10th > June > 1999 Archive

Intel a twelve incher

As revealed here last February, Intel is set to start developing 12-inch wafer technology. (Story: Intel outlines 12-inch future) Initially, the chip giant will roll out the technology at its research fab in Oregon next year, but it says it is committed to moving the 12-inch technology to other fabs over time. The benefit of producing 12-inch silicon wafers is that the company will, in theory, be able to produce more chips than the current eight inch technology. Although the initial capital expense is high, the cost of producing chips on 12-inch silicon wafers will drop by a third. The initial investment in Oregon will cost over a billion dollars. ® See also Intel Developer Forum Feb 99 Extensive coverage of Intel's plans plus a tour round its Albuquerque fab.
Mike Magee, 10 Jun 1999

IBM Micro gerstnered – gets ideas of reference

Two years agoFrom The Register two years back So to Geneva Airport, a watch, fountain and chocolate-ridden spot, where flight announcements have six musical notes as an intro, to the tune of "How much is that doggie..."* From thence, a five minute walk to the Moevenpick Hotel. Here, The Register presented itself to an IBM Microelectronics reception desk on the ground floor, only to be told that we were not welcome; the hacks' desk was up a flight of steep stairs. The thing was, that IBM Microelectronics was hosting a designers' conference and us mixing with them would be a little, je ne sais quois. We were told that we were to have a one-to-one interview with Dwight Tausz, marketing manager of the group, at 17.20 but as we first of all misheard this as White House and also noticed the press conference started at 17.15, decided to go with the latter rather than the former. (Dwight actually spoke during the press conference about 20 minutes after it started, so it is entirely feasible that we were scheduled to speak to the White House and so missed our opportunity to harangue the US president about chip monopolies.) Bill LaRosa, sales and marketing supremo of IBM Micro Europe, told us Dwight would tell us about the strategy of the group and so it came to pass. He introduced us first to the IBM NC Reference platform, a design containing all manners of good things including a Java virtual machine, a smart card reader, the Power PC 603e processor and Lotus applications and told us the good and somewhat interesting news that both Umax and Cisco said they would use the platform. The configuration on view at the back of the room looked groovy. A map next to it showed it had 4Mb of video memory, several AMD Ethernet controllers, a PCI slot, a CD-ROM interface, plugs for headphones and the like and assorted S3 chips and Asics. No room for your standard DRAM here. The bill of materials, we were informed, will cost around $250 - a snip. Would IBM itself use this NC reference platform, The Register asked? Mr Dr LaRosa seemed to hint in his answer that that was very likely. What place would Daisy (the Java chip IBM is developing) play in this strategy? That topic was off bounds too. When would people like Umax and Cisco start producing designs based on the reference platform? Autumn, the boys said. The NC reference platform is a followup to IBM Micro's set top box design which Thomson Consumer Electronics and Tatung have already said they will adopt. But in the press release, this development kit was described as a state-of-the-art design for Network Station manufacturers. As Mike Lunch, UK general manager of the IBM PC Co had told us at breakfast the same day that it was selling these like hot cakes, so much so that they were sold out, it seems that it is entirely possible Big Blue Corp will use the reference platform too. Did this announcement affect the Somerset JV? No way, said the boys. That agreement was still in place and rolling onwards. A brief discussion about the Cyrix design then followed. Would IBM Microelectronics undercut Cyrix on the 6x86MX chips the same way as it did last year? Mr Dr LaRosa said it wouldn't and never had. The Register was given to understand by its friends at Cyrix last year that this was precisely what happened, so undermining the joint strategy of producing better chips than Intel. It seemed to those listening that Mr Gerstner had planted his famous communicating shoe (The Register, passim) right on top of his IBM Microelectronic's division's respective heads and told them they better get wise and get networkcentric. That, of course, will make the 6x86MX an irrelevance. ® * The tune "How much is that doggie" may be unknown to our international readers but the first lines go, "How much is that doggie in the window, the one with the waggly tail? How much is that doggie in the window, I do hope that doggie's for sale". The song was a British hit in the 1950s.
Mike Magee, 10 Jun 1999

x86 chips will be two a penny

One of the interesting things we saw wandering around the halls of the Computex trade show in Taipei last week were the so-called "free PCs". These systems, which we saw on the Cyrix and one or two other stands, use microprocessors and other components which cost peanuts, while delivering a fair bit of functionality by yesterday's standards. Celeron processors -- a Pentium II by any other name -- almost cost peanuts too but in the next year or so, x86 chips, whether from the like of Cyrix, IDT, Rise, AMD or Intel, will cost practically next to nothing. One exhibitor at Computex told us that the cost to produce one gig of hard drive has now fallen to around $1. CRTs are cheap, and memory prices are beginning to slump. Given all of this, we're likely to see PCs around the end of the year which practically anyone can afford. Intel's response to this is to pave the way for an IA-64 generation aimed at the home and consumer market. That chip family is codenamed Deerfield but we won't see it until 2003. It is an X60 compaction of IA-64 but for the Willamette marchitecture. By that time, Intel will be talking 3000MHz turkey, and the processors won't be cheap. ®
Mike Magee, 10 Jun 1999

