vnunet.com Asia news wrap: 8 December 2005

EBay faces China threat; LG Electronics handset sales surge; NEC develops e-paper battery

Simon Burns, vnunet.com 08 Dec 2005

Internet auction giant eBay will soon lose its crown as the leader in China's booming online auction market, according to a report published today.

Online auctions in China almost doubled in popularity during 2005, said the report from China-based Analysys International.

Registered subscribers of consumer-to-consumer websites in China rocketed from 15 million in 2004 to almost 30 million by the end of the third quarter this year.

At the moment, eBay still leads local competitor Taobao in terms of registered users, with just over 50 per cent of the market.

But Taobao is ahead on turnover this year, with 57.10 per cent of the 2.32bn RMB generated in the third quarter, compared to eBay's 34.2 per cent. Taobao is controlled by Yahoo's Chinese partner Alibaba.com.

Analysys International predicted that Taobao will surpass eBay in turnover and registered user numbers by the middle of next year. Taobao's success appears to be a partial vindication of its decision to offer free auction services, which drew scorn from eBay.

"Taobao's strategy to attract users by free service has driven the boom in its subscriber base," said Sun Lilin, a senior analyst with Analysys. "But they still face challenges ahead on how to capitalise on the huge subscriber base."

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Korean mobile phone manufacturing powerhouse LG Electronics will produce over 66 million handsets in 2006, according to a forecast published today.

LG has increased efficiency and cut costs by better integrating its manufacturing facilities this year, said the Hyundai Securities report. As a result the company's shipments will leap from about 55 million this year to 66.7 million in 2006.

The jump in shipments is in line with industry predictions of a 10 per cent increase in worldwide mobile phone sales next year.

But LG's rising sales come with an improvement in margins at the mobile phone division, which accounts for 38 per cent of LG's revenue.

For the entire company, this will help bring a predicted increase in operating revenue from $22.92bn this year to $24.19bn in 2006.

Recent data ranks LG as the fourth or fifth largest mobile phone maker in the world, with just under seven per cent of the market.

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NEC of Japan has announced an ultra-thin, flexible battery suitable for electronic paper products.

The company said that the battery can be recharged in just 30 seconds, although prototypes only provide about 20 minutes of power sufficient to light an LED each time they are charged.

A photograph published by the company showed the thin, flat battery being bent at a near 180-degree angle with no apparent damage.

The battery is based on an organic polymer and does not contain enviromentally damaging heavy metals, the company said in a statement published yesterday. According to NEC, the functional component of the battery is 0.3 mm thick.

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