14th > September > 1998 Archive

The Register breaking news

Tesco puts £900 Fujitsu PII on sale

A Fujitsu 350MHz Pentium II machine goes on sale in Tesco’s new Cardiff store for £899.99 inc VAT today. The latest introduction follows a pilot scheme which Fujitsu consumer product manager Laurence Knott feels has been highly successful. Knott says the use of supermarkets for PC sales in the UK is the start of a revolution, and claims that prices in Germany and France (where, spookily, a Register associate seems to have bought a Fujitsu PC in a supermarket just last Saturday) are up to 30 per cent lower. The latest Fujitsu-Tesco model is a 350MHz PII with 64 megabytes SDRAM, 4.3 gigabyte hard disk, 32x CD, full multimedia spec and a 56K internal softmodem, plus software including Word 97, Works (you get SmartSuite in France) and IBM Via Voice Gold. “Fujitsu has proved that it’s possible to provide consumers with the latest technology at the best price,” says Knott. Now go and prove you can make a margin out of it, says The Register. ®
The Register breaking news

Resellers unite to pitch for multinationals

A group of resellers with a presence in Europe and the US has formed an international consortium aiming at major multinationals. The consortium, IT International, claims combined sales of over US$1.7 billion, and is chaired by Philip Garnar of the UK’s Elcom Group, whose American parent also provides the US presence. IT International, says Garnar, intends to address the increased centralisation of buying decisions by major multinational corporations. "The consortium, which brings together the finest service providers in Europe and North America, has been formed to allow multinational players to implement global IT strategies with local support. "Customers will have single source ordering with an easy-to-monitor service level agreement and benefit from best possible pricing." IT International currently has offices in 12 countries, and intends to expand to 20 offices across three continents by the end of the year. Other founding members are AB Microconseil (France), Computer Company (Benelux), Bechtle Group (Germany), CMA Group (Scandinavia and Russia), Dirtesa (Spain). The group intends to use e-commerce systems to supply customers, providing them with real-time ordering, stock availability information and customised pricing (Does this mean online gouging? – Ed). It aims to offer an average ship time of five days, with a 99.7 per cent service level achievement. According to Computer Company's President and Chief Executive Jos Houben, IT International will deliver "comprehensive end-to-end solutions, via both central and local contact points, using consistent systems, prices, and operating practices across all countries". ®
The Register breaking news

Still my beating heart

We've only bunged this one in here cos the last thing on our mind is to panic people who have had PaceMakers fitted. Are they year 2000 compliant? The people who make them haven't come clean about the installed base nor whether they rely on some kind of CPU -- although they almost certainly use a timing chip. And on the same subject, Intel has come clean on the fact that anything prior to the Pentium is not Y2K compliant according to the vague and hazy definition...and the last update is that GPS will start to go wonky as from August next year so don't fly on anything (even paddle boats might use them -- and cars in Singapore).
The Register breaking news

Web bears up under demand for Starr report

Like many lawyers, Kenneth Starr, the so-called independent counsel investigating Clinton's zippergate, used WordPerfect 6.1 for his report, which he supplied on CD-ROM to the House of Representatives. It was then converted to HTML, but some mistakes were made with the conversion and the versions first published on government sites were lacking some of the footnotes -- and, even worse for Starr, some footnotes that had been marked as not to be included, were included. Corrections were swiftly made. Reports conflict as to whether the Web held up under punishment from salacious surfers, but majority opinion is that it was not too serious -- only a few government servers crashed for short periods of time. Failure rates in accessing the key sites reached nearly 90 per cent for a time, and download speed was sometimes half what might be expected on a normal day. The large number of mirror sites were responsible for spreading the load. Even a broken Worldcom fibre optic cable, caused by a train derailment in Georgia, did not cause significant problems. Most nauseating perhaps (the use of cigars apart) was the hypocrisy surrounding the excuses used by the likes of Netscape and AT&T for posting the text of the report. They were just doing it to alleviate the stress at government sites and as a public service, they said, but few doubt that surfers were just curious about what pubic services were provided in the White House. They would say that, wouldn't they? The White House site put up two documents in defence. From a broader perspective, the saga has clarified the role of the Internet in news dissemination. Where pictures are unimportant (or disappointingly unavailable), television doesn't work well. Although Real Networks and Broadcast.com had reporters read the report, it was dull. Broadcast teletext via PBS was not needed as there was no gridlock. The downloaded report allowed readers to skip to the parts that interested them. ®
The Register breaking news

