 12 companies TD-SCDMA research grants By Hua Jinglei China Mobile will provide funding of RMB 600 million ($87.77 million) to 12 mobile phone and chip manufacturers for the research and development (R & D) of terminal devices based on the homegrown TD-SCDMA standard, China Mobile announced on May 17. According to the announcement, the 12 companies include nine mobile phone manufacturers, namely Motorola Inc., Samsung Corp., Yulong Computer Telecommunication Scientific Co. Ltd., Dopod Communication Corp., LG Electronics (China) Co. Ltd., ZTE Corp., Hisense Group, Guangzhou New Postcom Equipment Co. Ltd. and Huawei Technologies Co. Ltd. along with three chip makers, namely T3G Technology Co. Ltd., MediaTek Inc., and Spreadtrum Communications Co. Ltd. As China Mobile stipulated that chip makers and mobile phone manufacturers pair up in the R & D project, T3G will work with Motorola, Samsung, Dopod and Huawei while MediaTek will work with Yulong, ZTE and LG. Spreadtrum will collaborate with Hisense and New Postcom. Motorola, Samsung, Yulong, Dopod and LG, together with their chip maker partners, will receive combined funding of RMB 310 million ($45.35 million) from China Mobile for R & D of high-end TD-SCDMA mobile phones. The remaining mobile phone manufacturers, together with their chip maker partners, will be responsible for R & D of low-end TD- SCDMA mobile phones and will receive combined funding worth RMB 290 million ($42.42 million) from China Mobile, the announcement said. When contacted by Interfax on May 18, Zhou Xinfang, Spreadtrum's spokeswoman, declined to reveal the precise amount her company will receive from China Mobile. While Nokia Corp. was not selected by China Mobile as one of the mobile phone manufacturers, Cherry Gong, a public relations executive from Nokia China, told Interfax on May 18 that Nokia will continue to invest in TD- SCDMA mobile phone development "Nokia previously cooperated with China Mobile on TD-SCDMA mobile phone development. Our first TD-SCDMA mobile phone, which runs on Symbian's S60 operating system, will be launched before the end of this year," Gong said. Interfax commentary: Nokia's leading position in the Chinese market may be challenged by other mobile phone manufacturers, in particular, those from South Korea, which have seen their market shares increase rapidly. China Mobile's dominance in China's telecommunication market will not be broken in the short term, meaning the TD-SCDMA
  • 5. TMT.INTERFAXCHINA.COM WEEKLY BRIEFING May 16 - May 22, 2009 Volume II, Issue 20 Copyright © 2009 by Interfax China Ltd. page 5 standard is likely to be the most-used 3G standard in China. As such, Nokia's hesitation to launch TD-SCDMA mobile phones may lead to pressure from both China Mobile and rivals who got into TD-SCDMA earlier. Want to comment on this story or others? Visit the Interfax TMT China Subscriber Forum at http://tmt.interfaxchina.com/forum. STATISTICS AND DATA China Mobile 3G service users number 514,000 by April's end China Mobile's 3G TD-SCDMA service users numbered 514,000 as of April 30, 2009, China Mobile announced on May 20. This marks the first time the operator has officially announced user numbers of its TD-SCDMA services since launching them under its "G3" brand at the beginning of this year. China Mobile previously revealed that it will spend a total of RMB 58.8 billion ($8.6 billion) in 2009 on constructing around 60,000 TD-SCDMA base stations in 238 cities, in order to improve the signal quality of its 3G services. All three of China's telecom operators saw their growth in user numbers slow in April, according to their respective reports released on May 20. Over the month, China Mobile added 5.82 million mobile users, while China Unicom and China Telecom saw their mobile user numbers increase by 1.4 million and 1.87 million from March, respectively. Both China Unicom and China Telecom's fixed-line subscribers decreased in April, shedding 0.17 million and 1.9 million to 109 million and 202 million, respectively. The user bases of China Telecom and China Unicom's broadband services continued to increase slightly in April, up by 0.72 million and 0.54 million to 47.49 million and 33.15 million, respectively. The table below details the three operators' subscriber numbers as of the end of April 2009. Subscriber breakdown of major Chinese operators, April 2009 Service Cumulative subscribers by Apr 30, 2009 (mln) Net addition in Apr (mln) Monthly change (%) Net addition in March/Feb/Jan/Dec (mln) China Mobile 483 5.823 1.21 6.49/6.75/6.67/7.07 GSM service 482.49 -** -** 6.49/6.75/6.67/7.07 TD-SCDMA service 0.514 -** -** -** China Unicom GSM service 138.833 1.14 0.82 1.85/1.64/0.84/0.42 China Unicom telephone service 108.996 -0.171 -0.16 0.22/-0.5/-0.13/-* China Unicom broadband service 33.154 0.54 1.63 0.93/0.64/0.97/-* China Telecom CDMA service 34.71 1.87 5.39 2.21/1.7/1.02/-0.06 China Telecom telephone service 202 -1.9 -0.94 -1.83/-1.55/-0.97/-2.02 China Telecom broadband service 47.49 0.72 1.52 0.87/0.87/0.76/0.7 Source: China Mobile, China Unicom and China Telecom * Net addition figures taking into account former China Netcom subscribers ** Separate figures for China Mobile's GSM and TD-SCDMA service subscribers are not available China's online game market to be worth $9.93 bln by 2012 China's online game market will grow by 20 percent per year until 2012, when it will be worth RMB 68 billion ($9.93 billion), according to a report by a research firm released on May 19. China's online game industry generated RMB 20.8 billion ($3.05 billion) in revenue in 2008, growing by 52.2 percent year- on-year, according to the iResearch report. Over 80 percent of this came from massively multiplayer online games, with the remainder coming from Web and mobile games.