Screws went onto IBM at Gates' bidding

MS on TrialGates had set the tone about IBM's relationship with Lotus in 1994, long before the company was acquired by IBM. He had emailed Kempin "I am unsure if we need to see this as an organisational issue or an OEM issue. I am willing to do whatever it takes to kick them out, but strongly believe we need a worldwide hit team to attack IBM as a large account, whereby the OEM relationship should be used to apply some pressure." From this point on, Kempin exerted pressure on the OEM relationship to get IBM to stop competing, first with OS/2, then with SmartSuite, and later with World Book, which competed with Encarta. Clauson noted that "Gates was really mad about the World Book deal". When Norris had to negotiate the1996 market development agreement, Microsoft toughened its negotiating stance. It was "non-negotiable", since Microsoft had decided it no longer needed IBM to help make a market for Windows 95. Microsoft also turned the screw by telling IBM it could only have a single licence agreement for Windows 3.11, MS-DOS, MS-DOS tools, Windows 95, Windows for Workgroups, and NT 4.0 in a "Windows desktop family agreement". Apart from Windows 3.11 going from $9 to $62, despite the licence expiring in September 1997, Microsoft said that NT4 could only be licensed by IBM through the proposed agreement. Furthermore, if IBM did not sign, the MDA allowances would be cancelled in a renewal of the Windows 95 licence. Eventually, IBM was able to get Windows 3.11 for $25, but the overall extra cost to IBM was $75 million. Kempin initially refused to meet or talk to Santelli about royalties or relationship improvement, because of the Lotus competition. Norris wanted to know why Kempin was tying Windows 3.11 to IBM's ability to get an MDA for it. He also wanted to know whether Microsoft was requiring Compaq to give up favourable terms for other agreements. It was hardly surprising that Microsoft said that its agreements with Compaq were confidential. The agreement was finally signed in August 1996. Another dispute concerned the unwillingness or otherwise of Microsoft to provide quotations for use in joint press releases. The reason was clear enough: Norris made a note that said "Aptiva bundle SmartSuite, therefore no quote". Although it has always been recognised that comments attributed to executives have been made up by marketing departments, what is less known is the extent to which their supply was subject to negotiation. Norris showed himself very concerned at IBM's inability to negotiate suitable quotes from Microsoft, and conducted research that suggested that IBM lost $180 million of sales because of a perception that IBM did not get good NT support or have a good relationship with Microsoft. It would of course be better if the media ignored these fatuous quotations anyway (and mocked the person who allegedly made them), since they tend to predispose reader attitudes to products and relationships. Bengt Akerlind, who was director of Microsoft's OEM group, told Norris that IBM could get on various marketing programmes that Microsoft ran "when the two chairmen kiss and make up". Akerlind probed Norris: "How religious is your support of Smartsuite. ... What would it take to get you not to load Smartsuite?" Norris detailed issues concerning the first screen, and Microsoft's insistence that it could not have anything different from other OEMs. IBM had spent a great deal on developing tutorial programs to help new users, with between 60 and 150 programmers working on pre-loading, as well as research with usability studies and focus groups. It turned out that IBM's real concerns were that it was hard to differentiate PCs by following Microsoft's first-screen diktat. Furthermore, IBM had determined that three calls to its help centre (which cost $35 each) wiped out the profit entirely (showing that IBM's profit was in the order of $100 per PC), so that Microsoft's rejection of user improvements would be expensive for IBM, and work against user interests - although Malone in his examination did not catch this point. The pressure Microsoft put on IBM to use IE rather than Netscape has not figured previously in the case. Microsoft's requirement was that IE4 could be made available to IBM, with "more MDA dollars" if it agreed to put it only on "neutral" systems, which primarily meant "no Netscape", but also included no IBM or Lotus products that competed with Microsoft products. IBM eventually signed an IE4 deal. Norris was promoted in April 1997, so it is at this point that his valuable and meticulously documented account of negotiations with Microsoft stops. There was an epilogue to relations between IBM and Microsoft, written by Gates in an email to Kempin in October 1997: "Overall, we will never have the same relationship with IBM that we have with Compaq, Dell and even HP, because of their software ambitions. I could deal with this just fine if they weren't such rabid Java backers ...". Norris did not work with Java, so we have no special insight from him, but the Sun v Microsoft case should reveal much of what we do not yet know. So far as this catalogue of Microsoft's business dealings with IBM are concerned, if The Register were a tabloid rather than a broadsheet newspaper, we would be screaming "Blackmail!" We prefer to suggest that the IBM-Microsoft relationship had strong elements of sado-masochism, with the masochist IBM saying "hit me" and the sadist Microsoft replying "No". ® Complete Register trial coverage
Graham Lea, 10 Jun 1999

Cut a deal or you don't get Win95 – IBM faces PC suicide

MS on TrialIBM witness Garry Norris explained that Microsoft was offered $10 million by IBM to delink the audit of IBM's licence payments from the Windows 95 licence negotiation and to guarantee that any discrepancies would be cleared up. The audit was expected to take four to six months, and last until around the end of 1995, far beyond the launch of Windows 95, so IBM was having kittens at this move since it believed that not to have Windows 95 would be PC suicide. In the event, we shall never know what might have happened if IBM had had the intestinal fortitude to resist. The Personal Software Products division, which develops software, is in competition, but in its naive view, Microsoft thought it would be possible for the PC Company to get PSP to stop developing competitive products. Microsoft had no understanding of the dynamics of a large corporation. From about 20 July, IBM found it was completely cut off from access to Windows 95 code, and could not continue with development of models incorporating Windows 95. Kempin told Santelli that if IBM would agree not to ship SmartSuite for six months to a year, the audit would be settled. The judge asked at this point for Kempin's name to be repeated, which seemed to indicate that he was concerned at this gross abuse of power. Santelli reported Kempin as telling Thoman that although Microsoft threatened IBM over the bundling of SmartSuite by the PC Company, it was not possible for him to agree on behalf of all of IBM that there would be no competition using SmartSuite. IBM made it clear that it wished to get a licence for Windows 95 quickly in order not to miss the back-to-school market and the Christmas market. It was not a good idea to be so open with a monopolist, as this only served to make it more obdurate. Kempin wrote to Santelli on 15 August, a few days before the Windows 95 launch: "If you believe that the amount I am asking for [to settle the audit] is too much, I would be willing to trade certain relationship-improving measures for the settlement charges and/or convert some of the amounts into marketing funds if IBM, too, agrees to promote Microsoft's software products, together with their hardware offerings." Santelli replied: "Each day that IBM has to wait for the Windows 95 code, IBM is at a competitive disadvantage." It is hard to imagine Microsoft being anything but gleeful at this. IBM lacked a hard man. Norris revealed that IBM considered the possibility of buying the Windows 95 code at retail and paying to have it installed, but expected that this would result in a loss of volume between 30 and 90 per cent. To use OS/2 would result in loss of sales between 70 and 90 percent, Norris estimated, since "without Windows 95, you couldn't be in the PC business." Baber had told Norris: "Where else are you going to go? This is the only game in town." It was an acknowledgement that Microsoft had a monopoly. Norris estimated that the PC Company would be out of business sometime between the second and fourth quarter of 1996 without Windows 95. Baber had told Norris that IBM could have Compaq's price, together with support and participation in Microsoft marketing programmes, if it quit competing. Kempin was also blunt, and replied to Santelli on 5 January 1996: "As long as IBM is working first on their competitive offerings and prefers to fiercely compete with us in critical areas, we should just be honest with each other and admit that such priorities will not lead to a most exciting relationship and might not even make IBM feel good when selling solutions based on Microsoft's products." Microsoft's determination that it should be the only software company will not help its present case. In a call between Santelli and Kempin at the end of January, Kempin wanted to know why Microsoft did not get an opportunity to compete with SmartSuite, because "when the PC Company wins, Lotus wins and Microsoft loses". ® Complete Register trial coverage
Graham Lea, 10 Jun 1999