New York Times hacked

The New York Times Website was down for around 12 hours yesterday after a hacker organisation called HFG (Hacking For Girlies) protested about the imprisonment of Kevin Mitnick, who distinguished himself by being named the world's most wanted hacker by the FBI in 1995. Mitnick has been in prison awaiting trial for three and a half years on computer-related fraud charges. His trial is now scheduled to start in January. The front page of the NYT site was adorned with three females -- widely reported as pornographic, but a visit to a mirror at www.antionline.com will show otherwise -- and was an attack on the NYT's reporting of the imprisoned hacker. There was a poem by HFG (beginning "Wether you believe it or scoff/we at HFG hate john markoff/") -- a reference to the NYT journalist who co-authored a book entitled Takedown about Mitnick in 1996, which is being made into a film by Miramax. There is some better poetry of by Emerson, Keats and Voltaire embedded in the code. The timing was deliberately arranged to correspond with the busiest time of the week for the NYT site. This is said to be the most significant hack of a major news organisation. A complaint has been made to the computer crime squad of the FBI, which is investigating. We wonder who's software is at fault here... ®
The Register breaking news

Artecon consolidates UK beachhead

California-based storage specialist Artecon is looking for channel partners to join its distribution team now that it is firmly established in the UK following the completion of its merger with Storage Dimensions. Account manager Robert Taylor commented: "We are looking for new distributors. A reseller must be able to add something to the sale since it is a very technical market." He added that margin on products was still good. The company currently has distribution agreements with Aslan and Ideal Hardware. It also has a direct sales operation, which it says it will continue to back. The Storage Dimensions merger makes Artecon UK the fourth biggest player in the open storage market, according to IDC. Analysts said the market gained a stronger competitor, with a revenue run rate of $170 million. The company recently released the SuperFlex 7000 Fibre channel RAID storage solution and announced Redundant Data Path for NT. "RDP is a new software package that improves the performance and resilience of RAID storage systems with dual active controllers," said CEO Jim Lambert. ®
The Register breaking news

IBM intros ultra-high resolution LCD

IBM has developed a flat-panel display that could signal the end of CRT technology. The new display, due to be formally unveiled next week, offers four times the resolution of current LCDs and, claims IBM, shows images with as high a defintion as print. The panel, codenamed Roentgen, used 15.7 million transistors to create a matrix of 40,000 pixels per square inch. Its 16.3in diagonal size makes it equivalent to a standard 17in monitor. Such a high resolution could also help bypass the problem current LCD screens have switching to lower resolutions. A typical 800 x 600 display can only switch to 640 x 480 by blanking out a portion of the screen or distorting the image, usually badly. Theoretically, the extra resolution provided by Roentgen could be used to smooth out the distorted image so much that it looks fine. However, IBM admitted it might be some time before its new technology makes its way into laptop and desktop displays -- initally it will be sold to markets, such as medical imaging, where price isn't such a sensitive issue. ®
The Register breaking news

