7th > July > 1999 Archive

The Register breaking news

Intel cowboy talks to Intel cowboy

Ken Hamidi, the scourge of Intel's email system and the organiser of Face Intel, took matters a step or four further on Monday when he rode a horse up to Chipzilla Central in Satan Clara to deliver mail by pony express. Hamidi, who has campaigned against Intel over its employment practices for years, lost a case against the chip giant in spring, but is taking his case to the supreme court. Although there is a cartoon of Hamidi riding up to the Intel OK Corrall on his web site, we haven't seen a pic of him astride his bucking bronco yet. And although we know that a picture exists within Intel of Craig Barrett on his horse, we haven't been able to get our mitts on that one yet. Barrett's hobby is selling designer log cabins. Yeehah. ®
Mike Magee, 07 Jul 1999
The Register breaking news

Compaq demands 15 per cent cuts from component makers

The local Taiwanese press is reporting that Compaq has asked its suppliers on the island to cut their prices by 15 per cent. Earlier this week, Compaq started finalising its plans to sell PCs direct over the Web, rebating former channel partners, soon to be called agents, for passing on sales leads. Compaq prices had been much higher than its direct competitor Dell because of its nearly 100 per cent channel strategy, selling through distributors and dealers. The hardware giant wants Taiwanese manufacturers to assist its efforts to get margins out of PCs. While a 15 per cent cut in prices will hurt many local manufacturers, Compaq buys so much that they may have to bite the bullet. Meanwhile, the press in Taiwan is reporting that Compaq has shifted much of its business from Mitac and FIC, and has recruited local firm Q-Run to deliver 200,000 sub-$499 PCs as part of its push. ®
Mike Magee, 07 Jul 1999
The Register breaking news

Acer wins massive Dell deal

The organisers of the Taiwanese Computex trade fair are reporting that Acer has won a massive OEM deal with direct PC supplier Dell. According to the report, the value of the contract, which covers both desktop and notebook PCs, is worth nearly $1 billion for over one million systems. From the beginning of next year, Acer will ship 100,000 units a month to Dell, using its own worldwide distribution model. Earlier in the year, Acer struck a seven year OEM deal with IBM, while Dell and IBM also announced their intention to cooperate on PC infrastructure. ®
Mike Magee, 07 Jul 1999
The Register breaking news

Exclusive: We reveal Gateway exec's secret MS evidence

MS on Trial James von Holle, Gateway's director of software and Internet services, has been deposed three times by the DoJ. The first was on 23 September 1997, a month before the DoJ launched the contempt case, when he said that Gateway wanted to offer users a choice of browsers, but Microsoft was being difficult about it. The second was on 30 April 1998, but we know very little about this. The third deposition of James Von Holle, at Gateway, was taken on 6 October 1998 at Sioux City, South Dakota, two weeks before the Microsoft trial started. We can reveal that not only are there three versions of it, with increasing degrees of revelation, but The Register can disclose to readers, if they promise not to tell anyone, what Gateway still does not want the world to know. The first version to be made public consisted of 154 pages, nearly all of which were blank in the version released in April. Following protests by a number of news organisations, a considerably fuller second version was made available by Gateway, but some ten per cent of the content was still redacted. The Register requested a copy of this version, which was emailed by Gateway in MS Word format. Most people working with legal documents use WordPerfect because of its superior capabilities for handling text, so we duly converted the file to our preferred word processor. Using the "reveal" feature of WP, we examined the redacted pages that were blank when printed and found the missing text was protected by "Color: white" codes that can easily be deleted to allow the hidden text of what we shall dub version three to be printed. Just one small part that was not revealed because it had been previously removed. It consists of just 30 lines, and we now have some clues about the content of the fragment on pages 88 and 89. Close examination of the versions provides some most interesting insights into the fear that Gateway has for Microsoft, we can reveal. The awful truth - fear Study of what Gateway was able to insist "be treated at the highest level of confidentiality under the current and any prospective protective orders in this case" shows Gateway's paranoia about upsetting Microsoft. When the DoJ filed its Contempt Petition on 20 October 1997, it had a supporting Memorandum with 31 exhibits, nearly all of which remained under seal. However, the DoJ chose to reveal some startling evidence in the form of correspondence between Microsoft and three OEMs. In one example, Microsoft told Compaq to replace the MSN and IE icons in Windows 95, or have its Windows licence terminated. In a second example, Micron detailed how Microsoft would not allow it to remove IE. And in the third example, the DoJ revealed some juicy parts of von Holle's first deposition and additional written testimony from Gateway executives in response to DoJ Interrogatories. (See story) This evidence was important to the DoJ's case because in the past it had proved difficult to persuade OEMs to testify against Microsoft, even if subpoenas were issued. The reason was perfectly simple: all needed to license Windows, and Microsoft could demand any financial terms it wished, delay the licensing and the supply of betas (as happened with IBM), or refuse outright to license Windows. It was against this background that Gateway, chastened by the unfettered power that Microsoft had to control its future (and no doubt having received a tongue lashing from the Microsoft bully boys for being so silly as to answer the DoJ's questions truthfully) nervously braced itself for von Holle's third deposition It is most likely that Microsoft's legal team had offered some "advice", since it was clearly a nervous von Holle who faced questions from Karma Giulianelli of the DoJ. Stephanie Wheeler of Sullivan & Cromwell, for Microsoft, objected to every question beyond name, rank and serial number. It was as though von Holle had been instructed to be very sparing in his response if she objected to a question. ® Related stories Bringing Gateway to heel Give in or we'll audit you Complete Register Trial coverage Complete Register Trial coverage
Graham Lea, 07 Jul 1999
The Register breaking news