Secret deals MS uses to control PC companies

MS on TrialMDAs are not discounts from royalty rates, Norris adamantly maintained, but "a vehicle that Microsoft used in order for us to perform activities that benefited them in many ways. It was a vehicle that also gave royalty reductions that imposed costs on the PC manufacturer, in order to attain the royalty reductions. There were several provisions in it, for example, that would have required us to reduce or eliminate our shipments of OS/2, one of which I can specifically recall where it said, 'make Windows 95 the standard operating system of your company'." Some of the conditions that Microsoft presented to IBM if it wished to get a licence for Windows 9x or NT4 were: "adopt Windows 95 as the standard operating system for IBM: $3 [discount per Windows 95 licence]"; "Windows 95 is the only operating system mentioned in advertisement", to gain a $1 MDA reduction; and "reduce, drop or eliminate OS/2", which would be worth a total of $8 in MDA reduction. New in Norris' testimony was the reason for Microsoft stopping negotiating in July 1995. The instruction came from Gates, Ballmer and Joachim Kempin (Microsoft OEM VP) and resulted from IBM's bid for Lotus that was announced on 5 June 1995. Microsoft was concerned that Notes and SmartSuite would erode Microsoft's market share of Exchange and Office. Mark Baber, Microsoft's IBM OEM rep, quizzed Norris: "What are your plans for Lotus? What are IBM's plans? Do you plan on pre-loading SmartSuite? Are you going to drop SmartSuite in the boxes of your PC systems? Exactly what do you plan on doing with SmartSuite?" OEM chief Joachim Kempin played the 'I wanted to meet to clear the air. Bill Gates does not know we're having this discussion' card to Tony Santelli, general manager of the RS/6000 over dinner. Santelli emailed IBM vp Rick Thoman with Kempin's message: "LVG [Gerstner] should have called Gates to explain [the Lotus acquisition]", which was arrogant, to say the least. Another Kempinism that appeared to owe more to Far Eastern notions about face saving than a business negotiation in the USA, was when Kempin suggested to Santelli that the $10 million payment might be reduced if there were "an offer of good faith from IBM, something he could show Gates". It smacked of a demand for a "confession" in the worst days of the cold war. Roy Clauson, who was the resident manager of IBM's programming centre in Kirkland, Washington for liaison with Microsoft, was also at the dinner and emailed Santelli the next day a comment: "Microsoft is definitely worried about SmartSuite being given away and eating into their `office heartland' ". Clauson also noted that "there are lots of `combative' people in Microsoft ready to go to war with IBM." It is noteworthy that IBM has access to NT source code at Kirkland. If IBM only produced what Microsoft liked to call "neutral systems" (which in the real competitive world would be called systems with no competing software), then it would be allowed access to Windows 95 and BackOffice source code. On 17 July, following the completion of the acquisition on 5 July, IBM announced that SmartSuite would be the primary desktop offering from IBM in the United States. Microsoft told IBM it was breaking off negotiations three days later. It was at this point that Thoman had a call from Gates in an attempt to get matters moving, and Norris was able to hear a "pretty loud" Gates, despite the fact that Thoman "had the phone up to his ear". (The day Gates screamed IBM's house down) The foci of Gates' wrath were: SmartSuite, the audit, and OS/2 competition. The concern was that Microsoft might be forced to reduce its price for MS Office, in the face of competition. Since OEM prices for SmartSuite were in the order of $5, it was a serious threat. Furthermore, it was a case of a competitive market acting in the interest of consumers, which is the last thing that Microsoft wanted. Gates and Ballmer decided that a Windows 95 licence would be linked to the completion of the audit (which in fact was for MS-DOS, LAN Manager, Windows 3.0, Windows 3.1 and "eventually" OS/2) being undertaken by Ernst & Young). ® Complete Register trial coverage
Graham Lea, 10 Jun 1999

IBM evidence shows how MS controls PC OEMs

MS on TrialIn 1995, IBM paid Microsoft $40 million for Windows. In 1996 it was $220 million. In 1997 $330 million. In 1998, $440 million. Annoyance over this thumbscrew process is probably the real reason why Garry Norris is giving rebuttal evidence for the DoJ with the clear blessing of IBM, and giving us such a cornucopia. Norris, who was IBM's chief negotiator with Microsoft before and after the introduction of Windows 95, lived up to expectations in his direct examination by Philip Malone of the DoJ. His evidence provides the most damning account in the trial so far of Microsoft's exploitation of its Windows monopoly, and how it controls OEMs. This is the most detailed account anywhere of Microsoft's strategies and tactics in such matters, and even seasoned Microsoft watchers will be surprised at the extent to which their suspicions of Microsoft's business practices were confirmed. Norris has handwritten notes and computer records of the period - not exactly a kiss-and-tell diary, but solid contemporary evidence of Microsoft's actions. They were so good that they went entirely unchallenged by Richard Pepperman, for Microsoft. At the same time, what we see from the testimony is the inability of some senior IBM executives when faced with Microsoft's uncompromising abuse of ethical business behaviour. It was like the Corps Diplomatique trying to deal with threats from a gang of street fighters. So far as OS/2 was concerned, nothing new emerged, and the enigma remains as to whether IBM did change its policy towards OS/2 in a direct response to Microsoft's desires to eliminate it, or whether it was a consequence of Microsoft's actions. Even in the latter case, IBM could have found a way to keep OS/2 competitive if it had wanted to do so, but failed. The new revelations mostly concerned IBM's acquisition of Lotus, and Microsoft's reaction. Judge Jackson listened very careful to the testimony, and asked a number of questions for clarification. After this evidence, there can be no doubt that Microsoft should be prevented from ever again abusing its dominant position by having to publish an OEM price list, with only volume discounts allowed. It would also be necessary to ensure that the prices are set at a fair level and not subject to discounts refereed by Microsoft, as is the case with its so-called MDAs. The mechanism for this would need to be worked out, but it should not be beyond the capability of the courts. ® Complete Register trial coverage
Graham Lea, 10 Jun 1999

