5th > February > 1999 Archive

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A year ago: Compaq's Eckhard flees to London

We have spoken of The Landmark hotel before in these pages. It is distinguished by having an atrium full of very tall palm trees, which does not necessarily fit the profile of Baker Street, a mere five minutes away. Here, last Tuesday morning, was assembled a group of hacks to hear Eckhard Pfeiffer, CEO of Compaq-Digital-Tandem, outline the reasons for the proposed acquisition of Digital and to give said hacks some background. Pfeiffer, being our Man of the Year 1997, could not resist returning to his bean counting days and spelling out the ROI (return on investment, not King) figures for last year's financial results. "When we began built to order in Houston, it enabled us to become very price competitive, undercutting Dell and Gateway. We've improved our return on invested capital. Tandem is kicking in on a very similar model. If you look at Compaq alone, the ROI is 139 per cent." But pretty soon he got down to the nitty gritty, which we report here. Eckhard said: "We've just got here from New York. On Thursday, we had a board meeting to discuss the plan. We got the question from analysts earlier, what are you going to do with the $6.8 billion cash? "We've been saying for quite a while our key focus is on the enterprise. We saw the opportunity but we did not have all the resources. It is possible to run on NT but at Compaq we realised that in many bidding situations we couldn't offer everything our customers wanted. "There was a space in between Compaq and Tandem and that was the origin of the idea to acquire another company. Services and support is a huge opportunity but for truly global services and support, Compaq had to rely on many, many partners." The other attraction, he said, was Digital's huge customer base and its product portfolio. "Digital has a very rich heritage in terms of products and technologies and we see the ability to participate in large scale enterprises. One example is that Digital won a $1.6 billion contract with the US Post Office. Compaq was not ready to step up to the table and we clearly wanted that capability. "Compaq had 2,000 sales executives. We added 1,500 more with Tandem and now we're adding 14,000. "Clearly we said we wanted to do it all and at the same time we are the market leader in consumer PCs. It takes us immediately in terms of sales to the number two worldwide. We thought it would take $50 billion to get there but we just passed HP. If you take out HP's test and equipment, we're $2.5 billion ahead of them. "Compaq is now number one in the world in terms of NT. Compaq alone is the number one customer of Microsoft in the world. "It is clearly a major step in the enterprise strategy. Compaq is moving in as the leader in standards based computing. "The Alpha configuration is also important. Tandem has tremendous vertical markets and so does Digital. Digital has always been known for its rich technology that was never fully utilised. We hope we can take that much, much further. "The credibility of Digital will rise dramatically, it has leadership with 64-bit technology and with Alpha, Open VMS and Digital Unix. ®
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AMD hurts as Intel fights harder

AMD, Intel's chief competitor in the fight for microprocessor share, said yesterday it would post a loss in its first quarter because of price slashing by the Goliath. The company's shares fell by a further $2 on news from its CEO Jerry Sanders that price competition was beginning to hurt. Intel has reacted to AMD's victories in the low end by introducing faster Celeron processors and slashing prices on its existing model. There are a further series of price cuts all through the first quarter of this year. The battle is getting tougher as AMD rushes out its Sharptooth K6-3 and Intel responds by introducing its Pentium III (Katmai). Although AMD is hurting, last year it claimed it would reach a point in 1999 where it could resist Intel price pressure. The Federal Trade Commission (FTC), which starts a trial against Intel in March, may be interested in whether the Goliath is using its vast financial resources to batter its smaller competitor into submission. ®
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Lycos merger to create largest portal site

Lycos will become the Web's largest portal if rumours about the imminent sale of a 35 per cent stake to the media group NBC prove to be true. As part of the deal, Lycos, currently the third most popular portal on the Web, would merge with Snap, the minor portal run by NBC. With a combined audience reach of around 55 per cent, according to recent figures from the monitoring body Media Metrix, the new pairing would leapfrog to the top spot, bypassing the current number one Yahoo!. Executives from Lycos and NBC have refused to comment on the speculation but the report by The Industry Standard says that rumours of action were rife last week among employees at Snap. In fact, it was proving such a distraction, the report claims, that Snap employees were issued with an ultimatum telling them to stop chattering and get back to work. Elsewhere, one unnamed executive has been quoted as saying that this is going to be a "big deal" and that it is "super red-hot now". Some analysts are saying that this partial takeover could be worth more than a billion dollars. Lycos' stock price has risen threefold since the beginning of the year and much of that is due to speculation of a possible takeover (see Lycos seeks investment partner, preferably non-smoker). That said, the company's senior executives have lately been keen to play down rumours of a deal (see Lycos CEO claims partnership 'not imminent'). Last month @Home, the high speed US Internet service provider, announced it to was buy Excite, the world's second largest portal, for $6.7 billion. ®
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MS screws-up video remake, and admits it wasn't real anyway

