18th > August > 1999 Archive

The Register breaking news

Coppermine Celeron waiting in wings

A source claimed Intel is readying a Coppermine Celeron with as much as 256K of on-die cache, screaming Cindy (SIMD) instructions, and a 100MHz front side bus using Socket 370. That would make it equivalent to current Pentium III technology, in the same way that the Celeron is really a cut Pentium II. No release date was given for the product but Intel is now claiming no 100MHz FSB Celeron will arrive until the crack of dawn of the year 2000, Ma Shipton willing. Meanwhile, the same source claims Taiwanese motherboard manufacturers are leaving Intel technology in droves because they don't love the 810 chipset. The source said Intel deliberately designed the 810 chipset in such a way that the manufacturers are being forced to adopt technology from the likes of Via and SiS. And, he added, Intel will shortly produce a so-called 810 "fix", which it will give away free. ®
Mike Magee, 18 Aug 1999
The Register breaking news

Intel re-marks own chips

Four years ago From The Register No. 20, August 1995 Loyal readers will remember how The Register got itself in trouble with the great Satan of Chips (Intel, for those of you with no imagination), earlier this year. We'd said Intel had re-marked its own chips and for reason best known to itself, Andy's company went a bit incandescent. We can now move that forward a little bit. A letter from the Barnet Trading Standards Organisation ( a British consumer group authorised by .GOV), has somehow fallen into the hands of The Register. A lone dealer had complained he bought two DX4/100s and somehow got suspicious because they had heat sinks glued on. He prised them off to discover that they were, in fact, a special batch of DX2/66s, which Intel technical support had manufactured. OK, bang to rights. No. Intel complained like hell. But the Barnet TSO wrote the complainant (plaintiff in plain speak) back like this. "A criminal offence may be committed in this way as the Trade Descriptions Act 1968 creates an offence for applying a false trade description to goods in the course of a trade or business. "In this case however legal proceedings would not seem appropriate...I did ask whether Intel, as a sign of good will, would be willing to "buy back" your CPUs in exchange for accurately marked ones. I regret however they were not." Paul Wetherall, Trading Standards Enforcement Officer (Barnet). Intel, therefore, is bang to rights. Need we say more? ®
Mike Magee, 18 Aug 1999
The Register breaking news

Jungle customers earn discounts through free ISP

The drums are beating even louder for Jungle.com -- the brand new e-store with the Amazonesque name -- which opens its door for business on August 30. The 3i-backed online department store kicks off with a £7.5 million marketing spend; most of the first slug goes on traditional media – billboards, radio, national newspapers and the like. Then there’s the "£10 million" consumer giveaway -- and don’t forget the money Jungle.com founder Steve Bennett had to shell out for the domain name (we don’t know how much he paid either). Clearly, the company needs to hit the ground running. Jungle will sell a full-range of consumer goodies, and is linking up to other major retailers, including Carphone Warehouse, Britain’s biggest mobile phone supplier. But at the heart of the store is a catalogue of 90,000 computer products, and a software download shop, courtesy of Jungle’s intimate relationship with Software Warehouse, a leading British computer retailer/mail-order house, owned and run by Bennett. He is now devoting his attentions full-time to Jungle and has appointed a (so-far unnamed) MD from outside the industry to run Software Warehouse. Jungle intends to drive customers to its store through its own free ISP, jungleLink.net. Users earn loyalty points tied to the amount of time they spend online -- which they can convert into discounts on purchases they make at the Jungle department store. This is a clever twist and one that other retailers will surely copy. But Jungle has a head start here -- SWWH already operates a smallish free ISP. Presumably SWWH will convert these into JungleLink customers. ® Daily Net finance news from i>The Register
Drew Cullen, 18 Aug 1999
The Register breaking news

Special report: MS on the threat from Linux et al

MS on Trial Open Source and Linux Microsoft just does not understand the open software movement because it fails to comprehend that public recognition for writing good software can do more for the psyche than a bundle of Microsoft shares. Microsoft does admit that "the open source movement provides high quality software products" and it clearly rankles that they are free. The existence of Linux shows "there are no barriers to entry into the operating systems business ". Microsoft refers to Linux distributions as "commercial versions" in order to give a deliberately misleading aspect. Java Naughty Sun "continues to promote Java", Microsoft says, while Redmond "continues to market first-rate Java tools that can be used to create so-called 'pure Java' applications". And of course to sabotage Java by deliberately deviating from the Java specification, and oppose its standardisation. Microsoft says that its Java strategy is wrongly characterised as "anti-competitive", and claimed it to be "pro-competitive" since developers have been given the choice to write cross-platform Java, or to use Microsoft's modified version. The Sun litigation is not mentioned, nor is there any mention of the contract dispute that is to go to trial next year. A nasty taunt is that Microsoft claims that the term "pure Java" is a "marketing slogan": were it not for Microsoft, there would of course be no need for the term. It is also curious that Gates characterised Java as just another programming language, but now it is middleware that "had the potential to diminish the value of Windows". James Gosling, the architect of Java, complained that Java Native Interface (JINI) was not supported by Microsoft, and Microsoft wants to use JDirect instead. Nor had Microsoft implemented Remote Method Invocation (RMI), because Microsoft's "implementation" of Java "fully supports RMI - although at one stage Microsoft had discussed hiding RMI. Microsoft's Java development tools only work for Microsoft's Java implementation, Gosling noted. Some other challenged features have now been moved by Microsoft, which could not have made Java developers happy if they were using Microsoft's implementation. IBM and OS/2 During the early days of browser development, Microsoft's great fear was OS/2 rather than Navigator. IBM had included a browser with OS/2 before Microsoft had woken up to the importance of browsing. John Urbaniak, an OS/2 developer, has written that Microsoft instituted a triad of coercion against OS/2 by coercing OEMs not to pre-load OS/2; by coercing developers like WordPerfect and Corel not to release OS/2 products; and by coercing the press not to write positively about OS/2. "When IBM first released OS/2 in 1987" it required more RAM than most PCs had at the time. But for some reason, Microsoft omits the fact that it wrote that version of OS/2. Considerable ire is reserved for Garry Norris, "a relatively low-level IBM employee, approximately four or five tiers below Lou Gerstner". Norris was however IBM's chief negotiator with Microsoft and his evidence has yielded a great deal of information. Microsoft uses 21 pages to wriggle about this, but still ends up looking like an eel. Microsoft did not like being ignored by IBM CEO Lou Gerstner, and neither did it like his remark that "The PC's reign as the driver of customer buying decisions and the primary platform for applications development is over." Apple Apple didn't get a mention in the original Complaints, but since Microsoft was determined to view Apple as a competitor in its non-definition of the market, it was useful for the DoJ to show how Microsoft had treated one of its major customers. Microsoft's waffle took up 29 pages. "Recent studies suggest that [Apple] is drawing customers away from computers that use Windows." If so, why is Microsoft continuing to keep its minority investment in Apple? The key point about the platform competition evidence is that it proves in abundance that Microsoft indulged in a pattern of behaviour that was intended to be anti-competitive. The problem is going to be to find remedies that will work. ® Other sections Microsoft's antitrust defence The three threats to Microsoft MS on the Netscape AOL deal The threat from Open Source and Linux Back to intro Complete Register Trial coverage
Graham Lea, 18 Aug 1999
The Register breaking news