Berners-Lee laments way Web turned out

The man recognised as the creator of the World Wide Web has talked about his embarrassment and continued frustration with his progeny. "I'm embarrassed at how difficult it is," said Briton Tim Berners-Lee. "The problem is, my mother, your mother, our kids... they go out to the search engine, they ask a question. The search engine gives stupid answers because it reads a large proportion of the pages on the entire Web... and it doesn't understand any of them," he lamented Berners-Lee was speaking at a celebratory lunch of the MIT Laboratory for Computer Science in Cambridge, Massachusetts. Like a parent trying to handle an unruly child, the 'Father of the Web' also spoke of his displeasure at the direction the Web was heading. And like most parents, it involved TV. "It's not supposed to be a glorified television channel," he said. "I had hoped that the Web would be a tool for understanding each other," he said. He also said that the Web was becoming too passive and that it wasn't just about browsing, scouring it for information and then taking it. ''It's not supposed to be a glorified television channel,'' he said. ''I had hoped that the Web would be a tool for understanding each other.'' It also needs people to inject their content and put things back into it, he said. ®
Tim Richardson, 10 Jun 1999

Easy PC FlexATX designs tip up

Taiwanese companies were showing unusual designs at Computex last week, but only in private. This case, from ChenBro, is one of four the company showed in its private suite. The others include an egg-shaped PC, and a machine which includes a PC camera. The plastic machines are designed to accommodate Intel and Microsoft's so-called legacy free motherboards. Earlier this year, Intel said that there would be a number of such designs available for sale from around August onwards. But Taiwanese motherboard manufacturers we spoke to at the show claimed that the FlexATX design is still "under development". Because of the form factor, the machines will use Pentium IIIs with a socketed design, as first revealed here. ® Computex 99 coverage Intel Developer Forum Feb 99
Mike Magee, 10 Jun 1999

Win98 SE hits the stores, but service pack MIA

The US version of Windows 98 SE goes on sale today, but international users may have to wait a while longer, and the free service pack for existing users apparently won't be posted for few more weeks yet. According to US Windows 98 product manager Mike Nichols, the new version will be shipping with almost all new PCs, and will be on sale at US retail outlets from today. It's also allegedly available from Microsoft's Web site, but MS' Web morlocks don't seem to be up yet today, so there's a 'please come back later' notice, and not much else. But there are various noteworthy clues to where Microsoft is headed. The upgrade for existing users is being offered on CD direct from Microsoft for $19.95, while the service pack is also being offered on CD for $5. As we've mentioned here before, it's obviously in Microsoft's interest to be able to communicate directly with its users, and to be able to take a small fee from them every now and again for upgrades and service packs. We're trying not to get too suspicious about the MIA status of the free downloadable service pack though. From the Microsoft site in its current state however it would appear that the company will also be selling the full version (itself an upgrade, of course) of SE direct. We can't be absolutely sure of this until the online store's doors open, but this would be rather different from the previously announced policy of selling the $19.95 Win98 upgrade, and Microsoft's suggestion that you might like to 'skip the mall' will no doubt cheer up its happy band of retailers no end. What's in SE? Well, most of the stuff, aside from the connection sharing software, can be assembled from free downloadable bug-fixes and upgrades. Nichols seems to have been somewhat stretched to come up with advantages for the product yesterday, telling reporters that he hoped the convenience of having all the upgrades on one CD would get users to spend $19.95. He doesn't seem to have covered the justification for spending around $90 on the retail version, or why you'd spend the $19.95 when you can conveniently get the service pack for $5 (when it's out). But the 'convenience' angle is maybe a little spurious. Upgrades, various enhancements and service packs have historically tended to be free, downloadable if you're in a hurry but fairly easy to pick up on a free CD if you're not. In the UK, where this sort of stuff is commonly available on magazine cover CDs, we've noted an increasingly reluctance on MS' part to play ball. If MS lets the mags put service packs and upgrades on their cover CDs, then we've got the convenience without giving Microsoft the money. Ah, but will the mags be allowed to cover-mount the Win98 service pack? ®
John Lettice, 10 Jun 1999

DVD player prices set to drop

The price of DVD players is set to plummet over the next year as Taiwanese manufacturers implement an Acer Labs Inc (ALi) solution. At Computex last week, ALi introduced a chipset for MPEG-2m Dolby Digital decode and DVD channel control. ALi claims it is the first chipset which provides a complete solution. The Acer subsidiary has struck deals with manufacturers in Taiwan and mainland China, it said. ® Computex 99 coverage
Mike Magee, 10 Jun 1999

