E-Ten to enter China handset market in 2008

Daniel Shen, Taipei; Steve Shen, DIGITIMES [Tuesday 6 November 2007]

E-Ten Information Systems plans to begin marketing its Glofiish-branded handsets in the China market in 2008 as China has changed its licensing controls on the manufacture and sales of handsets, according to E-Ten chairman Hwang Shan-rong.

Meanwhile, E-Ten will re-enter the market for stock tracker applications in China in the first quarter of 2008, selling its own-brand stock tracker devices instead of cooperating with other brands or vendors, Hwang noted. Previously, E-Ten cooperated with Lenovo to sell its stock tracker devices in China but backed out of the market due to keen competition.

European sales currently account for 60-70% of E-Ten's total income, and sales in the Middle East market contribute another 10-20%, according to company sources.

E-Ten, having launched its latest models, the X600 and X800, on November 5 in Taipei, plans to introduce 4-6 new handsets in 2008, supporting either 3.5G or EDGE standards, said company president Wayne Ma.

In addition to marketing its 3.5G handsets under its own brand, the company will also seek opportunities to cooperate with telecom carriers in Western Europe to promote the 3.5G handsets under dual-brand or on an OEM bases, Ma stated.

Samsung starts sampling 64GB SATA 3Gbps SSDs

Press release, November 5; Esther Lam, DIGITIMES [Monday 5 November 2007]

Samsung Electronics has announced it has started sampling its new solid-state drives (SSDs) in 64GB capacities that support the SATA 3Gbps interface. The new series of SSDs are targeted for high-end notebook and high-performance storage applications.

The NAND flash chips in the new SSD series are 8Gb single-level cell (SLC) chips fabricated on a 50nm-class production process, according to the company. By supporting the SATA 3Gbps interface, the drives are able to achieve transfers twice as fast as their predecessors launched during March 2007.

Samsung also highlighted that the new SSDs only require half as much power as the 1.9W consumed by hard drives currently used in notebooks and only one-tenth the power consumed by enterprise-class 15,000-rpm hard drives in servers.

The SSDs are available in 1.8- and 2.5-inch configurations.

Samsung developed a 32GB PATA SSD in March 2006, followed by a 64GB version using the SATA interface in March of this year.

Source: Company, compiled by Digitimes, November 2007

Samsung's latest SATA 2.5-inch SSD
Photo: Business Wire

Notebook makers preparing solutions for low-price PC market

Yen Ting Chen, Taipei; Joseph Tsai, DIGITIMES [Monday 5 November 2007]

With the Asustek Computer's Eee PC bringing up the trend for low-price PCs in the market, notebook makers including Inventec and Compal Electronics are both preparing solutions for the MID (mobile Internet device) market with target prices of US$500, according to sources at notebook makers.

Asustek's Eee PC has proven that it is currently not possible to achieve a price point of US$199 in the consumer market. With the price of the highest specified Eee PC likely to be around US$430 by the end of this year, the price gap between Eee PC and Quanta Computer/Compal's MID products is getting smaller. Therefore in the future, if MIDs are positioned as low-price PC products, they would greatly impact Eee PC sales.

Quanta was the earliest to step into the low-price PC market with the OLPC (one laptop per child), and the company will continue to invest in the educational PC segments for low-price PCs, despite that the OLPC project is yet to realize its aims. Quanta predicts the low-price PC market will not cool off, since the trend is there, noted the sources.

On the other hand, although Compal is not optimistic over low-price PC products, it has still landed some orders and is preparing to enter mass production in the first quarter of 2008.

Inventec started working on small-size notebook products in 2004 following the acquisition of a development team in Japan and has already developed several small-size notebook models priced close to US$500.

ASRock to cut into mid-range and high-end motherboard markets

Monica Chen, Taipei; Joseph Tsai, DIGITIMES [Monday 5 November 2007]

ASRock plans to cut into the mid-range and high-end motherboard markets because of the limited growth in the entry-level segment, according to Ted Hsu, CEO of ASRock, adding that in 2008, mid-range and high-end will account for around 35-40% of the company's total motherboard shipments.

With the entry-level CPU market shrinking to only 20% in 2007, if ASRock continues to focus only on the entry-level motherboard market, the company's profits will only continue to decline, Hsu pointed out.

Although ASRock will cut into mid-range and high-end markets, the company's relationship with Asustek Computer will not be directly impacted, Hsu claimed.

However, adjusting the proportion of motherboards does not mean shipments will decline, noted Sterling Wu, president of ASRock. Overall shipments will continue growing with the company focusing in the retail channel, while outsourcing to Hong Kong-based Fittec Electronics will help relieve factory operation costs during slow seasons. ASRock will also lower costs by joint ordering Asustek. In all, the company's ability to gain profit will not be weakened with the strategy change, Wu attested.

Although previous reports indicated ASRock was planning new product lines, Wu said the company currently has no such plans. Additionally, an earlier plan to enter the graphics cards market has been suspended due to fierce competition in the market.

Wu predicted ASRock's net income in the fourth quarter should have a 3-5% sequential growth and profits in 2007 will remain level with those in 2006. Motherboard shipments in 2008 will see an on-year growth between 10-15% compared to seven million units in 2007. Market sources estimated the company's EPS (earnings per share) should be between NT$22-24 (US$0.68-0.74) in 2008.