Special report: MS on the Netscape-AOL deal

MS on Trial Microsoft evidently considers that its strongest argument concerns AOL's acquisition of Netscape, since it led its document with this. Microsoft claims that "the relative usage shares" of IE and Navigator "are not markedly different from when the case began [in May 1998]". Microsoft then goes on to claim that therefore this "certainly does not establish Microsoft's exclusionary conduct". That's deliberately misleading. Recent independent studies suggest that Navigator usage has sunk to 25 per cent. Microsoft was very concerned that one of the secret documents from the Netscape-AOL-Sun deal that it managed to see had AOL vps Miles Gilburne & Barry Schuler saying that "The 4.0 release [of AOL software] will be the last Microsoft version and that a Java version of that software would be produced in 18-24 months". A real reason for Microsoft not liking the deal is that it will make it more difficult for MSN to become profitable and dominant. Microsoft appears to have seized this side issue that has no special relevance to Microsoft's previous conduct, which is the subject of the Complaint, perhaps because it can go down claiming that the court ignored the "main issue". Future competition is just not relevant, and should not be considered as special pleading for lenient treatment. One gets the feeling that Microsoft is cross that its carefully crafted plans to eliminate Netscape completely have been thwarted by the AOL deal. Competition for Windows, as Microsoft calls "AOL's effort", should not worry Microsoft if it really has confidence that Windows is a good product. Microsoft made a great play during the evidence that Navigator was not componentised, but suddenly declared that it is componentised . In a deposition on 29 October 1998, Microsoft was told by Barry Schuler of AOL that Netscape had delivered to AOL in September 1998 a beta of a componentised version of Navigator. Microsoft even sells beta software and expects it to be reviewed, so it can hardly claim that another vendor's beta cannot be recognised. Microsoft talks about "getting [AOL/Netscape] software into the hands of consumers, but there is a big difference between carpet bombing and distributing software pre-loaded on a new PC. "AOL's vast distribution apparatus" will be used to distribute Java, Microsoft moans, and there are plans to develop a browser "with no Microsoft content" for use with AOL's "proprietary software" [there is no mention of Windows being proprietary, of course], so that "the operating system underlying their Web browsing software will be significantly less important to consumers". The moan continues: "IBM has begun efforts to integrate its Notes/Domino software with Sun's Java". But of course, the case is not about future possibilities that may or may not happen. Of course, AOL is itself threatened by the rise of free access to the Internet, and the number of Navigator users has also fallen. With a straight face, Microsoft suggests, quoting Merrill Lynch, that "the big challenge to Microsoft's operating system franchise is that there would be many computers that are not running Windows (that are simply net devices) on which AOL could effectively be the operating system". Microsoft "proof" that Microsoft does not control the browser market, which Microsoft manages to discuss without conceding that there is such a market, is that AOL has "the ability to determine what Web browsing software will be used by approximately two-thirds of all Internet users in the US". Since the future is not relevant to the case, this is rather good evidence of Microsoft's monopoly in the market, although Microsoft does not point out in the section where this is discussed that AOL is locked into IE until 2001, that the great majority of these users will then be using Windows 98, and that many would not drop IE whatever AOL did. Despite the hostility between AOL and Microsoft, there are mutual advantages in continuing the present arrangement whereby AOL is "promoted" by Microsoft and AOL "prefers" IE. Microsoft's whinge about not harming Netscape goes on for 20 pages, and gives a highly challenging interpretation of the facts. Microsoft all but calls Netscape's Marc Andreessen a liar over the famous minutes he took at the 21 June 1995 meeting when Microsoft denies it made the market division proposal. Microsoft's take is amusing: it was "encouraging [sic] Netscape to utilise the Internet-related functionality of Windows 95" and "suggested" that Netscape "reconsider" a previously discussed arrangement whereby Microsoft would license Navigator for Unix and the Mac (which seems to be an admission of a market-splitting proposal) since Microsoft was also suggesting that Netscape "made much broader use of the Internet-related functionality in Windows 95. Microsoft's final claim is that it provided an unusually high level of technical support to Netscape", which was not Netscape's evidence. ® Next part: The threat from Open Source and Linux Other sections Microsoft's antitrust defence The three threats to Microsoft MS on the Netscape AOL deal The threat from Open Source and Linux Back to intro Complete Register Trial coverage
Graham Lea, 18 Aug 1999
The Register breaking news

Special report: MS on the threat to its position

MS on Trial Having removed the threat of competing operating systems through OEM licensing moves, Microsoft spends most of the technical part of its claims in being worried by what it calls three middleware technologies: Netscape's browser; Java; and Lotus Notes/Domino (about which it has almost nothing to say). Considerable attention is devoted to attacking AOL and claiming that the AOL-Netscape-Sun deal proves that there is competition. For many observers, the key issue in the trial is Microsoft's attempts to kill Netscape, but the issues are in fact much broader and centre on Microsoft's illegal anti-competitive actions generally. IBM and Sun are castigated as well-financed competitors who have tried to develop alternatives to Windows (OS/2 and Java) - but without covering costs, it would appear. Microsoft's relations with Intel receive 14 pages about the "routine efforts" to co-operate on technology, but are included as an attempted refutation of the black character reference that Steve McGeady gave Microsoft, pushing home that McGeady "was not testifying on behalf of Intel" and that his testimony "contradicted" that of Ronald Whittier. In an entirely irrelevant section, Microsoft wails that "Non-PC devices and more compact operating systems ... will pose an increasing threat to Windows." The evidence cannot be considered because it is about future possibilities and the trial is limited to dealing with past iniquities.
Graham Lea, 18 Aug 1999
The Register breaking news