Sony brings digital music to retail channel

Sony's music division, Sony Music Entertainment, yesterday signed digital content distribution specialist Digital On-Demand to serve its album back catalogue to record stores worldwide. The move marks a major shift in the way music is provided to buyers, and could ensure the long-term survival of the high street record shop. Digital On-Demand's role will be to provide in-store kiosks that allow buyers to select and master CDs, DVDs or MiniDiscs. The music they choose is pulled from DoD's servers across its dedicated Red Dot Network, along with the sleeve artwork. Essentially, that allows record stores to offer the label's full catalogue of recordings, including those no longer available on LP or CD, without having to make room for all that extra stock. Providing a sufficient variety of recordings to keep attracting buyers was always the traditional record stores' weakness compared not only to the digital downloads across the Internet but to Net-based mail-order operations like Amazon. This kind of sales mechanism is something the stores themselves have understandably been keen on ever since the online music market began to take off. Sony's biggest signing for the DoD system is Virgin, which intends to put kiosks in all 20 of its North American stores to trial the system before deciding whether to roll it out globally. Meanwhile, HMV is working with IBM on a similar system that uses Big Blue's Electronic Music Management System, which has been designed as much for digital delivery to retail outlets as direct to buyers. Tower Records is also believed to be planning a series of Internet cafes that would double-up as showrooms for its Net-based mail-order service and ultimately as a sites for DoD-style kiosks. Sony's move is also an interesting commentary on how a major label perceives the development of the online music market. It has often been suggested that once the recordind industry sorts out the security issues of music downloads, the big labels would leap into action to become the sole source for digital music. Cut out the middle-man and you take a greater cut of the profits. Clearly the current retail channel will remain in place -- not enough music buyers yet have access to the Web and/or digital music players -- but it's not hard to forsee a time when the almost all music sales are made via the Web download model. Sony doesn't want to go too far down that route yet since the DoD deal is clearly about keeping the retail channel sweet. It must believe that buyers are still going to want to browse through music stores for some time to come. Ironically, of course, the stores themselves target the very buyers most likely to desert them for the online world: the young. The likes of Virgin, then, are not only going to need to embrace technologies like DoD's, but use it to attract all those older buyers they've been happy to alienate for years. ®
Tony Smith, 10 Jun 1999

Pentium chips could get pricier after World Customs ruling

A decision by the World Customs Administration to re-classify CPUs as components rather than chips could raise prices of PCs worldwide. According to English-language newspaper The Korea Herald, local customs authorities have imposed a retrospective tariff on Pentium IIs and Pentium IIIs imported since May 1997. Korean customs have just imposed an additional six per cent levy on the CPUs after a ruling by the WCO last May. That brings the tariff up to nearly 10 per cent. At press time, Intel was unable to respond to the reports. ®
Mike Magee, 10 Jun 1999

GamePC to ship 600MHz PIII system next week

Game players seeking the acme of performance might like to check out US vendor GamePC's Liquid Metal line. The PCs contain a 450MHz Pentium III processor overclocked to 600MHz, a 190MHz 3dfx Voodoo 3 3000 card, 384MB of PC133 RAM, 6x DVD drive, 10,000rpm IBM 18GB Ultra2 SCSI hard drive, and a 40x CD-ROM unit. An EIDE version sports a 22GB drive and a 52x CD-ROM player. To stop all this technology melting a hole through your floor, the company has added Kryotech's liquid-cooled casing. For good measure, the Voodoo card has its own cooler too. GamePC has yet to announce prices for the Liquid Metal range, but it did say it hopes to begin shipping them before 18 June. ®
Team Register, 10 Jun 1999

Amstrad loses Western Digital case

A US jury has found that Western Digital was not guilty of shipping faulty drives to Amstrad in 1989. Amstrad had wanted $140 million in compensation from WD, and had already received compensation from Seagate in an out of court settlement worth over $120 million. Western Digital had always maintained that its hard drives conformed to the specification demanded, and that problems were down to Amstrad designs. The PCs in question were part of Amstrad's ill-fated corporate range of PCs. ®
Mike Magee, 10 Jun 1999

Real 3D targets ATI with patent suit

Graphics hardware market leader ATI was yesterday slapped with a patent infringement and misappropriation of trade secrets suit by rival graphics specialist Real 3D. Real 3D's suit claims ATI, which commands over 70 per cent of the graphics chip market, has infringed two of its patents which cover the use of 3D graphics products in PCs and workstations. The company also alleges that ATI poached "key Real 3D engineering staff" in order to gain access to its trade secrets and thus compete with it unfairly. The suit, filed in the Orlando, Florida District Court, demands ATI be barred from selling infringing products. Real 3D is owned by military-industrial combine Lockheed Martin, but Intel and SGI also hold 20 per cent and ten per cent stakes in it, respectively. The Intel connection was based on Chipzilla's decision to hire Real 3D to create its i740 graphics card, designed to promote its then new AGP technology. Real 3D also develops graphics chips for Sega. Real 3D was formed in 1996; ATI has been in business since 1985. The patents in question are 4,727,365 (a computer video image generating system including a computer memory having 3D object data stored therein employs an advanced object generator for retrieving and processing the object data for output to a span processor for controlling the pixel-by-pixel video output signal for a video display -- the advanced object generator includes a translucency processor, an edge-on fading processor, a level of detail blending processor and a bilinear interpolator for texture smoothing) and 4,095,164 (a method for modulating color for effecting color cell texture). The second patent is pretty abstruse, but the first maps out the core features of any 3D graphics card, so it could affect every chipset ATI offers. Curiously, the patents were both filed in 1986 and granted in 1990 and 1988, respectively, and assigned to GEC. It's not clear how Real 3D came across them, presumably through its parent, Lockheed Martin. It certainly seems that Real 3D's description of the patents as its own "pioneering" technology is stretching the point a tad. ®
Tony Smith, 10 Jun 1999

Euro Net market too small to support so many ISPs

SurveyISPs across Western Europe could be in for a torrid time as competition continues to hot up in the marketplace. Although there are some 3000 ISPs in Western Europe chasing a $10 billion industry, those unable to stand the heat will simply be left to fry. That's because Internet demand is exploding, prices are in free fall, and companies are being forced to seek more innovative ways of appealing to customers. In its report Internet Service Providers in Western Europe, Cambridge-based research group Analysys Publications claims the market cannot sustain such a high number of suppliers. "Most of the factors encouraging market growth are short or medium term," said Dr Philip Lakelin, author of the survey. "In the longer term, and that really means only the next few years, the Internet access market will become considerably more streamlined. We expect to see fierce, cutthroat competition among the brand-driven and content-based ISPs in the coming years. "Casualties are inevitable among those that do not have flexible business models or the resources to sustain the losses that ensure continued rapid growth." Analysys believes that branded and content-based ISPs, such as AOL-Bertelsmann Europe, Freeserve and Planet Online, will continue to dominate the market. For other companies, such as retailers, it seems Internet access will be given away free as part of a standard loyalty package. ®
Tim Richardson, 10 Jun 1999

