TELECOMUNICATIONS – EQUIPMENT

China's ZTE to Supply ADSL to France Telecom
ZTE Corporation is to become a global supplier of ADSL equipment to France Telecom. The announcement follows a strategic partnership agreement between France Telecom and China Telecom, under which the two companies have launched a joint call for purchasing ADSL products. ZTE has signed contracts with both operators.

TELECOMUNICATIONS – ADSL MARKET

Swisscom Tops 800,000 DSL Customers
Swisscom reported strong growth in ADSL. Year-on-year, the number of ADSL access lines increased by 64.7% to 802,000, of which 490,000 are those of Bluewin retail customers and 312,000 are those of customers of other providers. Access fees cover fees for analog and digital access lines as well as broadband access lines (ADSL) for retail and wholesale customers, and Internet subscription fees. Financially, Swisscom increased its revenue by 0.3% to CHF 10.06 billion in 2004, with net income rising by 1.6% to CHF 1.6 billion. Operating income before interest, taxes, depreciation and amortization (EBITDA) was down 2.2% to CHF 4.4 billion. Equity free cash flow, which remains stable at CHF 2.9 billion, will be distributed to shareholders in the form of an increase of CHF 1 to CHF 14 per share in dividend payments and a share buyback of CHF 2 billion.

MULTIMEDIA – HOME ENTERTAINMENT

TiVo's Base Tops 3 Million
TiVo added approximately 698,000 net subscription additions in the fourth quarter, giving it over 3 million total subscribers - more than double what it was a year ago. Service revenue for the quarter increased 73% to $33.0 million, compared with $19.1 million for the three months ended January 31, 2004. TiVo's net loss in Q4 was ($33.7) million, or ($0.42) per share, compared to a net loss of ($12.4) million, or ($0.18) per share, for the three months ended January 31, 2004. The increase in net loss for the quarter reflects the impact of TiVo's increase in rebate expense during in the quarter.
TiVo said it is investing to further differentiate the TiVo service from generic cable and satellite DVRs, offering new entertainment and information applications to enrich its subscription offering and offer consumers greater choice and convenience in their home entertainment.
The newly released TiVoToGo service enhancement, which allows subscribers to transfer their shows to a PC, portable media player or DVD burner.

IT – SOFTWARE MARKET

Microsoft to Acquire Groove Networks for Collaboration Tools
Microsoft will acquire Groove Networks, a supplier of collaboration software for geographically distributed workgroups. Financial terms were not disclosed.

Groove's Virtual Offices enables teams to work together securely over the Internet. Microsoft said the addition of Groove products would build on the capabilities of its current collaboration products.

The acquisition also brings to Microsoft the development talent and technology leadership of top Groove executives, including founder Ray Ozzie, a creator of IBM Corp.'s Lotus Notes. Ozzie will assume the role of chief technical officer, reporting to Bill Gates, Microsoft founder, chairman and chief software architect, with responsibility for influencing corporate wide communication and collaboration offerings and associated platform infrastructure. Ozzie also will continue his work with the Groove team, which will be part of Microsoft's Information Worker Group.


IT SERVICES – MARKET

BT Signs $3 Billion Contract with Reuters
BT will become Reuters supplier of network services in a contract under which Reuters is expected to spend in the region of $3 billion over eight and a half years. Under the deal, BT will provide and manage secure data networks for Reuters products and services worldwide.

BT will also acquire Radianz, a leading financial services extranet provider, from Reuters for $175 million for the business plus any cash remaining on the balance sheet, net of working capital adjustments, at the date of completion. BT said the acquisition of Radianz is an important step in its ongoing transformation into a global provider of networked IT services.
Following the acquisition, Radianz will continue to provide high quality extranet services for Reuters and the global financial services market.


ELECTRONICS – MARKET

As Sony wobbles, Samsung rises
Korean electronics firm becomes the new 'factory of ideas'
Tokyo In 1997, the year Howard Stringer joined Sony, Japan's premium electronics company took little notice of Samsung Electronics, a South Korean television maker fighting a life or death battle to survive the Asian currency crisis.

Less than a decade later, Samsung has twice the market capitalization of Sony, which this week named Stringer as its new chairman.

Samsung also is no longer Sony's only rival. Apple Computer now dominates the market for portable music players. Silicon Valley companies have led the way in digital gadgets like the PalmOne personal organizers and TiVo's digital video recorders.

Sony is even facing strong competition from Eastman Kodak and Canon for digital cameras, a product category it invented.

Samsung has become what Sony could once claim - the competitor with both the breadth of products and the appeal of a premium brand.

This rapid reversal of fortunes illustrates the highly competitive world of consumer electronics that Stringer, a media man, is entering.

Complacency and coasting on best-selling products have contributed to a nearly 75 percent decline in Sony's stock value since its peak on March 1, 2000.

The invincible "factory of ideas" founded almost six decades ago by Akio Morita, the company that brought the world the transistor radio, the Walkman and the Trinitron television tube, seems to have lost its way.