Special report: Microsoft's pitch on antitrust

MS on Trial The plain fact is that Microsoft has monopoly power in the operating systems market for Intel-compatible processors, and now in browsing software, but is not willing to own up to it (although it does agree, nudge, nudge) to having market power. It claims it has not abused its power or suppressed competitive threats, but will not go to the next step of admitting monopoly power (which is not illegal in itself, although it is along the road leading to the crime of monopolisation, or illegally exploiting a monopoly). One of the more astonishing claim in Microsoft's Proposed Findings of Fact is that it says that the antitrust laws don't apply because there's no evidence that "Microsoft's actions have actually prevented other companies from creating new software products". It's not even a clever argument. So why wouldn't a venture capitalist support the development of an alternative to Windows? The answer is clear: they lend no money for competing against Microsoft, not because of its software quality, but because of its monopolisation of markets. When a story is largely fictional, it is hard to remember the purported facts. "Monopoly power is .. the power to control market prices or exclude competition, which cannot exist absent high barriers to entry" and "there is no applications barrier to entry [to the operating systems market]". But then we are told: "MS-DOS eventually became the predominant operating system for personal computers, in large part because of a number of popular applications were written for MS-DOS". Oh dear. Then, a fast-changing world is inconsistent with the notion that Microsoft has monopoly power, the monopolist intones. But if Microsoft did not have a monopoly, why should it be that there are effectively no competitors in the OS market? This is a very strong argument for there being entry barriers. Microsoft says that there were more applications for OS/2 than for Windows in 1990, and that when Windows 95 was released there were few 32-bit applications. It is doubtful whether the court will be impressed with the notion that Microsoft is a competitor for itself, which of course proves again that Microsoft is a monopolist as it cannot identify real competitors. Microsoft ruins its argument about entry barriers when it boasts of how much it spends on R&D. In addition, the tying of Windows to MS-DOS was more important than the applications barrier. Microsoft likes to point to the existence of Netscape as proof that there is no significant entry barrier, but fudges the issue that Netscape created a new market that was not the same as the operating systems market. A novel argument as to why Microsoft could not have had a monopoly was that it had to develop "many" new operating systems in this "stable product category" [careful, that sounds like a euphemism for a "market"]. And of course, Microsoft developed the fin de siecle Windows 9x to create a need for users to buy NT. Microsoft's claim that "it is misleading... to attempt to infer the existence of monopoly power from the absolute level of software prices, or from margins earned from licensing successful software products" goes against common sense. Microsoft's profit levels are obscene, because its margins are too great, and it does not spend enough on ensuring products are reasonably bug free before releasing them. Lock-in and switching costs Tipping is a rapid change in a market that results in a product becoming widely adopted. Contrary to Microsoft's view, tipping has occurred in the IE market, as the DoJ expected, and all Microsoft's protests are in vain. Microsoft claims it has "won" several distinct races to provide "the best operating systems software" between 1981 and 1998, and its dominance is not related to monopoly power. Of course, we all know that in these races, competitors were hobbled by Microsoft's marketing machine, and the ability to run in the race was not therefore assessable. Equally, users are mostly locked-in to the Windows market, whether they like it or not, because of high switching cost for a user to go from Windows to, say, OS/2, Unix, or Apple. Economists Having paid so much to bought-in economist Dean Richard Schmalensee for his opinions on computer science and far-fetched economic views du jour, Microsoft was going to make the most of him. Microsoft decided to attack the competence of the DoJ's rival economists (they "lack an adequate foundation" and "conducted essentially no independent empirical studies or other economic analyses" and "[Franklin] Fisher knew little about the software industry generally"), but this is slippery round, in view of Schmalensee's efforts. For Microsoft to claim that Schmalensee "conducted" detailed analyses does not correlate with his evidence: any work seemed to have been done by ill-informed associates or students, and repeatedly demonstrated flawed methodology. Schmalensee used an average price of $2000 for PCs initially, whereas Fisher used $953. Microsoft criticised the fact that Fisher had used data from PC Data, "a source on which no party previously had relied" [meaning it was unfavourable to Microsoft's arguments]. The MDC data set used by Microsoft for its browser claims (a small household study where respondents often did not know what browser they used) was so discredited during the cross-examination of Schmalensee that claims made by Microsoft using the data cannot be given credibility. Microsoft even paid for an opinion by Eugene Erickson that the data were collected "by methods consistent with high standards of survey research", but it is unconvincing. Microsoft tried to pick holes in the AdKnowledge data set used by the DoJ, and while the data do have problems, they did stand up to cross-examination. It is interesting that Microsoft did not use the MDC data internally: for its own studies, but preferred "digital dial calldowns of Web surfers" in the US, and hits to top sites for International data. Incredibly, Microsoft claims that its actions have "promoted increased usage of the Internet" since the number of users has gone up from 3 million to more than 100 million, according to Schmalensee. At least we know who to thank. Market definitions Microsoft squirms in a section entitled "There is no fixed definition of an operating system". The same could be said about the definition of a bicycle or a ham sandwich, and merely showed that Microsoft wanted to use its own definitions for an OS and a browser. Microsoft wants competition to be examined for platforms rather than for operating systems, because this would broaden the market definition. Besides, it has dealt with the rival operating system threat with OEM licensing tricks. So now, to Microsoft, the Web is a platform, so is Java, and so is Netscape's browser. All markets are "purported markets" as Microsoft prefers not to recognise the existence of any market in which it is dominant, since to do so would condemn itself as being a monopolist. Microsoft then wails that in the "narrowly-defined operating systems market for Intel-compatible processors", Microsoft has no monopoly because of Linux. What a laugh. Of course Microsoft always wants to add in Apple to increase the size of the OS market, and claims that Apple is a serious rival: "the MacOS has been a competitor to Windows for more than a decade" Microsoft says, which is absurd, especially since Microsoft is discussing the "alleged market" for Intel-compatible operating systems. Microsoft tries to make the case that the Netscape browser and Java threats to Windows are incompatible with the plaintiffs' market definitions, and put Windows in a different market: this is just wishful thinking by Microsoft. Schmalensee, Microsoft's economist, is credited with claiming that product markets should not be defined because they exclude "companies and technologies that plaintiffs acknowledge pose competitive threats to Microsoft". His confusion will not help: it is not the threat to Microsoft that is of concern, it is Microsoft's threats, and in particular its anti-competitive actions against competitors, and as a consequence, the harm that this does to consumers. Schmalensee wanted the inquiry to be whether Microsoft is constrained in its behaviour by the activities of its competitors. He claimed that Microsoft constrained its behaviour with respect to pricing and product development because of the "intense competition" it faced. His conclusion, that Microsoft is not a monopolist, does not follow from his premises, and so the argument is fatally flawed. OEMs and tying Microsoft criticises the evolving argument by the DoJ with respect to tying, but does not acknowledge that since the Complaint in May 1998, Microsoft has changed how it tied IE to Windows 9x. Microsoft complains that the DoJ was unable to identify a tied product. If, says magician Microsoft, there is a tied IE, where is it then? Really Microsoft's lawyers should look at Microsoft's product history and even read the trial transcript: everybody else in the world knows the trick Microsoft played, including Judge Jackson. Never mind, Microsoft continues, "the tied product [whoops] ... has benefited software developers, computer manufacturers and user". That's a surprising claim. Many people report being seriously inconvenienced by having to suffer IE popping up all the time, even when their browser of preference is not IE. Anyway, the magician continues, isn't it better to have HTML parsing and rendering in Windows rather than in developers' products? But why not in the browser, one might reply? Well, says Microsoft, we've added "new features" [techno-sabotage] so that users must have our version of IE to get the HTML help system working. No prizes for guessing why Microsoft changed to HTML help, and messed up developers who depended on the old system. There is a 12-page special section reserved for an attack on DoJ witness Edward Felten. Of course, we all know that Microsoft sprinkled the code into Windows 98 to make the separation of browsing functions difficult, rather