TSMC chairman spells out chip futures

Morris Chang, CEO of the Taiwanese Semiconductor Manufacturing Co (TSMC), earlier this week outlined his company's plans for the future. Chang claimed that Taiwan's chip production already exceeds the combined efforts of Germany, France and Italy and is now the fourth biggest manufacturer. In the next few years, he said, Taiwan will become the third largest producer, knocking South Korea off its perch. He said that companies without their own fabrication plants which currently account for seven per cent of revenues worldwide, are likely to grow to 12 per cent over the next five years. That said Chang, would help to fuel the growth of TSMC, which is a foundry company, with fabs. He said that producing silicon is capital intensive but that Taiwanese companies should be able to achieve a 25 per cent growth rate, compared to an average of 12 per cent worldwide. TSMC, however, wanted to reach 30 per cent net profits, because the capital turnover rate for silicon wafer OEMs is around 50 per cent. ®
Mike Magee, 07 Jul 1999
The Register breaking news

Chip sales grew in May, trade body said

US trade body the Semiconductor Industry Association (SIA) said sales of chips in May continued to show market recovery. Sales in May, worldwide, amounted to $11.28 billion, a rise of 11.8 per cent, year on year. The Asian market is also showing growth, said George Scalise, president of the SIA, amounting to 18 per cent year on year. European sales declined in May by 2.8 per cent, compared to April sales. ®
Mike Magee, 07 Jul 1999
The Register breaking news

AMD flogs off chipmaking kit

Chip manufacturer AMD is selling its surplus semiconductor kit. A full list of what AMD calls its surplus assets may be found here. On the same page, the firm also gives directions to its warehouses in Santa Clara and Austin. Aside from sputterers, wafer scrubbers and the like, there are also more mundane items for sale including office equipment, desktops and notebook PCs. ®
Mike Magee, 07 Jul 1999
The Register breaking news

Football more popular than sex, Novell claims

A year ago From The Register No. 85 -- a year ago Football is more popular than sex among office workers, according to Novell, in yet another dodgy survey designed to plug BorderManager. More than 25 per cent of UK employees with access to the Web have been tracking the World Cup online, according to Novell. When they should be working. This is the inference we are supposed to draw. By contrast, A Novell survey conducted last year reported that 15 per cent of workers said that they viewed pornographic or obscene material on the Internet at work. So there you have it. But what about all those workers who were too embarrassed to admit they were ogling at pornographic images online? Novell says the latest survey shows that the Internet has arrived as a medium of choice for sports fans. Of the 1016 adults interviewed about their use of the Internet at work and study, 51 per cent of workers who use the Internet for recreational purposes accessed World Cup related sites. Eugene Forrester, market development manager, Novell UK, commented: "Whilst most would agree football is fairly innocuous, the 50 per cent using the Internet for non-work purposes in the office can be a serious problem and lead to many wasted hours." He went on to plug his company's product, BorderManager, which companies can use to restrict the sites to which employees have access. ®
Drew Cullen, 07 Jul 1999
The Register breaking news

Hackers convention rolls into Vegas

A spangly oasis in the middle of the Nevada desert is to host a massive jamboree for hackers at the weekend. It will be the seventh year on the trot that the "annual computer underground party" for hackers will have been staged, and Las Vegas is gearing up for one heck of a party. "We are not trying to teach you to learn how to hack in a weekend, but what we are trying to do is create an environment where you can hang out with people from all different backgrounds," trills the DEF CON publicity. "All of them are interested in the same thing, computer security." So the gamblers of Las Vegas are going to rub shoulders with another bunch of chancers -- how quaint. But could this annual get-together be the reason behind the spate of high-profile Web attacks that have received so much publicity over the last six weeks or so? Only last weekend the official site for the state of Hawaii was trashed when vandals reportedly sprayed "violate-the-state" all over its cyberwalls. Network Solutions was also recently targeted along with other top drawer sites including the US Army, the department of agriculture and the FBI. Could it be that all these high profile hacks have been done merely to give the hackers and crackers at DEF CON something to brag about during the conference? After all, it is a reunion of sorts and at such tedious events nothing is more fun than playing one-upmanship with your peers. You can just hear the overblown conversations now as the delegates at one of the DEF CON soirees juggle a glass of wine and a plate of canapés while trying to nibble on a flaky vol-au-vent. "You trashed the National Oceanic and Atmospheric Agency -- cool. But I turned over the FBI man, it was a breeze..." ®
Tim Richardson, 07 Jul 1999
The Register breaking news