Microsoft's fatal video demo seems to have finally vanished beneath the waves yesterday, as the company failed to remake it adequately. To make matters worse, the company also confessed that the Internet connectivity in the earlier video hadn't been real in the first place. In principle that admission needn't necessarily have been surprising - Internet connections are so variable that it's practically impossible to produce a level playing field for a 'scientific' test. Simulating a connection is therefore a far more sensible route to take, and we're pretty sure we saw a Microsoft reference to Allchin's original tests as being based on simulated connections earlier this week. If anybody can remind us where we saw this, incidentally, it would be a big help, as right now we can't seem to lay hands on it. But even if Allchin's tests were perfectly legitimate in using simulations, the video Microsoft showed at the beginning of the week did not make that clear. The reverse, in fact. It was originally presented as a video of a duplication of Allchin's tests, and as our transcript makes clear, anyone watching it would come away with the impression that it was showing a real live connection to the Internet. On numerous occasions Yusuf Mehdi's voiceover specifically states that the computer is connecting to the Internet. For example: "When I click on that icon, we'll connect to the Internet … We are now on the Internet … we're actually connecting out to the Internet and fetching that data." Enough? There's plenty more. But yesterday a Microsoft spokesman was telling reporters Microsoft was "using computers in a studio to illustrate the points that we had discovered in the laboratory," which as far as we can make out means there was no live connection, or at least no continuous live connection as shown/implied by the video. So take a look at what has happened to the video over the past few days. On Monday it was a duplication of tests already conducted by Allchin, using "virgin" machines. It was scientific, and accurate. The discrepancies in the video having been shown by the DoJ, it then moved to being a still scientific and accurate demonstration where unfortunately there had been a couple of minor and irrelevant changes made to the Registry on one of the machines. Then by yesterday it wasn't scientific and accurate at all - it was an 'illustration' of Allchin's points, a TV commercial, you could say. You could also say, based on the transcript, that it looks awfully like a deliberate attempt to mislead the court. These problems are compounded by the failure to duplicate the tests on Wednesday night. Microsoft had won permission to try for a second, clean video on Wednesday, but that evening - surprise, surprise - it found it impossible to achieve consistent bandwidths on the Internet connections. As we all know this already (it was where we came in, wasn't it?), it's difficult to understand why, on Wednesday afternoon, Microsoft was under the impression it could go to an office, set up some computers and achieve consistent connections to the Internet, so it could perform scientific tests. Are they just stupid, or is there another explanation? ® Related Stories: Full video transcript Allchin heads for video remix MS exec recants over video inconsistency DoJ skewers MS exec over falsified video Complete Register trial coverage
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PlayStation emulator wins first round against Sony

Sony yesterday failed to prevent Connectix from selling its Mac-based PlayStation emulator, Virtual GameStation (VGS), until questions over the software developer's alleged infringement of Sony intellectual property rights and copyrights have been answered. Last week, Sony Computer Entertainment asked the Federal District Court of San Francisco to order Connectix to cease VGS shipments, release last week to mail order and retail channels as version 1.1. Version 1.0 was sold only by Connectix itself, and only during MacWorld Expo, held the first week of January. However, the Court rejected Sony's demand, suggesting that the latter's case against Connectix is not (as yet) as strong as it might have hoped. Certainly, Connectix has insistently stated its innocence of the charges, and has denied claims that VGS encourages the piracy of PlayStation games software as vigorously. Ironically, while Sony's failure will certainly irritate the company, many Mac games developers won't be too happy about it either, particularly those selling or preparing Mac versions of games currently available in PlayStation format. Still, since VGS will only play PlayStation games written for the US TV standard, NTSC, not the UK's PAL spec., ensuring the emulator is of little use to British Mac owners, perhaps this will encourage game developers to focus once again on the long-neglected UK Mac market. Well, here's hoping... ® See also PlayStation emulator developer to fight Sony lawsuit Sony to sue Connectix over PlayStation emulator N64 emulator vanishes after lawsuit threat
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Major US indie label backs MP3