than for reasons of efficiency. This was described in detail in the evidence. Microsoft deliberately misunderstandood what Felten showed, and was caught cheating as well. Not surprisingly Microsoft has nothing to say about its cheating, but we doubt if Judge Jackson will forget the attempt to mislead the court. It was a pity that the DoJ relied so much on their lawyers trying to understand the situation, because their questioning of technical witnesses such as Farber and Felten was frequently not well enough informed. Microsoft also reminded us of the Court of Appeals utterances about penetration: the "interpenetrating" (which Microsoft calls "integrated") design of Windows 98 giving "facially plausible benefits". Come off it. The appellate court got it wrong because it was obsessed with the politics of the case, and certainly did not understand the computer science of the matter. Microsoft has not shown any benefits for the IE -Windows tie that could not have been obtained in ways that were more convenient for users Microsoft quotes its witness Jim Allchin as saying that things work better if they are designed and built as a unit - but of course Windows 3.x and Windows 9x are both unintegrated products, with MS-DOS substitutable by DR-DOS. The user benefits claimed for the "integration" of IE to Windows are said to be better value for users, fewer problems [but not for those who prefer another browser], greater dependability [so why does Windows 9x need to be rebooted so frequently?]; ease of use ["integration" makes no difference as it is transparent to users with non-Windows versions]; and unique capabilities [which many users do not want, such as the requirement that IE be present to use the Help command in Windows 98, and for the filing system]. We cannot imagine Judge Jackson bothering to read ten pages of minutiae about the Windows 98 interface, but perhaps he would be interested to know that right-clicking of a mouse on an icon is at least ten years old, even if it was new to Microsoft. Netscape, Microsoft claims, "wasn't 'foreclosed' either from a single distribution channel or from the marketplace as a whole [so there IS a market, eh?]" and there "were no constraints on Netscape's distribution [except that Microsoft effectively locked Netscape out of the best channel by threatening OEMs and others]". "There was remarkably little evidence about the impact of Microsoft's actions on consumers", the tome opines. For once, that is true, but there is enough on the record concerning how users suffer if there is a lack of choice, whether they know it or not. For consumers, the code remains seriously buggy and unstable; prices are high; there is less innovation; but Microsoft makes an obscene monopoly profit. OEMs and licensing A new and untrue claim is made that "Microsoft's agreements with OEMs are designed to protect the integrity of Microsoft's copyrighted intellectual property by limiting the scope of what OEMs are licensed to do". There then follow two references to the direct testimony of OEM chief Joachim Kempin, but neither reference links the copyright claim to OEM licensing in this way, so Microsoft is trying to mislead the court. Microsoft also says that Windows 9x is covered by "registered copyrights". Microsoft has invented this argument to counter claims that the plaintiff States are seeking "to deprive Microsoft of rights guaranteed to it by the Copyright Act and Constitution", and want to "impose state-created limitations on Microsoft's federally guaranteed rights to license and distribute Windows". In fact, it is the OEM licence agreement that sets out the onerous terms concerning Windows 9x, such as the right to delete icons, and it has nothing to do with copyright. Microsoft says that OEMs may install "whatever software products they like and place icons for those products on the Windows desktop and list them in the 'Start' menu". As we saw in Garry Norris' evidence, Microsoft penalises OEMs who include competitive software, and would prevent an icon being present if its purpose was to enable users to disable certain Microsoft functionality. Microsoft claims that "OEMs are free to install any non-Microsoft software" but of course they are not really free to do so because they have to pay a higher price if they do, in that they cannot qualify for MDA (market development agreement) discounts for not loading certain software. "The existence of older versions of Windows, so-called Windows 'clones' [Sun's WABI and OS/2, apparently, but no mention of X-Windows] and pirated copies of Windows .. limits the price Microsoft can charge for Windows". Microsoft says that its operating systems are licensed at "typically less than 5 per cent of the price of a new computer", but this is untrue. The cost of its operating systems have increased over time as a percentage of systems cost (as Microsoft's own data showed), and are now typically over 10 per cent of systems cost, and increasing. This is a real problem for Microsoft and accounts for its concern about Linux. There are a few differences between the DoJ case and the plaintiff States' case. The States are seeking monetary penalties under their respective antitrust statutes, but it seems unlikely that they will achieve this through the present action, or Microsoft would have been entitled to a jury trial. The States also claimed that Microsoft has indulged in monopoly leveraging, specifically that Microsoft used its OS monopoly to gain control of the browser market, but Microsoft succeeded in having this claim summarily dismissed in September, which was surprising. Dynamics of software market competition Microsoft tries to make a case that the software industry competition is different from that of other industries. Virtually all costs of producing software are "fixed costs", it argues, sweeping aside the fact that marketing and sales costs will be considerable and greatly exceed the fixed costs. The argument that even a small firm can satisfy market demand is not unique to the software industry at all: the same is true for publishing, for example. Another false argument is that the value of software increases as more people use it, because of network effects and increasing returns. In fact, of course, it is the value of the market that increases, or where there is competition, as happened for a time with MS-DOS and DR DOS, the value of MS-DOS decreased. Finally, Microsoft argues, software never wears out so that upgrades must be produced. But there is a good argument that users in many cases do not want more and more trivial additional features in software: they want bug-free software that carries on working, and again this is not unique to the software industry, since, for example, people do not expect reference books, garden tools, or chess sets to wear out to the extent that they must be replaced. Predation and patterns of behaviour Microsoft is trying to make the case that Microsoft's "interactions" so far as Intel, Apple, and RealNetworks are concerned are not predatory, that the allegations were not plead, and that Microsoft's "discussions" were "intended to facilitate technical cooperation". Microsoft moans that predatory pricing was not included in the DoJ Complaint, but has been much discussed. The real point is that the DoJ needed to establish a pattern of behaviour, not just have one or two points where Microsoft had erred. Consequently, Microsoft is unlikely to escape this way. Microsoft helpfully established what it thinks are three criteria that must apply to establish predation, but claims that none apply. The judge may think otherwise, since they are: the objective of removing a competitor; an unprofitable action resulting in the reduction of competition; and a reasonable prospect of recouping losses after the competition is reduced. Microsoft of course now claims that it did not regard IE as a separate product, but selling it and producing stand-alone versions for other platforms rather ruins that claim. Even sillier is Microsoft's claim that its investment in IE, including in IE for non-Windows platforms, has not been unprofitable. To be exact, Microsoft says there is no evidence of this, which should be translated as "guilty as charged". The evidence of Microsoft's predation against Netscape is so great that it must have been embarrassing for the lawyers to pen the words of denial. Procedural matters Microsoft leans heavily on the earlier Court of Appeals decisions relating to the present case, but this is probably optimistic. The appellate court "tentatively" concluded that Windows 95 is an "integrated product" under the terms of the consent decree, but the judges had no background in computer science and clearly made an error that, in an equitable world, should be corrected by the Supreme Court. As expected, Microsoft frequently claims that if the plaintiffs did not question on cross-examination something that Microsoft had said in the thousands of pages of written or oral testimony, then it was conceded. This will not be accepted by the court because the judge wisely decided on an expedited trial, and had each point had to be refuted, the hearings would have gone on for many months more. The separate summary produced by Microsoft PR is not a summary at all, but a whitewashed and misleading account of what Microsoft actually said in the Proposed Findings of Fact. The "summary" contains arguments that are not made in the main document. Microsoft's defence of the antitrust claims does not auger well for its case. The lawyers would have been better advised to be more conciliatory in their tone, but their instructions from Redmond would have precluded any retreat from the aggressiveness that characterises what Judge Stanley Sporkin once described as "a rather young company". ® Next part: The three threats to Microsoft Other sections Microsoft's antitrust defence The three threats to Microsoft MS on the Netscape AOL deal The threat from Open Source and Linux Back to intro Complete Register Trial coverage
Graham Lea, 18 Aug 1999
The Register breaking news

