24th > September > 1998 Archive
Fed chairman Alan Greenspan ignited the world's markets with his suggestion (subject to a vote of the Federal Open Market Committee on Tuesday) that the Fed will cut short-term interest rates next week. The Senate had been about to vote a resolution urging a rate cut, but dropped it on whispers of the Fed's move. It is extraordinary that such a move could have such an effect on markets. A small cut in the 5.5 percent inter-bank overnight rate is unlikely to have anything like the effect on companies that the announcement had on the market. It is a psychological message, in effect -- that inflation will be restrained by an economic slowdown. The result was a rise in the Dow of 257 points, to 8154, making 1998 gains positive once again. NASDAQ rose 62 to 1760. Internet stocks showed strong gains after their recent thrashing, although the whole technology sector did very well. Major gainers in percent: Adobe (5.0), Amazon.com (19), AMD (11.7), AOL (9.7), Apple (3.5), Broadcast.com (11.0), Cisco (5.4), CNET (19.6), Datastream (32), Dell (6.7), Excite (33), HP (5.9), IBM (3.4), Intel (4.2), Informix (3.8), Inktomi (11.1), Intuit (16.4), Lycos (19), Microsoft (4.1), National Semi (3.8), Netscape (8.3), Quantum (5.4), Qwest Seagate (4.5), Sun Yahoo (15), VLSI (7.1) Losers included Symantec (-3.6 percent), and Broadvision, a developer of e-commerce software, fell 25 percent because of concerns about how it recognised revenue from a renegotiated agreement to license software to Iona Technologies. The volume of Broadview shares traded was more then eight times the average over the last three months. The Center for Financial Research and Analysis, which produces a newsletter that looks for accounting irregularities, drew attention to its findings. Broadvision had been tipped by financial analysts, and the current problem is not apparently related to the current quarter's expectations, according to Janine Kromhout of Broadview in a conference call yesterday. eBays IPO, after earlier expectations of $14-16, was priced at $18, which was considered to be rather high, although it is the first IPO for almost a month. ®
Argentine Federal Judge Adolfo Bagnasco yesterday formally requested the extradition of two IBM employees to face charges of fraud and bribery. The request was made in connection with a long running Argentine case where it is alleged that $21 million in bribes was paid to secure a contract for IBM Argentina. The two IBM employees, Steven Lew and Peter Rowley, have been accused of involvement by former IBM Argentina president Ricardo Martorana. The $249 million contract, to install a computer system for the state Banco Nacion, was a flop, and the murk surrounding it was one of the factors that induced IBM to pull out of South American contracts earlier this year. But the scandal itself won't go away. The IBMers and a couple of former IBMers seem willing to offer testimony in the US for the Argentine case, but the judge doesn't want to cut this kind of deal, arguing that they're the accused, and should therefore be physically in the dock. A clutch of former IBM Argentina and Banco Nacion officials are already in the frame, but the judge wants to pursue the nature of the oversight exercised by IBM US HQ at the time of the contract, and hence to determine the level of involvement of US employees. ® Click for more stories.
Ericsson yesterday launched the US version of its top-of-the-range GSM phone, the 888, at the PCS 98 show in Orlando, Florida. The US model, the I 888, will be available by the end of the year and will be GSM 900/PCS 1900 dual band, i.e. it will work in the US and with the most common world-wide GSM implementation. The European version, which The Register has and rather likes, is dual-band GSM 900/DCS 1800, covering the two non-US GSM implementations, so the I 888 (or perhaps a future tri-band model) is likely to have attractions to European travellers as well. The 888 models have built in PC card modem and an infra-red port, so can be used with mobile computers, palmtops and PDAs without too much hassle. Ericsson meanwhile has got some egg on its face after reports that there was a quality problem with the first production run of the 888. The company confirmed this yesterday, but said most of the faulty units were sold in Sweden, and that a repair and replacement programme is under way. So far, ours still works... ® Click for more stories.