US independent record label Rykodisc, whose roster includes Frank Zappa, Richard Thompson, Morphine and Lloyd Cole, has become the latest music company to embrace the MP3 digital music format. The company posted 175 tracks on the GoodNoise Web site, each available for download for 99 cents. According to the company, more songs will be posted over the next few months. Rykodisc is the largest record label to support MP3, which is generally viewed by the music industry as a technology that promotes piracy. That led the big five companies -- Sony, Polygram, EMI, Time-Warner and Bertelsmann -- to announce the Secure Digital Music Initiative (SDMI), a committee charged with developing a universal digital music format that, unlike MP3, makes it very hard for download tracks to be copied. Yet such is the level of suppport for MP3 among users that earlier this year many of the companies backing the format came together to form the Genuine Music Coalition to create a version of MP3 that incorporates a digital watermark to prevent piracy. That move won grudging support from the music industry's chief trade organisation, the Recording Industry Association of America, which has so far been vigorous in its condemnation of MP3. This may well have been instrumental in persuading Rykodisc to go for MP3 rather than wait for the SDMI to issue its own format. "Rykodisc is answering the strong consumer demand for music in the MP3 format," was the official response. "We want to give the MP3 customer a legitimate alternative to unauthorised distribution, which is already pervasive on the Internet." ® See also GoodNoise, Harry Fox deal 'legitimises' MP3
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Micromuse drug charge man facing trial in Guernsey

The millionaire founder of London-based reseller Micromuse is still stuck in the Channel Islands awaiting trail on charges of possessing drugs. Christopher Dawes is due to appear at the Royal Court of Guernsey on 23 February and is currently out on open remand, according to Channel Islands police. Dawes spent New Year in a Guernsey prison cell after being arrested on the neighbouring Channel Island of Alderney on 26 December. On 14 January he was charged with cocaine possession. A police spokesman confirmed Dawes had appeared in court on 26 January, but the case was not proceeded with as enquiries were continuing into the case. Dawes was again placed on open remand with certain conditions –- he had to surrender his passport and report to the police twice a week. In addition, he was only allowed to return to mainland UK if he gave the police 24 hours advance notice. Dawes, 39, had his helicopter and private jet were impounded and stripped by Customs following the drugs raid. The Australian-born jet-setter last year cashed in his shares in Micromuse, the company he founded in 1989, for £24 million. ®
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HP to tell the world it is serious about the Web

Hewlett-Packard is to blow a cool $100 million on a new advertising campaign in an attempt to convince people that it is serious about the Internet. Despite being responsible for much of the hardware that helps power the Net, HP is still not perceived to be an Internet company, marketing manager Nick Earle admitted at a conference in San Francisco. That's why HP is to embark on the biggest-ever advertising campaign in the company's history, although exactly how that money is to spent still remains sketchy. What is known is that HP has poached Allison Johnson, who used to work on IBM's e-business campaign, to help carry out this costly makeover. An in a sideways swipe at the recent scramble to make money on the Net, Earle said that HP will be successful in what he called "Internet Chapter Two", when companies are no longer fixated with just selling books and trawling the Web looking for information. ®
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MS accused of telling staff to spam ZDNet

A woman claiming to be a former Microsoft employee has accused the company of encouraging its staff to post pro-Microsoft messages on ZDNet. It is of course perfectly possible that Michelle Bradley is an anti-Microsoft zealot seeking to blacken the company's name further, but her case has been supported by a second individual, signing himself "Tom Thumb" and claiming to be a current MS employee. Says Bradley on ZDNet: "I can safely tell this now, since I 'retired' from Redmond last week. A verbal memo (no e-mail allowed) was passed around the MS campus encouraging MS employee's to post to Z-Net articles like this one. "The theme is Microsoft is responsible for all good things in computerdom. The government has no right to prevent MS from doing anything. Period. The memo suggests we use fictional names and state, and to identify ourselves as students." Bradley says it's interesting "to count the postings [on ZDNet] that do exactly this". Pity the poor pro-Microsoft ZDNet poster who really is a student. "Tom Thumb" says he can confirm her claims, and adds: "I have heard something very similar to what she talked about. But frankly, I did not interpet the thing as 'encouraging us to post.' It was more like 'Do it! And do it a lot!' "A lot of people around here [Redmond, allegedly] are very unhappy about this. And we are increasingly embarrassed by what is going on. We employees with any remaining shred of integrity and honour are getting as much BS piled on us as the outside world is. And very few of us any more are getting stock options to shut us up." ® Complete Register trial coverage
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Dell commits to Ireland production facilities