Special report: Trial truth according to Microsoft

MS on Trial Microsoft trial judge Thomas Penfield Jackson now has substantial documents from both Microsoft and the DoJ - these "Proposed Findings of Facts" are the rival parties' interpretations of what was really established as fact during the trial proceedings. Microsoft's document, analysed here, puts forward the company's own curious view of events at some considerable length. It is, you could say, Microsoft's Mein Kampf. The 442-page production features "black-is-white" logic and commoditises Microsoft's perceptions about itself. It cannot be read without the refrain: "That's not true; that's a distortion; relevant facts are being omitted". The document should have a health warning, since to read it (not an easy task) could seriously prejudice objectivity. New "evidence" is introduced from time to time as Microsoft adds things that it omitted to introduce into evidence, and which are inadmissible at this stage. Unsupportable generalisations are made without any reference to the evidence. Pages of sales pitch, about Windows 98 for example, are also included - these are unlikely to appeal to Judge Jackson. Either Microsoft seems to have taken the view that if it is going to lose the case, at least it can do it with a sales-oriented document - or it is incapable of putting its best foot forward. There is a great deal of repetition, with arguments being duplicated in several sections - but not infrequently contradicting each other. Sales pitches have been added by marketing and PR people, it would appear. The more technical parts are taken from the direct testimony of Microsoft witnesses, but with only partial understanding. Microsoft has chosen to ignore facts that interfere with its arguments, in the hope that the court will not notice that the omissions. It is unlikely that the judge will do much more than turn the pages. The DoJ has until 10 September to produce comments on Microsoft's PFOF. The usual Microsoft arrogance pervades the document, always seeing Windows as a "standard" platform, and competitive software as being proprietary because of its disdain for de facto standards. The focus is on consumers because of Microsoft's need to show that there was no consumer harm, and that it had not therefore fallen foul of the antitrust laws. Microsoft is selective about the third-party data that it introduces, picking and choosing quite happily to find what best fits its story. Since many of the dire predictions foreseen when the case started have come to pass, it is unsurprising that Microsoft favours older data. This particularly applies to the situation with browser share. Many of the assertions that Microsoft makes are just untrue, and not even white lies. An area where judges are particularly experienced is in assessing when witnesses are lying. Judge Jackson will have made his conclusions during the cross-examination of Microsoft's witnesses, and the result is unlikely to help Microsoft's case. It will probably mean that quite a few of Microsoft's arguments that have some validity will not be accepted, because of the unreliable evidence of its witnesses. The lawyers' efforts at plastering over the cracks will not work, because Microsoft's witnesses impeached themselves, and lacked credibility. The document catalogues Microsoft's paranoia about the future, although this can play no role in the case. It is hard to see how Microsoft's concern with "various technologies of which Microsoft is not yet aware" can help Microsoft's defence. So far as past actions are concerned, Microsoft has resorted to one of its areas of expertise: rewriting history. Corporate paranoia Corporately, Microsoft exhibits paranoia about its competitors The claim that CP/M was overtaken by MS-DOS "because of the failure of CP/M to continue to provide what consumers required" conveniently ignores the fact that CP/M was ripped off by MS-DOS and marginalised as a result of IBM having devoted less than its full attention to the deal. IBM only later offering CP/M-86 as a high-priced alternative to prevent a legal action by Digital Research. Windows 3.0 was not successful, as claimed: it was another two years before Windows 3.1 appeared in April 1992 as the first usable version. Microsoft is not known for its confessions about its deficient or unsuccessful software. But Windows 1, Windows 2 and OS/2 version 1.21 were "costly attempts" to produce a GUI that were unsuccessful. And that's not all: Windows 3.x deficiencies included limited security and portability to other microprocessors. The story that "the role of MS-DOS [in Windows 3.0] was reduced essentially to providing the file system and certain device drivers, and the most basic operating system functionality migrated into Windows" is untrue. Windows was just a GUI application to MS-DOS 5.0, and its role was not "reduced". This falsehood is continued when Microsoft tries to claim that Windows 95 "had the same sort of integrated design as the Mac OS". Microsoft falsely described "Windows" as an "operating system" in its SEC filings at the time. Only NT was and is a Windows operating system. Microsoft continues with the claim that "Windows 95 ... [included] Web browsing functionality". That will be news for those who queued up to buy it in August 1995. It is noteworthy that a January 1994 memo by Dave Pollon that Microsoft trotted out explained that Microsoft wanted "business users to buy Chicago". So much for the nascent NT. Browser integration A common Microsoft trick is to claim that a recommendation from a low-level employee who understood a situation but was ignored was in fact elaborating what was accepted at the time as mainstream policy. The great example of this was with browser development, since only a handful of people were concerned with it. At the end of 1993, Microsoft was still considering having an Exchange client in Chicago (later Windows 95), but made no progress on this. The lateness of Microsoft's decision about browsing resulted from Microsoft having failed to buy a 20 per cent stake in Netscape (and procure a seat on its board) in the autumn of 1994. In January 1995 Microsoft licensed Mosaic from Spyglass, the licensee of the National Center for Supercomputing at the University of Illinois, which gave the great innovator something to copy. Even so, Gates did not appreciate how Microsoft was missing the boat until his "Internet tidal wave" paper in May 1995. Even in June 1995, Microsoft was still discussing its Internet strategy and goals, and it was not until 7 December 1995 that Microsoft's Internet strategy was outlined publicly, an additional and tougher Spyglass contract agreed, and Java licensed. We are told that "a brief delay in Microsoft's public articulation [come off it] of its Internet strategy impelled industry participants and analysts alike to predict the company's demise". Errors and omissions There are interesting omissions. It is quite extraordinary that Microsoft should ignore the great contributions of its chairman and CEO. Gates gave 20 hours of videotaped deposition, but this is never referenced. In years to come, law students will be taught that his stonewalling appearance was the greatest PR error ever made by a defendant in an antitrust case, and that it is unacceptable for the CEO to be hyper-aggressive and unresponsive. Gates doesn't even rate a mention until page 175, when his Comdex speech in 1990 on "Information at you fingertips" (which in fact offered nothing new) was credited with inspiring the development of networking and subsequently Internet access. Microsoft likes it to be known that it is spending so much on what it calls R&D (17 per cent of its revenues, it says) but does not make it clear that this includes large amounts spent on propaganda and brain washing for developers (which it choses to call "evangelising"), and that would be better characterised as a marketing expense. Microsoft makes the point as an argument to support its claim that a monopolist would not spend so much. Microsoft's lawyers have also done a sloppy job: they could not even get right the date of entry of the Final Judgement in the consent decree case: it was 21 August 1995, and not 21 April. They also claim that the direct testimony was through written witness statements, but this was not the case for Steven McGeady of Intel. Their editorial inability to remove inconsistencies has not helped their case. If ever there were a sign that Microsoft lives in a make-believe world, one has only to glance at comments such as "relentless innovation occurs at Microsoft". It is surely a joke that Microsoft lists itself as its main competitor: ("long-run competition [is] from [Microsoft's] installed base"), followed by competition from pirated software. Persuading users to upgrade is another problem, the monopolist moans, and admits that "it must constantly innovate" to give an incentive for users to upgrade. So there we have it: "innovation" is to persuade users to upgrade, and is not for the benefit of users "since software does not wear out". But that does not square with "The prices charged by the category leader are constrained by the risk of being displaced, which also forces the leading firm to innovate." Really? Mars Bars have been around since before the war, essentially unchanged, despite strong competition. To Microsoft's claim that its success is "largely attributable to its vigilance in identifying, and its success in innovating in the face of, new trends in the software industry" one only has to say "What about missing the Internet than?" "Innovation" has always consisted of buying-in products like QDOS and Mosaic, or buying-in development teams, such as Dave Cutler & Co from Digital to create NT. It's good to know that to Microsoft its blackmail, bullying and aggressiveness is really just "tough bargaining" and "spirited dialogue". Those "strings of Microsoft emails from all hours of the day and night" demonstrate Microsoft's insecurity about its continued OS "leadership", although "monopoly" would be a more appropriate word. Microsoft claims that if it had a choice it would not go to the lengths that it does to promote Windows to ISVs: employing 2,000 people at a cost of $630 million. Curiously Microsoft probably does spend more than necessary to protect its monopoly, but that is a result of its zero-tolerance attitude to competitors, and its need to "win" on every occasion, whatever the cost. The reward system at Microsoft (share option allocations) is linked to "winning". The losers are the users: they are less likely to find non-Microsoft software if developers are persuaded to write for Windows only. And we are told: "Microsoft's reputation would suffer if Windows did not perform as represented by Microsoft." So what's the point of the document? Let Microsoft have the last word: "No conduct challenged in this case has been detrimental to consumer welfare. Indeed, the benefit to consumers and to the Nation's economy of the widespread adoption of Windows as an industry standard has been enormous." So there you are. Run the credits. ® Next part: Microsoft's antitrust defence Other sections Microsoft's antitrust defence The three threats to Microsoft MS on the Netscape AOL deal The threat from Open Source and Linux Back to intro Complete Register Trial coverage
Graham Lea, 18 Aug 1999
The Register breaking news