  • 6. TMT.INTERFAXCHINA.COM WEEKLY BRIEFING May 16 - May 22, 2009 Volume II, Issue 20 Copyright © 2009 by Interfax China Ltd. page 6 The report also said that China, the world's second-largest online game market, differs from that of the world's largest and third-largest - the United States and South Korea - in that it is far more reliant on domestic players than overseas sales. The report said this meant the industry is particularly well prepared for weathering a global recession. China currently has 55.5 million online game players, according to iResearch. Online game playing grew the fastest among under 18s and over 40s in 2008, the report said. INTERNET AND SOFTWARE China Telecom 3G service to integrate with Baidu Baidu.com, China's most popular search engine, announced on May 18 that it has partnered with China Telecom to pre- install Baidu applications in China Telecom's Best Tone mobile search service. According to the announcement, Best Tone will give users access to Baidu's services, including Web, music and image searches, news and message boards. Best Tone will be preinstalled on China Telecom's custom-ordered 3G handsets, and made available to other China Telecom customers for download. According to the announcement, Baidu and China Telecom will seek further opportunities for cooperation. China had over 100 million mobile search users in 2008, according to statistics from iResearch, and the figure is set to grow steadily to 312 million by 2011. WIRELESS China Telecom to offer mobile search on 2G and 3G networks in June China Telecom will roll out mobile search services for both its 2G and 3G networks nationwide in June, a senior official with the operator's mobile search partner told Interfax on May 19. "The service is currently available in Shanghai and Chengdu and will be expanded to other cities in China in June," Wang Congqing, CEO of mInfo Inc., which is providing technology and content for China Telecom's mobile search service, said. According to Wang, the mobile search function will be integrated into China Telecom's new SIM cards. Mobile phone and personal handy-phone system (PHS) users can use the service to search localized information on traffic, weather, restaurants and entertainment. The service will also be available via text message. On May 18, China Telecom announced it was partnering with Baidu.com to offer the search engine's services, including mobile search, to China Telecom customers. "The cooperation between China Telecom and Baidu only provides mobile search services on China Telecom's 3G network, while the mobile search service China Telecom is to launch in cooperation with mInfo can also be used by China Telecom's 2G mobile phone users, as well as PHS users," Wang said. The mobile search service provided by China Telecom and mInfo will be free of charge, according to Wang, although he declined to reveal the financial side of the deal between mInfo and China Telecom. Datang Telecom to raise $176 mln for TD-SCDMA R & D Datang Telecom Technology Co. Ltd., one of the primary developers of China's TD-SCDMA 3G standard, will raise up to RMB 1.2 billion ($176 million) to fund TD-SCDMA product research and development, the company announced on May 18.
  • 7. TMT.INTERFAXCHINA.COM WEEKLY BRIEFING May 16 - May 22, 2009 Volume II, Issue 20 Copyright © 2009 by Interfax China Ltd. page 7 Datang Telecom will issue up to 140 million shares through a private placement to raise the money, which will be used to finance R & D of TD-SCDMA data cards and data fusion technology and products, according to the company announcement. The funding will also be used to develop bank cards based on the standard developed by Europay, MasterCard and Visa. Datang Telecom plans to spend RMB 96.01 million ($14.04 million) on data card R & D, RMB 191.72 million ($28.04 million) on data fusion technology and RMB 172.02 million ($25.16 million) to develop the bank cards. Datang Telecom is under great capital stress, Xiong Yuncai, an industry analyst with Guolian Securities, told Interfax. The company's asset-to-liability ratio exceeds 80 percent and most of its debts are bank loans. "It is wise for Datang Telecom to finance its R & D projects through a private share placement, which is expected to ease its current financial pressure. In addition, the data card business is an ideal field for the company to enter since it is strong in smart card production and the outlook for 3G data cards is promising," Xiong said. China Telecom to invest $730 mln in Inner Mongolia over next five years China Telecom has signed an agreement to invest RMB 5 billion ($730 million) in the Inner Mongolia Autonomous Region over the next five years, according to a company announcement on May 18. According to the agreement, China Telecom will construct a 3G CDMA2000 1x EV-DO network, a fiber optic transmission network and a mobile broadband network in the region. China Telecom and the local government will also launch six projects and build innovation and research service platforms for enterprises to better adopt telecom and IT technologies. China Telecom also plans to expand its sales channels and distributors in Inner Mongolia, which will directly create over 20,000 jobs annually. Telematics market emerging in China A telematics market is emerging in China, which will provide telecom operators, software developers and content providers with a new revenue source, an industry analyst told Interfax on May 21. Telematics, by the industry's definition, refers to the combination of global positioning satellite (GPS) tracking and other wireless communications for use in automobiles, allowing automatic navigation, roadside assistance and remote diagnostics. "China, the largest automobile producer in the world, has also grown into a large automobile consumer, with annual automobile consumption growth of over 7 percent," Jason Huang, industry analyst with consulting firm Frost & Sullivan, said. According to Huang, the fast-growing automobile market is stimulating the telematics market in China, with an increasing number of automobile manufacturers planning the launch of telematic services in the country. "In March this year, Toyota Motor Corp. became the first automobile company to launch a telematics service in China with its 'G-Book' telematics system, which comes pre-installed in its Lexus RX350. More automobile manufacturers will follow suit in China over the next two years, such as General Motors China and Nissan Motor Co.," Huang said. Telecom operators, software developers and content providers will play an increasingly important role in the development of a telematics market in China, although the market will initially be led by automobile manufacturers, according to Huang. Traffic information service providers are emerging in China. Companies such as NavInfo Co. Ltd., AutoNavi Software Co. Ltd. and China TransInfo Technology Corp. (CTFO) are exploring the market by either cooperating with automobile manufacturers or seeking partnerships with telecom operators. NavInfo and AutoNavi have so far cooperated with Toyota to provide the latter with navigation maps and real-time traffic data for its telematics services in Beijing, Shanghai, Guangzhou and Shenzhen, while CTFO is talking with China Telecom and China Unicom over the provision of real-time traffic data.