Dell has confirmed that a $90 million production facility in Limerick, Ireland will become operational by the end of the year, and will create around 1700 jobs. That will come as some consolation to the Irish government, which this week learned its attempts to prevent job losses at Apple's Cork plant had failed. Apple announced that 450 jobs were to go following its decision to outsource the plant's iMac production to South Korean company LG Electronics in a deal that appears to be paving the way for a major production deal with Apple (see Apple tight-lipped on LG's iMac production deal). LG will be assembling European iMacs in its own facility in Wales. In an interview on Irish TV, Dell chairman and CEO Michael Dell said he did not foresee his company following Apple's example. "Our Irish operations are tailored to our needs," he said. "I don't expect to change that. In fact, I see further expansion of our operations here." Market research agencies IDC and Dataquest recently published figures naming Dell the second and third biggest global PC vendor, respectively, and noted its industry-leading level of growth -- almost 65 per cent, according to Dataquest. ®
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Flying pickets turn to Internet to wage war on factory owners

Trade unionists will march into cyberspace today to create a virtual picket line as part of Britain’s longest running industrial dispute. The Communication Workers Union (CWU) is protesting against the dismissal of 31 workers from the Critchley Label Technology, a label-printing factory at Crumlin, south Wales, in February 1997. With ingenious irony, the CWU hopes to encourage many of its 300,000 members from across the communications sector to clog the Critchley works’ own communication network with unwanted e-mails and faxes for 24 hours. Chris Proctor, from the CWU, said: "We have offered to meet them anywhere at anytime but they’ve never responded, so we’ve resorted to this to get our message across." Critchley Label Technology sees things slightly differently. It said: "The Union inspired demonstration is a sad misdirection of attention against a profitable and growing company in the industrial sector, which has a very low turnover of employees." Internet users across Europe turned off their computers only last week to protest to telecommunication companies about the price of local calls. Hackers have also long used direct action to cause disruption to targeted businesses and companies. The protest attempted today represents a more direct form of action, available to everybody via the Internet. ®
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Big name ISPs fail to impress

The Microsoft Network, America Online and CompuServe have been publicly humiliated by PC World Magazine -- the world's biggest-selling monthly computer publication -- after it released its annual list of the top ISPs in the US. All three failed to make it into the top 10 -- and CompuServe was lucky to make it onto the list at all. Of the three, MSN performed the best with a ranking of 14 out of 20 – one place better than AOL at 15 -- and an overall rating of just "fair." But in summarising MSN's service the judges said: "Ho-hum at best; loses points for relatively short support hours and toll-only support line." AOL also received a "fair" rating but the judges slammed the service saying: "A cinch to set up -- just pop in the disk -- but poor performance and weak support still dog this behemoth." CompuServe -- rated "poor" -- performed worse still limping in at 19 out of 20. "Once dominant service is now long in the tooth," the judges said. "Can be a struggle to set up and support needs improvement." There was better news for AT&T WorldNet which pipped IBM Internet Connection into first place. The judges said AT&T's service as "outstanding" and added that it was "world class" except for slow responses to support e-mail. The companies were assessed by an independent company to gauge the speed and reliability of the service, among other things. The company also surveyed 8,000 subscribers of PC World Magazine to gauge their levels of satisfaction with their ISPs. ®
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End of the line for Siemens MBO hopes

Siemens' crippled microchip plant in Tyneside has received another blow following the death of a management buyout proposal. Talks collapsed with Siemens yesterday, when the German electronics giant rejected the offer. This ends the 250 employees' best chance of keeping the factory open beyond the June deadline set by Siemens. According to today's Times, it is understood that Siemens refused a £400 million offer from two of the Newcastle plant's senior executives. Although no other deal was evident, the company may be hoping for a better offer on the back of recently rising chip sales and prices. Siemens spent £650 million on the Geordie project, which had 1100 staff when its closure was announced last July. ®
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Data networks too complex for solo vendors, Olicom claims