Restructure for JBA as legal case looms

JBA Holdings has announced a rejig that will split the company into four sectors. The internal restructuring will lead to the Warwickshire-based business focussing on apparel and footwear, food and drink, car parts, and electronics. The company now consists of four divisions: product, marketing, finance and geographic operating units. Ken Briddon, JBA chief executive, said: "These four sectors account for 60 per cent of the business at present, we expect to raise that to 80 per cent over the next three years." JBA said the cost structure of the company would be cut by £5 million per year, with a one-off implementation cost of £800,000. Projects not relevant to the new strategy would be slashed, sales and marketing teams be made smaller and the way software was developed in the labs switched, according to a company statement. The move follows last week's layoffs, when JBA announced 44 UK staff redundancies. Most of the workers affected were software tool developers. JBA has cut its global workforce by around eight per cent to 3000. Last month the company was also hit by a legal claim filed by US customer Hartmarx Corp for damages in excess of $18 million. The claim related to software and services provided to Hartmarx by JBA International under a supply contract. JBA said it would "vigorously and strenuously defend" the legal claim. ®
Linda Harrison, 07 Jul 1999
The Register breaking news

IBM sells Dominion share to partner Tosh

IBM has pulled out of its Dominion Semiconductor DRAM fab joint venture with Toshiba, according to Japanese business daily Nihon Keizai Shimbun. Sources cited by the paper claimed IBM has agreed to sell its share in Dominion to Toshiba for Y20-30 billion (approx. $165-250 million). Neither party would confirm the reports, but an official statement on the deal is expected to be made later today. IBM still has other DRAM production facilities around the globe, so this is hardly a sign of the company's immediate exit from the market. That said, chairman Lou has often said the company needs to move away from such low-margin business. ®
Tony Smith, 07 Jul 1999
The Register breaking news

Infineon pegged for October IPO

Siemens' semiconductor operation, Infineon, is now ready to launch its IPO, company executives said yesterday. The timing of the issue is yet to be decided, but Infineon finance director Peter Fischl said the company is geared up to make its IPO in October. That would follow the end of the company's first fiscal year as a spin-off, ending 30 September. The results the Infineon posts will be crucial to the success of the IPO. And given the IPO is Siemens' payback for all the money it has poured into its semiconductor division, it clearly wants to ensure the issue, which analysts have valued at up to ten billion euros ($9 billion). Infineon has yet to record a profit, though CEO Ulrich Schumacher was "cautiously optimistic", according to reports on newswires, that the company will come close to breaking even. Schumacher also said the IPO was key to establishing Infineon as an entity in its own right, separate from Siemens. ®
Tony Smith, 07 Jul 1999
The Register breaking news

Freeserve claims phone charges are irrelevant

With just days to go until Freeserve closes the door on applications for its partial sell-off, worrying news has reached The Register about the ISP's understanding of the issues facing Net users in the UK. It seems Freeserve's grasp of what Net users think is important is horribly misplaced. In fact, it's so way out you have to question how the "guys" who lead the monster ISP can do anything with their heads stuck so firmly in the clouds. In an article today in The Times Freeserve's Leslie Smith was asked to comment about a new money-saving initiative due to be launched by 4thenet.co.uk. The Brighton-based ISP is planning to pay back part of the interconnect fee to its users. The more they stay on line, the more cash they get back -- a backside-about-breast way of reducing the cost of hooking up to the Net. Well, that's the theory at least. Yet Smith doesn't seem to think the scheme will work because, as she puts it so eloquently, "the phone call charge is not much of an issue for that many people." The phone call charge is not much of an issue for that many people? Did she really say that? Yes she did. Oh dear, oh dear. So Oftel's pronouncement on the unbundling of the local loop yesterday needn't have happened. The Campaign for Unmetered Telecommunications (CUT) may as well pack its bags and go home. And the US' supremacy in all things wired obviously has nothing do with the fact that those Net users across the pond can sit online and surf to their heart's content without having to decide whether spending an extra hour online means the kids won't get fed this week. It's nice to know that the UK's premier Net company is so in tune with the needs of its million or so users. ®
Tim Richardson, 07 Jul 1999
The Register breaking news