  • 8. TMT.INTERFAXCHINA.COM WEEKLY BRIEFING May 16 - May 22, 2009 Volume II, Issue 20 Copyright © 2009 by Interfax China Ltd. page 8 Nevertheless, the market is in its early stages, with the concept of telematics still new to Chinese companies. "A mature telematics market will constitute three groups of market players in terms of their functions in the industry chain. The primary tier will consist of software and digital map developers and content providers. Telecom operators and telematics service providers will form the secondary tier," Huang said. "The first-tier market players will provide content-integrated software to the secondary-tier players, who will generate the services. Automobile manufacturers will form the third tier, integrating telematics services into their automobiles with the help of telecom operators and service providers, which will be sold to end consumers," Huang continued. Huang said that during the preliminary stages of China's telematics market development, there will be competition between automobile manufacturers and telecom operators over control of the industry chain. However, he said the two parties will eventually negotiate a reasonable split of revenues and control, as each party is essential to the development of a telematics market. "The most likely business model of telematics in China will see telematics service providers responsible for user management and billing, while they will share revenues with the other participants in the industry chain," Huang said. Interfax commentary: Although Chinese telecom operators are well aware of the emerging telematics market, they have been distracted by the development of 3G services, though they are bound to enter the telematics field with gusto sooner or later. Although the analyst believes that the most likely business model for telematics in China will see telematics services providers taking care of user management and billing, as systems become more complex, it will be telecom operators who have the expertise to manage the consumer end of the market. HANDSETS China Unicom joins Android camp China Unicom announced on May 17 that it has become a member of the Open Handset Alliance (OHA) to improve development of handsets and applications based on Google's Android operating system. "Our UniPlus mobile OS will be based on Android. The first UniPlus phone has been manufactured and is undergoing tests," Luo Qiuyan, a China Unicom marketing official, told Interfax. China Unicom said in the announcement that its OHA membership will allow it to develop applications such as typing software and mobile voice search services based on Android. Dr. Li Kai-fu, vice president of Google, said that Google will cooperate with China Unicom and launch a range of mobile search services on the operator's upcoming Android-based OS. Interfax previously reported that China Unicom is working on its UniPlus mobile OS, although it was still in the early stages of development. Telecom analyst Fu Liang said that the best way for operators to create a successful mobile OS is to partner up with a third-party mobile OS developer to integrate their services and applications. Li Gang, vice president of China Unicom, said in the announcement that Android is the most open platform for mobile devices that telecom operators, handset manufacturers and application developers can cooperate on to launch products more quickly and effectively reduce costs. Android is a mobile terminal OS based on the open source platform Linux and was the brainchild of the OHA, an alliance formed by Google, China Mobile and another 33 companies in November 2007. China Unicom is the 48th company to become a member of the alliance.
  • 9. TMT.INTERFAXCHINA.COM WEEKLY BRIEFING May 16 - May 22, 2009 Volume II, Issue 20 Copyright © 2009 by Interfax China Ltd. page 9 GAMING Perfect World invests in Web game company Nasdaq-listed Chinese online game operator Beijing Perfect World Co. Ltd. has invested RMB 15 million ($2.19 million) in a Web game developer and operator, the company announced on May 18. Chengdu Ye Net Science and Technology Development Co. Ltd., which runs 10 Web games on its Web site, webgame.com.cn, was the recipient of the investment, which Chi Yufeng, CEO of Perfect World, said would diversify his company's product pipeline and expand its online community services. "The rate of mergers and acquisitions in China's online game market will increase as fast-growing online game operators gain sufficient capital to purchase smaller companies," Zhao Xufeng, an industry analyst with iResearch, said. According to iResearch, China's online game market will continue to grow by 20 percent per year until 2012, with total revenues generated by online gaming operators set to reach RMB 68 billion ($9.93 billion) in the same year. On May 18, Perfect World announced that it generated total revenue of $62 million in the first quarter of 2009, up 40.2 percent year-on-year, and net profit of $31.5 million for the period, up 36.1 percent year-on-year. MEDIA Chinese film distributor sues Apple for copyright infringement A Chinese film distributor has sued Apple Inc. for copyright infringement, the lawyer who filed the lawsuit told Interfax on May 18. Unauthorized digital copies of seven popular films, including the well-known Chinese-produced "Chi Bi," Walt Disney's "Bolt" and a South Korean animated movie "Backkom," have been found on some Apple products at the time they were sold by one of the company's authorized resellers, Chengdu Xinya Communication Technology Co. Ltd., Zhang Honglei, a lawyer with Zhenxu Law Firm in Kunming City of Yunnan Province, said. Zhang said that he has recently filed a complaint in the Intermediate People's Court of Kunming City on behalf of Shanghai Skynet Asia Culture Communication Co. Ltd., which holds the exclusive rights to distribute Backkom in China. Skynet Asia Culture Communications has asked for RMB 500,000 ($73,139) in compensation from the two companies. It has also demanded that Apple and Xinya Communication Technology stop distributing the movies on Apple hardware and offer an apology on both Apple's Web site and in major Chinese media, Zhang said. "Although there is no specific rule in China's Copyright Law to directly regulate such copyright infringement, Apple should take responsibility for its authorized reseller since the latter was found to be involved in copyright infringement," Zhang said. The court has accepted the lawsuit and is now reviewing it, Zhang said. No one at Apple or Skynet Asia Culture Communications was available for comment when contacted by Interfax. Zhang has also not received any official response from Apple.