Bandwidth costs in UK too high

Survey Adoption by small and medium businesses is being held up by the high price of bandwidth, according to a senior analyst at Durlacher Research. The claim came as Durlacher, which monitors Internet growth, released its latest report on the impact of the medium on the small business market. Sarah Skinner, the senior analyst, said research figures showed that 46.1 per cent of the 1093 businesses surveyed, still used a modem as their primary connection. She said that while bandwidth prices in the rest of Europe had dropped by 29 per cent over the last year, the UK drop was only between 10-20 per cent. "I think BT is partly to blame," she said. "But all the telcos in Europe are behind in DSL." DSL is being touted at a price not suitable for the small business market, said Skinner. "We have to cannibalise ISDN," she said. We reported earlier on other elements of the Durlacher report, here ® Daily Net finance news from The Register
Mike Magee, 18 Aug 1999
The Register breaking news

Happy Cat doc reveals Intel chipset futures

The application of Lernout & Huspie translation software to a Japanese Web site has provided intriguing insights into Intel's future plans. Two days back, we reported the existence of the roadmap, with dates for up-and-coming Intel technology including Coppermine, Willamette, Timna and Foster. According to the translated document, Intel will use a chipset called Tehama for the Willamette, which will inherit some of the characteristics of a chipset codenamed Camino II. Camino II, according to the translation, will support ATA/100, four USB ports and integrated Lan technology Intel is dubbing "Kianerth". It looks, too, as though Intel will adopt a new socketed PGA design. There is a picture of this on Happy Cat's site. ® See also Happy Cat leaks stash of Intel futures
Mike Magee, 18 Aug 1999
The Register breaking news

Big Blue to push Linux supported twin-600MHz box next week

IBM said this morning it will release a low price small business server with dual 600MHz Intel chips and 1Gb of memory. But IBM could not tell us how much the 3500M10 will cost, because Intel is set to adjust its pricing this weekend. The box will be the first to come with IBM's 90 day server support for Linux, which it announced a week or two back. The server will come with complete certification on all Linux platforms, and is available in configurations for 500MHz, 550MHz and 600MHz parts too. It has a Wide Ultra SCSI disk controller, supports ServeRAID adaptors, and has built in 10/100 Ethernet, as well as a bevy of system management software. IBM will also introduce a £750 commercial desktop next week. The PC 300GL uses a 500MHz Celeron. ®
Mike Magee, 18 Aug 1999
The Register breaking news

Tom's Hardware speaks out over alleged Intel mobo muscle

Dr Tom Pabst, who founded Tom's Hardware page, is alleging that Intel has been muscling Taiwanese mobo manufacturers. Pabst, who has just posted a first look at AMD Athlon motherboards, said there was a "very strong rumour" that Intel is throwing its whole weight behind the threats. That, he says, goes some way towards explaining that only a handful of companies supported the Athlon at its launch in Taipei last week. He suggests that lack of motherboard support threatens the financial viability of AMD's chip, and that the BX chipset shortage is artificial. An Intel representative said: "We don't respond to rumour or speculation. We do believe very strongly that we conduct our business practices in an ethical, legal and professional manner at all times with both our customers and suppliers." ® See also Is Intel pressuring mobo maker rumour returns Component shortages threaten mobo manufacturers Intel confirms months-long mobo shortage Coppermine Celeron waiting in wings
Mike Magee, 18 Aug 1999
The Register breaking news

Spammer by any other name is still a spammer

Meat eaters are being given the chance to trade their unwanted spam for prime steak and burgers. The Spam Recycling Center (SRC) says it will forward any spam it receives from Net users to the Federal Trade Commission (FTC) as part its fight against junk e-mail. Last month it dumped almost 200,000 spams on the FTC and since then it's accumulated a further 100,000 unwanted e-mails which are also destined to be reported to the authorities. And the prize for responsible netizens who send their spam to the SRC? Omaha Steaks is offering 40 per cent off steaks and six free hamburgers with every order. Mmmm sounds fishy. For it's not until you read the small print that you discover that the venerable SRC is part of ChooseYourMail.com, "an ethical, private, 'opt-in' e-mail marketing company that acts as a private sector intermediary between e-mail marketers, netizens and ISPs." In other words it trades in spam that people have requested. The fact that it is an "opt-in" service appears to make ChooseYourMail think it is somehow different from regular spammers. "The Spam Recycling Center serves as a demonstration of email advertising conducted in a consumer friendly, non-spam, manner," it claims. Think again. For how did it let other net users find out about it spam-for-steak offer? It sent an unsolicited e-mail. Bingo. The Register will be sending ChooseYourMail's junk mail to the Spam Recycling Center in the hope it too will be reported to the FTC -- but we'll be steering clear of their mad cow-meat promotion. ®
Tim Richardson, 18 Aug 1999
The Register breaking news

Airport Departure Gates hit by Windows crash

The picture says it all... ®
Team Register, 18 Aug 1999
The Register breaking news

Usability is the key for Visio upgrade

Visio has upgraded its software and repackaged it as 'Visio 2000', just in time for the new century. The new version is faster and has a number of new features, but the company is stressing the improved usability as the real improvement from the last edition. The changes were inspired by research at the company's usability labs. The idea is that people should be be able to use the program within an hour of installing the software. The new version is also Internet-enabled. Users can embed multiple hyperlinks to external information (remember that HTML still only supports single hyper links though). It also supports VML format, a more efficient way of storing images than traditional bitmaps which also allows 'pan and zoom' viewing of documents online. Changes include a new opening screen, which gives easier access to recently saved documents and templates. The "SmartShapes" tell users what they do, and can be customised. Movement aroung large documents has been improved with pan and zoom windows, and Excel style page tabs have been added to make it easy to move around the document. David Sanders, marketing manager at Visio, commented: "We have tried to make the whole environment more intuitive to anyone familiar with Microsoft Office products. It uses Windows Installer Technology -- we are the first people outside Microsoft to use it -- to make use of the program as simple as possible." Further information about the upgrade can be found here
Lucy Sherriff, 18 Aug 1999
The Register breaking news

Iridium asks shareholders to cut stakes by 40 per cent

Iridium, the all-but-bankrupt satellite-based mobile phone service, has demanded its shareholders take a 40 per cent cut in the value of their stakes in the company, according to a report in today's Financial Times. The move is the latest stage in Iridium's convoluted restructure. Iridium currently has bonds valued at $1.45 billion in total. A $90 million interest payment is due on that debt, but Iridium now wants to convert the bonds into equity, giving bondholders a combined 25 per cent stake in the company. That will clearly devalue existing shareholders' stakes, so CEO John Richardson is asking them if they mind, according to the FT report. Given Iridium has already filed for Chapter 11 protection, it's clear the company isn't long for this world, unless it can make the restructure work and clear its debt. That may well be sufficient incentive for company shareholders to side -- albeit unwillingly -- with Richardson on this one. ® See also Iridium defaults on debt Iridium crisis nears Motorola demands help keeping Iridium in orbit
Tony Smith, 18 Aug 1999
The Register breaking news