Dell has become the latest PC company to hop into the ISP business, with the launch of Dell ConnectDirect, via agreements with AT&T WorldNet, Excite and SBC Communications. The service will be bundled with US-sold Dell Dimension PCs from this week, and will include an easy sign-on process that allows users to choose ISPs, personalised Web home pages and links to (aha!) Dell services, support and registration sites. DirectConnect will feature six basic home pages, each targetting a specific market segment, including home, education, small business and government. One likely attraction for customers is that Dell proposes to offer high speed access via ADSL connections, so long as it's possible to do this from where the customer lives. This won't actually start happening until early next year though, when SBC plans to start rolling the service out in Texas and California. Dell already has a similar agreement covering US West's territories. It also appears Dell will be adding ISPs as it goes along - so far AT&T WorldNet is the only one named. Meanwhile Register Man of the Year, Compaq CEO Eckhard Pfeiffer, was unable to resist a sneer to reporters after a speaking engagement last night. Compaq is way ahead of the game in using the Internet to keep in touch with its customers, he said, and then couldn't resist promising a big announcement Real Soon Now. That certainly ties in with the hints that Compaq will be working with Excite rival Yahoo! on a new portal that combines Yahoo! content with Compaq's Alta Vista search engine. It is also believed that the company will be increasing its stake in the Road Runner high-speed, cable-based ISP owned by Time Warner. It appears all this is about giving family access to the Internet to customers, and extending the services so far provided into e-commerce territory. Just call him the Big E... ® Click for more stories
Netscape and Lucent have teamed up to sell e-commerce systems to communications service providers and large enterprise customers. The products will be sold under the brand of Lucent ECommerce Solutions, and will consist of a portfolio of consulting services, software and network security products for e-commerce. This is potentially a big deal for Netscape. The two companies have entered a multi-year co-operative agreement whereby Lucent licenses Netscape's CommerceXpert Internet commerce applications suite and Application Server software. They'll also jointly market, sell and support ECommerce Solutions. "By leveraging Netscape's electronic commerce expertise and our knowledge of the business processes and networks used by service providers and enterprises, Lucent is uniquely positioned to help our customers aggressively meet those goals," said Duane Elmquist, vice president, Lucent Internet Software Group. Lucent ECommerce Solutions are typically aimed at large enterprises and large communications operations, and incorporate business process consulting, integration and end-to-end project management. They will initially come in three flavours - Internet Procurement Solutions, to convert paper-intensive operations to online transactions; Self-Service Solutions used to personalise services on a business' Web site, and Business Trading Solutions to host online trading communities. ® Click for more stories
Federal Reserve chairman Alan Greenspan ignited the world's markets with his suggestion (subject to a vote of the Federal Open Market Committee on Tuesday) that the Fed will cut short-term interest rates next week. The Senate had been about to vote a resolution urging a rate cut, but dropped it on whispers of the Fed's move. It is extraordinary that such a move could have such an effect on markets. A small cut in the 5.5 per cent inter-bank overnight rate is unlikely to have anything like the effect on companies that the announcement had on the market. In effect, it is a psychological message: that inflation will be restrained by an economic slowdown. The result was a rise in the Dow of 257 points, to 8154, making 1998 gains positive once again. NASDAQ rose 62 to 1760. Internet stocks showed strong gains after their recent thrashing, although the whole technology sector did very well. ® Click for more stories Major gainers in percent: Adobe (5.0), Amazon.com (19), AMD (11.7), AOL (9.7), Apple (3.5), Broadcast.com (11.0), Cisco (5.4), CNET (19.6), Datastream (32), Dell (6.7), Excite (33), HP (5.9), IBM (3.4), Intel (4.2), Informix (3.8), Inktomi (11.1), Intuit (16.4), Lycos (19), Microsoft (4.1), Nat Semi (3.8), Netscape (8.3), Quantum (5.4), Qwest Seagate (4.5), Sun Yahoo (15) and VLSI (7.1). Losers included Symantec (-3.6 per cent), and Broadvision, a developer of e-commerce software, fell 25 per cent because of concerns about how it recognised revenue from a renegotiated agreement to license software to Iona Technologies. The volume of Broadview shares traded was more then eight times the average over the last three months. The Center for Financial Research and Analysis, which produces a newsletter that looks for accounting irregularities, drew attention to its findings. Broadvision had been tipped by financial analysts, and the current problem is not apparently related to the current quarter's expectations, according to Janine Kromhout of Broadview in a conference call yesterday. EBays' IPO, after earlier expectations of $14-16, was priced at $18, which was considered to be rather high, although it is the first IPO for almost a month.
