24th > June > 1999 Archive

The Register breaking news

Dell takes its toll on Compaq

The youngest billionaire in the Forbes Top 10, Michael Dell has been bragging again. This time it’s not about the size of his wad, but the rate at which his eponymous PC company is eating Compaq’s lunch. Talking at a press conference in New York this week, Dell scoffed at the idea that the PC industry is shrinking or stagnating. "Dell earned about 55 percent of the total profitability in the first quarter," he said. He went on to say that this gain looked set to increase as a result of yet another profit warning from Compaq. Perhaps one reason Compaq appears to be suffering is the growing number of corporate accounts Dell claims to be poaching from its rival. ®
Team Register, 24 Jun 1999
The Register breaking news

AMD issues severe losses warning….

Chip maker AMD said late yesterday its Q2 results will be worse than it expected. The company warned it will lose $200 million in Q2. That follows a loss last Q of $128 million, which CEO Jerry Sanders described at the time as a very bad result. The company is now predicting it will only sell over three and a half million chips in Q2. It managed to sell five million in Q1. The news sent its share price tumbling to just over $18 on Wall Street. Yesterday, Sanders blames severe market conditions for the decline, but suggested that the Athlon-K7 could be AMD's salvation. But AMD has the problem that it needs to churn out enough Athlons to satisfy anticipated demand and at a price that will turn its fortunes round. We will examine the realities of this later today. And we now have an idea how the different flavours of Athlon will be priced. The 600MHz part will cost $699, the 550MHz part $479, the 500MHz part will cost $324. (1000 units). AMD has now posted information on the Athlon on its Web site. The profit warning will cast a heavy cloud over the introduction of AMD's new processor. It now appears to make more sense than ever for some white knight to ride in and asset strip AMD.®
Mike Magee, 24 Jun 1999
The Register breaking news

Baan revives, but MS bid is probably smoke

There's great interest at the moment in Baan's share price, which started its dive last October when Jan Baan announced at BaanWorld in The Hague that the company had just ended thirteen consecutive quarters of meeting financial analysts' expectations, and that it had started a partnership with Microsoft.
Graham Lea, 24 Jun 1999
The Register breaking news

Systems builders must avoid complacency, says Microsoft

Delegates at the European integrators forum in Monte Carlo were issued with a stern warning from Microsoft that they must not miss out on NT workstations or the Internet if they want to survive. Laurent Delaporte, Microsoft OEM European marketing director, told system builders that customers were getting smarter and had higher expectations. "The last 12 months has caused a lot of uncertainty in the European market," he said. "But the Internet is changing our lives, and system builders need to recognise this and adapt." According to Delaporte, the EMEA PC market saw 16 per cent growth in this period, with 30 million new PCs shipped. He added that the consumer market was driving this strong growth. But cautioned that new players are always coming into the retail channels. Microsoft was putting a lot of effort into NT, said Delaporte - an effort being matched by the major multinational PC vendors. "Multinationals are increasingly recognising the importance of small businesses, but you cannot afford to miss the NT workstation trend, or you might miss out financially." The second warning concerned the Internet. He said global penetration of the Internet had reached 40 per cent, and PC builders must also incorporate this into their business. ®
Linda Harrison, 24 Jun 1999
The Register breaking news

Microsoft to offer Word 2000 at $8 in Korea

Korean newspaper Chosun Ilbo is reporting that Microsoft is attempting to introduce a one year licence scheme where users can get Word 2000 at 10,000 won ($8). The paper claims that this is a move by Microsoft to capture the Korean wordprocessing market, which is currently owned by local software Hangul 815. Further, Microsoft will then provide Office 2000 at a higher price, the newspaper claims. According to the report, the one year licence for $8 is set to impact local Korean development seriously. Microsoft has no competitors on database and spreadsheet software in South Korea. Microsoft is already under investigation by the Korean Fair Trade Commission (FTC). For more information, see Kbench. ®
Mike Magee, 24 Jun 1999
The Register breaking news

Hard drives get hard sell from Maxtor

Storage vendor Maxtor today asked system builders to stop thinking about storage solely as a capacity product if they want to cash in. Storage value was no longer measured in price per gigabyte, Jon Toor, director of product marketing at Maxtor, told the conference. Instead, assemblers needed to start thinking about what storage can enable the PC system to do. "Storage plays an equally key role in PC performance," he said. In keeping with the theme of how to add value, he added: "In turn we need to be aware of how this system performance effects customers." Fast drives in general could have a real impact on computer performance, and may be a cheaper way of boosting this than through the microprocessor, according to Toor. He said that the IT industry was guilty of thinking about storage as capacity only. "With hard drives it's a matter of the extra value that you can add by thinking about performance," he said. ®
Linda Harrison, 24 Jun 1999
The Register breaking news