AMD K7 to launch 28 June at 600MHz

Sources said that AMD will formally introduce its K7 processor on the 28th of June and will have one processor running at 600MHz. There will also be 500MHz and 550MHz flavours, as previously revealed. Processors will ship to system integrators on the 3rd of August. In the first two weeks of August, there will be volume shipments of the product, and at introduction time, AMD will also have tier one vendors demoing machines based on the K7. As you might expect, the K7 will not be called the K7. It could be called the Alereon (see earlier story), but we hope to have more details on this later. The reference design specifies Nvidia TNT. In August, distributors will be carrying stocks of the product, we can confirm. The ramp will be sufficient to supply some end user needs. The K7 at 600MHz will be the first time AMD has ever introduced a processor which beats an Intel chip. The significance of this will not be lost on OEMs and PC manufacturers, who are likely to queue up to use the processor. Gateway is a definite, and it is likely Compaq will not be far behind. Yesterday, AMD tried to persuade us to sign a non-disclosure agreement but instead we decided to take the K7 challenge and accumulate info elsewhere. AMD will not comment on the details above. ®
Mike Magee, 10 Jun 1999

Intel confirms Celeron price cuts

Intel confirmed today it made price cuts on Celerons and its 400MHz Pentium II last weekend. The price cuts have come a month earlier than anticipated. The Celeron 466 now costs $147/1000, the 433MHz part $113/1000, and the 400MHz Celeron $93. The 366MHz part drops to $69/1000. The PII/400 now costs $173/1000, a ten per cent reduction. Further price reductions will now come mid-July. Our pricing roadmap should now be viewed with these changes in mind. ®
Mike Magee, 10 Jun 1999

Job losses follow Ideal re-org

Ideal Hardware is to make "substantial" redundancies and reorganising to cut costs, following a profits warning. The storage distie is disbanding its operational board and replacing it with a smaller, executive board, headed by Ian French, who is now promoted to chief executive. He will report directly to Inter-X boss James Wickes. At the same time, Ideal Hardware co-founder Kevin Harper is resigning today from Inter-X, the holding company for Ideal. He will continue to work as a consultant for new Inter-X subsidiary, The IT Network. Ideal says it will save £2 million a year through the restructure, which will lead to an one-off charge £700,000 for the current financial year. Inter-X said difficult trading conditions in distribution had resulted in "a material decline in margins and profitability since the latter part of April". Extremely disappointing Recent trading for Ideal is "extremely disappointing", and this means group profits for this financial year falling significantly below stock market expectations. But Ideal is still trading profitably and cash flow remains strong, Inter-X says. To keep that way. the Board is "embarking upon a significant restructuring of Ideal in order to produce immediate material reductions in its cost base and improved efficiency of its sales teams." The sales and product management teams will also be restructured. Further details of the job losses and restructure will be announced tomorrow, but redundancies were described as "substantial" by Wickes. Upbeat IT Network On the upside, Inter-X forecasts great things for its new Internet service, the IT Network. Described as a product comparitor database, this service will have more than 100,000 registered members by the time it launches at the end of the month. And committed revenue to date exceeds £650K, Inter-X says. The IT Network is now forecast to break even -- on the operating level in the current financial year and to make material contribution to group profits thereafter". But there's a sting in the tail -- launch costs will now be £500,000 higher than the £3.2 million originally anticipated. But this is due to "overwhelming" response for the service. ®:
Linda Harrison, 10 Jun 1999

Sage recruits for e-commerce drive

Accountancy software giant Sage will create 300 new jobs at its head office in Newcastle-upon-Tyne over the next year. Granted, most of these will be in that late 20th Century equivalent dark satanic mills -- the call centre. But beggars can't be choosers. especially in the North-East, England's biggest employment black-spot. The Register is all in favour of siting call centres where jobs are scarce. That way you get intelligent people on the other end of the line when you ring customer support. And as paying customers of Sage, we frequently ring customer support -- due to our own incompetence, rather than because of any defects in the software. Ahem. It sometimes takes them a while to pick up the phone, but Sage staffers are always courteous, and always solve our problems quickly. So as far as we are concerned, the more reps, the merrier. The newbies will boost Sage's drive to convert its two million customers to ecommerce-savvy operators. They will support customers wishing to set up their own Web sites and help to expand the Web services on offer. Graham Wylie, managing director of Sage UK, said staff had more than doubled over the last two years, and predicted healthy growth in the future. Currently, Sage employs 700 people. ®
Linda Harrison, 10 Jun 1999

More UK telcos deny toll-free access – so who is it?

Cable and Wireless and NTL have joined BT in denying they have plans to offer unlimited toll-free access to the Internet within the next three months. Yesterday, Tory MP Ian Bruce said that telcos were working on a service that would give phone users access to a single toll-free number of their choice -- a move that would provide unmetered access to the Internet for millions of people in the UK (see earlier story). So far, nobody wants to own up to it. So instead of the The Register running up a massive phone bill trying to find out, would the telco about to offer such a service please put their hands up and admit to what's going on. Is that too much to ask? ®
Tim Richardson, 10 Jun 1999

Access to Auntie now comes free

The current mania for launching subscription-free Internet services shows no sign of waning despite warnings today that there are already too many ISPs in Western Europe (see Euro Net market too small to support so many ISPs). BBC Worldwide's commercial web service, beeb.com, has confirmed it is the latest outfit to offer a subscription-free service. Available later in the summer, freebeeb.com is an alliance between BBC Worldwide and ScottishTelecom, which owns Demon Internet. ScottishTelecom will provide the technology behind the service, and beeb.com will provide the content. The BBC was at pains to point out that no public funds would be used to support freebeeb.net. "The Internet is becoming a mainstream medium," said Rupert Gavin, BBC Worldwide's CE. "With the launch of freebeeb.net, BBC Worldwide will provide users with the choice of easy access to both the BBC's online services and the wider Internet, via a known and trusted brand. "It is further evidence of BBC Worldwide's commitment to developing new and exciting online services, which permit closer direct relationships with our online users." The launch of freebeeb.com will also create upwards of 100 jobs. Elsewhere, Irish telco Ocean said yesterday's launch of its subscription-free service would help Ireland become a leader in e-commerce. Acknowledging the significant impact similar services have had in other countries, executives behind oceanfree.net said they hoped that the new service would have a similar effect in Ireland and lead to a tenfold increase in Net users in the next three years. Ocean is a joint venture between BT and Ireland's Electricity Supply Board. ®
Tim Richardson, 10 Jun 1999