Oh CIENA! Tellabs shuns takeover

In a blizzard of press releases, CIENA Corporation has confirmed the "mutual termination" of its planned merger with Tellabs. CIENA blames "investor reactions to events of the last several weeks" for the amicable parting of the ways. "The ultimate ability to obtain shareholder approval for the merger and made it difficult to move forward with the kind of momentum needed to realize shareholder value," it says. As you recall, CIENA's stock went into freefall, following its failure last month to win a mega-contract to supply AT&T with its optical networking equipment. Tellabs said then that it would press ahead with the takeover but on greatly reduced terms. But failure last week to secure another big contract for its wavelength division multiplexing (DWDM) systems sent shares spinning down a further 29 per cent. This was too much for even the most gung-ho Tellabs investor. Tellab shareholders would have been very unwise to wave through any deal, until doubts over CIENA's ability to sign up new customers are resolved. The collapse may be personal business disaster for Patrick Nettles, CIENA's president and CEO, but boy does he do a good impression of Pollyanna. "While we are disappointed that our plans with Tellabs will not come fruition, we remain excited about our future as an independent entity," he says. This is simply not true. Nettle's credibility with investors is undermined -perhaps fatally - and the company is up for sale. "Over the short-term,", Nettles continues with a euphmism of the highest order, "CIENA will continue to face the challenges associated with expanding our customer base". On the bright side,the core elements of our business remain strong." CIENA's team spirit is "indomitable", the company has $200 million cash in the bank and it is the only "DWDM vendor commercially shipping a 40-channel system with more than one million channel kilometers installed for customers on three continents". This adds up to 11 big telecoms customers, so there is plenty of opportunity. It also makes the company very vulnerable to the whims of its customers. On the less bright side, CIENA is having to discount prices to keep customers happy. Discounting is of course a relative concept. The company now has to get by on gross margins of 45-50 per cent. But with rivals like Lucent, the company's $200 million cash pile won't go very far if the market descends into a real do-fight. Q3 earnings at $129 million, are up slightly on last years $121 million for the quarter. But Q4 revenues will be materially below those reported for the third fiscal quarter, due to "uncertainty created by the events of the last few weeks and attempts of our competitors to capitalise on that uncertainty may delay or alter some customers' near-term purchase decisions". The company is restructuring its sales and marketing organisation, as part of its mission to restore shareholder value. Pollyanna Nettles says: "As an emerging company, CIENA has battled the underdog status for most of its corporate life. As a team, our employees have faced and conquered enormous hurdles and their spirit is unyielding. Ultimately, it is these highly motivated people, our field-proven products, and our industry- leading technology that will enable us to capitalise on the opportunities ahead." This is eyewash. Being a overdog is so much more fun. That way your salespeople get to sign up new business.®
The Register breaking news

Intel price axe swings again

Intel has once more taken the axe to its processor pricing, with cuts being made on selected procesors in the workstation, desktop and notebook computer range. The biggest price drop is on the old 266MHz mobile part, which drops by 34 per cent to $159 when bought in quantities of 1,000, but other chips fall by between eight and 30 per cent. Intel is maintaining its price on its high end 450MHz Pentium II part operating at the 100MHz bus speed, but has cut the 400MHz and 350MHz units to $482/1000 and $423/1000. For those parts using the 66MHz bus, the 333MHz Pentium II drops by 26 per cent to $234/1000, while the 300MHz PII falls by eight per cent to $192. The company has kept the price of its Celeron-Mendocino chips, introduced last month, steady. But it made a cut in the price of its old technology 300MHz Celeron chip to $95. This means that the “old Celerons” without the faster Mendocino core, are effectively at the end of the road. They have not had wide market acceptance. For the mobile chips it produces which come in the so-called “mini cartridge” form factor, Intel reduced prices on the 266MHz to $391/1000, a 12 per cent drop, while the 233MHz mini-cartridge falls further, by 20 per cent, to $209. The price cuts in Intel’s mobile chips indicates that the company intends to wean most of its larger customers to the mini-cartridge format as soon as it can. Intel has made numerous price cuts on its chips during the course of 1998. Formerly, it used to reduce prices every quarter, but now does so far more regularly. This latest price round is an indication that the market can expect further reductions and fresh introductions. The cuts are also aimed to take advantage of the Christmas market. ®
The Register breaking news