  • 10. TMT.INTERFAXCHINA.COM WEEKLY BRIEFING May 16 - May 22, 2009 Volume II, Issue 20 Copyright © 2009 by Interfax China Ltd. page 10 ELECTRONICS AND HARDWARE Qingdao digital terrestrial TV operator offers 30,000 free terminals Qingdao Guangdian Mobile Digital TV Co. Ltd., the exclusive digital terrestrial TV operator in Qingdao City in northern China's Shandong Province, will distribute 30,000 digital terrestrial TV terminals for free to car owners in order to foster a user base among private individuals, a senior company employee told Interfax on May 22. "We will offer the first batch of 10,000 digital terrestrial TV terminals to private car owners in three months, and the second batch of 20,000 units will be distributed over the next two years," Shi Xianggao, general manager of the company, which operates digital TV networks for public transport in the city, said. Qingdao Guangdian Mobile Digital TV purchased the terminals from its partner, Hisense Group, at a much lower price than the terminal's market price of RMB 2,000 ($292.56), according to Shi. Private car owners in Qingdao can apply to Qingdao Guangdian Mobile Digital TV to receive one of the free terminals, which will give them access to nine free TV channels, including those of national state broadcaster CCTV and regional operators. In addition to the nine channels it currently broadcasts, Qingdao Guangdian Mobile Digital TV also plans to provide stock market information via its digital terrestrial TV service. Although the service is provided for free at present, the company may consider charging users a monthly subscription fee after one year, Shi said. Qingdao Guangdian Mobile Digital TV started broadcasting digital terrestrial TV based on the Chinese standard, DVB- TH, during the Beijing Olympics held in August last year. As of May 18, the company has installed over 2,000 digital terrestrial TV terminals in public transportation and private cars, according to Shi. Besides Hisense Group, Qingdao Guangdian Mobile Digital TV has also launched partnerships with local commercial banks and insurance companies concerning the operation of digital terrestrial TV in Qingdao. Lenovo racks up $226 mln loss in fiscal year Lenovo Group Ltd., China's largest PC manufacturer, filed $226.39 million in losses for the fiscal year ending March 31, 2009, compared to a profit of $470 million in the previous fiscal year, the company announced on May 21. During the period, Lenovo's total revenues slid by 8.9 percent year-on-year to $14.9 billion. Lenovo's Greater China business unit, which covers mainland China, Hong Kong, Macao and Taiwan, was the only part of the company's business to report a profit, which amounted to $354.18 million. It also revealed in the report that growth of its global PC sales slowed to 2 percent year-on-year by volume for the period. Its market share fell to 7.6 percent, ranking fourth globally. Yang Yuanqing, Lenovo's chairman, admitted in a statement that Lenovo's weak implementation of its strategy in the fiscal year led to the dramatic decline in profit. Since the beginning of 2009, Lenovo announced two rounds of restructuring in order to save costs and increase its focus on emerging markets. The restructuring programs cost a total of $146 million, according to Lenovo. Yang Xiaopeng, an industry analyst with CCID Consulting, said that Lenovo's restructuring programs will strengthen the company's performance in emerging markets, although Lenovo will continue to suffer in the current fiscal year. "Since the market demand for high-end computers continued to shrink since last year, Lenovo should take steps to focus more on low-end PCs and target individual and small and medium-sized enterprise users," Yang said.
