26th > October > 1998 Archive

The Register breaking news

Compaq under increased threat from direct vendors – now official

IDC issued figures on Friday showing that Compaq is under increasing pressure from direct vendor Dell, but is also being threatened again by HP, quasi-direct vendor IBM, and even Gateway. The latest figures from IDC, show that Pfeiffer's outfit lost four points to opposition in the US. That will lead to fears from Compaq shareholders that the twin acquisitions of Digital and Tandem are taking their toll. While still number one in the US, Compaq figures, according to IDC at least, are showing slippage, with companies like Gateway rushing to take advantage of the unique situation in the PC market. Last week Gateway said it had shipped over 820,000 PCs in its third quarter. Western European demand figures are keeping up with the USA, according to IDC. But as reported here last week, Dell is shipping a huge quantity of PCs from its Limerick plant, while IBM is taking steps to ditch large swathes of its direct model. ® Related Stories Big Blue server division does huge channel turn around The great satan of hardware called Dell..Limerick Click here for more salutory lessons
Mike Magee, 26 Oct 1998
The Register breaking news

Intel price cuts boost PII over Celeron

As predicted here last week (Intel, AMD and Cyrix to feature in price cut blizzard) the Intel price cuts implemented today push higher performance Pentium II chips further into the mass market, and indicate a certain de-emphasis on Celeron. Several lower speed chips are no more, and although there is still some price advantage for Celeron, the gap between the 'Basic PC' line and PII has narrowed. Intel, which has seen PII-based machines obstinately succeed in price-sensitive markets while Celeron's performance has been somewhat less glorious, takes it on the chin by explaining: "Continued strong acceptance of Pentium II processors enables Intel to strongly ramp these products into higher volume price points." Loosely translated, this means the manufacturers and the market have decided they want PII rather than Celeron, so Intel has decided to give in a little. The biggest cut implemented is 30 per cent on the 350MHz PII, to $213. The 333MHz, which is the new entry level, is down 23 per cent to $181, and the 400MHz and 450MHz down 22 and 16 per cent respectively, to $375 and $562. So Intel clearly still thinks it can keep clear blue water between the lower end PIIs and the fastest. The Celeron 333MHz 128k cache version loses 17 per cent to $159, while the 300AMHz only 7 per cent to $138. Celeron is therefore being positioned for markets of extreme price sensitivity where running Intel is still essential, i.e., pretty narrow ones. It's at least arguably that Intel is still trying to figure out its low-end strategy. The PII Xeons also had cuts, the 400MHz with 1Mb cache down 30 per cent to $1,980, and the 400MHz with 512k cache down 27 per cent to $824, which is the same price as the 450 MHz version of the same chip. There were no cuts on the PII and Pentium mobile modules, where Intel must feel pretty secure still. (R) Click for more stories
John Lettice, 26 Oct 1998
The Register breaking news

ST claims sub-$100 chip breakthrough

ST Microelectronics said it has produced an integrated system on a chip which will allow industrial PCs to be built for less than $100. But that begs the question why end users should be denied the benefits of such a system. The announcement will put ST head to head with NatSemi-Cyrix, which has vowed to be a leader in the integrated chip market. ST, formerly SGS Thomson, said its STPC Industrial, aimed at the point of sale market, Internet surfing boxes, gaming consoles and information kiosks has a target volume price of below $40. The design was built using up to date modular diagrams, and the chip's die size includes over 60 per cent of system level integration. The rest is used for CPU activity. ST was not prepared to say who its customers are for the design, but one contender is likely to be Acer. Earlier this year, the company's CEO, Stan Shih, said that the sub-$100 market would be a lucrative area for his company. ® Click here for more stories
Mike Magee, 26 Oct 1998
The Register breaking news

Scots to coordinate chip intellectual property right exchange

Scottish Enterprise today said that it had introduced the Virtual Component Exchange (VCX) under the auspices of its Alba Project to specialise in the exchange of semiconductor intellectual property. The Alba Centre is a project set up by Scottish Enterprise to encourage companies and universities in Scotland to train up chip designers to create system-on-a-chip devices, said a representative. Partners in the venture include ARM, Cadence, ISS, Mentor Graphics, Motorola, Phoenix, Siemens, TSMC from Taiwan and Toshiba. The representative said that VCX was "to find a way of trading intellectual property securely and efficiently". That will shorten design cycles. The Alba Project has a campus based in Livingstone, Scotland, which also includes a support centre for the project's partners. The representative said that the omission of other well known semi companies, including NatSemi and Intel, was not deliberate or planned. It hoped to pull other players into the project. (R) Click here for more stories
Mike Magee, 26 Oct 1998