Secret trial evidence II – how MS brought Gateway to heel

MS on Trial The first von Holle deposition revealed that Microsoft was being difficult about the renewal of Gateway's Windows licence. Microsoft allowed a temporary extension to the agreement that expired on 30 June 1997, but was not about to let Gateway rest easy until Gateway came to heel and stopped asking for concession that potentially threatened the Windows monopoly. Von Holle said Gateway was "not allowed to remove any ... icons that Microsoft pre-configures [such as IE3]. Asked if Gateway believed it would be of value to the end user if they wanted a PC that would boot straight into the Gateway customised version of Communicator, he replied that he believed it would be "a much simpler environment for the end user". He added: "If the user is not required to boot or launch an application directly from Windows and there was some sort of an underlying layer that sat between the interface and the PC operating system that abstracted those commands, then there would definitely be a threat to Microsoft Windows" because "the requirement for Windows would not be there", so allowing other operating systems to be used below the browser. From Gateway's standpoint, an interface that is independent from Windows as the underlying operating system would "give more [operating systems] competition in the industry, and more choice for the end users...The competition would do two things: it would force lower prices [of operating systems] in the industry and it would also force more innovation in the industry." The result would be lower computer prices, he concluded. Brave words, but he was a virginal deposant. Gateway gave written responses to DoJ Interrogatories, which showed that it wanted to remove the IE icon. Microsoft responded that if it did so, it would lose its Windows licence: "On several occasions, Gateway representatives have asked Microsoft to remove the icon for IE from the desktop but Microsoft representatives have refused each request, saying that the browser cannot be removed or sold separately. In addition, Gateway is precluded from unilaterally removing IE from Windows 95 because the OS Agreement does not grant Gateway the right to modify any part of the licensed software. "In fact, Section 2(g) specifically reserves to Microsoft all modification rights and rights to the source code for Windows 95. In addition, Microsoft representatives have repeatedly stated that Gateway has no right to modify the source code for the operating system. As a result, Gateway must provide IE with each Gateway system that is sold with Windows 95." "Moreover, Microsoft representatives have repeatedly said verbally and in electronic mail messages to Gateway representatives, including Richard Brownrigg, that Microsoft will not allow Gateway to modify or customise one key portion of the desktop created by IE4. The desktop will consist of three elements of an 'active desktop' that will allow real-time information to be relayed to the end-user interactively. One of these elements is a 'channel bar' that organises information available on the World Wide Web into a number of 'channels'. Each channel contains information and hyperlinks supplied by a third party content provider. Gateway representatives have indicated a wish to customise the channel bar for IE4 to allow Gateway to provide channels that are unique to each customer. Microsoft representatives have said, however, that Gateway and other OEMs may not remove any of the channels delivered by Microsoft. The only modification that Gateway will be allowed is to add one channel that provides Gateway content. The DoJ also produced evidence that Gateway (and Packard Bell) did not want to have the IE icon compulsorily cluttering the desktop. An email from James von Holle to Gayle McClain at Microsoft noted: "We need to be able to remove icons the customer does not want. We want IE to have 'uninstall' for as much of the code as possible without disabling the system." Von Holle saw desktop 'clutter' as being confusing to users. Microsoft, of course, had a rather different view. ® Related stories Gateway exec's secret MS evidence Give in or we'll audit you Complete Register Trial coverage
Graham Lea, 07 Jul 1999
The Register breaking news

Secret evidence III: 'give in or we'll audit you' – MS

MS on Trial The en clair information in the first version of the von Holle deposition that was released by Gateway was about James von Holle's background; there was also a plug to the effect that Gateway bears the cost of customer support; a few lines of description of Gateway's Destination system; with the remainder concerned with the administrative arrangements of the deposition. Ripping stuff, no? Version two of the deposition reveals that von Holle contradicted himself a number of times, for example as to whether Gateway would like to see a choice of OS vendors. He was pressed as to why Gateway wanted to have the IE icon removed after the user had decided which browser to use - which Microsoft would not allow. It seemed very strange that there was no consideration given to the desirability of having quite a few browsers, but evidently Gateway's customers seem to include a high percentage of newbies. Perhaps von Holle's explanation of a desire to avoid confusion between browsers has some merit, but a more likely story is Gateway's desire to differentiate itself. There was also the issue of trying to reduce the cost of calls from confused punters. A Gateway response to a DoJ Interrogatory said: "With regard to communications regarding Gateway's installation of products of software manufacturers other than Microsoft, after Gateway began offering Netscape Navigator, a competitive browser product, with its systems, Microsoft representatives repeatedly told Gateway representatives that Microsoft considers Gateway's offer of the competitive product a 'serious' issue that would "affect our working relationship". This is a very stark threat from a company that would like to think it is mature enough to attract enterprise business. A further little gem was seen in an email copied to von Holle concerning the strained relationship between Gateway and Microsoft: "In addition, when Gateway elected to use Netscape Navigator as the browser on its Intranet, Microsoft representatives again strenuously objected. In fact, Microsoft representatives strongly implied to Troy Miller of Gateway that Microsoft would compensate Gateway for its 'investment with Netscape' if Gateway would 'remove the Netscape browser and replace it with IE.'" An unpleasant threat was that "In addition, Microsoft representatives threatened that Microsoft would audit Gateway's internal use of Microsoft products and, contrary to a verbal agreement between executives of the companies, Microsoft would charge Gateway a royalty for each copy of an Microsoft product used at a Gateway facility." Gateway's main sin, in Microsoft's eyes, was to encourage users to choose which browser they preferred, with Microsoft of course wanting the possibility of a choice to be suppressed. We also learn that "Dell turned Netscape down" because they did not want to hurt their relationship with Microsoft, and received "special things" as a result. There was just one funny moment to do with what Gateway called a registration button for gateway.com (and which Microsoft evidently regarded as an icon that made it less likely that users would sign up with MSN or a tame Microsoft-approved ISP). The external name was the Internet registration button but internally, Gateway called this as the BAB - the Big Ass Button. ® Related stories Gateway exec's secret MS evidence Bringing Gateway to heel Complete Register Trial coverage
Graham Lea, 07 Jul 1999
The Register breaking news

