Competitive Alert (JUL 5--Aug 5)

Sony Computer Entertainment (SCE) is going to begin a video distribution service for its portable game player, the PSP on July 27, 2005. Sony Communication Network will prepare a portal site for distributing video called the Portable TV (p-TV) for the PSP. It will begin distribution of video contents on a Wireless LAN. The p-TV''s portal site has very little information, only saying "the service will begin very soon". Sony disclosed that the company would ready a variety of genres including movies, sports, music, dramas, animations, and entertainment information at the PlayStation Meeting 2005.

The video compression method offered by the P-TV is MPEG-4 AVC (H.264). The use of the service requires browser software for the Internet. SCE is going to offer a download file of the system software version 2.00, which includes the browser on July 27, 2005. The software enables access to the p-TV site as well as regular internet sites and SCE will be able to combine the browser software with its game software. The browser software supports HTML4.01 but does not support Flash.

In addition, the system software version 2.00 can forward image files to another PSP unit via Wireless LAN ad hoc communication and can use an image file as wallpaper on the menu screen. [M. Robertson, Portelligent]

KDDI (au), Japan''s second largest wireless service carrier is going to absorb TuKa, which is a wholly owned subsidiary of KDDI, by October 1, 2005, KDDI made an announcement on July 25, 2005.

Mr. Onodera, CEO of KDDI, commented that absorption allows KDDI to acquire TuKa''s 3.6 million subscribers and will prevent the subscribers from going to other carriers. Another reason is the optimization of sales channels. By merging the sales sites of au and TuKa, it is possible to increase sales outlets and place new sales outlets where necessary.

KDDI plans to keep the TuKa brand including the PDC service offered by TuKa, however details are not decided.

KDDI plans to offer au brand handsets as a replacement for TuKa handsest although the exact timing is not available. KDDI is also going to offer KDDI''s family discount plans to TuKa subscribers. [M. Robertson, Portelligent]

Hitachi Maxell of Japan announced a new Anoto pen, the DP-201. The new digital pen is about 15 percent slimmer than the company''s existing digital pen and feels more like a regular pen.

The DP-201 measures 157 mm x 21 mm x 18 mm with a pen cap. It weighs 30g. Hitachi Maxell eliminated about 20 percent of the weight through the miniaturization of optics and substrates. The pen supports wireless access by Bluetooth and fixed line access by USB.

The Anoto pen is a digital pen developed by Anoto of Sweden. The Anoto pen allows transfer of handwritten information to devices such as a personal computer. See a picture of the DP-201 at: http://www.itmedia.co.jp/news/articles/0507/25/news082.html [M. Robertson, Portelligent]

Motorola of the U.S. announced a handset equipped with a QWERTY keyboard called the "Q", on July 25, 2005. The "Q" is based on the company''s super slim handset, RAZR and is 11.5 mm thick. Motorola adopted Microsoft''s Windows Mobile 5.0 as the operating system. It enables e-mails and internet access.

Other features include a 320 x 240 pixel color display, a 1.3 million-pixel camera, miniSD card slot, recording of still images and video, Bluetooth, IrDA, and mini USB. The "Q" is capable of replaying MP3, AAC and WMA music files.

The "Q" is going to be available in the first quarter 2006. Price information is not available. An image is available at: http://www.itmedia.co.jp/news/articles/0507/26/news033.html [M. Robertson, Portelligent]

The term "Well-Being" has been commonly used in South Korea in recent years to describe a health-conscious lifestyle. With the popularity of the Well-Being concept, handsets in South Korea began to add functions that are health-conscious, Japan''s itmedia reported on July 25, 2005.

Well-Being handsets began to appear in late 2004. Anycall introduced the SPH-E3330 which has a pedometer and a separate unit for measuring body fat. Users input sex, height and weight information into the handset and place both thumbs on the measuring unit which uses the infrared communication function of the cellular phone. The user''s body fat percentage is displayed on the cellular phone screen.

Pantech & Curitel introduced the PH-S6500 which supports the Running Mate function for joggers. Users can jog carrying the handset after inputting height, weight, and length of stride. The handset will display exercise distance, speed, and calorie consumption. The PH-S6500 is also suitable for mountain hikers as it incorporates a compass, altimeter and air gauge.