Memory Corp eases way out of AIM

Memory Corporation is heading for Europe, planning a listing on the young, still unproven, EASDAQ stock market in Brussels. It is moving from London’s junior exchange, AIM, where it took a thorough drubbing, listing on AIM at 45 pence in 1995, then soaring to a dizzying 553 pence before spiraling downwards to the mid 20s. That said, it raised £6 million recently with a placing and rights issue in April at 20 pence per share. Brussels based EASDAQ is unfamiliar territory for most and it lists only 37 companies, many in the high-tech sector. It’s brief existence has a been chequered one, with many wannabee stars blazing brightly for all of 15 minutes before falling into obscurity. David Savage, chief executive of loss-making Memory Corp said EASDAQ’s focus more accurately reflects Memory’s direction and its international customerbase. Despite numbering the likes of Hitachi and Intel in its clientlist, the Scottish semiconductor company has a turbulent history. Last year the company reported losses of £3.31 million with pre-tax losses standing at £1.2 million. Datrontech owns 49 per cent of Memory and when it embarked on a joint venture with the company to set up DTEC, it was a major boost to the beleaguered manufacturer. The consensus is that Memory has diversified wisely, now focusing on licensing intellectual property rather than manufacturing for the semiconductor marketplace. Memory Corp bought Memory Plus and a Hong Kong sourcing company, both of which have now been drafted into the overall Datrontech fold. The current upturn in the DRAM market and the fact that Memory and DTEC can draw on the overall Datrontech distribution model has helped both. Memory is 55 per cent owned by institutional investors and 25 percent lies with around 2,000 private shareholders. They will be asked to transfer their holdings into the US dollar-based Global Depositary Receipts that are traded on EASDAQ like ordinary shares. ®
Janice McGinn, 26 Oct 1998
The Register breaking news

IBM to resell notebook drives to Compaq, Gateway

IBM has introduced a fresh family of hard drives and claims it now has the biggest capacity notebook drive in the world. Compaq and Gateway have already committed to using the units, claimed IBM. It is to show the drives at Comdex/Fall at Bally's Hotel. The Travelstar 14GS has a capacity of 14.1GB and is 17mm high. According to Big Blue, it weighs less than a baseball. The other two members of its notebook family are a 6.4GB, 9.5mm hard disk aimed at the ultra slim family of notebooks and a 10GB Travelstar 10GT, which is 12.5mm high. Although IBM will include the hard drives into its ThinkPad family of notebooks, it will also sell the units through its OEMs and distributors. But eager road warriors will have to wait until December, which is when the units will arrive in limited qualities. ® Click for more stories
A staffer, 26 Oct 1998
The Register breaking news

US SEC gets cross about profits. Very cross

The all too common practice amongst IT companies of boosting profits by overstating the value of research acquired in takeovers is exercising the US Securities and Exchange Commission, and it has asked an auditor group to come up with new guidelines. The SEC said the practice is becoming more commonplace as mergers and acquisitions pick up speed in the technology sector particularly, and the SEC suspects that many companies are abusing the practice. It has been in talks with a number of high-fliers about their accounting practices, not least Cisco Systems, Worldcom and America Online. A special panel at the American Institute of Certified Public Accountants has been requested to develop new guidelines for accounting for acquired research, but proponents warn that general guidelines could limit companies’ freedom of action. (R)
Janice McGinn, 26 Oct 1998
The Register breaking news

It's financials again – but it's a Colt that's pointing at you, here

Colt Telecom Group’s loss grew by a hefty 69 percent to £15.4 million in the third quarter, but still in line with analysts’ expectations of a £13.6 million to £20 million loss. Colt’s shares jumped by 26.5 pence to 671.5 pence on the news and the company said it now operates across seven countries and 11 cities. It intends to be operational in 20 cities by the year 2000. Colt, headquartered in London and run by Boston-based Fidelity Investments, has grown its European network significantly, trebling its sales to September 30, up to £61.1 million from £21.4 million this time last year. Chairman Jim Hynes said: "Our performance has exceeded all expectations, reflecting the very strong demand we have seen for our services in all markets and across all customer segments. Turnover for the third quarter of £61.1 million was up 32 per cent over the second quarter and gross profit of £11.6 million increased by 34 per cent over the second quarter, almost 2.5 times gross profit for the third quarter of 1997. He added: “Colt is serving more customers in more markets than ever before... and serving customers in a broader range of industrial sectors.” The equity, debt and convertible offerings completed during the quarter raised over £626 million pounds of new capital, and at the end of the quarter, cash resources amounted to £764 million. “This leaves us well positioned to finance our growth and expansion plans," said Hynes. ®
A staffer, 26 Oct 1998
The Register breaking news