Unmetered Web access championed by Japan

Japan has decided that affordable unmetered Net access is a priority if it is to excel in the digital world. The Ministry of Posts and Telecommunications said that unmetered access must be introduced by next year so that ordinary people can use the Net without worrying about the size of their telephone bills. It wants families to be able to log onto the Net and stay put for as long as they like, all for around £30 a month. In a bold move that shows a clear lead to other world governments, Japan’s politicians have decided that the wider social benefits of unmetered access far outweigh those of shareholders. Earlier this month, Nippon Telegraph and Telephone (NTT) pre-empted government calls and said it would introduce flat monthly local phone charges for Net access by the end of the year. With more strings attached than the puppet cast of Thunderbirds, NTT said the roll-out of such a service would be limited - only applying to ISDN users in a small number of areas. NTT president Junichiro Miyazu told Asia Pulse: "We cannot introduce a flat-charge system nation-wide simultaneously." "We will start on a limited scale and seek user feedback," he said. Predictably, he also warned of the strain on Japan's telephone network if unmetered access were to be introduced. The Department of Trade and Industry was asked to comment but failed to return the call before press time. ®
Tim Richardson, 24 Jun 1999
The Register breaking news

Do Athlon K7 figures add up for AMD?

Analysis The cynical amongst us might suspect that AMD introduced its Athlon K7 processor slightly early to somewhat mollify the thrashing it would get on Wall St after CEO Jerry Sanders III delivered his $200 million loss warning for Q2 yesterday evening. However, an AMD European executive claimed that was not true today, but he was prepared to talk in a little more detail about the pricing pressures on the company. Robert Stead, European marketing director at AMD, said that while the market is very competitive, that means his company was being taken "much more seriously". Sanders claimed yesterday that heavy grey market activity, coupled with aggressive pricing from Intel on the Celeron platform would contribute to AMD's loss in Q2. He also claimed that Cyrix has been "liquidating" its processors as it exits the market, a charge that we are hoping the subsidiary will rebut later today. That is, of course, if the Cyrix sub is not taken over today by a Taiwanese company, as Web gossip appears to suggest. Stead said that AMD will release official K7 benchmarks in the near future, but would not say when. How will Intel react to the introduction of the K7-Athlon? A representative said that the company would continue to attempt to offer the best price/performance in every segment of the market. Intel's Pentium III prices (last changed 13 June), are $268 for the 450MHz part, $482 for the 500MHz part, and $744 for the 550 part. Intel doesn't have a 600MHz part yet, but we can expect to see the company slash its prices to once more put pressure on AMD in the near future. While AMD has been shipping some K7 parts, the mathematics of its ramp are interesting. In a conference call yesterday, he said that AMD will make tens of thousands of K7s in Q2, hundreds of thousands in Q3 and as much as a million in Q4 of this year. While the K7s are currently being produced in its Austin fab, our information is that when Dresden starts serious production, it will be at .18 micron, meaning more yields from silicon wafers. Yields are currently good, we are given to understand. However, the maths still make bleak news for AMD shareholders. If you take an average selling price (ASP) of say $500 across the range, by the end of the year the K7 sales forecasted will represent around $605 million, if you say AMD will sell 200,000 processors in Q3. There is of course, the K6-III Alereon line of business but that is being seriously pummelled by Intel, with no likelihood of the grievous bodily harm ceasing. Sanders may or may not being overoptimistic about the million K7s that ship in Q4, but on these figures, it is likely that AMD will not do too good. It wants to resist Intel kicking it on the K7 Athlons, but there is no doubt, from previous indications, that the chip giant will use all of its marketing muscle and deep pockets to keep the pressure on its little brother. Is such a gladiatoral contest, where one opponent is 1,000 feet high and the other a dwarf beside it, fair? The US Federal Trade Commission (FTC) appears to think so. The battle will now be on for AMD to prove itself without retiring hurt, being acquired, or losing completely. ®
Mike Magee, 24 Jun 1999
The Register breaking news

Cirrus, IBM rejig JV

In a bid to reduce its costs, Cirrus Logic said today that it will cut its fab operation and allow its partner IBM to take over full control of its MiCRUS silicon joint venture. According to David French, CEO of Cirrus, eliminating the fixed market costs of the fab will allow his company to operate more efficiently. Cirrus will take a one time restructuring write-off in its current fiscal quarter ending 26 June. IBM will take over the fab, based in East Fishkill, NY. ®
Mike Magee, 24 Jun 1999
The Register breaking news

If Slot A is Athlon, is Slot B Bi-Athlon?