Cyon also offers a unique healthcare phone, the LG-SD410, which has a unique sports car design and a built-in alcohol detector. Breathing into the detector on the side of the handset allows the measurement of the user''s alcohol level and displays the result. The phone then informs the user if it is ok to drive or if the probability of an accident is high. The LG-KP3400 is known as a health care phone as it can check blood sugar when it is used with an optional blood drawing kit. [M. Robertson, Portelligent]

SK Telecom and KTF are getting serious about an HSDPA (High Speed Downlink Packet Access) network. Both of them are going to construct a nation-wide HSDPA network by the first half 2005.

According to industry source on July 26, SK Telecom and KTF are in the last stage of selecting suppliers for their HSDPA networks.

SK Telecom plans to install an HSDPA network in 23 cities spending a total of 600 billion won ($581.96 million @ won 1031/$US 1). It already issued orders for 550 billion won ($533.46 million) worth of infrastructure. The company selected Samsung Electronics for the metropolitan areas and LG Electronics, who is about to set up a joint venture with Nortel Networks, for the non-metro areas.

SK Telecom''s representative in the technology strategy office commented, "We started installation of switching centers and base stations. We are discussing terms of contracts with Samsung Electronics and LG Electronics. We will be able to complete contracts before September 2005." SK Telecom plans to invest another 600 billion won ($581.96 million) in an HSDPA network in 2006 and spread the service area to 84 cities across South Korea.

KTF also plans to launch an HSDPA service in 17 cities in 2005 and expand to 45 cities in the first half 2006. KTF requested proposals from Samsung Electronics and LG Electronics regarding base stations and switching centers.

KTF is conducting benchmark tests and will accept proposals up until the end of July 2005. KTF plans to select infrastructure suppliers in August 2005. If the LG Electronics - Nortel Networks alliance is selected as a supplier, LG Electronics will supply switching centers and Nortel Networks will supply base stations.

KTF plans to select different suppliers for the different districts. KTF plans to invest 300 billion won ($290.98 million) in 2005 and 350 billion won ($339.48 million) in 2006.

With plans to install nationwide HSDPA networks by the end of the first half 2006, SK Telecom and KTF are likely to be able to launch commercial HSDPA services in March 2006 as it''s planned. However, the problem is that the handset chip which supports HSDPA in full is not available.

The HSDPA system supports 14.4Mbps data communication speed for down link. The handset chipset which supports a maximum 7.2Mbps data communication speed (MSM6280 supplied by Qualcomm), is slated for availability after the third quarter 2005.

Samsung Electronics and LG Electronics have prototyped handsets which support 1.8Mbps downlink data transmission, and are conducting experiments. [M. Robertson, Portelligent]

BenQ of Taiwan announced a technical collaboration with Pentax of Japan on July 20, 2005. The two will collaborate in digital still camera technologies.

The two companies announced two 5 million-pixel models on the same day. They will announce two models of new digital cameras in every quarter in the future.

BenQ sets its digital camera sales target at 800,000 units for 2005, which is 60 percent more than the last year. BenQ has not been very serious about digital cameras.

However, consumers are becoming more sensitive to the price of digital still cameras, and the market used to be dominated by the Japanese makers. Functions of digital cameras are increasing while prices are falling rapidly. Some Japanese digital still camera manufacturers are beginning to lose money on digital still camera operations. BenQ considers that the time has come for Taiwanese vendors.

Pentax has been supplying lenses to BenQ, and BenQ participated in system structure designing and development of a super slim model. BenQ''s panel procurement capability and Pentax''s strong technology base will improve the competitive edge of both companies. [M. Robertson, Portelligent]

Small and medium sized digital still camera manufacturers in Taiwan are turning to camcorders in search of new business opportunities. Aiptek and Chicony are both producing their own brand digital camcorders and OEM/ODM products.

Aiptek withdrew from the digital still camera market and made camcorders its primary product. Although it plans to ship 1.5 million units in 2005, it shipped 450,000 units in the first half 2005. Aiptek''s camcorder operation is expected to be in the black this year.

Many of the commercially available camcorders are manufactured by Japanese companies. They are expensive as they use tapes, optical discs and hard disks as the recording media. They retail for more than $399 in the U.S. market. On the other hand, camcorders manufactured in Taiwan use memory cards making the camcorders cheaper. Taiwan-made camcorders are sold for about $199 in the U.S. Taiwanese vendors are trying to cultivate the market demand focusing on mid- to low-end camcorders. [M. Robertson, Portelligent]