NTL to launch digital telly service in September

Cable company NTL is predicting massive growth when it starts bundling a new range of digital communication services in the UK in September. Its focus will be on selling packages of TV, Internet and interactive services, and telephone across the whole of the UK and through new European franchises. NTL executives hope this new strategy -- and the fact that its phone tariffs will apparently be cheaper than BT -- will make it a major force in the UK and European communications market. The Hampshire-based company predicts that NTL's digital cable offer will generate 250,000 subscribers by mid-2000. And part of that uptake will be driven by high-speed Internet access and interactive services such as online shopping and banking. CEO Barclay Knapp said: "NTL's strategy is simple. We will increase our subscriber base by selling integrated services of TV, telephone, interactive and Internet services. "That will attract media and consumer companies wanting 'carriage' or transaction services. In turn, they will provide business to our telecoms and satellite operations as we get them connected." The bundled services will be delivered using NTL's own cable connections and through a combination of telephone lines and digital terrestrial television outside its franchise areas. ®
Tim Richardson, 10 Jun 1999

BT saves Station X for exploitation

Bletchley Park, site of the British successful attempts to crack Nazi cyphers during World War 2 and old stomping ground of this reporter, is finally destined to become a crypto theme park. Today, Bletchley Park Trust chairman Sir Philip Duncombe announced that British Telecom and land-owning quango Pace have saved the site for the Nation from the clutches of the local authority, Milton Keynes District Council. Milton Keynes, famous for its cornflake box school of architecture and possessor of one of the highest young male suicide rates in the country, had considered turning the home of the world's first electronic computer into prime development land. However, thanks to funding from BT and Pace, the Bletchley Park Trust will be able to buy the site and turn it into a major heritage centre. BT and Pace will own the site, originally known by its codename, Station X, and lease it for a 250-year period to the Trust. While we welcome the preservation of this important national -- nay, international -- monument, we can't help be worried by the dreaded phrase 'heritage centre'. If it's anything like most such locations in the tourist-tempting British Isles, visitors can expected to be hawked Alan Turing Towel Sets, Wolfpacks of Biscuits, Bletchley Baseball Hats, Colossus Cream Teas, the Admiral Doenitz Bouncy Castle and other such tat. ® See also Microsoft denies Gates to fund UK computing museum Statue of Turing spurned by US IT giants
Tony Smith, 10 Jun 1999

Linux disties clash over PowerPC clustering quality

The Mac Linux community was in a some confusion today when it emerged that attempts to show the Linux on the PowerPC was an ideal platform for parallel computing systems might not be all they were cracked up to be. TerraSoft Solutions (TSS) a couple of days ago announced Black Lab Linux, a version of the company's Champion Server Linux distribution for cluster computing. TSS claims Black Lab Linux offers a "robust, low cost and low power consumption, high performance advanced computing solution". Essentially, the Black Lab business designs and specifies clusters of PowerPC-based machines running Champion Server. Linux on PowerPC, a company consultant claimed, was "a viable and competitive solution" for parallel computing. But today, a spokesman for rival Linux distributor LinuxPPC, claimed TerraSoft had got it wrong. Cited by leading Mac information service, MacInTouch, he said a "group of researchers at the Distributed and High-Performance Computing (DHPC) Group at University of Adelaide in Australia published a paper finding that Linux on PPC is a poor choice for clustering". The DHPC group's findings, published in March, compared a cluster of iMacs, a Beowulf-style Pentium-based PC cluster and a network of DEC Alpha workstations. In benchmarks, the iMac system didn't come out too well compared with the others. "The group used iMacs and an older version of LinuxPPC, but the results are clear: Intel and Alpha clusters massively outperformed the iMac cluster," said the LinuxPPC spokesman. So, who is correct? Well, the DHPC group did use an old version of LinuxPPC, whereas Black Lab Linux is based on a far more recent release of the Linux kernel. And, Black Lab doesn't claim to be better than Alpha or Pentium solutions, merely that it consumes less power. Still, that doesn't necessarily make it a "viable" or "competitive" solution, either. We were unable to download the University of Adelaide report at the time of posting to confirm their findings. However, a follow-up survey, using more recent versions of both LinuxPPC and Champion Server, would certainly go some way to clear up the issue. ®
Tony Smith, 10 Jun 1999

Computacenter battles to retain BT contract

BT’s PC procurement business is up for grabs as its three-year contract with Computacenter comes to an close. Computacenter, ICL Multivendor Computing and Compel are understood to be on the shortlist for the UK's biggest PC supply contract, worth £60-£80 million a year. BT’s decision, expected in the next few months, could significantly swell or deplete the coffers of the resellers battling it out. ICL stands a good chance of stealing the contract from Computacenter, according to industry sources. And BT and ICL are no strangers. Sir Peter Bonfield, CEO of BT, is the former CEO of ICL. But Computacenter is confident it will retain the agreement. "BT is a long-standing customer and our largest client. We have held the business for three years and have a very good relationship," a Computacenter spokesman told the Evening Standard this week. BT declined to comment as it said its relationships with suppliers were confidential. Computacenter won the BT contract from Zenith Data Systems, a division of Bull, in 1996. The reseller giant has seen share prices halve since July last year. Its share price was up 14 pence to 444 pence this afternoon. ®
Linda Harrison, 10 Jun 1999