MS UK Win98 SE free offer not very free really

Updated Finally, we have the complete and totally accurate poop on Microsoft UK's free update to Windows 98 SE. And with a bit of luck, all of the people working for Microsoft UK will themselves have had their knowledge upgraded within the next few hours. Unfortunately, it turns out to be not very free at all. The story so far. Microsoft UK announced in late June that "existing registered customers of Microsoft Windows 98 will be eligible to receive a free copy of Windows 98 Second Edition." No mention of different arrangements for people who bought it retail and those (most) who got it shipped as an OEM copy, with their PC. Earlier this week Microsoft UK sent a letter to its OEMs advising them that their customers would be eligible, and telling them to direct them to the Microsoft Connection. But when we publicised this yesterday, it all started to fall apart. The Microsoft Connection was turning away callers, saying contact your OEM, and the OEM will decide whether you get a free upgrade or not. The form on the Microsoft Web site had meanwhile sprouted (we don't remember it being there a couple of weeks ago) a message saying the offer didn't apply to OEM customers, who should contact their supplier. That was the situation until a couple of hours ago, when Microsoft UK PR business manager David Gregory, in response to queries from The Register, took steps to resolve the confusion. And now? Well, the no OEM customers message has disappeared, but a price for post and packing has gone up - UKP16.82. That's about $26.40, so the UK free offer costs more than the US 'not free' $19.95. This now puts the Australian free version, with shipping and handling charges of A$13.95 (about $9.20) in a clear lead. But shall we just pause for a moment and try to figure out what has been going on in MS UK? The Microsoft Connection staff do seem to have been briefed at some point that Microsoft would not be offering "free" upgrades to OEM customers. The message on the site saying so (the one that disappeared this morning) tends to support the interpretation that there might have been an internal plan to get the OEMs to shoulder the costs of upgrade distribution while giving out a really free upgrade to retail customers. OEMs would have squealed about that of course, so maybe the other plan of giving everybody an upgrade that was presented as free, but that cost more than the paid-for version in the US, turned out to make most sense. Pity the implemented bits of both plans at the same time, and pity the "free" offer now looks like a cheap PR stunt. But here's where the form is, if you've got your UKP16.82 ready: MS Expensive Free Offer Microsoft UK has given us a response to the above story. The episode was not, the company says, designed as a PR stunt. Postage and packing is charged by a third party distributor charge and the money doesn't go to Microsoft - the product is still free and Microsoft will not profit from Widows 98 Second Edition in the UK. Microsoftnevertheless accepts that it doesn't look free to the consumer, and would like to apologise for the confusion caused for those who ordered the product before 6th July, when the Web site changed. Microsoft says it will absorb the cost of third party delivery to customers who applied before the pricing details went up on the site. ®
John Lettice, 07 Jul 1999
The Register breaking news

Secret evidence IV: the ‘MS Product Leverage Model’