Big Blue to spend more in South Korea

Lou Gerstner, IBM's CEO, said on a visit to South Korea that his company is to pump money into the country. A report in local English language paper the Korea Herald said IBM will increase the amount of equipment it buys from South Korean companies by around 20 per cent, accounting for a total of $1.2 billion in 1998. Gerstner, who is on a visit of the Far East, said that it will cooperate with a South Korean government department to set up units aimed at assisting the growth of the small and medium business market. IBM will also create a software and support centre in the country. That centre will mean a $15 million investment over the next three years. The reports said that Big Blue was making the investments because it believed that South Korea and its high technology units had a healthy future. ®
The Register breaking news

Zippergate leaks unsettle Wall Street

Some turbulence is expected in US markets today after the publication of the Starr report. The White Office has accused Starr's office of leaking the content on Friday, allegedly in a move to calm markets with the news that there was nothing significant beyond what had been previously leaked. A rumour was circulating in the Street that vice president Al Gore was involved, but the report contained no evidence of a threesome. The maxim that the market dislikes uncertainty proved true again. After Clinton's tearful apology at a White House prayer meeting and the release of the Starr report ("in line with expectations", in Street talk), the Dow rose 180 to 1195, and Nasdaq gained 3.6 per cent to 1642. The New York Times reported that foreigners are exiting US markets, although US investors are holding out because of their 401k retirement plans that are in stock. The dollar has fallen 11 per cent against the yen in the last month. Disney announced lower-than-estimates earnings after trading ceased. Oracle pulled off an increase of 15 per cent based on good results, while Intel improved seven per cent on a forecast of a better third quarter than expected, the result of anticipated ten per cent better US and European sales, compared with the year-ago quarter. Other major gainers were Dell, Microsoft, Cisco, Ascend and Network Associates -- the latter tipped to double in the next 12 months by Lehman Brothers. In fact, the Brothers have their own crisis: bankruptcy talk sent its stock down around ten per cent. The Nihon Kzai Shimbun quoted industry sources that NEC's loss for the six months ending 30 September would be Y10 billion, with sales down seven per cent to Y2.2 trillion. Only NEC's computer division seems to have done well. The problem area is, of course, the DRAM sales decline, and sluggish sales in other areas. This morning, the Nikkei moved up 106 points in the first 30 minutes of trading, having fallen 749 points -- five per cent -- on Friday. In Hong Kong, the opposition leader accused Beijing of giving instructions to the Hong Kong government to support the market -- with an estimated $15 billion of the near $100 billion reserves.®
The Register breaking news

Baby Bells argue for IP phone charges

The Baby Bells are flexing their muscles to compete with nifty competitors that do not enjoy the Babies' semi-regulated monopoly.
The Register breaking news

Diamond bundles Internet music with RIO

Diamond Multimedia's newly launched Rio PMP300 portable music player will be marketed with licensed content from the MP3.com Web site. Diamond will bundled 100 songs from MP3.com with the new product. Under the terms of the deal, each organisation will provide the other with “aggressive” promotion and advertising. Ken Wirt, Diamond Multimedia VP, said the package was aimed at educated, looking for a cheap playback device. He suggested the CD would attract those already hunting music on the Internet. The Rio device will drive music into a new digital era, Michael Robertson, president and CEO of MP3.com, said. "The market expansion enabled by portable devices and Internet content will be far greater than what we've seen in the past. Users want to be able to sample music, have exposure to a wide array of [unsigned] artists, and purchase only the tracks they like." The Rio PMP300 can store up to an hour of digital quality music and up to 12 hours of voice quality audio from the Internet or a CD, using MP3 compression. It is smaller than an audio cassette and runs on a AA alkaline battery. Rio PMP300 starts shipping in the states this October for about $199.95. Dates for a UK release have still to be confirmed.®
The Register breaking news

