25th > September > 1998 Archive
No Corel profit yet, but Cowpland optimistic
Corel's sales for its Q3 increased by 46 per cent over the year earlier quarter and were sequentially up 13 per cent from the previous quarter. However, profit remained elusive. The loss reported yesterday was marginally down from the previous quarter and attributed to a one-time restructuring charge of $15.9 million for consolidation of Corel's Utah operations to its Ottawa HQ. Without this charge, the loss would have been changed to a $7.6 million gross profit. The cost of sales increased only 13 per cent, so the gross profit showed a 58 per cent increase over the year-earlier quarter. Expenses, apart from restructuring, were down significantly, mainly from a cut in advertising of $13 million over the year-earlier quarter. The cash and short-term investments are now $20 million, compared with $30 million at the end on November, when the financial year ended. Shares were unchanged at $2 1/16. The company said that despite the move, future product releases remain on schedule. Michael Cowpland, the CEO, said: "We anticipate a return to profitability by our fiscal year end. We believe that our results will continue to improve and are consequently targeting sustainable profitability beginning in the fourth quarter of fiscal 1998." Corel continues to experience a declining market share for its WordPerfect Suite and CorelDraw, although the growth in the market size provides some compensation. The worst may now be past. ® Click for more stories
EFF attacks ‘US-centric’ domain name plan
The Electronic Frontier Foundation (EFF) yesterday attacked proposals for revamping the Internet domain naming system. The group said that Internet democracy would be undermined if the joint proposal by the Internet Assigned Numbers Authority and Network Solutions were accepted by the US government. EFF board member John Gilmore said that the proposal would result in "another US-centric, closed corporation that would be run by an elite group shielded from public scrutiny". At the end of September, the contract for NSI running the domain name system comes to an end. The 'New IANA' plan is about to be considered by Ira Magaziner, the US presidential advisor on the Internet, who wrote a white paper seeking proposals to disengage the US government from the control of domain naming. The EFF is a San Francisco-based civil liberties organisation concerned that the Internet may cease to be a vehicle for free speech. In its analysis of the New IANA plan, it points out that the public is prevented from participating in the DNS, and that freedom of expression is not specifically protected. The EFF sees the transition arrangements as being unsatisfactory, and says that the lack of public exposure of key contracts would perpetuate the existing monopoly. The EFF pointed out in an open letter to IANA, NSI and Magaziner that in two respects the proposal does not follow the white paper requirements. So far as governance is concerned, the proposed charter and bylaws do not protect against "capture by a self-interested faction". As for operational matters, the EFF argues that the procedures for fair, open and pro-competitive processes are inadequate, and do not protect against "capture by a narrow group of stakeholders". The EFF has produced proposed changes in the New IANA documents to meet its concerns. Magaziner said without referring specifically to the EFF, that he felt that progress was being made but "criticisms made by different groups have to be taken into consideration. It doesn't have sufficient consensus yet. It's the Internet, so you'll never get 100 percent consensus on anything". ® Click for more stories
Cirrus bales out of IBM and Lucent chip joint ventures
A couple of years back the then management of Cirrus Logic told The Register that chip fab capacity was going to be tight, 'fabless' semiconductor firms would therefore be in trouble and so Cirrus was going to do a deal with IBM to secure capacity, and therefore prosper. Oops. The boys who made this unfortunate strategic decision are no longer with the company, and Cirrus yesterday moved onto the next stage of its long march back, with the announcement of 500 job losses and the proposed reduction of its wafer fab capacity by 70 per cent. It's talking to IBM to reduce its 48 per cent stake in the Micrus joint manufacturing venture in East Fishkill, and is trying to sell its 40 per cent share of Cirent Semiconductor to its partner there, Lucent. Cirrus says it expects to take a charge of up to $500 million, and that it is trying to eliminate exposure to charges related to under-utilisation of the two fab plants. So basically, an earlier cunning plan to acquire enough capacity to strengthen its position against fabless rivals turned into a nightmare where Cirrus had to continually find things to chuck into the maw of its ever-hungry fabbing capacity. IBM and Lucent may be in a better position to get contracts into the plant (don't count on it in IBM's case), but don't expect Cirrus to make a bundle out of shedding its stakes in them. ® Click for more stories.
Microsoft bidding for Euro publishing giant?