  • 11. TMT.INTERFAXCHINA.COM WEEKLY BRIEFING May 16 - May 22, 2009 Volume II, Issue 20 Copyright © 2009 by Interfax China Ltd. page 11 FEATURES China Mobile favorite to win mobile TV race By Hua Jinglei China's three telecom operators are accelerating their plans to roll out mobile TV services in order to gain ground in the forthcoming 3G era, with China Mobile the favorite to win among both analysts and consumers. Although the 3G networks deployed by operators have the potential to provide streaming TV services, all three operators plan to rely mainly on the China-developed China Multimedia Mobile Broadcasting (CMMB) mobile TV standard to deliver their mobile TV services to both their 2G and 3G customers. "All three telecom operators are accelerating their mobile TV businesses, but China Mobile still has the biggest chance of dominating the market," Michael Chang, an industry analyst with market research firm In-Stat, said. According to Chang, the government's preference for TD-SCDMA as a 3G standard and CMMB as a mobile TV standard will drive China Mobile's mobile TV business. "It is the Chinese government's wish to develop CMMB mobile TV. At present, only TD-SCDMA+CMMB mobile phones can obtain network access licenses from China's Ministry of Industry and Information Technology (MIIT), which gives China Mobile a head start in CMMB mobile TV operation," Chang said. On May 19, China Mobile became the first telecom operator to sign a deal with China Satellite Mobile Broadcasting Co. Ltd. (CSMB), the national operator of CMMB, allowing China Mobile's CMMB-enabled handsets to access the CMMB network, according to Shen Hongbin, general manager of TiMi Technology Co. Ltd., a chip manufacturer and the developer of CMMB. As well as reaching a deal with CSMB allowing their handsets to include CMMB functionality, telecom operators will also need to reach deals with local CMMB network operators to give their customers access to CMMB. Again, China Mobile is ahead in this respect, having already sealed a deal with Shenzhen Media Group, one of the largest media groups in China and the exclusive CMMB operator in Shenzhen City in Guangdong Province, on May 14. The deal goes beyond the basic provision of CMMB services, with Shenzhen Media Group and China Mobile working together to combine mobile phone, broadband Internet, wireless Internet and digital TV services. In addition, the two parties will also develop mobile newspaper and value-added services to be delivered through China Mobile's 3G TD- SCDMA network, according to Zhang Chunlang, director of Shenzhen Media Group's general office. "It is the first time a Chinese telecom operator has cooperated with a media group over 3G-based new media," Zhang said. In another deal, China Mobile and the State Administration of Radio, Film and Television (SARFT) are in talks over jointly launching netbooks with TD-SCDMA and CMMB technology, the first batch of which will be released between July and September this year, a source at China Mobile told Interfax on May 20. Despite the lack of CMMB handsets capable of accessing their 3G networks, China Telecom and China Unicom are preparing to offer CMMB access to both their 2G and 3G customers. On May 17, China Unicom began its mobile TV trial based on CMMB. The trial will end in October, from when the telecom carrier will start charging users subscription fees. According to a China Unicom customer service representative, China Unicom's mobile TV service will be offered via both CMMB and its 3G WCDMA network. Besides the broadcasting of TV channels, the service will also allow users to download videos and access video-on-demand (VOD) programs. Since the beginning of this year, China Telecom has launched partnerships with a number of content providers for its mobile TV services offered via its 3G CDMA network. Its first 3G mobile TV channel was launched on May 17 in partnership with Youku.com, domestic industry portal NetEase reported on May 18. In addition, China Telecom is negotiating CMMB access for its terminals with CSMB, Interfax was previously told by Meng Fei, general manager of CSMB's CMMB mobile TV terminal department.
  • 12. TMT.INTERFAXCHINA.COM WEEKLY BRIEFING May 16 - May 22, 2009 Volume II, Issue 20 Copyright © 2009 by Interfax China Ltd. page 12 However, China Mobile is still the winning tip among analysts in the mobile TV stakes. "Chinese mobile phone users favor China Mobile's 3G services, which will serve as another driver for the operator's mobile TV business," Chang said. According to a survey by Chinese industry portal Sina on May 17, 75.6 percent of participants said they were aware of the 3G TD-SCDMA standard and favored it over WCDMA and CDMA2000. Interfax commentary: Although China Mobile is making advances in the provision of CMMB mobile TV, China Unicom should not be discounted as a serious mobile TV provider due to its WCDMA network, which is technically superior to China Mobile's TD-SCDMA network. As such, China Unicom actually is competitive in providing streaming mobile TV services running over its 3G network. However, the government's stance, which favors the TD-SCDMA and CMMB standards, adds an element of uncertainty to China Unicom's chances in the mobile TV field. Chinese telecom operators caught napping by traditional media mobile services By Cindy Geng Mobile services from traditional print media companies are increasingly eating into the revenue of multimedia message service-based (MMS) mobile news services offered by China's telecom operators, an expert told Interfax on May 20. Qian Ling, an expert at the China Mobile Research Institute, said that media groups such as Nanfang Press Corpo., Tianjin Daily Press Group, Beijing Daily Group, Yangcheng Evening News Group and Beijing Youth Daily Group all pose challenges to telecom operators with the mobile versions of their publications. "Telecom operators face a two-pronged challenge from such media groups. First, traditional media have more attractive, original content. Second, these groups have formed an industry chain, in which telecom operators are merely the conduits through which media content is delivered," Qian said. According to Qian, despite their expertise, the mobile news services provided by telecom operators are not as attractive as those offered by