"No single vendor can –- or should -– do it all," Olicom CEO Niels Christian Furu says. He would, wouldn't he? Always a niche vendor, Danish-owned Olicom is cosying up to Cabletron with a joint global OEM and marketing agreement. This will see Cabletron flog Olicom's Token Ring products, while Olicom will flog Cabletron's SmartSwitch Router 8000. Olicom's sales pitch -- or plea for independence -- runs like this: 1. A fundamental transition is underway in data networking to a more diversified environment. 2. Demand is accelerating for reliable bandwith across complex heterogenous environments. 3. No vendor could or should try and handle this by itself. This is whistling in the dark. One could just as easily argue that more can go wrong in multi-vendor data networks. Cisco, Lucent, Nortel Networks, 3Com, Alcatel, Siemens and others of that ilk are end-to-enders, by inclination, if not yet in reality. They will continue snaffling up smaller suppliers for there technology In the data networking world there are predators -- and then there's prey. Cabletron and Olicom are both members of the waiting to be eaten camp. Huddling closer together does not change this. ®
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K6-3 to have new name as software war begins

An executive at AMD UK today said that the K6-3 will have a different name -- but he won't say what it is. Paul Ridgway, at AMD UK, was talking at a VIA seminar in London this morning. He also the introduction of the K6-3, whatever it is called, will be "very, very soon" but didn't narrow that down either. However, Ridgway hit out at Intel and its strategy, and promised further OEM wins after AMD's success with Gateway. He said: "People are no longer saying: 'What Intel PCs have you got?' when they go into stores." The K6-3 will give the Pentium III a run for its money, he claimed. "The Pentium III and the K6-3 are good sparring partners, and the K6-3 is absolutely equal to the Pentium III." He promised support for the K6-2 and the K6-3 will continue into the next century. "We've plenty of headroom both the K6-2 and the K6-3," he said. "The K6-2 will compete against both Celeron and the Pentium II." He said Pentium III offered poor value and that AMD has a six to nine month lead over Intel. "Mainstream applications show no performance increase. It will take time for Intel to develop this," he said. "When the Pentium III hits the streets, it won't be running at mainstream price points. The K6-2 has been successful in the retail markets but you won't see the Pentium III there. Intel is going to take some time catching up with this. Maybe the software war has already started." ®
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VIA puts chipset weight behind PC 133

Chipset company VIA has decided to push the PC133 SDRAM standard and said that Direct Rambus was too expensive a solution. Dean Hays, director of marketing at Via, said: "We're working with a number of memory companies to develop the PC133 spec. Intel took the lead on PC100 but VIA is taking a lead on developing PC133. We intend to create a specification for it." VIA, said Hays, was working with NEC, Micron and Samsung. He had received numerous calls from other memory vendors over the last two weeks interested in the specification. He said that VIA had to show support for Direct Rambus because of the weight of industry support behind it. But, he added, systems using Direct Rambus were likely to cost too much and the PC industry would put its weight behind PC133. "Just about every memory vendor we've talked to in the world has yield on PC 133," he said. He suggested that yield on Direct Rambus might be indifferent. ® See also Intel, chip-set vendors prepare for Rambus shortage IBM to offer Rambus alternative Intel to pour $100 million into Samsung
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VIA unveils chipset roadmap, claims Camino late

A senior executive at chipset company VIA outlined today his company's roadmap for the rest of the year. Dean Hays, director of marketing at Via, said: "One of the things Intel does is to abandon functions [from] its chipsets when it wants to move on. We support functions and so it's a just a simple choice between CPUs." He said that its ProMedia chipset would be a cost-effective alternative for the Socket 370 platform, building on features on its Pro Plus and MVP4 feature sets. It would offer a high level of integration, including a 2D/3D graphics engine and use the VT82C686A South Bridge design. VIA will introduce the product in March and will go into mass production in Q2, Hays said. VIA is also designing chipsets for the 133MHz bus. It would compete against Intel on performance and integrated chipsets and again would introduce product in Q2. The company will also have a six month lead over Intel's Camino chipsets with its Pro133A and Pro133 designs, he claimed. "We'll be six months ahead of Intel," he said. "The rumours are Camino has slipped." He said its 1394 Firewire chipset, VIAFire VT6305 is now available and said: "Our intention is to integrate this into the chipset. We originally thought it belonged on the North Bus but now we're thinking of it more as South Bridge chipset," he said. VIA will also issue its own design guidelines for its chipsets, he said. "Intel's approach to design guidelines is to say: 'Do it this way, don't change it, trust us'. Our design guides are are far more flexible than that." ®
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VIA to IPO on 5 March