"Samsung is now the anti-Sony," George Gilder, a visiting American technology analyst, said in an interview in Tokyo on Wednesday. "Sony is layered with bureaucracy," he added.

Samsung, by contrast, has kept a lean corporate structure, with authority increasingly delegated to front-line managers around the world, and almost a quarter of the far-flung staff of 88,000 dedicated to research and development.

But in the boardroom purge Monday, Sony demoted the one engineer credited with developing a new, world-beating product line, the PlayStation game consoles.

Ken Kutaragi remains chief executive of Sony Computer Entertainment, but he loses supervision of Sony's consumer electronics and semiconductor business just as it is preparing the Cell Chip, a superchip that is to run the next generation of game machines and also high-definition televisions. With the hand-held PlayStation Portable selling well since it was released here in December, the next PlayStation is scheduled to come out next year, in time to compete with a new Xbox console by Microsoft and a new console by Nintendo.

In the past three years, Sony's electronics division has dragged down company profit. With the division forecasting a loss for 2004, Sony is expecting about $1 billion in profit for the year ending in March, about 1.5 percent of revenue of about $69 billion. By contrast, Samsung, in the year that ended in December, had $10 billion in net income on sales of $52 billion.

A high profit allows Samsung to invest billions in research and development, maintaining 15 laboratory complexes around the world.

"Last year we spent $7 billion in capital spending, the largest for any information technology company in the world," Chu Woo Sik, a spokesman for Samsung Electronics, said by telephone from Seoul. This year, Samsung Electronics, the world's largest maker of memory chips, will invest $10 billion.

Samsung also has a huge capacity to build raw components like memory chips and display panels, lowering production costs.

Samsung was once a back-of-the-store brand with bulky televisions and boom boxes. After the Asian currency crisis, Samsung upgraded its product lines to compete directly with Sony for the premium market, leaving cheaper electronic goods to new companies in China. After spending $3 billion a year in advertising, including extensive Olympics sponsorships, Samsung's $12.6 billion brand value now rivals Sony's, according to Interbrand, the brand consultancy.

Samsung is such a leader in flat screens that Sony swallowed its pride last year and joined Samsung in building a huge factory in South Korea.

With the price of panels for the screens quite volatile, executives of both companies said the deal helped reduce the risk.

Sony, for its part, had clung too long to its innovative Trinitron picture tube technology, and it paid the price at Christmas.

In the last quarter of 2004, Sony's television sales rose 5 percent, but profit fell 75 percent from a year earlier. No longer able to command the premium prices associated with proprietary technology, Sony increasingly competes with high-volume, low-cost producers.

On Tuesday, Stringer met with Japanese reporters and vowed that Sony would be cool again.

But on Ginza, Japan's bellwether shopping street, the cool store was not Sony's showcase building. It was the five-floor Apple store.

On a recent Sunday afternoon, crowds entered the Apple store to inspect the latest iPods, using computer terminals to book appointments with Apple's sought-after technical advisers.

Sony was caught flat-footed with a late introduction of an Internet version of its 25-year-old Walkman, and profit from world audio sales fell 48 percent in the final quarter of last year.

"Samsung is like the old Sony," said Gilder, who edits the Gilder Technology Report. "Samsung has much of the spirit of Sony 10 years ago."
Source: The New York Times
Written: by James Brooke and Saul Hansell


IT/TELCO – VOIP

AOL Announces VoIP Service
Will announce pricing, details within the next month; promises tight integration with e-mail and IM.
Welcome! You've got VoIP.
That was the message America Online sent to the world Tuesday via the VON Spring 2005 conference here, where AOL chief executive Jon Miller officially announced the "AOL Internet Phone Service," with pricing and availability details to follow in the next 30 days.
"It's really time" for Voice over IP services, Miller said, during a keynote address to several thousand VON attendees. While admitting that AOL knows that "there's a lot we don't know, a lot of hurdles and questions," Miller was confident that his company's history of successfully bringing communications technology to the mass markets would continue in the VoIP space.

Specifically, Miller said AOL will look to bring more than just replacement telephone service to VoIP, instead building on its e-mail and instant-messaging expertise to bring more functionality to voice communications.
"We think [VoIP] can be much broader," Miller said. "There’s a totally different opportunity by integrating presence. You can screen the call, take the call, or send an instant message - your buddy list becomes a dashboard [for action]."

Miller said AOL's version of VoIP would be "regulatory compliant," meaning it will work out of the box with support for features like dialing to the public switched telephone network, and to 911 emergency services.
While he didn't deliver important specifics about pricing or availability, Miller said AOL Internet Phone Service will first be offered to current AOL customers. AOL said it will buy wholesale VoIP services from Level3, and also announced a partnership with Sonus Networks Inc. for VoIP back-end networking equipment and infrastructure.

AOL's entry into the VoIP market had been widely expected, and the company itself noted that it has already offered limited voice services in Canada and parts of Europe. The company said as part of its service it will provide an adapter box so that customers can use regular phones to access the VoIP service.
Source: Advanced IP Pipeline
Written: by Paul Kapustka