The US IT industry has succeeded in convincing the US government to grant more temporary H-1B visas to overcome the severe shortage of what are nowadays described as engineers. Bill Gates, Andy Grove and others had been prominent in campaigning for the measure. Late yesterday, agreement was reached that the present limit of 65,000 visas per year would be increased to 115,000 for the next two fiscal years (which begin in October), and then fall to 107,500 in FY 2001 and back to 65,000 in FY 2002. In the current fiscal year, the 65,000 limit was reached in May. The Senate had approved the measure in May, but democrats in the House had expressed concern about the protection of American workers, and the White House threatened a veto. Only companies with more than 15 per cent of H-1B visa holders will need to show that they have tried to recruit qualified Americans. There will be a fee of $500 per visa, to be used for training and scholarship programmes for American citizens. An increasing problem is that many new American recruits wish to become instant executives with generous stock options and golden hellos, without spending any time in programming or product development. This in large measure accounts for the present shortage of staff -- a lack of willingness to undertake hard work. The visa approach is regarded as the least-cost way of increasing the workforce, and although such workers are supposed to receive comparable salaries to American native workers, in practice this is often not the case. Other approaches to staff shortages have included setting up research centres outside the US, as IBM often has. Microsoft recently announced it would be setting up a centre in India (Malaysia had been hoping for this), as well as its small centre in Cambridge's silicon fen. It comes as a shock to some US companies that many Europeans are not prepared to live in the US. Temporary workers are often employed by agencies (and routinely fired and rehired) in order to avoid any obligation on the real employer having to provide corporate benefits. ® Click for more stories
Executives are getting cheap computer training with taxpayers' money because everybody has ignored Prime Minister Tony Blair's vision of an army of unemployed trained to kill the Millennium Bug. Blair suggested 20,000 unemployed be trained as programmers to fix the bug across the UK, each getting £1,300 training grants from a £26m budget allocation. But the agency appointed to spend the money and the author of the training course decided teaching executives how to use computers was a better way of spending the money. Course author Peter Callahan of Sheffield Hallam University said: "We have the opposite view to Tony Blair. We don't think there is a skills problem." Instead the course covers a few commercial products to fix the millennium bug, then dwells on how managers can use computers in business because "it gives a broader base". IT National Training Organisation project consultant Tony Cusack said: "One of the problems is when there are spontaneous initiatives announced, putting the infrastructure behind it can be a struggle." Cusack said there was no time to teach 'Bug Busters' so the scheme changed. "Part of the broader initiative is not to fix the millennium bug but to upskill people in IT," he said. He said: "It's a political objective and our butts are hanging out for 20,000 people to meet Blair's estimate." Last week it was revealed only 26 people had enrolled. There was also 'no time' to meet Blair's desire to have the course as a nationally recognised qualification, said Cusack. "It's late and it can be argued, too little too late." Callahan said the 10 day programme would cost about £300 a day, leaving companies to pay £1,700 of the training bill. Action 2000 communications manager Elizabeth Allen said questions needed to be asked about how Blair's vision was carried out. ® Click for more stories
Somewhere back I have ancestors from Wales — a place where, as everyone knows, you need half a pint of phlegm in your throat before you can pronounce place names.