MS on Trial Examining what was omitted in the less-redacted, second version of Gateway software director James von Holle's second deposition gives some amusing insights into corporate paranoia. Gateway decided it even wanted to keep confidential the names of people involved in contract negotiations with Microsoft. We fail to see why Penny Nash, Kathy Skidmore, Thomas Kelly and Jim Collas should not have their names revealed on the record. Clearly Microsoft knew who they were. Perhaps Gateway was none to keen on the media contacting them, lest they said something unfortunate. There's further evidence of Gateway's fear of the media: its web site must be the only one in the IT business to give only a snail-mail address (no telephone, fax or email address) for media contact to corporate communications. Another redacted section deals with the hardware support that Gateway sought from Microsoft in March 1997, but why this two-year-old information should still be "secret" is hard to imagine. It seems that Gateway wanted drivers for AGP graphics, DVD disks, and dual displays released to them before Windows 98 was finished. In addition, von Holle wrote as part of Gateway's internal preparation for a meeting with Microsoft that: "The message to Microsoft is that they are slowing the pace of new product introduction in the industry. They have a dominant market share in the core operating system. They are not spending the required R and D to keep the pace of innovation in the OS current with the industry hardware. This will especially hurt Gateway because of our first to market sales of the latest technologies." So perhaps Microsoft's hot breath down Gateway's back is a little more understandable if that is what a major OEM privately thought of Microsoft - and we all know just how sensitive Microsoft and its leader are to the tiniest criticism. But it got worse. In a section entitled "Microsoft Product Leverage Model", von Holle wrote : "Microsoft 'Tax'. Wherever Microsoft gains a dominant position: no real option to Microsoft's products." Asked what he meant by the choice of the term "tax", he replied that "It was just a term used lightheartedly to indicate that that was something that we would pay each time we sent a product out the door." Von Holle admitted that alternative products were not evaluated by Gateway. He also noted under a heading "Microsoft strategic initiatives" that so far as the Internet was concerned, Microsoft wanted minimal competition. Another redacted section has von Holle saying that Gateway's margins on PCs are "generally in the 16 to 20 per cent range". This can hardly be a secret, since assiduous study of SEC filings would give basic data to work this out. So please don't tell anybody. Microsoft's corporal punishment method, as was so well seen in the rebuttal testimony of Gary Norris of IBM, is to be mean and demanding with the discounting of its price for Windows, which it does through a blackmailing system called market development agreements (MDAs). In Gateway's case, one of its many MDAs gives it a $1 rebate for installing the latest version of Windows. That's another secret, by the way, as is the information that compliance with the Windows Hardware Quality Lab's criteria gives a further $6.50 discount. The single section that The Register has not seen, because it was physically deleted from the file before we received it, follows some questions about what other OEMs were paying Microsoft for Windows. An exhibit was produced to von Holle that seems from its numbering to have come from Gateway. It may well be a Gateway discussion document about OEM Windows prices. After the 30 lines that still remain sealed, von Holle is asked if Gateway's relationship with Microsoft is important to Gateway, to which he replied in the affirmative. The next question concerns Gateway's desire to offer users a choice of browser, so it could also be that this was the subject of the hidden dialogue, although it is less likely. Microsoft agreed to pay Gateway for the cost of the IE4 CD-ROM that it shipped, it was revealed. In the interest of scholarship, if any reader could slip us [Graham:Lea@compuserve.com] the missing text, we'd welcome seeing it. Further evidence of Microsoft exerting its will was seen from the section that shows that Microsoft required Gateway to agree to grant Microsoft patent immunity. Von Holle said: "My understanding is that we grant patent immunity to Microsoft for any patent that we might hold that they ship in their products that we license." He agreed that Gateway would have preferred some compensation for this, but "it was not negotiable, that it was going to stay in if we intended to licensing products". There are no redacted sections in the cross-examination, which supports the thesis that Microsoft had control over Gateway's evidence. Indeed, the main revelation from this secret version of the von Holle deposition is the power that Microsoft continues to exert over OEMs generally. Unless remedies are found that deal with this, most of the effort so far will have been in vain. It is imperative that if Microsoft is to keep its stewardship of Windows, then the whole MDA system be dismantled immediately and there must be a published (and possibly regulated) price list. ® Complete Register Trial coverage
Graham Lea, 07 Jul 1999
The Register breaking news

IBM-Compaq in Alpha copper fever talks

IBM is close to striking a deal with Compaq to make copper Alphas. We predicted that last February, but yesterday US magazine CRN got confirmation from an IBM group VP of worldwide marketing. He said that IBM and Compaq had been in discussion for some time over the move. Both Compaq and API say they will produce copper Alpha processors in the near future. Next year, Alpha is likely to hit 1.4GHz, according to our sources. ®
Mike Magee, 07 Jul 1999
The Register breaking news

Pledge to create 3000 jobs from Dixons

Dixons will create 3000 jobs after recording a nine per cent rise in pre-tax profit to £237.1 million. The pre-tax profit for the year ended 1 May 1999, compared to £217 million for the previous year, was slightly ahead of analysts’ forecasts of between £230 million and £235 million. Turnover was up 13 per cent to £3.1 billion. Retail operating profit before exceptional items was up four per cent to £201 million. 116 shops were opened or re-sited, providing an extra 650,000 square feet of retail space. Dixons said it had created around 3,000 jobs over the period, and intended to match that number this year. Sir Stanley Kalms, Dixons' chairman, said the group had had an encouraging start to the new financial year. Current like-for-like sales were ahead across the group’s retail brands, he said. "The Group is particularly strongly placed to take advantage of the considerable opportunities available to all our retail brands and Freeserve arising from new technology, the growth of the Internet and ecommerce. We will maximise our efforts to exploit these unparalleled opportunities," said Kalms. Falling consumer confidence had hampered a number of the group’s markets in the first half, according to a company statement. Sales had improved in the second half, but with strong downward pricing pressures. ®
Linda Harrison, 07 Jul 1999
The Register breaking news

Toshiba back-tracks on anti-Linux stance

Toshiba appears to have reversed its policy on Linux and decided to support the open source OS on its notebook PCs after all. To prove it, the company's Japan-based Computer Engineering Group has opened a Web site devoted to users keen to run Linux on their Toshiba laptops. The site, which went live on 1 July, doesn't offer much information right now, but it's a start. The site promises full details of how to install Linux on Toshiba's notebooks, though it doesn't say when this will happen. Other promised features include the creation of an information desk for developers, Linux installation information and a list of supported hardware, both PCs and peripherals. The company's move follows Australian notebook owner Geoffrey Bennett's attempt to get Toshiba to refund to him the cost of the bundled copy of Windows 95. Bennett eventually got his money back, and sparked a worldwide protest against Microsoft in the process. ®
Tony Smith, 07 Jul 1999
The Register breaking news