Dutch policeman nabbed in Microsoft raid

A Dutch policeman was arrested and charged with handling stolen goods, after the National Crime Squad intercepted a van with 20,000 Microsoft Windows 95 Upgrade CD-ROMs on board. Two others, a Dutch national and a UK national, were arrested and charged with handling stolen goods worth £1.5 million. The CDs, believed to be stolen from KAO Systems in Ireland, a Microsoft distribution centre, were recovered on September 3, following an “intensive two year investigation”. The operation started from “surveillance of software sales adverts on the Internet,” Microsoft reveals. UK police have recovered stolen or counterfeit Microsoft CDs worth up £50 million in the past three months, according Microsoft's UK Internal Investigations team. "If the price looks to good to be true...be very suspicious," David Gregory, anti-piracy manager at Microsoft, warned. He said the raids demonstrate Microsoft’s “unswerving commitment to protect the vast majority of UK computer resellers. "We promised to hunt down the illegal distribution channel and give a fair playing field to those who want to do business with us." Detective Chief Inspector Alan Williams from the National Crime Squad added: "The remit of the NCS is to target organised crime on a national and international scale. Organised crime revolves around profit, and it is evident that the illegal sale of this property can realise vast amounts of profit for those involved." More information is available from Microsoft's Web Site.®
The Register breaking news

In brief: Cases against Western Digital dismissed

A US district course late last week threw out eight class action lawsuits against hard drive manufacturer Western Digital. The allegations were that WD had issued financial statements that were misleading. ®
The Register breaking news

Intel moves to reassure industry on bugs

Intel has admitted that it is impossible to prevent bugs from escaping its testing process. But today it moved to reassure end users and customers that its bug testing process is up to the task of dealing with the complexity of this and future generations of its microprocessors. That follows bad publicity given to Intel earlier this year over an erratum with its Xeon line of server chips. John Barton, validation manager at Intel US, said: “Over time it has become obvious that validation is a crucial part of our success. We spend millions of dollars on validation and we don’t take it lightly.” Barton claimed that Intel had developed a three tiered process to sift out as many problems as it could, using a combination of test suites, feedback from OEMs, ISVs and other partners, and end users. He said: “It’s our job to do our level best that errata and escapes are not fatal to prodicts. If it happens, Intel will make good on it. It’s obvious we cannot completely guarantee any of our products will be completely free of errors.” He claimed that his testing unit has the specific job of looking at designers’ work and testing it to destruction, if that is possible. If what Intel describes as “a sighting” – a report of a bug – is notified to them and it is found it is a serious problem, Barton said it gave its major OEM customers one month’s notice. But he also claimed that built into its P6 architecture was a method of implementing some fixes through altering microcode. That is what happened with the Xeon problem and Intel was able to fix it quickly. He said the technology was proprietary to Intel. ®
The Register breaking news