Nokia goes for cultural Chinese mobile revolution

Nokia has today introduced a form of GSM that it claimed will cause a revolution in the world wide arena, as well as in the lucrative Chinese market. GSM -- which stands for Global System for Mobiles -- is a practically worldwide standard everywhere apart from the US. In the US, a few operators have made inroads into the market, but analog and other systems are still popular there. Nokia, a Finnish company, said that its "High Capacity" GSM system will offer consumers and end users better bandwidth than before. Mikko Heikkonen, president of Nokia's network system network, announced the breakthrough at a conference in the capital of the People's Republic of China. Said Heikkonen: "The number of mobile subscribers is expected to reach 300 million by the end of this year and we anticipate around one billion users in 2005." He did not elaborate on whether that was in Red China alone. The so-called revolution includes new products from the Finnish company, including a mobile switching centre, a home location register base station and training and planning services. Motorola has already sold some systems of its own to Red China, as revealed here earlier. Nokia in the UK was not prepared to comment. ® Click for more stories
A staffer, 26 Oct 1998
The Register breaking news

Microsoft pushing for smaller than ever CE

A report in The Wall Street Journal has claimed Microsoft is on the verge of creating a smaller, leaner operating system to succeed CE. The report claimed that Microsoft will, tomorrow, introduce a so-called "smart card" system for "smaller devices". Embedded devices are, judging from the report, only one of Microsoft's aims. The company is probably reacting to a deal a few months ago when Symbian was formed. Microsoft was unavailable for comment at press time. ®
A staffer, 26 Oct 1998
The Register breaking news

The Microsoft Trial continues…

Judge Jackson expects John Warden, Microsoft's trial lawyer, to wind up his cross-examination of Barksdale today. Warden had said that he needed until Monday at the earliest to finish this, but Judge Jackson -- deliberately misunderstanding Warden, it seemed -- said he was going to hold Warden to his Monday commitment. When Warden said he didn't think he made a commitment, Jackson replied: "You just did." The programme seems to have changed somewhat, with eight hours from Gates' 20 hours of videotaped deposition now scheduled to be shown to the court, probably starting Tuesday. It is expected that the video will be released to the media afterwards, which while perhaps not in the Clinton-tape league, is likely to appeal to connoisseurs of these things. It has already been demonstrated that Gates' videotaped responses did not agree with documentary evidence. Leaks about the Gates' videotape, especially from Stephen Houck, the lead lawyer for the 20 States that are also taking action against Microsoft, suggest that Gates is evasive, non-responsive and disingenuous, and even appear to indicated that he doesn't know what a browser is -- Microsoft likes to talk about browser technology being incorporated in Windows, but is hard pressed to explain whether the mac and Unix versions of Internet Explorer are browsers. Rick Rule, a lawyer retained by Microsoft, said that although documents produced by David Boies, the counsel for the DoJ, appeared to show that Microsoft wanted to crush Netscape, "that doesn't make an antitrust violation". Rule has also apparently mischaracterised Barksdale's evidence by claiming that during his cross-examination, the Netscape CEO had never expected Netscape would generate revenue from the browser market and had instead turned to other areas. Even a superficial reading of Barksdale's testimony and cross-examination shows this is absolutely not the case. It would not be the first time that a Microsoft lawyer has made an unwise remark during the defence of Microsoft. Stephen Holley, a partner of Sullivan & Cromwell, Microsoft's principal external lawyers, was caught passing a document "filed under seal" to Linda Himelstein, Business Week's legal editor in September 1995. Although the document concerned another case, it emerged that Holley could be subject to contempt of court proceedings, and that his firm had lax procedures for handling confidential materials. It was revealed by Milo Geyelin in the Wall Street Journal that Holley contradicted testimony from Himelstein, with the result that a Business Week lawyer produced to a court records of some dozen conversations that Holley had had with Himelstein. Thus it came to be known that Holley had criticised an outfit worn by Ann Bingaman [the former head of antitrust at the DoJ]. The notes show Holley "making biting personal snipes about Ms Bingaman and saying that 'everyone on her professional staff thinks she's out of her mind'." To make matters worse, Holley was appointed to the New York City Bar Association's Committee on Professional and Judicial Ethics in 1992. Holley, it seemed, had been a regular deep throat to Business Week during the Microsoft antitrust case. His firm apologised publicly, but the damage was done. ® Click for Register trial coverage Click for more stories
Graham Lea, 26 Oct 1998
The Register breaking news

