A8 Digital Music Holdings, a leading provider of ring tones and other audio content to mainland mobile-phone users, aims to drive expansion by focusing its internet-enabled services to 3G subscribers and pursuing potential acquisitions. The plans came after the Shenzhen-based company announced record profit and revenue for last year. A8, which marks 10 years of operations in May, yesterday reported a 27.24 per cent increase in net profit to 102.01 million (HK$116 million) yuan, from 80.17 million yuan in 2008, on steady demand of its pay-to-download digital music service and tightened cost control. Revenue increased modestly to 707.15 million yuan, up from 706.08 million yuan. Excluding a 49 million yuan income from a one-off event with China Mobile during the Lunar New Year holiday in 2008, A8 estimated turnover grew about 8 per cent year on year. As of December 31 last year, A8 had no borrowings. Its cash, bank balances and liquid short-term assets amounted to 402 million yuan, up from 317.6 million yuan the previous year. Chairman Liu Xiaosong said A8 was striving to become 'the biggest digital music services provider in China' through its 'Music Cloud' strategy and greater adoption of its A8 Box jukebox mobile software, which directly target mainland users of internet-ready handheld wireless devices. 'We have a well-defined long-term business-to-consumer strategy and have been exploring prospects for extending the group's [market] footprint through mergers and acquisitions,' Liu said. Music Cloud is an internet-based digital audio service, with social networking features, that allows subscribers to directly download and search music through compatible mobile phones, home stereos, personal computers, MP3 players and car stereos. 'This is a long-term strategy of the group,' Liu said. A8 Box software is expected to be a big revenue earner, as it is being embedded in Taiwanese semiconductor firm MediaTek's chipsets for 3G mobile phones made on the mainland. The software enables mobile-phone users to easily access and buy content from A8's large online audio database and other providers.