Free round the clock Web access is here

A German ISP appears to have started offering round-the-clock unlimited access to the Internet for a flat-fee of around £50 a month. Details are still sketchy but it appears Bremen-based ISP Internet-Professionell is offering five different price plans. Among them, PC Profi-Tarif gives users round-the-clock access plus five email addresses for DM149 -- around £50 a month. At the other end of the scale users can subscribe to the Schnupper-Tarif to receive toll-free calls between 7:00pm and midnight, and one email address, for just DM49 (£16) a month. Speculation that the ISP had teamed up with Deutsche Telekom to offer the service appeared to be dented when a spokesman for the telco giant said he wasn't aware of any such partnership. Attempts to contact Internet-Professionell to find out more drew a blank. A spokeswoman for AOL Europe confirmed that they had been made aware of the new service last night although she was unable to comment further without more information. ®
Tim Richardson, 07 Jul 1999
The Register breaking news

ARM confirms it's talking to TI and others…

The share price of ARM soared by 114p yesterday and prompted the company to issue a statement intended to quell takeover speculation. The rise in the share price is a 12 per cent movement. ARM said it "noted" the rise and had seen speculation in the media about the company's involvement with Texas Instruments. The company confirmed it was in talks with several licensees including Texas Instruments. "These discussions may or may not lead to existing partners licensing the next generation of ARM technology. Discussions with all of our partners are continuing and shareholders will be kept informed of material developments as they occur," the statement continued. The "may or may not" bit in that last paragraph is interesting. It wouldn't license its technology to the others if TI took it over, would it? As an exercise in quelling speculation, the statement is eloquent in achieving the opposite effect. ®
Mike Magee, 07 Jul 1999
The Register breaking news

Optimisers not optimistic about Merced

A communication from a reader has pointed out that one big problem with Intel's up and coming Merced processor is optimising the compilers. The reader, who preferred not to be named, said that optimising simple programs with small data sets is easy, but for real world applications, including server programs, it is almost impossible. That is because the variation according to the type of data used is too extreme. "Basically, the only way to optimise for a particular data set is to dynamically recompile explicitly for that data set," he said. "In a way, this is what the Alpha EV6 does, but the IA-64 was designed explicitly to avoid this type of problem." He explained the problem is down to load latency. For Merced, instructions are grouped together into a block which can all be executed in parallel. "You cannot dynamically re-order the execution of these blocks and they must finish in the same order they started." If one block stalls, the following block will stall too. UltraSparc and Alpha processors, he said, do not do this unless there is a data dependency. "Even StrongARM, which is single issue, can execute instructions following a load if there is no data dependency." The foregoing means that you are at the mercy of data and memory access speed, load latency. If the data set fits into the cache, it will probably work. But the speed difference between CPU and memory is getting bigger and bigger, and that makes thing worse. He claimed that could be one reason Intel is so intent on pushing Rambus as a standard as it has a faster clock rate, even though it does not work well in servers. ®
Mike Magee, 07 Jul 1999
The Register breaking news

Intel-NatSemi war looms over VIA, PC133

VIA Technologies and NatSemi have thrown the gauntlet down to Intel with the announcement of a deal designed to allow VIA to produce PC133 chipsets. VIA has already agreed to buy NatSemi's Cyrix unit, in a move generally interpreted as an attempt to escape from Intel's licensing straightjacket, and as Intel has already gone on the record with the view that the deal won't give VIA a valid Intel licence, it's now clearly war. According to a VIA-NatSemi statement issued today, the two companies "strategic agreement" caters for NatSemi doing the foundry work for VIA chipset in Pentium II-type computers. "This alliance is for VIA to continue to develop and market VIA's chipset which offers the advantage of a 133MHz front-side bus, PC133 SDRAM, and AGP4X compatibility." Intel is already suing VIA for claimed breach of licence terms, and is of the view that VIA should stop shipping this kind of stuff. By manufacturing with NatSemi, VIA hopes to benefit from the age-old Intel-NatSemi cross licensing deal. Intel says this doesn't cover VIA, but by making the joint announcement today, NatSemi is saying it does. Fun and games, folks. "Through this agreement with National, VIA can continue to deliver compelling chipset solutions for our customers," said Wen-chi Chen, President and CEO, VIA. "The chipset solutions will be particularly attractive for PC manufacturers competing in the low end market space, where the cost-efficiency of these high-performance parts will be the most apparent." NatSemi seems not to have been available to give good quote for the announcement, but presumably has braced itself for the barrage of legals its 20+ year cross-licence deal ally Intel will surely unleash. ®
John Lettice, 07 Jul 1999
The Register breaking news