Rumours earlier in the week that the Anglo-Dutch Reed Elsevier, publisher of Computer Weekly and owner of the Lexis-Nexis database, was about to be bought by Microsoft were strongly denied here yesterday by Fokko Covers, Reed Elsevier's European Finance Director. On the Amsterdam Beurs, the shares fell back NLG 0.60 to 29.70 (two per cent) after a ten per cent gain Monday and Tuesday. In May 1997 Reed Elsevier signed a $30 million, five-year deal for Microsoft software, one result of which was the replacement of NetWare by NT in the London HQ. Last October's attempt by Reed Elsevier to merge with Dutch publisher Wolters Kluwer to create a $30 billion company failed in March, largely because of competition law concerns in Europe. The result was some uncertainty about the future management of the group, in which Reed and Elsevier both have 50 per cent. Microsoft's interest in publishers is generally viewed as a quest for content, but its experiences so far haven't been good. Gates wanted to make an investment in Dorling Kindersley, the London publisher specialising in illustrated books and multimedia, and tried to buy the company in 1992. Following a period of collaboration on CD-ROM products, independence from Microsoft was more highly valued by DK, so some 30 per cent of the company was floated in October 1992. Microsoft acquired around 25 per cent before losing interest and treating DK as a picture library. Slate, Microsoft's would-be literary e-zine, edited by Michael Kinsley (formerly editor of the New Republic, and a failed candidate for the editorship of the New Yorker recently) is very far from breaking even -- and Microsoft did not distinguish itself by failing to get a billing system working for it. Microsoft Press has been a fair success -- it could hardly fail, given its exclusive access to Microsoft documentation. But so far as a deal with Reed Elsevier is concerned, Dutch company law would make the probability of any bid being successful quite remote. An unnamed Dow Jones source was quoted yesterday as saying that Reed Elsevier and Microsoft are in discussion about a mega deal. If there is any truth at all in a closer relationship being established, our money is on it having something to do with the viagrafication of MSN in Europe, and just possibly a deal for Reed Elsevier to help improve Microsoft Press sales. ® Click for more stories.
Trigem III – now look out for the $399 PC
The confusion surrounding Trigem's $499 iMac-esque PC has started to clear, with the emergence of what seems now to be a fairly normal scheme to storm the US retail market, with three classes of machine at $399 and $499 price points. Earlier this week Trigem was reported to have struck a massive deal with Wal-Mart (see Huge Wal-Mart PC deal to bust $500 mark), but yesterday the company found itself denying that any such deal existed (see TriGem deal with Wal-Mart merely a dream). In all probability what really happened was that the operation that will actually be selling the machines in the States, eMachines (a joint venture between Trigem and Korean Data Systems), has been talking to Wal-Mart among other companies, and that good old Korean optimism contrived to translate this into a done deal in the pages of the Korea Herald. Even as you read the optimist responsible may be dangling by his thumbs in a back-room somewhere in Seoul. It's now being reported that eMachines is somewhat more modestly in talks with the major retailers, including OfficeMax, Best Buy and Fry's Electronics. Some of these are going to have to bite, as the numbers quoted in the original leak are vast enough for it to be imperative for this huge pile of gear to go somewhere, whatever the price. The first machine, the eTower, will be a $399 Cyrix-based box with two gig hard drive, 3D graphics and built-in modem. Planned Q4 shipments of 200,000 units are in line with the 130,000 Trigem didn't really say it was shipping through Wal Mart. Next out will be a Celeron version with a bigger hard drive, and a Cyrix one with DVD drive that will connect to a TV -- both of these will be $499. But think of the financials involved in this little lot. If Trigem was talking about shipping 1.13 million units through Wal Mart in the next year, and if the 200,000 for Q4 is projected over that period, we'd reckon on 1.5 million units plus going into the US in a year. That comes to a retail value in excess of $600 million, which is 75 per cent of Trigem's 1997 sales. Add some more for similar sales programmes in the rest of the world and you get a picture of a company making a huge bet on a massive production ramp, and scarily narrow margins (if you could even call them margins). Those optimistic Koreans, eh? ® Click for more stories
Intel chief claims Microsoft alliance still strong