Be unveils so-so first post-IPO results

Alternative OS developer Be yesterday posted its first financial results as a public company, and they don't look to positive. For the three months to 30 June, Be's second quarter, the company recorded revenues of $537,000. That's an impressive increase of 74 per cent on the first quarter's $309,000, but the quarter-on-quarter growth is overshadowed by the fact the company achieved sales of $602,000 for the same period last year, a fall of 11 per cent. This despite the launch of BeOS 4.0 late last year -- ie. just in time for Q1 -- and the recent release of version 4.5 in June. For the quarter, Be lost $4.7 million, a little larger than the $4.5 million it lost in the same period last year. Other expenses pushed the loss to $6.6 million, compared to $5.7 million last year. The loss for the first quarter before and after expenses was $4.2 million and $6.0 million, respectively. Be's figures aren't exactly inspiring, but they're hardly discouraging either. Far more important will be the numbers for the current quarter, which will more accurately reflect the success -- or otherwise -- of BeOS 4.5, the first version of the OS that has been pushed into the mainstream. It will also show just how well Be is doing in persuading vendors to back the BeOS. Earlier this year, Be signed deals with Hitachi and Fujitsu, and more recently with Microworkz, AST and iDot. Curiously, Be's release on the results didn't mention Microworkz, which is using the BeOS for its iToaster $199 Net access device, so maybe Be is as sceptical about the PC vendor's ability to ship the device as many of its customers appear to be. iDot's BeOS-based box is due to ship at the end of the month. ®
Tony Smith, 18 Aug 1999
The Register breaking news

RAM Lifestyles – can they be serious?

Notice anything different about August 16? That was the day the "RAM Lifestyles" media blitz kicked off. The Council on Computing Power, a new lobby group of memory makers, launched the campaign to raise awareness of the importance of RAM, and divert attention from processor speed. Presumably, Intel is not co-op funding these ads. The group said that it was gearing up for a 'media blitz', to start on August 16th. We were as overwhelmed by the coverage as you were. Consumers need to be aware that adding a bit more memory can improve computer performance just as effectively as a processor upgrade, the group said. The Council on Computing Power consists of Hyundai Electronics, Infineon, Micron and Samsung. ®
Lucy Sherriff, 18 Aug 1999
The Register breaking news

AOL figures soar – but not in the UK

AOL added a million new members to its content-rich service in just 125 days, it boasted yesterday, With 18 million members worldwide -- 20 million if you count its CompuServe members too -- the online service provider appears to be growing from strength to strength. But AOL's continued growth is not repeated everywhere. In the UK, official membership figures have remained stagnant for the last six months. In February, AOL UK said it had 600,000 members. Today, an AOL spokeswoman confirmed that the figures had remained unchanged. She did say, though, that the figures have increased but was unable to say by how much. The same applies to AOL's CompuServe brand in the UK which has also remained unchanged at 400,000 for the last six months. The contrast of AOL UK's inability to attract new members compared to the exaltations of AOL Inc provides a clear indication of the massive changes that have hit the UK over the last year. AOL UK has been hit hard by the advent of subscription-free services, a position it hopes it will be able to redress when it officially launches its subscription-free Netscape Online service next week. Yesterday, Bob Pittman, AOL president and CEO said: "This membership milestone is strong evidence that AOL is, by far and away, the pre-eminent mass market interactive brand." Whether the same can be said of AOL UK is another matter. ® Daily Net finance news from The Register
Tim Richardson, 18 Aug 1999
The Register breaking news

Child porn GP struck off Medical Register

A doctor was struck off the medical register of practising clinicians after he was convicted for Net-related kiddie porn crimes. According to the General Medical Council, the "offences for which he was convicted in December 1988 are so abhorrent that we consider the he is totally unfit to retain the privilege of registration." Former doctor Robert Arwel Jones, 34, already had a history of sexual offences including indecent exposure, it was revealed. He was convicted at Chester Crown Court and sentenced to four months in prison for possessing 5,000 pornographic images -- including 1,200 of children -- that he'd downloaded from the Net. Jones had even digitally altered some of the pictures to include his naked body overlaid next to images of children. Striking him from the register, the GMC concluded that Jones could not be trusted to continue practising as a doctor. Failure to take such action would undermine the public's trust in the medical profession, the professional misconduct committee ruled. ® The Register's full coverage on Child Pornography and The Web
Tim Richardson, 18 Aug 1999
The Register breaking news

Four letters added to Pentium III make for 10 times price hike

Sometimes, here at The Register, we wonder whether it's just us reeling at the price of microprocessors. If you buy a stack of Pentium III/Xeons, for example, they'll typically cost you 10 times the price of a stack of bog standard Pentium IIIs. The answer, it appears, is validation. Intel representatives are at pain to assure us that these particular members of the PIII family, because they are designed for servers, are well worth the price. So what do you get for your $3,000 or whatever? Obviously, there's cache on die, in the shape of SRAM (synchronous random access memory). SRAM is much more expensive than DRAM (dynamic random access memory). But not that expensive. Indeed, we're sure it's possible to run an entire network with god knows how many clients using a Linux OS without the whole thing falling over, all of the time. In 1986, for example, one of Michael Dell's new 286s running at a stonking 12MHz managed to keep a whole company going without falling over, and run the fax queues and print servers and the ilk. Can an Intel chip with an additional four letters tagged on really be worth that extra dosh you have to pay, even given the expense of extra SRAM? Sounds like the Emperor's Clothes to us... ®
Mike Magee, 18 Aug 1999
The Register breaking news

Updated: DRAM market calm in July

The 30 day rolling average prices until July 30 were 64Mb DRAMs (PC 100 8Mx8) were $6.18 for North America, $5.58 for Europe and $5.75 for Asia. All prices quoted are for major buyers. And don't forget these are very major buyers. And that these prices are historical. Today, you're unlikely to get 64Mb DRAM in the UK for under $7 trade, a friendly DRAM broker tells us. Prices could go as high as $8, as the trade buys in replacement stocks over the next few weeks. Anyhow, here goes the ICIS-LOR stats for July. European prices fell 5.1 per cent, North America fell 1.98 per cent, while Asia inched up 1 per cent, compared with the 30-day average DRAM prices to July 23, 1999. Memory modules spot prices for 64MB DIMMs (PC 100) were $39.93 in North America, 7.15 per cent higher than the previous week, $42.34 in Europe (5.64 per cent up); and $43.27 in Asia (up 6.61 per cent). A reader asks why European prices are cheaper for 64Mb and more expensive for memory modules. Also why do the 8x8 modules cost less than eight 64Mb chips bought separately. We agree that it doesn't make sense. The discrepancies can only be explained by stock backlogs, according to our DRAM broker. Typically, European DRAM prices are higher than in North America and in Asia. They were lower in July ( and are still lower now) than in America and Asia because that's the time the market goes into the summer doldrums here. The market is still quiet: European brokers are shifting old stock for less than their replacements will cost. Memory modules are a slightly different matter -- today, the talk in the UK DRAM channel is of 8x8 shortages. But that can't have been the case in July, judging from ICIS-LOR's stats. Presumably, there was less inventory overhang for modules in Europe than for North America and for Asia. At the same time there was more inventory in toto for modules than for individual 64Mb, hence the lower aggregate prices. But hey, this is a reporter, not a DRAM analyst. For the full monty check out ICIS-LOR. We don't know if it has a web presence -- but it's a Reed subsidiary with offices in London and Singapore, if you want to track it down. ICIS-LOR charges good money for its information -- or so we found out last time we wrote up a summary of its findings. How we get the prices is no secret -- it's available free on AsiaBiztech. ®
Drew Cullen, 18 Aug 1999
The Register breaking news