Oz porn queen defends lecher list

Porn queen and cyber-rights crusaderess Bernadette Taylor has kneed the Australian Government right where it hurts after ministers questioned the accuracy of her "exposed list" (see earlier story). And in a move that could seriously embarrass the Australian Government, she's told ministers they can even check the details for themselves to prove its accuracy. In an open e-mail today to the Australian Minister for Communications, Richard Alston, she said: "The list was compiled under my instruction by one of the highest qualified (and arguably most experienced) systems engineers on the planet using the latest in equipment and software technology available. "Because of the sensitive nature of the list, every single entry on the list was checked and tested thoroughly. "If it's on the list it was looking at porn. "Of course if the minister still disputes that he can come and look at the corresponding credit card details [for himself]," she wrote. Last month, the saucy Lara Croft lookalike published a list of 4316 individuals she said were using government-provided Internet access to view pornography during work hours. She took the action to protest at the Australian Government's decision to censor the Net and hold ISPs responsible for any breaches in the new law. "The list represents the inadequacy of filtering and/or monitoring and/or supervision systems as used by the govt," she said today. "If they can still access my adult Web site from a Government PC during office hours then the list shows that these systems do not work... yet they expect ISPs to do it right the first time or pay a fine." She dismissed claims that some of the people on the list may have been doing bona fide research into the subject or had happened upon the site by chance. For that very reason, she discounted all entries that had less than 20 access requests per IP. "But accidental and research accesses don't include spending several hours over several weeks watching Webcam shows in their entirety (and in many cases joining up via credit card) and playing games on the site," she said. Taylor has vowed to carry on her fight to get the law overturned. ®
Tim Richardson, 10 Jun 1999

What do Micron, Samsung and Rambus have in common?

Rambus shares rose sharply at the beginning of the week after Micron said it was ready to provide samples for the memory technology. Over the last month, Rambus shares have seesawed between $75 and around $90. When we checked for the purposes of this piece, its share price was $84.75. Last year, Intel invested half a billion dollars in Rambus, and before then, Micron had been reluctant to promote the technology. Earlier this year, Intel pumped $100 million into Korean memory manufacturer Samsung, with the proviso that it develop Direct Rambus, bigtime. (Story: Intel to pour $100 million into Samsung). Many DRAM manufacturers are livid with Rambus (and with Intel) because they have to pay the company a licence fee to manufacture the memory modules. Intel is also a big investor in Samsung, which promotes Direct Rambus heavily, and, of course, in Rambus itself. This is all a big coincidence. There is, of course, no connection between Intel's investment in these companies, and its public stance that PC-133 is not its cup of tea. Close to a billion dollar investment in RDRAM is, of course, not chickenfeed even for Intel, and might make anyone in their right mind think twice about switching to PC-133. ®
Mike Magee, 10 Jun 1999

Beer, cigarettes, crisps make it hard to use laptops in pubs

There's few major items we own that are as confusing, unpredictable and reliable as our personal computers. And it's even harder when you have to use them in your pub. Q. This may sound daft, but is there any inherent danger in using my laptop in my local? I'm in there for most of the afternoon, and would love to use my notebook while I'm quaffing some ale. A. I'm not sure whether to envy you your lifestyle or to pity you for being the sad lush you obviously are. There are inherent dangers in using your notebook in the boozer and they're not as obvious as you might think. Besides the danger of crisp particulates entering your keyboard, the obvious danger of spilling your pint of London Pride over a £2,000 machine, and the weird looks you'll get from everybody, there are some hidden problems too. First of all, if you're able to connect to the Internet at The Mason's Arms, after six pints of Pride you might feel you want to send abusive email to your boss. This is counterproductive, and could result in unexpected job opportunities in the future. Secondly, laptops have limited battery lives. Plugging your machine into the socket by the bar is not likely to be welcomed by the landlord or landlady of the pub. The best suggestion I can make is to buy a hood or shade that will cover your head, and so make the screen of your notebook unreadable. Q. Where would I go to find out which laptops will stand up to the salt water environment produced when I burst into tears? I get no help from Web sites. A. Sigh. Another reader with a bit of a problem. I doubt that regular notebooks will resist a full sized blub, but there are some specialised machines that are coated in tear resistant and corrosion resistant materials. I would suggest that you avoid situations where you are likely to feel emotionally fraught. Don't work for any of the major IT vendors, for example. Attention, non-techies Don't be embarrassed by your problems with computers. If you have a question, send it to me at Szechuan Publishing and I may select it to be answered here. Just remember: you're not a "dummy," no matter what those computer books claim. The real dummies are the people who, though technically expert, couldn't design hardware and software that's usable by normal consumers if their lives depended upon it. ®
Author, 10 Jun 1999

Further Intel, VIA shenanigans emerge

After we revealed at last week's Computex that VIA was facing tough pressure from Intel over its PC-133 chipset, further evidence has emerged of the chip giant's Machiavellian manoeuvres. (Story: Intel outed on PC-133) According to the latest issue of Forbes magazine, Intel has sent out a heap of letters in an attempt to dissuade PC vendors from shipping a VIA chipset which offers better performance than Intel can. Intel is relying on its Camino chipset to deliver a 133MHz front side bus (FSB) but as we reported earlier this week, the chipset is delayed again. (Story: Camino delay will mean Intel compromises) Forbes reprints letters sent from Intel's Ron Smith to customers which indicate the level of the chip behemoth's ire. One letter Forbes quotes says that VIA might be claiming that its PC-133 chipset with a 133MHz front side bus was manufactured by NatSemi and so licensed by Intel. Smith continues that Intel's position is that VIA's parts, whether fabbed by NatSemi or not, does not form part of an Intel-National cross licence deal. Smith followed this up by sending off another missile, sorry missive, co-signed by the CEO of VIA, saying that the VIA PC-133 chipset was not part of the licence agreement the two companies had signed. Many observers are of the opinion that Intel licensed its chipset to VIA, OPTi and others to avoid action against it from the Federal Trade Commission (FTC). As we exclusively reported in The Register, Intel is gunning for VIA. The suit it "accidentally" launched last month appears to be no joke. Our understanding is that individuals at Intel responsible for the so-called "clerical error" have lost their jobs. The dispute between Intel and VIA has deeper implications and centres around the massive support PC manufacturers are giving the PC-133 standard. VIA has around 800 employees and Intel around 65,000. Go figure this one. ® See also What do Rambus, Micron and Samsung have in common? VIA revenues soar on PC-133 wave PC-133 wins the day in old Taipei Intel made big, big mistake sueing VIA Computex 99 coverage
Mike Magee, 10 Jun 1999