Graphics company Nvidia said that 3Dfx's action on alleged patent infringement is "nuisance litigation". The company said it will vigorously defend itself against the action and had not yet received a formal complaint but only a copy of a 3Dfx press release. Jen-Hsun Hang, CEO and president of Nvidia, said: "In light of recent admissions by 3Dfx, we can only speculate that they are turning to legal remedies in an attempt to stay profitable." He said that 3Dfx should instead be addressing their core market issues of channel saturation for older products and uncertain demand for their latest product. He continued: "While we have not yet been served with the complaint, Nvidia has examined the patent and believes there is no infringement by the Riva TNT [graphics processor]. Nvidia intends to defend itself against this nuisance litigation." ® Click for more stories
Samsung has started production of engineering samples of 1Gb SDRAM chips, it has announced. The chips use .18 micron technology and will eventually be fitted to memory modules creating 2Gb DIMMs, said Samsung. Samples are already with Intel, Compaq and IBM. Although it is likely to be some time before full scale production begins, the speed and size of the chips could mean they supplant hard drive technology. Roy Taylor, joint managing director of Vanguard Microelectronics UK, said: "It's technology that's very interesting and it shows they've got a strong lead. Silicon design is different from process design but Samsung is good at both." ® Click here for more stories
AOL is about to mail a million CD-ROMs a week containing version 4.0 of its software. It will not be AOL's most expensive campaign, however, as in the 1995 and 1996 marketing campaigns, as Abishek Gami, William Blair & Co's Internet analyst, estimates that 100 million disks were despatched. So far, some five million AOL users have downloaded the new version. AOL currently has more than 13 million subscribers. Bob Pittman, AOL's president, ambitiously told a recent conference of financial analysts that AOL expects to pass the 40 million mark "in a few years". The prize that AOL has not yet awarded is a contract for set-top boxes, as part of its drive to increase AOL use. The front contender is believed to be NCI, but it is not saying anything -- partly because of its IPO plans. AOL acquired NetChannel to help craft its interactive TV content last year, but did not launch a service for Christmas as had been expected at the time. It is just possible that there will be a development for Christmas this year. NCI is seen to be more flexible than its competitors in its ability to tailor a requirement to its product capability. Meanwhile, in the US at least, watch out for an AOL CD-ROM in the cornflakes, and many consumer queuing areas. Even the kiddies will be assaulted in school cafeterias, Pittman said. ® Click for more stories
Asian wires said that Samsung has managed to develop plastic, rather than glass panels for LCD displays. This is a manufacturing breakthrough, an analyst said. The units will be both lighter and cheaper than the current displays and will be aimed at the growing notebook market where lightness is at a premium. Bob Raikes, chief analyst at monitor market research company Meko, said the development would help Samsung achieve economies of scale. He said: "If Samsung has succeeded in making this on the substrate level, they may well gain a significant advantage in manufacturing." He explained that they key to plastic technology is to get bigger substrates. "Plastic may be a significant advantage in allowing them [Samsung] to make bigger panels at a far cheaper rate," he said. Plastic LCDs are also far less fragile than glass, also making them an attractive option for notebooks. According to the reports, the panels are .6 millimetres thick and are over 20 per cent lighter than the existing products. ® Click here for more stories
California Microwave has bought former Olivetti unit Adaptive Broadband for $11 million in cash. A further $7 million will be paid provided Adaptive reaches its targets. Adaptive was part of the Olivetti and Oracle Research lab before it was spun off as a separate outfit. The unit specialised in delivering wireless Internet access technology, providing up to 25Mbps in the 5.8GHz unlicensed frequency band. The first products using Adaptive technology are expected in the middle of next year. California Microwave said it would invest further R&D funds in the technology, which is suited for emerging countries where a wired infrastructure does not exist. Market research company Pioneer Consulting estimates that the market for this type of technology will amount to $2.4 billion by the year 2001, and $6.5 billion by 2007. Most of the revenues from the sale will be split equally between Olivetti and Oracle. Staff at Adaptive will continue to work in Cambridge, England. According to Professor Andy Hopper, a director of Adaptive and of the laboratory: "In effect, California Microwave has purchased the technology in the same way that a venture capitalist would." The laboratory had previously spun off two other units, Telemedia Systems and Virata. ® Click here for more stories