A reader points out Athlon is AMD's uniprocessor, and that should make Slot B, which we announced at the end of last week, the Bi-Athlon. He also says that we can expect Triathlons, Pentathlons and Decathlons. Is there no limit to these Olympian aims? ®
Author, 24 Jun 1999
The Register breaking news

Resellers must adapt to survive

The much talked about birth of the free PC need not spell the death of the PC reseller, this morning's delegates at the Integrator Forum Europe 99 were told. But assemblers will need to change and become more like service providers if they want to profit from the future. Using the analogy of the mobile phone industry, ZD Market Intelligence director Mike Daly said whoever delivered service would benefit, despite no margin being made directly on the hardware. "Where cell phones are free, other services can provide enough revenue to cover this cost," he said. "A service provider can use a PC to sell ecommerce. And this relationship is the most important for the customer - who do I have the relationship with for my mobile, Nokia or the service provider?" In the same way, the brand of PC was not as important as the reputation of the service provider, he said. And the people who would suffer would be slow moving vendors and resellers, or companies with poor customer relations. "If 30 to 40 per cent of PCs were supplied free, as could happen, technology and pricepoints would cease to be an issue. "Customer relationships are the key, and this is something few vendors have," said Daly. ®
Linda Harrison, 24 Jun 1999
The Register breaking news

Tempo ISP customers get free Web calls at last

Screaming.Net has said that all 75,000 Net users who have subscribed to its service will be able to enjoy toll-free access to the Net tomorrow. In an email sent to users last night, the ISP set up by fridges-to-PCs retailler Tempo, acknowledged that there had been some difficulties transferring accounts from BT to LocalTel. "BT has now confirmed to us that all customer requests for transfer of telephone services from BT to LocalTel will be complete by Friday 25 June, with an absolute guarantee that this will take place by Wednesday 30 June," said the email from Screaming.Net. "We apologise for any delays that you may have experienced to date and assure you that we are doing all we can to rectify the situation." Users of the Screaming.Net service must switch telcos if they want to take advantage of off-peak toll-free calls to the Net. The ISP has been plagued by administrative problems ever since it was launched in April. Last month, LocalTel accused BT of working at a snail's pace, holding up thousands of Net users who wanted to switch telcos -- a view shared by the telecomms watchdog Oftel. BT said it could only process 250 applications a day -- even though Surrey-based Screaming.Net was receiving 2,000 applications a day to take advantage of the service. ®
Tim Richardson, 24 Jun 1999
The Register breaking news

Microsoft takes it on the Chin

Microsoft on Trial Judge Jackson is clearly determined that he is not going to be Sporkined or Lessiged. In 1995, Judge Stanley Sporkin's refusal to agree the feeble consent decree was reversed by a foolish Court of Appeals in a political decision that resulted in the present case being brought to do what the previous case failed to do. Judge Laurence Silberman, one of the appeal judges who reversed Sporkin, even had control over a slug of Microsoft shares in a trust fund, it emerged, and had to recuse himself from the future appeals, although he did sign the Court of Appeals Order on 2 February 1998, staying the appointment of Professor Laurence Lessig as a special master. Silberman had the doubtful distinction of serving as US ambassador to Yugoslavia fr om 1975 to 1977, and we can all see the result there. He was known to be pro-business, and opposed to antitrust law. So what has Judge Jackson done to ensure that he has access to independent technical and legal advice without aggravation from Microsoft? You're probably thinking he must be reading The Register, but we cannot disclose that. He's certainly done the next best thing by appointing Andrew Chin as his law clerk, something that not even Microsoft can stop. Chin has had a quite remarkable career and is admirably equipped for the job. He won the US Mathematical Olympiad in 1984, was a Rhodes Scholar at Oxford where he completed a doctorate in mathematics and computer science in 1991, and taught computer science for a year at the University of London. He then emerged from Yale Law School in 1998. But that's not all: the clincher is that he's an Associate at Wilson, Sonsini, Goodrich and Rosati, where Gary Reback has proved to be the US heavyweight lawyer against Microsoft in a number of previous contests. There can be little doubt as to Chin's opinion, as a result of this move. The consequence for the present case is that it is likely to be decided somewhat sooner, since Chin has shown from his record that he is a fast achiever. Much of the burden of preparing the Judge's Opinion falls to the law clerk. It will be no easy matter for the Court of Appeals to reverse what emerges, since the arguments are likely to be well-formulated. Chin does lack any industry experience, but it is heartening to see somebody appointed who is so well-grounded in technology and law. It may well be that steps will be taken for any appeal to bypass the Court of Appeals and go straight to the Supreme Court, since the evidence is so overwhelmingly against Microsoft that the only issues can be whether antitrust law should be enforced. That is a political decision, and the higher courts are most decidedly political. It will now be very important for the industry to formulate the best remedies to resolve the case, and to ensure that the DoJ and the states press for their enforcement. We doubt that there will be much happiness in the Microsoft legal camp about Chin's appointment. ®
Graham Lea, 24 Jun 1999
The Register breaking news