Bouncing onwards from his visit to London earlier this week Intel CEO Craig Barrett has been telling journalists that his company's relationship with Microsoft is still strong today, maybe even stronger than it's been in the past. But Barrett protests too much -- in the same breath, he's capable of telling Reuters' reporter that Intel is taking a neutral view of the impending competition between Symbian and Microsoft's Windows CE. You wouldn't credit that this is a man whose company just last week (see Intel network scheme means war with Microsoft) announced it would build a range of cheap, embedded network devices that won't be running Microsoft operating systems and that look like they won't be very happy connecting to NT servers either. Meanwhile, Barrett's claimed neutrality between CE and Symbian doesn't sit happily with Intel's recently discovered enthusiasm for StrongARM, likely to be the platform for at least some of the aforementioned 'thin server appliance', and a strong contender as the platform of choice for the next generation of phones form Symbian companies. The point here is that Intel focussing on ARM will inevitably tug it into the Symbian camp. To understand why you need to understand what Symbian is about. Looked at from the wrong direction it's an alliance of Ericsson, Motorola and Nokia that was stitched-up in order to provide them with a platform for their smart phones and communications devices. Granted, it is that as far as these companies are concerned, but the other part of the Symbian group, Psion, is the one that's contributing the OS technology, and its goals are rather different. In setting up Psion Software, the part of the group that turned into Symbian earlier this year, Psion was aiming to OEM a tightly-linked software and hardware platform consisting of ARM hardware and Psion's EPOC32 OS. Psion's software has been developed over a long period for low resource platforms, and it's appropriate for a whole range of devices in the mobile, pocket and embedded markets. Windows CE isn't. A CE port to ARM now exists, and Microsoft has all sorts of plans for extending CE into other markets, but at the moment the company's main focus seems to be on the Jupiter version of CE, a fatter version that may cannibalise sales of Windows on sub-notebooks. So if Intel's going to be fabbing StrongARM and designing new generations of the chip (which it is), it'll find its customers will tend to be using EPOC for a lot of their devices, and it will probably find itself at least considering the OS for some of its own devices. On the other hand, ARM's latest licensing deal with HP may give CE a boost if one of HP's plans is to switch its line of CE machines to ARM, but ARM's joining Intel in Bluetooth suggests that large numbers of StrongARM sales will go via a different route. And Intel's own Java development will surely turn the company's thoughts to JavaOS, or even StrongARM-based Java chips. But if Craig says he's still great chums with Bill, it must be true, right? ® Click for more stories
Quantum puts Bigfoot in it
Quantum said it has introduced the industry's highest capacity desktop hard drive. The Bigfoot TS series of drives comes in capacities of 6.4Gb, 8.4Gb, 12.7Gb and 19.2Gb in a 5.25-inch form factor and includes Quantum's shock protection system. That was previously only available on its Fireball L and Fireball EX hard drives. The drives, manufactured by Quantum's Japanese partner, Matsushita-Kotobuki, are aimed at consumers, small business users and commercial customers. Suggested retail prices for the drives are $169 for the TS 6.4, $199 for the TS 8.4, $299 for the TS 12.7 and $399 for the TS 19.2. Quantum claimed that the Bigfoot TS range has better performance over the previous range, including improved firmware and a 512K buffer. The drives include an Ultra ATA interface, a PRML read channel and 6.4Gb capacity on each of the platters. One of the first OEMs to use the Quantum drives is Hewlett Packard, which will build them into its HP Brio range. ® Click for more stories
Belgium's most famous IT man speaks naturally
Lernout & Hauspie has said that it will introduce natural language into its speech products starting from October 6. At the same time, Gaston Bastiaens CEO of the company, hinted strongly that he was on the verge of signing a major deal with a car manufacturer to use its speech products. Sources said Ford-Chrysler was a likely candidate. Ericsson will also licence the technology. Bastiaens said that the natural language component would deliver speech closely resembling the human voice, rather than the stilted robot-sounding language the technology currently delivers. He said the deal that L&H had signed with Microsoft at last year's Comdex/Fall had stood the company in good stead but refused to be drawn on how much his company was receiving in licence fees. L&H, however, is in discussions with a number of other firms to license its technology, he added. But Intel is not one of them. Two days ago, a demonstration Intel's CEO Craig Barrett conducted in London fell at the first speech recognition hurdle. ® Click for more stories
Big Blue takes cake on Netfinity's birthday