traditional media groups. "Although telecom operators have their own free mobile news services delivered via daily MMS messages, the mobile services from traditional media companies offer better user experiences," Qian said. He elaborated by pointing to the richer use of images and layout in mobile services from traditional media companies, their superior user interfaces and their greater degree of interactivity. According to Qian, many of these services are offered through the third-party platform Goonews developed by Zhirongweituo Inc. Goonews is an application that users can install on their handsets that gives access to over 300 daily newspapers. The tool collects data on user behavior for advertising purposes. Qian said that telecom operators, wary of their MMS-based mobile newspapers being perceived as spam, have been overtaken by services such as Goonews. "An industry chain has formed, with traditional media companies as the content providers, and third-party platforms such as Goonews linking them with advertisers and customers. Telecom operators have, against their wishes, been relegated and cut out from gaining advertising revenue." Future remains uncertain for China's semiconductor industry By Hua Jinglei Industry watchers are split over whether the release of 3G services in China will stimulate the country's ailing semiconductor industry. On May 19, Zhang Rujin, CEO of Semiconductor Manufacturing International Corp. (SMIC), one of the world's biggest contract semiconductor manufacturers, said at a press conference in Beijing that SMIC will turn around losses and return a profit as early as the fourth quarter of this year due to increasing demand for 3G-related products in China. The
  • 13. TMT.INTERFAXCHINA.COM WEEKLY BRIEFING May 16 - May 22, 2009 Volume II, Issue 20 Copyright © 2009 by Interfax China Ltd. page 13 company started reporting losses from the second quarter of 2007 and recorded a net loss of $178.4 million in the first quarter of 2009 - its biggest since the slide began. Zhang added that the global semiconductor market is approaching the bottom of its business cycle, and that China's semiconductor industry will be the first to recover. He backed up his claim by citing the rise in recent months of the global semiconductor industry's book-to-bill (BB) ratio, which measures the relationship between orders received and the amount of product shipped and billed. According to the Semiconductor Industry Association (SIA), the global semiconductor industry's BB ratio increased each month from January to March this year, although the April ratio has yet to be released. Despite the increase, the ratio remained at less than one for the three-month period, indicating that supply is greater than demand. However, Yang Bin, a semiconductor analyst with CCID Consulting, questioned Zhang's claim that the release of 3G services would result in increased demand for handsets and therefore semiconductor products. "Although some expect the demand from telecom operators' purchase of mobile phones for their 3G services will help drive a recovery in China's semiconductor industry, the impact will not be significant because the demand for 3G mobile phones will be offset by decreasing demand for 2G mobile phones," Yang said. Moreover, demand from mobile phone and related devices such as mobile TV terminals account for a small proportion of the demand for semiconductors, according to Yang. "Taking the China Mobile Multimedia Broadcasting (CMMB) mobile TV market as an example, revenues from the whole CMMB mobile TV market only totaled several hundred million renminbi last year, while China's semiconductor sector generated revenues of RMB 60 billion ($8.78 billion) throughout the year," Yang said. Despite the rising BB ratio, Yang said the semiconductor industry has worsened since the last quarter of 2008. "China's semiconductor industry will see a drop in year-on-year revenues for the first time this year. Revenues for the semiconductor industry will decline by approximately 20 percent globally for the whole of 2009, while the decline will be between 18 percent and 19 percent for China's domestic semiconductor industry," Yang said. Yang said that the domestic semiconductor sales volume will shrink by approximately 17 percent year-on-year in 2009. "China only produces 30 percent of the semiconductor products it consumes domestically - the remaining 70 percent are imports," Yang said. According to statistics released by China Customs, China's semiconductor imports declined by 20 percent year-on-year in the first quarter of this year. Tom Hackenberg, an industry analyst with IMS Research, was more upbeat in a recent report. He said that the global mobile handset industry, with growing markets in developing nations, combined with significant development in 3G and 4G technologies and consumer demand for multimedia smartphones, will likely drive demand for digital baseband solutions in the second half of 2009 and the global RF semiconductor industry to post double-digit growth in 2010. Xiong Yuncai, an industry analyst with Guolian Securities, said that it is still too early to predict when China's semiconductor sector will recover. According to Xiong, China's semiconductor manufacturing industry is operating at around 60 percent capacity, while the global average figure for the first quarter of this year was around 50 percent.