A senior executive at core logic company VIA said today that the company will float on the Taiwanese stock exchange on 5 March. Sean Davidson, international marketing manager at the company, said: "Over the long term, we aim to be the world's largest core chipset supplier." Currently, said Davidson, VIA is number ten in the world but by the end of the year hopes to have climbed further up the chart and will have nearly 1000 employees. The company uses Taiwanese foundry TSMC to produce its chipsets. "The Taiwanese board manufacturers were fixed to Intel but now we can offer a competitive product and you're not paying for the Intel brand name," said Davidson. He said: "The sub-$1000 market, we believe, is the market. We'll support everything that's out there in the x86 market, whether it's Rise, IDT, AMD, Intel or Cyrix." ®
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UK mobile phone firms escape call charge cuts

Mobile phone companies will not have to cut call charges to increase competition, Oftel decided yesterday. David Edmonds, director general of the telecomms watchdog, ruled out intervention to see call costs drop and stimulate the market. Edmonds said controls were unnecessary because competition between the major players was already pushing down tariffs. He said: "The four networks are providing such competition that despite the huge increase in demand for mobile phone services, prices have fallen and should continue to do so." The industry regulator noted that persistently high returns from Vodafone and Cellnet had resulted in complaints that prices were inflated. However, it said call prices from mobiles had fallen by two thirds between 1990 and 1998, despite rising demand. The Daily Telegraph today said that studies suggested Orange and One-2-One were both fattening their market share at the expense of Vodafone and Cellnet. ®
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Bug's Life fails to halt Pixar profit plunge

Steve Jobs is clearly spending too much time on his old stomping ground, spending too long away from the company where he's the real CEO, not some 'until the sign up the new guy' interim model. While Apple (interim CEO: Steve Jobs) recently recorded its fifth consecutive profitable quarter, Pixar (non-interim CEO: Steve Jobs) has just recorded fourth quarter profits a quarter of what they were for the same period last year. The company posted revenues of $3.1 million, compared to $7.1 million for Q4 97. Profits for the quarter were down to $1.1 million from $4.4 million in the same period a year ago. The company blamed the decline on the fall in income from Toy Story royalties and merchandise (you mean people are still buying plastic Buzz Lightyears?), while the more recently released A Bug's Life had yet to start pumping revenue into the company. Toy Story 2 is due to be released next November, the third instalment of the company's five-picture deal with Disney. Long-term Apple watchers will, of course, remember Jobs' words on taking over the helm at the Mac maker on a temporary basis having turned down the role full-time and passed on the chairmanship of the board: "I've already got the best job in the world, which is to be part of the team at Pixar. "The problem is I have a life. I just can't be the CEO at Apple. I just don't have that to give." That was said July 1997. Eighteen months and still counting... ®
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Web-based bookstore for UK from Bertelsmann

Bertelsmann is to open an online bookstore in the UK before the end of the month to rival Amazon.co.uk and the WH Smiths-owned Internet Bookshop. Sources close to the world's third largest media company said an announcement would be made within the "next few weeks". As well as offering books, the site, Books Online (BOL), is also likely to offer music and videos, although the full extent of the items on offer is still being kept under wraps. Bertelsmann will also announce a number of partnerships within the UK to help promote the Web store, although a spokesman for the company refused to reveal exactly who was involved. But since the Bertelsmann empire includes AOL UK, CompuServe UK and Lycos UK, you don't have to look too far to see which Web sites will be at the top of the list of partners. News that the UK is to get yet another major online bookstore may seem like market saturation to some, but according to Nick Gibson, analyst at Durlacher Research, there is still a significant gap between the number of people who want to buy books online, and those who actually have. The fact that demand is not being met shows that there simply isn't enough choice on the Web, said Gibson. News that Bertelsmann was to launch its BOL online bookstore in the UK had been known for some time but no one knew exactly when it would be open for business. Yesterday, Bertelsmann launched BOL online bookstore in Germany and France adding that it had set aside $300 million to develop BOL's European activities. ®
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Diamond CEO charts company's MP3 future

