Baidu also had its hands full trying to appeal court ruling that found the company guilty of violating copyrights held by a local affiliate of music major EMI Group PLC, the Wall Street Journal reported, citing Baidu's lawyer. The court ruled Baidu's website provided access illegal MP3 files of music copyrighted by Shanghai Push, EMI's China-based affiliate. The court ordered Baidu to pay the plaintiff US$8,408 compensation for the 34 company copyrights Baidu allegedly violated and to stop the downloading of Shanghai Push songs. If the appeal is denied, Baidu could be forced shut down its MP3 search engine, which accounts for much of the site's traffic.
Baidu's MP3 search page has attracted the attention of global music giants Sony BMG, Vivendi Universal, and Warner Music Group, some of which are reportedly suing the Chinese company.
Microsoft has its share of headaches too its former executive, Kai-Fu Lee, took up post as head of rival Google's China operation, despite attempts by the Seattle-based software giant to block Lee from defecting based on the non-compete clause he signed in his Microsoft contract. The Washington state court where the case was heard ruled that Lee, who founded Microsoft Research Asia in Beijing in 1998, could work for Google under certain restrictions. During the court hearing, Lee testified that Microsoft mismanaged much of its operations in China in recent years, with misguided moves that included threatening and insulting the Chinese government, the Seattle Times reported. The Chinese government had written off Microsoft, and morale at the company's China operation was low while employee turnover was high, Lee testified.
At Google, Lee's first goal is to reportedly recruit 50 college graduates this year, while Microsoft Research Asia has said it plans to recruit 100 to 150 graduates this year.
Nokia-China Putian in JV
Nokia, the Finnish mobile phone and network company, announced a US$111 million joint venture with state-owned telecom player China Putian Corp with a view to collaborating on research and development, manufacturing and marketing of 3G equipment solutions. The partnership gives Nokia the chance to push the European-initiated WCDMA 3G technology a Chinese market that continues to champion its own, as yet commercially unproven, TD-SCDMA standard.
China to develop own DVD format
For the second time in two years, China has announced it will develop its own next-generation DVD standard to avoid paying hefty licensing fees to foreign companies, which adds up to about 40% of the production costs, state media reported. The new standard will be based on, but incompatible with, HD DVD, which is being promoted by Toshiba Corp, Universal Studios, Intel Corp, and Microsoft. The Chinese standard is not expected to reach markets until at least 2008 and, if adopted, it could add a new wrinkle to the battle between HD DVD and the competing Bluray Disc formats, over which one will become the dominant new DVD standard. About 80% of DVD players worldwide are made in China.
China Mobile eyes acquisitions
China Mobile, the world's largest cell phone company by number of users, is considering the purchase of a controlling stake in SmarTone Telecommunications Holdings, in addition to its provisional agreement to buy 66.5% of China Resources Peoples Telephone in Hong Kong, according to media reports. A successful purchase of Peoples Telephone, the fifth-biggest cell phone company in Hong Kong, from its controlling shareholder, the state-owned China Resources (Holdings) Co, would give China Mobile a foothold in Hong Kong, pitting it against five other mobile operators. Talks to acquire a SmarTone stake, seen as a means by which ChinaMobile can acquire a 3G license, which SmarTone holds, were in preliminary stages, the South China Morning Post reported.
First mobile phone TV service planned
China Mobile has teamed up with Shanghai Media Group, the only Internet protocol television licensee in the country, to feed television content over mobile phones, the South China Morning Post reported. The service, to be delivered through China Mobile's 2.5-generation, GPRS-based data and multimedia platform Monternet, could be launched by the end of this year. China Mobile will become the country's first mobile operator and second telecommunications group to offer the service, following Shanghai Media Group's Internet television agreement with fixed-line operator China Telecom.
Netcom buys 4 regional networks
China's second-largest fixed-line telephony operator, China Netcom, has agreed to purchase four provincial networks from its state-owned parent company for US$4.5 billion, the Financial Times reported. The four northern regions of Jilin, Shanxi, Heilongjiang and Inner Mongolia Autonomous Region have 30.5 million fixed-line subscribers – a penetration rate of 24.9 percent. Netcom's chief executive Edward Tian said the company would need to focus on broad-band, corporate clients and value-added services.
PC maker eyes larger market share
Lenovo, the world's third-largest personal computer maker, aims to expand its share of China's fiercely competitive PC market to 35% by the end of 2005, Reuters reported. The company's market share stood at 32% at the end of June, 28% coming from Lenovo's own-brand business and the remainder from sales of IBM, whose struggling PC business was bought by Lenovo for US$1.2 billion this year. Market researchers IDC expect PC shipments in Asia to rise by 14.9% this year, compared to a worldwide figure of 14.1%.