  • 14. TMT.INTERFAXCHINA.COM WEEKLY BRIEFING May 16 - May 22, 2009 Volume II, Issue 20 Copyright © 2009 by Interfax China Ltd. page 14 INTERVIEWS China to overtake India as IT outsourcing leader in next five years - KPMG partner By Hua Jinglei In five years, China will supplant India to become the first country people associate with IT outsourcing, and will lead the global market, Egidio Zarrella, global head and partner of KPMG's IT advisory, told Interfax in a recent interview. "China was still a tiny baby in the global outsourcing market over the last three to four years. However, it is now growing into a teenager. The rapid growth of China's revenues from IT outsourcing will continue in the next decade, during which the compound growth rate will be between 20 percent and 25 percent year-on-year," Zarrella said. According to Zarrella, although China is only beginning to make its presence felt in the global outsourcing industry, its enormous potential is obvious. "According to a number of rankings, China is gaining ground in areas such as financial attractiveness, business environment, people and skills, and ranked among the most popular alternatives to India in a recent survey," he said. "We see that more companies want global IT outsourcing, not simply from India or China, but from both. Do you know which country is serving Japan, the world's biggest economies? It's China, rather than India," Zarrella said. Zarrella said government support was the biggest factor behind China's success in the global IT outsourcing market. "China's emergence as a center for IT and other service industries, is the result of a combination of government focus, investment and demographics," he said. In recent years, the Chinese government has drafted a plan to increase spending on research and development to $110 billion in 2020. This is part of its plan to become a world leader in science and technology. Several cities such as Beijing, Shanghai, Dalian and Hangzhou, have used government subsidies issued under the plan to promote themselves as outsourcing locations, according to Zarrella. "Some Chinese IT outsourcing companies have benefited from the government's favorable policies. They told us that they are working hard with the government support to build up the 'China Sourcing' brand so more work will flow to China," Zarrella said. "There is no need for China to worry about India or for it to follow India's model in IT outsourcing, because China's outsourcing industry has been shaped by different factors," Zarrella said. In Zarrella's point of view, China's growth has been founded on the domestic market as well as nearby overseas markets such as South Korea and Japan. In the current economic downturn, China is continuing to enter new markets, taking advantages of its strong infrastructure and talent pool, as well as language skills. In contrast, India has relied mainly on western countries for its outsourcing success. Regarding outsourcing hotspots, Zarrella believes that three Chinese cities, Dalian, Shanghai and Beijing, are the most attractive to those looking to outsource work, while the cities of Changsha, Hangzhou, Chengdu, Shenzhen, Guangzhou and Qingdao are snapping at their heels. "Gains in China's offshore contracts, largely for IT, are far outpacing those of the global market. This segment's growth is forecast to soar by 30 percent annually from 2009 to 2013, compared with an impressive, but more modest, 19 percent growth rate elsewhere in the world," Zarrella said. However, Zarrella said there are also problems that could hinder China's development into a global IT outsourcing giant. "Foreign companies are often put off by the complex internal structures of Chinese companies, which is one of the largest problems for China's IT outsourcing companies," Zarrella said. "Another problem in China's IT outsourcing industry is the absence of a sense of public relations. As a result, some foreign companies know little about China's capacity to provide IT outsourcing services," Zarrella said.
  • 15. TMT.INTERFAXCHINA.COM WEEKLY BRIEFING May 16 - May 22, 2009 Volume II, Issue 20 Copyright © 2009 by Interfax China Ltd. page 15 EMERGING COMPANY PROFILE Beijing Turna Internet Technology Co. Ltd. General information Established in April 2008, Beijing Turna Internet Technology Co. Ltd. is a Web game developer and operator, which currently operates one Web game, "RPG San Guo". Core business Web game development and operation Performance roundup At the end of 2009, Turna started public beta testing of its first Web game, "RPG San Guo". The game's user base has reached approximately 200,000 to date. The game adopts a free-to-play model, allowing gamers to play for free and only pay for value-added services such as game missions and virtual items. Turna is scheduled to start public beta testing of its second Web game, "Shen Gui Shi Jie", in June this year. It also plans to develop a new Web game by the end of this year. Contact information Sector Gaming Address Room 1009, Huamu Mansion, South Maliandao Avenue, Xuanwu District, Beijing, PRC. Telephone 86-10-5269 3619 Facsimile N/A E-mail weishiyao@turna.com.cn Web site www.rpg3g.com , www.sgplay.com.cn Date of Establishment April 2008 Source: the company Q&A With Yu Boqiang, CEO of Turna. Interfax: Are you going to cooperate with other game developers and operators? Yu: Yes, we are negotiating with a South Korean Web game developer to launch one of their Web game products in China, though according to confidentiality agreements, I can not reveal the title. The negotiations are nearly completed and the Web game is expected to be launched in China this year. Interfax: Do you have plans to target overseas markets? Yu: Yes, we do. Actually, we have already launched "RPG San Guo" in Hong Kong, Macao and Taiwan, as our first step in tapping overseas markets. EVENTS MobileMonday Shanghai MobileMonday Shanghai (www.mobilemondayshanghai.net) is part of the MobileMonday global organization (www.mobilemonday.net), the leading mobile industry-related community and event organizer, a non-profit organization running in over 70 cities across the globe. MobileMonday Shanghai is also a non-profit organization, founded in 2006. It is the only mobile-centric regular event in the whole of east China, and also covers convergence topics between online and