Lights go out at BTInternet as whole network crashes

BTInternet customers were left twiddling their thumbs this afternoon as one by one the ISPs servers all crashed. First the mail servers fell over, prompting a stream of calls to BTInternet’s technical support line. Soon after the news servers toppled and then the Web servers came tumbling after. One BTInternet customer told The Register that he called the helpline after experiencing problems downloading emails. He said that his call to the ISP’s support line was effectively abandoned, as half way through the call it became apparent that this was not a run-of-the-mill glitch. “Initially it was suggested that I change the settings on my email client to access a different mail server, or I was told I could wait an hour and see if things improve. The helpline analyst said he didn’t know what the problem was, he just knew there was a server down.” The picture soon worsened as the call progressed. “Then he said: Wait a minute, it’s all gone down. If I were you I’d log off, make myself some tea and watch TV for a while.” At press time, no one from BTInternet was available to comment, and the company’s servers will still missing, presumed dead. ®
Sean Fleming, 24 Jun 1999
The Register breaking news

S3-3Dfx deal had legs

Sources close to the discussions have confirmed that 3DFx made an offer for S3. But it was an offer that S3 could and did refuse. Instead, earlier this week, it bound Diamond. The issue at question for 3DFx is that its next generation chip, Napalm, has some problems with features and functionality, according to the source. While Nvidia's NV10 chip is exciting, the source said, the only thing that comes close to it is the S3 GX4. It "has a smaller die size and is the only serious contender on the block". For that reason, 3DFx wanted S3. Unfortunately, it couldn't have, our source said. S3 turned down 3Dfx's offer. ®
Mike Magee, 24 Jun 1999
The Register breaking news

AMD-Intel gladiatoral battle takes share shape

As the implications of AMD's predicted share loss reverbarated around the world, early signs on Wall Street were that the chip company's shares would fall further today. The price fell to 16 13/16th, down $1 1/4 from yesterday's closing price. And the news also appeared to affect Intel's price. Its shares, an hour after the New York Stock Exchange opened, had fallen by 13/16ths to $55 3/14th. We still think Intel's share price is well undervalued. ®
Mike Magee, 24 Jun 1999
The Register breaking news

C&W wins $75 mill Compaq deal

Compaq will supply telco Cable & Wireless with its desktop PCs and notebooks for the next three years, it said today. The deal is worldwide across 53 countries and worth $25 million a year, Compaq claimed. However, Compaq will have to give C&W "best pricing" and guaranteed support, which corporate dealer International Computer Group will supply. Computacenter will look after the UK end of things. The agreement is not exclusive but C&W will get access to future plans through Compaq product divisions. Presumably, no NDA Chinese Walls with other vendors will be crossed in the process. ®
Mike Magee, 24 Jun 1999
The Register breaking news

Compaq wins $75 mill C&W deal

Compaq will supply telco Cable & Wireless with its desktop PCs and notebooks for the next three years, it said today. The deal is worldwide across 53 countries and worth $25 million a year, Compaq claimed. However, Compaq will have to give C&W "best pricing" and guaranteed support, which corporate dealer International Computer Group will supply. Computacenter will look after the UK end of things. The agreement is not exclusive but C&W will get access to future plans through Compaq product divisions. Presumably, no NDA Chinese Walls with other vendors will be crossed in the process. ®
Mike Magee, 24 Jun 1999
The Register breaking news

Freecall-UK ready to go live at last

A service which claims to offer toll-free access to the Net will be launched on Monday. Finally. Freecall-UK says that unlike other services, users will be able to "earn" free calls online during peak hours depending on how often they use the Net. The service is aimed at small businesses and home workers who get clobbered with high charges for accessing the Net during the day. It means that if users spend 30 hours online during peak hours one month, for example, they will automatically receive 15 hours of free daytime Net access the following month. According to Richard Jay, who has funded Freecall-UK without any external backing, the service has had a complete change of strategy since it was first touted last month. Initially, Jay said users would be able to "earn" free time online by generating revenue as part of an ecommerce collective. While this is still the case, the emphasis on SMEs and SoHos is a change of direction for FreeCall-UK from its original consumer-based plan. But it's much more than a simple facelift. Having witnessed the evolution of FreeCall-UK over the last six weeks some people might be forgiven for thinking that the business strategy was devised on the hoof. Some may feel that Jay came to market with a product before he had any real notion of what he intended to offer. Others have been less kind -- views which led to personal attacks and threats of violence against him and his family. For the 178,000 people who have already registered their interest it will indeed be interesting to see if FreeCall-UK -- and its Surrey-based ISP partner Link-Connect -- can deliver what it promises within the coming months. ®
Tim Richardson, 24 Jun 1999