CPUGate: US citizen issues writ against US Commerce Dept

A private citizen has accused the US department of commerce of wilfully shipping technology secrets to foreign powers. The civil case, Charles R. Smith vs US, centres around the American government shipping supercomputer technology to Russian and Chinese military labs for nuclear weapons research. Mr Smith claims that his government did this without notifying its citizens. But Helen Fahey, a US attorney in charge of the defendant's case, issued a blanket denial. She said her government had performed due diligence with its technology. In the summons, there is a whole list of cases which Fahey denied. Those stretch back many years, back to 1994, and we have the details, which deserve much analysis, which will arrive over the next days and weeks. Currently the US is agitated over the fact that Red China seems to have all of its current nuclear technology. This case bears on that. ®
Mike Magee, 07 Jul 1999
The Register breaking news

Win98 free update part 99 – it was possible, once

We thought we'd finally nailed down the Microsoft UK free update to Win98 SE story a couple of hours ago, but no, there's more. It was possible to get a totally free update, without paying postage, for an OEM version, but now it isn't. The latest information we had from Microsoft said that the company would be picking up the tab for anybody who'd applied before the post and package pricing details went up on the site yesterday. The message put up yesterday, and pulled again today, said - wrongly - that OEM users would have to contact their OEM for upgrade Ts & Cs. Today's revised message added the price, and removed the OEM prohibition, while in the interim staff at the Microsoft Connection had been telling OEM callers to contact their OEM. But (and frankly, we're getting really sick of the buts in this story series) we've been contacted by a user who'd got his copy of Win98 on an OEM machine, and who has just this morning received a Win98 SE Update - for free. A mistake, or was there a Microsoft policy change somewhere along the line? The original MS release certainly didn't differentiate between retail and OEM buyers, and certainly didn't mention paying money. Maybe the early bird catches the worm, and the rest of you are too late. "When I first heard of the upgrade offer," say our informant, "I faxed the form plus my receipt from Dan [overseas readers, this is a UK computer outfit with a silly name] - this was before the OEM/retail distinction was made clear. This morning, what should turn up but a copy of Windows 98SE, no delivery charge, no nothing." Anybody else who got the freebie, let us know, and we'll either update the story again, or just jump out of the nearest window. ® Free Win 98 parts 1-98 MS UK Win98 SE free offer not very free really MS UK extends free Win98 SE upgrade to OEM PCs
John Lettice, 07 Jul 1999
The Register breaking news

Intel's chequered background to Merced emerges

A reader of The Register has given us the background on Intel failures of the past. He was responding to an earlier story today, where a chip architect was wondering how good the IA-64 Merced platform is. The correspondent detailed a story about the past of Intel processors which also did not work too well. He said: "Intel did well with the 8080/8085. They started to get wiped out by the Z80, and got the 8088/8086 out the door just in time. In parallel, they did OK for a while with the 8048 and 8051, but pulled out of that business really early, while other were making good money from 8051 derivatives. "Every other Intel processor has bombed. The i432 disappeared about as thoroughly as the Merced looks like it might. The i860 got people excited, but went nowhere. In microcontrollers they have failed to get anything but some RAID controller and similar low volume design wins. "They got wiped out in DRAM. They only did well in EPROM for a time, by use of bundling deals with their processors. Their chip set business has been built more on tie-ins than engineering merit. It's amazing they have been able to keep cranking out these faster 8086s so consistently, when they never get much else right." It is a chequered history and interesting because of the vast liquidity the Intel Corporation has, and will have. ®
Mike Magee, 07 Jul 1999
The Register breaking news

Infineon IPO to fund US Net acquisitions

Siemens said today it will use the money it makes flogging off Infineon, the spin-off company formed from its semiconductor division, to buy US Internet companies. The company didn't say which Net businesses it had its corporate eye on, but if it makes as much out out Infineon as analysts expect, it should end up with up to $9 billion to spend, giving it scope to snap up a range of operations. Siemens said yesterday it is on course for the Infineon IPO in October at the earliest. In addition to Infineon, Siemens said it will use the proceeds from the sale of its Siemens Matsushita Components subsidiary to buy Internet firms too. ®
Tony Smith, 07 Jul 1999
The Register breaking news

Spam investigated by MS pirate catchers

Microsoft plans to investigate a Web site selling MS Office 97 Pro for $89.95. The software giant was notified yesterday by The Register that email users were being spammed with details of this discounted jewel cased software. The offer, with an angelfire.com URL, was described as a "close out sale." "They will go fast!!" screamed the email. "Order today!!" MS Office 97 Pro was the sole product available for sale on this site. Customers were asked to send credit card details. When The Register contacted the company – Online Software - we were told that it was a clearing house for software and that everything was legal and above board. "I buy from wholesalers across the country. They buy from clearances – from companies that have gone bankrupt," said Kerry Miller, founder and MD of Online Software. The company also ships outside the US, including the UK. Miller said he assumed Microsoft was aware of his business, stressing that he bought goods from Microsoft authorised wholesalers. Jewel case is the clear plastic case that software comes in – without manuals. Miller said he also stocked the retail version – which included the manual. His company shipped this at $199.95. The standard retail price for this product in the UK is £404.43 ($618.80) plus VAT, according to Microsoft. ®
Linda Harrison, 07 Jul 1999