  • 16. TMT.INTERFAXCHINA.COM WEEKLY BRIEFING May 16 - May 22, 2009 Volume II, Issue 20 Copyright © 2009 by Interfax China Ltd. page 16 mobile industries. MobileMonday has become a successful concept in Shanghai since it was launched in October 2006, and draws between 100 and 150 guests at each meeting. MobileMonday has so far hosted such events as mobile advertising, mobile user-generated content, mobile TV, mobile payment and transactions, mobile Web 2.0, branded handsets, mobile IM, mobile gaming, location-based services and much more to come. Time: Monthly events Location: Shanghai, China Hosting Organization: Mobilemonday, in cooperation with Tekes/Finchi and Nokia Web site: www.mobilemondayshanghai.net Contact: Mr. Bruno Bensaid E-mail: info@mobilemondayshanghai.net OptiNet China 2009 As the nations' premiere event for optical networking since 2001, OptiNet China Conference brings the industry together and prepares you to meet current and future challenges through a world class educational program. OptiNet offers you an unparalleled opportunity to learn, exchange knowledge, cultivate relationships and receive insights into the latest trends, critical issues, innovations and developments in fiber optical communications. Two forums on FTTH and on Carrier Ethernet staged in conjunction with OptiNet China broadens the scope and delivers audiences complementary information. Attendees can also explore the latest solutions, components and systems at the accompanying expo. Date: June 3 - June 4 Location: Presidential Plaza Hotel, Beijing Hosting Organization: Infoex-World Services Ltd. Web site: www.optinetchina.com Contact: Mr. Peter Lee, Event Manager Tel: +852-28651118 Fax: +852-28651129 E-mail: peter.lee@infoexws.com Ms. Isabel Shi, Sales Director Tel: +86-10-62771798 Fax: +86-10-62771799 E-mail: isabel.shi@infoexws.com
  • 17. TMT.INTERFAXCHINA.COM WEEKLY BRIEFING May 16 - May 22, 2009 Volume II, Issue 20 Copyright © 2009 by Interfax China Ltd. page 17 Wireless China Industry Summit 2009 At Wireless China you will find the very best and latest high-performance wireless solutions and networking technologies. What makes this event worth attending? A series of distinct educational forums featuring high-caliber speakers, plus an unparalleled opportunity to learn what's new for carriers, service providers, device manufacturers as well as users from multiple vertical industries. You'll receive unique insight into the full spectrum of technical and business information, and gain knowledge from the experiences of others that can't be found anywhere else. You'll also have the chance to meet peers, industry leaders and major vendors who are as enthusiastic as you are about the opportunities ahead. • Wireless for Enterprise Mobility and Networks • Wireless City, Public Broadband Access and Hotspots • Short Range Wireless Solutions • Emergency Communications, Public Safety and Security • Wireless Home and Entertainment Networks • Machine to Machine (M2M) Wireless Connectivity • Wireless Solutions for Consumer Electronics and Computing • Wireless + Mobile 2G/3G Integration • Location-Based Systems and Services • Next-Generation Wireless with Software Defined Radio • Vertical Industry Applications – Aviation, Transport, Rail, Energy, Education, Medical and More! Date: September 16 - September 17 Location: Landmark Hotel & Towers, Beijing Hosting Organization: Infoex-World Services Ltd. Web site: www.wirelesschina-summit.com Contact: Mr. Peter Lee, Event Manager Tel: +852-28651118 Fax: +852-28651129 E-mail: peter.lee@infoexws.com Ms. Isabel Shi, Sales Director Tel: +86-10-62771798 Fax: +86-10-62771799 E-mail: isabel.shi@infoexws.com
  • 18. TMT.INTERFAXCHINA.COM WEEKLY BRIEFING May 16 - May 22, 2009 Volume II, Issue 20 Copyright © 2009 by Interfax China Ltd. page 18 INTERFAX INDUSTRY DATABASES Interfax industry databases Interfax's industry-specific databases are available as a subscription-based service. Stay abreast of trends in your field by subscribing to Interfax's databases, and receive monthly updates on the latest key figures and data essential to making informed decisions. The following databases are available for purchase in conjunction with the TMT China Weekly: Production volumes of electronic and information products in China Revenue, trade and fixed investment figures Software industry revenue figures Mobile handset shipments Comprehensive China telecom industry figures Updates for these databases will be distributed on a monthly basis. Contact your account manager for further information regarding subscription options tailored to the needs of you and your company. INTERFAX INDUSTRY REPORTS INTERFAX INDUSTRY REPORTS The following in-depth industry-specific reports are available for purchase: China Carbon Trading Market up to 2012 Clean & Renewable Energy in China up to 2010 Pharmaceutical Outsourcing in China - Looking Ahead China’s Online and Mobile Gaming 2008 to 2010 China’s Aluminum Fabrication Industry 2007-2010 China Commodities Report: Grain and Softs 2008 WEEKLY MONITORS - CHINA WEEKLY MONITORS - China Keep up-to-date with breaking developments within your target industries in China with Interfax China's authoritative industry weeklies. China Investment Weekly China Pharmaceuticals & Health Technologies Weekly China Energy Weekly China TMT Weekly China Mining and Metals Weekly
  • 19. TMT.INTERFAXCHINA.COM WEEKLY BRIEFING May 16 - May 22, 2009 Volume II, Issue 20 Copyright © 2009 by Interfax China Ltd. page 19 RESEARCH SERVICES Custom Research Sound China strategy is built upon sound insight. Fully understanding China's shifting terrain is an absolute prerequisite for success. Our team of business specialists focuses directly on your needs to conduct in-depth investigations to provide tailored intelligence and analysis. Utilize our China expertise to ensure a solid foundation for your strategy in a wide variety of applications, including mergers and acquisitions, China entry, strategic business planning, new product launches and development, investment and funding analysis, due diligence and market intelligence, among others. Contact our research team for a full assessment of how we can use our accumulated China industry experience and unparalleled industry network to your full advantage. Email: Cynthia.wong@interfax-news.com Phone: (852) 2537 2263 Fax: (852) 2537 2264 THE INTERFAX TMT CHINA TEAM THE INTERFAX TMT CHINA TEAM Contact the Interfax TMT China team at the following e-mail addresses: Reporters: Cindy Geng: cindygeng@interfax.cn Hua Jinglei: jinglei@interfax.cn Editor: Adam Skuse: adam@interfax.cn The information contained here is believed to be fully reliable, but is provided for information purposes only with no warranty expressed or implied. The user shall fully indemnify and hold harmless Interfax Information Services B.V. and any of its Affiliates against any judgment, liability, loss, cost or damage resulting from or arising out of the content the information and recommendations contained herein, as they are not to be used or considered as an offer to sell, or a solicitation of an offer to buy, or related to any omissions, delays, errors or inaccuracies. ###