Diamond Multimedia CEO Bill Schroeder yesterday told attendees of the NationsBanc Montgomery Securities Technology Week conference in San Francisco that the company has sold over 100,000 Rio PMP300s since the MP3 player's launch last November. The thrust of Schroeder's speech was to stress Diamond's move to expand out of its traditional role catering for the graphics and sound add-on markets. As reported in The Register, Diamond embarked on just such a strategy last November in attempt to cut costs and improve the company's financial position (see Diamond to axe up to 180 jobs). Then, Schroeder said Diamond would soon begin to focus on high-margin, proprietary products for the 3D graphics, audio and multimedia markets, and items like the Rio for new markets. Low-margin cards based on other companies' technologies would begin to disappear from Diamond's product line. The subsequent sales of the Rio suggest that Schroeder's plan may be working. It's most recent component was the launch of RioPort, an Internet portal aimed at music fans and Rio owners. "We want to extend out of the hardware-only model," said Schroeder at the conference yesterday. He then went on to compare Diamond's new approach to the razor market. Rio, he said, represents the razor, RioPort the blades -- razor manufacturers make far more money on the blades than the razors, he added. Schroeder described Rio and RioPort as "breakout" products which provide Diamond with a "developing revenue stream" -- unlike the company's more traditional products, he admitted. ®
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Ingram to produce its own non-branded PCs

Ingram Micro has revealed plans to brand its white-box PCs within the next two months. UK resellers will get access to the kit if the planned US trial goes well. At the System Builder Summit Conference in Phoenix this week, Ingram said that it intended to start the branding exercise to establish market presence for its resellers. The Ingram Micro name will not be used on the systems and no direct marketing or advertising will take place for end-users, the broadliner said. Doug Antone, Ingram Micro executive vice president, told the conference that resellers would be given sales tools and support to market the products. He outlined the distributor's worldwide plans for the branding of these systems. "Within the next one to two months, we will determine if it makes sense to brand our unbranded offerings. This decision will be made corporately, and then rolled out worldwide on that market condition and request from our customer set. This will also include the UK," he said. The boxes will be aimed at resellers selling to small and medium-sized businesses, but reception in the UK has been mixed. The Ingram produced machines would be competing with those from existing UK systems builders. Luke Ireland, a director at PC assembler Evesham Micros, was unfazed. He said: "It is inevitable that distributors will go into PC assembly. But it is already a very competitive market, and I think they’ll struggle." US systems builders reacted by saying Ingram was trying to cut them out of the market. Ireland was more upbeat. "They might try to take our business, but there’s a lot more to a PC than what goes in the box," he added. Peter Rigby, director of rival distributor CHS Electronics, was similarly dismissive: "This is still a fast growing market. The problem will be convincing resellers to take the products on board and change from their present branding." ®
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UK cable firms to offer Web over the TV services

Telewest has announced it is to follow the lead of the UK’s other leading cable companies by providing an interactive, high-speed Internet based television service. The other two main UK cable operators, NTL and Cable & Wireless, are to launch similar services in spring and autumn of this year - Telewest estimates it will have joined the fray with its updated millennium package at the end of 1999. All three companies plan to supply digital set boxes made by Pace, and Telewest has already ordered 100,000 of the units. Stephen Powers of Telewest claimed that, although lagging behind the competition, Telewest would, "supply a better quality service with better prices." This leaves only BSkyB and On Digital without plans to supply Internet access via their television service. Telewest’s new service will only be accessible via a TV and a special keyboard. ®
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AMD desktop chip found hiding in Compaq notebook

Compaq has admitted that it published misleading information on its Web site about the type of processor used in its Presario home notebook PC. The Compaq Presario 1255 notebook uses AMD 333Mhz K6-2 desktop processor, and not the costlier mobile version of the same chip, according to reports in InfoWorld. The choice of the cheaper desktop chip could put a strain on the notebook. Desktop processors generally consume more power, which can reduce battery life, it can also increase heat output, which can affect performance. The chip will not over heat provided it is slowed down below the stated 333Mhz clock speed. Steve Crawley, Toshiba product marketing manager, said: "I wouldn’t expect a major manufacturer to use a desktop processor in a notebook, although it is not unknown in a third-tier vendor." Robert Stearn, AMD European marketing director, said successfully putting a desktop chip in a mobile depended on many factors. Although not familiar with this particular case, he said: "You need to pay attention to clock speed, supply voltage and heat emissions. As long as you have an adequate cooling system, it’s OK." Stearn admitted the need to keep the machine cooler used more power and as a consequence could reduce battery life. InfoWorld today reported that Alex Gruzen, director and general manager of Compaq’s Presario Mobile Division, agreed the information on the Web site was misleading. He said it was a legacy product, adding: "We are correcting it as we speak." The Compaq Presario 1255 notebook was still listed on the Web site as containing the AMD K62 mobile chip at press time. ®