IBM has introduced three Netfinity servers and at the same time announced a cash trade up offer on its existing machines. The Netfinity 7000M10 is a four-way 400MHz system which will support up to 8Gb of ECC memory, has 12 hot plug PCI, predictive failure alert for chips, fans, hard drives and PSUs, and will support both Gigabit Ethernet or High Speed Token Ring. Reseller prices start at £8,632. The Netfinity 5500M10 is an upgraded 5000 and now uses two 400MHz PII Xeon chips, supports up to 2Gb of 100MHz memory, and has prices starting at £5,695. The last system, a two way system using PII Slot one technology, comes with support for 400-, 450- and 350MHz chips, and comes as standard with 64Mb of memory. Prices for this model start at £2,307. The trade up programmes apply to old IBM and non-IBM servers, with rebates raning from £350 up to £1,800. The offers apply until the end of January next year. Big Blue is also offering ISVs and business partners a promotion, valid until the end of December next, where they can lease Netfinity 7000s for 24 months with the payment being equal to one per cent of the local list price each month. ® BootOid 111 Big Blue indulged in a hyperbole-fest because the NetFinity is a year old and sent journalists in the UK a black cake to commemorate its anniversary. "With its sleek black looks, Netfinity brought design to the Intel server market. But beauty is more than skin deep..." and so on. Click for more stories
Food company bitten by FAST piracy team
Aberness Foods subsidiary AR Gray has agreed an out-of-court settlement with the Federation Against Software Theft (FAST) after the company was found to be using illegal copies of software. The settlement involves £8,000 in punitive damages, to be paid to software developer Open Access, plus a £12,000 purchase of new, legal applications. Contrite AR Gray IT manager Bob Hart said he was glad the affair was over and had been settled amicably. FAST accepted AR Gray's contention that it had used the illegal software unwittingly, but FAST CEO Geoff Webster sounded a warning for other firms. "If companies are found to be using illegal software and are not willing to rectify the situation in a satisfactory manner, FAST will not hesitate in taking court action," he said. ® Click for more stories
IBM to use copper in chipsets for Merced 8-way systems
IBM has said it is developing chipsets for an eight-way Merced machine using a combination of copper wiring and silicon on insulator (SOI) technology. The company said that it is migrating a number of features from high end servers to support the Intel platform. Bill Colton, worldwide general manager of the Netfinity division, said: "We will blend the best IBM technologies -- the stuff that powered the Nagano Olympics and Deep Blue -- with the best of the Wintel architecture to create hardware that stands apart from the pack." Other features it will use in the 8-way Merced processor include OnForever, a scheme intended to extend high availability capabilities of Hot Plug PCI to processors and memory and provide diagnostics. Netfinity server clusters will be able to use interconnect technology from the SP RS/6000, which will allow the connection of Netfinity servers to RS/6000 SP clusters. According to Big Blue, the SOI based chipsets deliver higher speed and performance clusters, a claim Intel denies. The company will also incorporate glass ceramic chip carriers into Netfinity servers. That gives faster communication between chips, claimed IBM, without increasing heat or consuming more electricity. ® Click here for more stories
Ionica struggles on against insolvency rumours
Struggling fixed wireless phone company Ionica is doggedly denying rumours today that it has hit a brick wall, and headed for insolvency. The company, which appointed a new chairman yesterday, has made no secret of the fact that it needs to find a 'strategic partner' if it is to live, but claims the search goes on. Ionica's big problem is that it didn't achieve critical mass before the whole thing started to go pear-shaped. Its unique selling proposition, that Wireless Local Loop (WLL) technology could be deployed cheaply across the UK in order for it to compete directly with BT for subscribers, was undermined by congestion problems in its first markets. Attempts to fix these with extra hardware had to take precedence over rolling out the service further, and Ionica swung instantly from stock market start-up darling to basket case. Its bankers wouldn't advance more money, partner Nortel wouldn't bale it out (and said it would be closing the factory that builds the Proximity gear Ionica uses earlier this week), so Ionica continues the forlorn quest for a cash injection. The new chairman may be a positive sign. Anthony Coleman moves in after a stint as finance director of Yorkshire Electricity, and may face the prospect of strong-arming existing investors to accept half a loaf. Ionica currently claims its cash resources of £45 million will keep it going until January. Paradoxically, the original business plan still looks perfectly viable. If, say, a cellular company, a new entrant like Energis or maybe even WorldCom moved in, all would be lovely in the garden again. The main obstacle, effectively, is that any buyer would under current circumstances drive a very hard bargain. ® Click for more stories
BT escapes with caution after abuse complaints