Shares in Memory Corp have soared by more than a third in two days, following a buy recommendation from BancBoston Robertson Stephens. Memory Corp's share jumped from 15p to 21.5p on the buy note, But BancBoston analyst Andrew Griffin reckons there is plenty of upside to come. He has set a six-month target of 50p. According to Griffin, Memory Corp has "the fastest write speed flash memory controller technology. This product will be sold into the high growth flash card market. In our opinion, limited independent competition makes this a very attractive business proposition in the medium term." Griffin expects Memory to return to profit in 1999. He forecasts PBT of £3.186 million for the year to December end 1999. This year he is forecasting losses of £1.274 million.®: For more stories click here
South Korean computer company TriGem has now denied that it has struck a half billion dollar deal with major US retailer Wal-Mart. The Korea Herald, which originally broke the story, said today that reports TriGem had sold 1.3 million PCs to the retailer were untrue. According to the newspaper, TriGem has said it has not even started talking to Wal-Mart. Nor has it clinched any other major deals in the USA. But TriGem is making an ultra-cheap PC, including monitor, which will cost around $450 a box. It is targeting these units at the Western European and US markets. ® Click here for more stories
Documentum is pressing ahead with its efforts to control documents and provide knowledge management for enterprises. Its latest developments include an application for the investment and banking sector, and for utilities. A recent deal with Sybase has resulted in Sybase's Adaptive Server Enterprise being used with Documentum's Enterprise Document Management Systems to increase the number if concurrent users and minimise resource contention. The product range for client-server and Web environments is centred on its EDMS. Last year, the company sharpened its marketing towards three key industries: discrete manufacturing, process manufacturing and financial services. It's a profitable business -- Documentum boasts 18 consecutive quarters of revenue growth. Its second quarter showed a 64 per cent increase in revenue over the year-earlier quarter, and a 119 per cent increase in net income. The company also has around $100 million stashed away. Its IPO was in 1996. Documentum sells directly, through international distributors, and through so-called signature partners who add value. In Documentum's case, two thirds of its income is from licences, and the remainder from services. The two founders, Howard Shao and John Newton, both formerly with Ingres, look after product development and knowledge management respectively. Jeffrey Miller, the CEO, has on the board Geoffrey Moore, the author of Crossing the Chasm and other hi-tech marketing tomes. ® Click here for more stories
IBM is to manufacture a range of PCs aimed at the retail market through an agreement it has with Acer. Sam Dusi, segment product manager of the IBM ThinkPad range, said the units will be produced by Acer in Germany. But that begs the question as to whether the ThinkPad I's, which will cost around $1,599, depend on Siemens and Acer sorting out their difficulties. Earlier this month, talks between Acer and Siemens fell through over the Taiwanese company's acquisition of its German manufacturing unit. IBM could not be contacted at press time as to whether or not the introduction of its ThinkPad I's hung on a Siemens-Acer deal in Germany, or not. ® Click here for more stories
Cisco CEO John Chambers moved to crush continuing speculation that his company has targetted optical telecoms equipment manufacturer Ciena for acquisition. Chambers said Ciena had a number of "serious shortfalls" which left the company wanting as a potential purchase. He cited common vision, long-term strategic importance, short-term post-purchase gains, a similar culture and the right chemistry among Cisco's buying criteria, few of which Ciena measures up to. Chambers said he looks for companies that can help Cisco move into new areas, now that it is focusing more on the telecoms market. He said his company largely purchases the expertise of engineers and others. Presumably it was just such expertise that led Cisco to team up with Ciena back in April to co-develop what it called the "next generation optical internetworks" and build overlay switching and routing technologies directly into optical networks. However, now it would seem Cisco is no longer interested. Perhaps had Ciena been granted the humungous AT&T supply contract, which its failure to win led to the massive shareholder panic, which in turn caused the proposed Ciena-Tellabs merger to collapse, Cisco would be taking a different position. But then, of course, it wouldn't have a hope of picking Ciena up. Or perhaps, Ciena's shares having risen 26 per cent since the Cisco takeover was first mooted, Cisco simply wants to talk them back down again to make it rather cheaper to bring Ciena's expertise on board. ® Click here for more stories
