Thu, May 18, 2006 - Page 12 News List

High Tech set to gain Japan foothold

By Jason Tan  /  STAFF REPORTER

High Tech Computer Corp (宏達電), the world's biggest maker of handsets operating on Microsoft Corp's mobile operating system, is set to gain a stronger foothold in the Japanese smartphone market by winning orders from Japanese Internet conglomerate Softbank Corp, analysts said yesterday.

"The visit of Softbank to High Tech Computer this week will benefit the latter as High Tech Computer has stepped up efforts in making inroads into the Japanese market this year," Ann Liang (梁嘉鈴), principal analyst at research firm Gartner Inc's Taiwan branch, told the Taipei Times.

The Japanese telecommunication ecosystem differs from other nations as major operators such as NTT DoCoMo Inc, KDDI Corp and Vodafone KK, have a say on specifications of mobile phones to be sold to users, she said.

"It is a smart move for High Tech Computer to explore Japan's market by working with these domestic telecom players," she added.

The analyst's remark came after the Chinese-language daily the Commercial Times reported on Tuesday that top officials from Softbank paid a visit to High Tech Computer on Monday to discuss possible smartphone procurements from the Taiwanese maker to supply to Vodafone KK, a business unit Softbank recently acquired.

The paper said that High Tech Computer is also mulling the possibility of setting up a branch to manage growing business in Japan.

"We see positive implications [from Softbank's visit]... With NTT DoCoMo's shipment starting, and fresh interest from Softbank/Vodafone KK, Japan will be another important market for High Tech Computer, in addition to Europe, the US and Asia," Vincent Chen (陳豊丰), an analyst with foreign securities brokerage CLSA Ltd said in a research note released yesterday.

In March, Softbank acquired Vodafone KK, Japan's third-largest mobile phone operator, for ¥1.75 trillion (US$15.9 billion), making it one of the biggest-ever acquisitions in Japanese history.

The third-generation (3G) subscriber base of Vodafone KK -- previously the ailing Japanese unit of the world's biggest handset company Vodafone -- has only 2 million to 2.5 million users in Japan.

The figure is much smaller than NTT DoCoMo's approximately 19 million, a client High Tech Computer signed up last year and will start supplying 3.5 G handsets to this month, Chen said in the note.

Nonetheless, any High Tech Computer-Softbank partnership would serve as a boost to the Taiwanese company's forecast shipments of 10 million smartphones this year, he added.

In a filing to the Taiwan Stock Exchange on Tuesday, High Tech Computer denied any partnership with Softbank, saying that it was merely media speculation.

The company's shares were down 0.44 percent yesterday to close at NT$1,125 (US$35.63) on the Taiwan Stock Exchange.

This is not the first time Softbank has been linked to potential Taiwanese partners, as the company is also looking to form a joint venture here to tap into the booming Internet TV market, founder Masayoshi Son told reporters during a visit to Taipei in November.

The company is in talks with TV stations, digital content providers, record labels, broadcasting firms and production houses over possible partnerships to push its Internet TV platform called TV Bank.

Set to launch in spring, the platform will enable viewers to search for and watch content such as foreign films over broadband connections, which Son believed will be a new cash cow.

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