Ted Hsu, CEO of ASRock (left) and Sterling Wu, president of ASRock (right)
Photo: CJ Liu, Digitimes

Taiwan top-three digital camera makers expected to ship 53 million units in 2008

Jimmy Hsu, Taipei; Adam Hwang, DIGITIMES [Monday 5 November 2007]

Premier Image Technology, Altek and Ability Enterprise, the top-three Taiwan-based OEM/ODM makers of digital cameras, will together ship at least 53.0 million units to account for over 50% of the global output in 2008, according to industry sources in Taiwan.

Ability Enterprise is expected to see about 50% growth in its 2008 shipment volume because the global market shares of Casio and Samsung, Ability's main clients, are on the rise and its strategic alliance with Asustek Computer may help it obtain orders from Sony, the sources indicated.

Altek, in addition to existing clients Eastman Kodak and Hewlett-Packard (HP), has made progress in competing for orders from Japan-based brands, the sources said.

Combined shipment volume for the three makers will be less than half of the global total, estimated at 85-90 million digital cameras in 2007, but will exceed half in 2008, the sources pointed out. However, second-tier Taiwan-based makers, such as Tekom Technologies and Aiptek International, will suffer a negative impact from the top-three's growth in shipment volume.

Source: Industry sources, compiled by Digitimes, November 2007

Google Phone Has Mobile Calling Industry Worried

Internet giant Google is now gearing up to conquer the global mobile calling market. On Tuesday, Google announced a plan to release an operating system for mobile phones in partnership with handset makers and wireless providers around the world. The Google Phone could become the next iPhone, sweeping the mobile communications industry.

The biggest advantage of the Google Phone is likely to be its extensive Internet services. It will have almost all the features of the Internet -- search, location-based services, instant messaging, media player, and entertainment. This indicates that handsets are now becoming mini PCs.

Google has formed a partnership called the Open Handset Alliance (OHA) with some 30 global handset makers and mobile operators such as Samsung Electronics, LG Electronics, Motorola, HTC, Intel, Qualcomm, China Mobile, NTT Docomo, and KDDI. A Samsung Electronics source said that the Google Phone will allow users to video clips about their areas of interest like movies and sports in the form of videos with the press of a button.

As handsets begin to adopt advanced features and act more like mini PCs, software and services are becoming more important than hardware. In the PC industry the most profitable company is software and service provider Microsoft. The software giant makes more money than PC manufacturers from its Windows operating system which comes installed on most PCs. Google aims to do the same with its mobile phone operating system. But it has strong rivals, including Microsoft, Nokia and Apple, which have their own mobile phone operating systems -- Windows Mobile, Symbian and OSX, respectively.

To beat these rivals, Google plans to use a low-price strategy. It has agreed to provide its operating system for next to nothing by basing it on the reasonably-priced Linux operating system. In contrast, Microsoft reportedly receives US$12 per handset in royalties. Google also plans to open up the source of the system software so its partners can modify it as they see fit. It will generate profits through advertising.

Google's entry into the mobile calling market is expected to cause an upheaval in the industry. Competition will likely get particularly fierce in the wireless Internet business as existing mobile operators will strive hard not to lose market share to newcomers like Apple and Google. Mobile handset makers are welcoming the news because expanded services can lead to an increase in demand. Handset makers are also happy because the Google Phones, expected early next year or in the second quarter, should boost their sales. But some point out that if handset makers depend too much on Google or Microsoft, they'll see their profits tumble just as PC makers did. An LG Electronics executive said that competition to produce Google Phone may become heated, which could push the phone's release earlier than expected.

(englishnews@chosun.com )

Fresh Allegations in Samsung Scandal

A scandal involving alleged Samsung Group slush funds is snowballing with a series of new disclosures by a former head of the conglomerate’s legal team Kim Yong-chul and the organization he unburdened himself to. In addition to secret funds amounting to W1 trillion (US$=W907), the Catholic Priests` Association for Justice and Kim say that Samsung regularly bribed 40 prosecutors and that it manipulated evidence and testimony in a trial on illegal wealth transfer from Samsung chairman Lee Kun-hee to his children.

Making public a document containing what they say were internal Samsung guidelines for bribery, they said Lee himself ordered the bribery of judges, prosecutors and journalists. Prosecutors seem wary of launching an investigation, saying they will make a decision after watching a second press conference by the Catholic organization on Monday. But experts say the prosecution will have to investigate if material evidence is presented.

At the heart of the allegations are slush funds operated by the nation’s largest conglomerate. Kim and the group claim Samsung has W1 trillion in secret funds and bribed politicians and other influential figures with it. The corporation is also accused of giving more illegal campaign funds to presidential candidates in the 2002 presidential election. Kim told a daily the illegal campaign funds came from the company’s slush funds, not from chairman Lee’s private coffers. A public investigation of the campaign funds could be launched if Kim presents material or circumstantial evidence to back up his claims.

If so, one question will be whether Samsung gave more money to the camp of President Roh Moo-hyun than has already been disclosed. An investigation at the time concluded Samsung gave W32.47 billion to the Grand National Party campaign but a mere W3.6 billion to Roh’s camp.

The CPAJ has disclosed what were allegedly Samsung’s internal bribery guidelines given directly by Lee. In the document, Lee suggests giving hotel gift certificates to those who refuse to take cash bribes. The Samsung Group says the remarks were taken out of context, and claiming that the Samsung chairman directly ordered bribery was a “distortion.”

Kim claims he himself manipulated evidence and testimony in the trial of executives of the amusement park and quasi-Samsung holding company Everland, sued in 2000 on charges of selling convertible bonds to the tycoon’s children at a knock-down price in an apparent attempt to pass on the group leadership. Evidence proving the claim could prompt a new investigation and questioning of Lee.

(englishnews@chosun.com )