An alliance of sorts has been forged between the two rival cellular standard in the US, but it's not as yet entirely clear against whom it is being directed. The deal was announced yesterday between the North American GSM alliance, which represents US GSM companies running PCS 1900 services, and the Universal Wireless Communications Consortium (UWCC), which is the body pushing TDMA. TDMA is actually rather close to GSM in technological terms, and is also the second most popular cellular standard in the world. It is however a largely US standard, and its proponents need a route out. GSM, on the other hand, is the leading standard by miles, but the US GSM outfits are still locked in combat with the rival CDMA systems that started deploying around the same time. With us so far? One of the biggest cellular issues at the moment is over third generation standards, and that's what the UWCC/GSM Alliance deal is all about. The two groups say they "strongly support a United States position endorsing multiple standards for the next generation of global wireless technology currently under review by the International Telecommunications Union (ITU)." This, gentle reader, could mean a number of things. Qualcomm, the noisiest of the CDMA mob and the would-be owner of all the key intellectual properties, wants the US 'let the market decide' policy favoured by the FCC to triumph over the heavily regulated and directed approach pursued by Europe (this is the approach that made GSM the standard and made digital cellular take off fast in Europe). So maybe the US GSM mob is defecting, and making common cause with the TDMA guys to get a slice of the global action. Or maybe the alliance is actually intended to undermine Qualcomm's bid to establish its ownership of the key underlying technologies for third generation systems - multiple standard mean Qualcomm's less important, right? It is as yet unclear, but they obviously don't want the International Telecommunications Union (ITU) to define a single standard for IMT-2000, the projected global 3G system. ""Competing TDMA and GSM manufacturers and operators today come together and make it very clear: we support multiple 3G Standards," said North American GSM Alliance Chairman Don Warkentin. "Efforts by other groups to artificially constrain the marketplace to one single standard are not in the best interests of the consumer." They don't specify who these other groups are, unfortunately, but they've got a six point plan: 1. Free market choice of wireless technology. 2. The allocation of available spectrum independent of technology restrictions. 3. The deployment of multiple Third Generation standards. 4. The understanding that countries should not arbitrarily limit choice of standards to a single technology. 5. Agreement that second generation wireless customers and carriers be supported in the transition to 3G technology. 6. Agreement to investigate areas of potential convergence in the evolution of the technologies supported by the UWCC and the GSM Alliance. Now that last one definitely sounds like 'get Qualcomm.' ® Click for more stories.
Fujitsu claims a memory latency (ie. response time) of four times that of local memory, compared with 16-plus times for a comparable Data General or Sequent system. Synfinity at the moment can be used to allow customers to buy a four-way system which can be upgraded to eight by simply adding another four-way box and a Synfinity interconnect, whereas 'future-proofing' schemes that are being offered by the likes of HP effectively involve swapping-out the machine. Currently the Synfinity eight-way server is being offered in a NUMA SMP configuration, but early next year it will be available in the form of a PCI card VI-based high speed node interconnect. It will also be produced in router-type configuration, and basically it will be possible for customers to mix and match, using multi-processor boxes plus clustering to produce massively scalable systems, still using commodity components. That could mean 32-way by 2000, and clustered configurations supporting far larger number of CPUs. ® Click for more stories.
The Times of India reported today that most people buying iMacs in Asia were female. The newspaper said that over half the people buying iMacs in Japan were women, quoting Graham Long, Apple's VP in charge of South East Asia. He was surprised, the paper said. According to the English-language newspaper, Long said that sales of iMacs in Asia will represent five per cent of Apple's market share but that Steve Jobs' company wanted to transform that to 12 per cent within the next year. According to the Times of India, the reason women were interested in the iMac was because of its small footprint. The newspaper said that Apple had a very aggressive attitude towards sales in the Far East. ® Click here for more stories
Every day, from now until the year 2000, Dane-Elec is supplying The Register with UK figures. After a couple of days, we shall graph it so our dear readers can see what life is like in the UK memory market. Prices in pounds sterling.