British Telecom has escaped with a rap on the knuckles after being caught in an absolutely outrageous piece of malpractice (writes an absolutely outraged Register). UK telecoms watchdog OFTEL has let the giant off with a caution after some of its sales staff were found to have been using billing information to swipe rival ISPs' customers. OFTEL had received complaints that telesales staff for BT's Click Internet service were studying phone records which only BT and the customer had access to, finding the phone numbers of rival ISPs and then cold-calling them customers to sell them Click instead. OFTEL says this "appeared to OFTEL to be an abuse of BT's dominant position, in contravention of the Fair Trading Condition in their licence." From BT's point of view, the upshot of OFTEL's investigation seems to be a score draw. The company has promised to ensure that staff selling Internet services don't have access to customer calling information, and that telesales staff with access to such information do not market Internet products. According to Director General of Telecommunications David Edmonds "I have made it clear to BT that if any further incidents of this kind occur I will consider further action which could include the issuing of an Order against BT. We will continue to protect consumers' interest by ensuring that there is fair competition in the provision of information services." But this arrangement leaves matters nicely fuzzy. Could it just have been a case of a few isolated incidents involving rogue staff? And could BT explain why telesales staff had (and some will apparently still have) access to customer calling records? Perhaps some of the complaining ISPs or cold-called customers might consider having a word with the Data Protection Registrar, who is responsible for regulating the use of confidential data in the UK. ® Click for more stories
NatSemi to pay IBM Micro $55 million – now official
As revealed here, National Semiconductor is to pay for the privilege of terminating its foundry agreement with IBM Microelectronics. IBM will stop making Cyrix chips before the end of this year and will take a one time charge in its second quarter of fiscal 1999, the company formally announced today.
Updated: Transmeta to use IBM fabs after Cyrix loss
Reliable sources in Silicon Valley said early today that IBM Microelectronics is to take up some of the slack in its fabs caused by the loss of Cyrix business by building chips for Transmeta.
C2000 keeps resellers In Touch with ecommerce
Computer 2000 has launched a electronic commerce system which it claims will increase resellers sales productivity by up a third. Called InTouch 2000, the SAP-based system hooks up to the mainframe in C2000’s European headquarters in Munich, and pumps out real-time pricing and stock information. Undaunted by its previous inability to persuade resellers to place orders on earlier versions of In-Touch, C2000 aims to funnel 25 per cent of transactions through the system by the end of 1999. "This is the way of doing business in the future," Andy Gass, deputy MD of C2000 UK, said. US parent company Tech Data's ecommerce system had -- after a slow start -- seen orders doubling each quarter, he said. The company is basing its reseller pitch on improving sales floor effectiveness. "The telephone is not an efficient way of doing business," Gass said. “It takes resellers a minimum of three calls to get price/ availability information to customers. We are giving the information to enable salespeople to close deals in one call. By providing prices online, we will improve customer satisfaction.” By automating the ordering process, C2000 also expects to drive down its returns, although it declined to specify by how much. The distribution giant has gone live with In-Touch 2000 in Belgium, Sweden and in the UK and plans a Europe-wide roll-out in coming months. In Sweden, C2000 is trialling a reseller-branded version of the system.If successful, it will extend this service offering throughout Europe. Resellers link up to In-Touch through a password-protected Internet interface. And they can place their orders using a shopping basket utility and search engine which trawls through the 32,000 SKUs (stock keeping units) on C2000’s books. The ecommerce system is not completely seamless. It does not accept orders by credit cards for example, and resellers make payments through their usual credit accounts. CC2000 is considering adding the facility in the future, Gass said. In Touch cannot handle channel assembly or late configuration requirements. Special bid pricing will continue to “require some form of human intervention”, according to Gass, while pointing out that credit card payments currently comprise less than two per cent of reseller transactions.” Tech Data is currently working with PCOrder.com on an ecommerce system capable of handling channel assembly. This should make its way across the Atlantic at some point, Gass said. A lot of tweaking could be required before it can be used in Europe, as Tech Data logistics do not run on SAP. For bin ends and spiff day prices, C2000 is using another “e-distribution” mechanism -- a push broadcast service. Using Active X-enabled Windows IE 4, UK resellers receive news of C2000's promotions, as they happen.® Click for more stories