Quakeadelica UK finalist did not use Intel PII/450 box, says AMD

AMD has denied the London finalist in its Quakedelica competition was secretly using a Pentium II/450 rather than the AMD-based box specified. A report in UK newspaper The Daily Telegraph said that a US Quake champion with the unlikely nickname of Thresh had beaten UK contender James Page, who goes by the equally unlikely name of Billox. But, according to AMD, the report was also a load of Billox. Said an AMD representative: "We're trying to set the record straight. They were all AMD machines supplied by Elonex. The report in The Telegraph is erroneous." Asked whether it was possible for Thresh to have smuggled in a PII/450, the representative said: "No one was playing on an Intel-based machine." In the end, all was well, AMD UK reported -- the definitely K6-2 equipped Page was declared the winner. ® Click for more stories
Mike Magee, 26 Oct 1998
The Register breaking news

AT&T goes up… and up

AT&T Corp's third-quarter earnings rose 68 per cent, reflecting the positive effects of a massive cost cutting exercise and fast growing sales. Excluding one-time charges, profits increased to $1.81 billion from $1.08 billion this time last year, on revenues up 4.3 per cent to $13.65 billion from $13.09 billion. The telecomms giant shed over 18,000 jobs during the year and operating costs fell by 8.8 per cent to $10.34 billion. Sales, general and administrative costs declined by 15 per cent, and as a percentage of sales they were down to 24.4 per cent. Sales growth is up from the second quarter's one per cent, partly through a push into the $100 billion local phone market, and a host of new services for business and higher-margin consumer customers. Wireless services grew by an impressive 19 per cent while data services were up by 4.7 per cent. There were weak spots, including the consumer long-distance sector, where revenues fell 2.9 per cent to $5.81 billion, and AT&T said it was experiencing increased competition for domestic and international long-distance services. The company experienced strong growth across most of its business, including its consulting arm, AT&T Solutions, which increased revenues by 35 per cent to $273 million; and the online arm, AT&T WorldNet, increased revenues by 65 per cent to $100 million. ® Click for more stories
Janice McGinn, 26 Oct 1998
The Register breaking news

Childe Rolande IBM rides from Aix to Gwent, bypassing Java but including Santa Cruz

IBM has rediscovered Unix and it is developing a new version for Intel's IA-64 based on AIX, SCO's Unixware and Sequent's PTX operating system. Maybe the AS/400 division is getting too much attention nowadays, or maybe the AIX division is saying we've got 64-bit too. Maybe IBM does weddings and bar mitzvahs, but when Big Blue announced project Monterey today, it cast a lifeline at the beleaguered SCO, providing grist to the rumour mill that IBM might buy SCO and put it out of its misery. The fact that Project Monterey made no mention of Java, and since Java is IBM's biggest single corporate investment, ever, observers might wonder if the AIX division and IBM headquarters are signing from the same hymnal. If they are, and if the new Unix is the operating system for all platforms, is this the first serious indication that Java isn't coming up to scratch? For the record, the companies are collaborating on a single 64-bit version for Intel based servers, using both Unixware and AIX, resulting in a single Unix product line across IA-32, IA-64 and IBM processors. IBM said it will make significant investments to make it the leading Unix operating system. No figures, but the investment will be directed at porting IBM's middleware portfolio and operating system development to exploit Intel IA-32 and IA-64 and IBM's Power architecture; and in technical and marketing support for ISVs." Bob Stephenson, senior vice president IBM Server Group, said: "Working with these companies, we're capitalising on the base of proven leadership technologies to deliver the world's best Unix on Power microprocessor and high-volume Intel microprocessor systems." Not surprisingly, the troubled SCO is, "delighted to be at the heart of this major announcement," according to Doug Michels, SCO's CEO. He added: "It's a great opportunity to take SCO's products to a new range of enterprise customers." Sequent is equally delighted. "The AIX partnership provides the clear choice, combining proven technology, tremendous resources and unprecedented industry support," said Casey Powell, chairman and CEO of Sequent. On the ISV front, BEA Systems, Informix, Micro Focus, Netscape, Novell and Pick Systems, and others praised the initiative. A number of manufacturers and said they will use the new software, including Acer, CETIA, Groupe Bull, ICL, Motorola Computer Group, and Unisys. Sun Microsystems said nothing. ®
Janice McGinn, 26 Oct 1998