14/09/98 Daily Digest

Tesco flogs Apples of the computer variety Tesco is adding a new variety of apple to its shelves when it begins a one month pilot scheme to market the new iMac. The computer will be available at the two largest stores, one in Stirling, Scotland, and the other in Cardiff, Wales. Jon Molyneux, managing director for Apple UK, said: "Since the iMac concept was launched in May, we have been looking at a number of options to expand our retail presence. Tesco is clearly committed to exploiting the benefits the Internet can offer all of us as consumers. It seems a natural place to test market iMac." Tesco's product development manager for personal computers, Ian Sinclair, said that Tesco supported the iMac because it was consumer oriented. "The iMac has been designed to let people connect to the Internet very simply," he said. The marketing programme will include in-store demonstrations, local advertising and PR campaigns and point of sale literature. Tesco will also take opportunity to promote its TescoNet service by including it in the demonstrations. Tesco extends Fujitsu contract Supermarket giant Tesco has dealt out another bloody nose to the retail PC channel. Today at its newest superstore, in Cardiff, Tesco will start selling Fujitsu PII 350Mhz PCs for £899.99 (inc VAT). The T-Bird PCs come with 64Mb SDRam, 4.3Gb hard drive, internal 56K modem, a 15" monitor and run Windows 98. In July, Tesco began selling PCs from Fujitsu and Siemens Nixdorf as part of a trial. When the Fujitsu PCs went on sale at Tesco's store in New Malden, Surrey, more than 700 were sold within the first two weeks. One happy shopper is said to have undertaken a round trip of some 300 miles to buy six of the Fujitsu 266Mhz PCs, which were selling at £799.99. A representative of Tesco said the supermarket chain had shaken the traditional PC retailer. "You only have to look at the sort of deals and bundles some of them started putting together in the wake of our trial to see that we have had a major impact on their business." Fujitsu already sells PCs through supermarkets in France and Germany and claims it is committed to driving down the purchase price of home PCs to make them accessible to a wider income group. Laurence Knott, head of Fujitsu's home PC division, said: "We were always sure this would be a success and we are delighted that we have proved that it is possible to deliver current technology at such keen prices through Tesco stores." Dicom takes bite of Swiss start-up Dicom Group PLC, the Anglo-Swiss distributor of document imaging products, has snaffled up a 35 per cent in Base-Net Informatik for CHF420,000 in cash. Base-Net is a start-up company specialising in software for the banking industry. The company began trading in Autum 1997 and has yet to complete its first financial accounting period, which ends 31 December 1998. The transaction is to be handled through Dialog Holdings AG, a wholly-owned Dicom subsidiary. Urs Niederberger, DICOM's Finance Director, will join the Board of BASE-NET as a non-executive director. Acorn appointment Acorn Group Plc has appointed Andy Greensmith (37) as Chief Financial Officer. He joins the company from the BBC, where he was treasurer. He replaces Stan Boland, who was promoted to the role of Acorn's CEO in June,1998. Storm predicts Directors at Storm, the storage distribution division of Integrated Technology (Europe) Ltd (ITE), are "confident of reaching their budgeted turnover of £90 million for the year to 31 March, 1999. Sales hit a record £61 million for the year to March 31,1998 -- up 39 per cent on 1997, while profits for the year were up 29 per cent to £2.8 million (£2.1 million),the summer edition of Storm Outlook reveals PC channel deals delivered straight to the desktop An Internet broadcast service designed for PC builders and resellers has opened up for business in the UK. Called Send-IT-Now, the ticker tape service delivers OEM news, the hottest deals as they happen straight to the desktop. Send-IT-Now! is the brainchild of George Evans, former commercial director of Microsoft DSP Datrontech and founder of the company's OEM division. More information is available from Send-IT-Now’s! Web Site Avnet issues profits warning Avnet Inc, the giant US components distributor, said it expects its Q1 fiscal 1999 earnings will fall below analyst expectations. Following the results for July, August and incoming business in the first two weeks of September, the company expects Q1 earnings before charges of between $0.80 -$0.85 per share, compared with analyst estimates of 99 cents per share. The company also to record one-time costs in connection with the previously announced reorganisation of its Electronics Marketing Group's (EMG) EMEA operations. It blames the profits fall on a "decline in demand in its core business due to continued weakness in the global electronic components market. Sales of microprocessors and sales to certain high-volume customers have been strong; however, core sales are weaker resulting in a degradation of gross profits."®
The Register breaking news

Winbond buys up ISD

WinBond Electronics, the Taiwanese specialist IC vendor, is to acquire all the shares it does not currently own in Integrated Storage Devices, for $10.5 million in cash. The company said the mergers meant it now has one of the strongest voice recording and playback IC product lines in the world. "We believe that we will have great success in selling ISD products through our marketing channels," Arthur Chiao, Winbond chairman said. David Angel, chairman and chief executive officer of ISD, said that it was a well timed deal: "ISD and Winbond have been working together in the development of ISD's long-duration flash-based ChipCorder products. Our companies complement each other well." After completion, ISD will become a subsidiary of WinBond.®