Computer Warehouse scores zip on Register ChannelMark™

Customers of UK Mac reseller Computer Warehouse (CW) shouldn't try to seek technical support or customer service on Mondays and Tuesdays -- if their experience is anything like The Register's they won't get it. "There's no one there today or tomorrow," a hapless CW operative told us when we called to enquire how to get our faulty Umax scanner, purchased along with a huge stack of Mac goodies for our Web design team, replaced under guarantee. For a company that has won numerous awards from the UK Mac press' readers, allegedly for the quality of its service, CW's approach this time was far from exemplary: return calls were promised but never made and on numerous occasions Register staffers were consigned to 'hold' oblivion. Now, two weeks since we first contacted CW, we're told they can't do anything until we return the scanner -- despite being previously promised an CW tech guy would come out to replace the faulty £99 device. "It's part of our Ts&Cs," said another CW staffer -- maybe, but clearly keeping promises isn't. And we know it's definitely up the spout -- Umax's own, very helpful tech support team told us so. No wonder, then, that CW scored zero on our exclusive Register ChannelMark™ benchmark. Calls to CW boss Jonathon Cole proved ineffective -- he was not available to discuss the matter. Well, he's certainly lost The Register's business. We won't buy from CW again -- and would wish anyone else who plans to the very best of luck. ®
Team Register, 18 Aug 1999
The Register breaking news

Apple, Cisco invest in Net content delivery service

Apple and Cisco today took minority stakes in Internet content delivery specialist Akamai. Cisco's four per cent stake was bought for $49 million. Apple did rather better it spent $12.5 million in June for a five per cent stake, showing it's rather better at monitoring share-price movements than is the Great Satan of Routers. Akamai maintains 900 servers in 15 countries to provide a backbone service for content companies like CNN and Yahoo! The company's software balances demand across the network and performs other such technical jiggery-pokery to maximise playback performance. Last month, Apple announced its QuickTime TV service -- designed to show-off the Mac maker's QuickTime multimedia and media streaming technology -- would be hosted by Akamai. Cisco's interest in Akamai centres on the latter's technology rather than its bandwidth, and the investment will see elements of that technology being incorporated into Cisco's routers and switches, and that's what really explains why Cisco is paying four times as much as Apple for a smaller stake in the company. ®
Tony Smith, 18 Aug 1999
The Register breaking news

Egg shells out £1m for Excite UK exclusive

Excite UK is set to make more than £1 million after it agreed to let Net bank Egg tap into the user base of Britain's second largest portal. Egg recently opened the first Net-only savings account in the UKand no doubt hopes that Excite users will soon begin hatching their own interest for its online banking services. For what Egg needs are account holders willing to conduct their banking online and the deal with Excite has been arranged for exactly that purpose. "Our deal with Excite is crucial to our business," admitted Wendy Tan, e-commerce partnerships manager at Egg. "We need to target the new and fast growing Internet generation by fostering strong e-commerce partnerships to benefit our customers. "Egg will be benefiting from Excite's remarkable traffic and we are convinced that the deal will be invaluable to both parties," she said. For Excite, it adds another e-string to its e-bow and enables its users to apply for an Egg credit card, a loan or even a mortgage online. ® Daily Net finance news from The Register
Tim Richardson, 18 Aug 1999
The Register breaking news

Dell continues to shine

Dell's online sales have reached $30 million per day, contributing 40 per cent of the company's quarterly revenue of $6.1 billion, up 42 per cent on the same period last year. The company reported net income of $507 million, up 58 per cent. In the States, Dell takes the number one spot in the US for sales of PC systems for the quarter, number one for sales to US businesses -- including small businesses, and the number two spot for server systems. In Europe, revenue increased by 24 per cent, with shipments growing twice as fast as the rest of the industry. As well as knocking Compaq off the top spot in the UK, the company has increased revenue in France by 55 per cent. "We are now the largest direct company within the worldwide home and small-business market, and are significantly more profitable in that space than our nearest direct competitor," said Michael Dell. "Our US consumer shipments grew more than 100 percent in the quarter, and about one-half of those sales were generated online, through www.dell.com." US shipments increased 55 percent, also doubling analysts predictions for the company based on industry growth. Dell said that the company was setting the standard in the computer industry. He also said that the Internet would would increase in importance in direct sales. A chunk of the company's $930 million of cash from the quarter's operations was used to buy back 17 million shares of the company's common stock. Dell closed the period with six days of inventory. ®
Lucy Sherriff, 18 Aug 1999
The Register breaking news

Amazon.com sues Amazon.gr

Amazon.com is suing a British company because it alleges it is engaged in "extortion, mail fraud, wire fraud, and criminal copyright violations that form a pattern of racketeering activity". The suit was filed in the United States District Court for the District of Delaware. It alleges that Greg Lloyd Smith, who runs a number of companies including Leeds-based CITI Services Ltd, ripped off the Amazon site to create Amazon.gr and Amazon.com.gr -- "Greece's Biggest Bookstore". The lawsuit alleges that Smith is engaged in a "thinly veiled shakedown" of Amazon.com and is trading upon its global success to make money. Smith and his wife, Aikaterini Theochari, who live in Greece, are personally named in the suit, as are two of Smith's companies, CITI Services, Inc. (a holding corporation organised under the laws of Delaware in the US) and CITI Services Limited. "Amazon.com... has become a target for those willing to engage in unscrupulous business practices," said Bill Curry, a spokesman for Amazon.com. "We take it seriously when someone engages in unfair business practices and tries to pass himself off as connected to Amazon.com." "With this lawsuit, we're putting other Amazon.com copycats and cybersquatters on notice: You can run, but you can't hide," he warned. The defendants contacted Amazon.com on 3 May and informed the company they were using the name Amazon Greece. They offered to sell a controlling interest in CITI to Amazon.com for $1,632,000 but the world's biggest online bookstore refused to "comply with this thinly veiled shakedown". No one from CITI Services Ltd was available for comment today although there is a disclaimer on the Amazon.gr site which reads: "We are not affiliated with Amazon.com, Inc." ®
Tim Richardson, 18 Aug 1999
The Register breaking news

Fujitsu Siemens merger back on track

It's back on. After an apparent dose of last minute nerves, as experienced by many an anxious bride and groom to be, Fujitsu and Siemens are ready to announce that they have tied the knot. Next Tuesday (24 August), in Frankfurt, the two will unveil their merged European PC businesses and introduce the new company's management team. The merger will push Fujitsu into the upper echelons of Euro PC makers and, at the same time, will afford Siemens the opportunity to pull out of the market without seeming to be in an unsightly hurry. Earlier this month, there were reports coming out of Germany that the proposed joint venture was starting to falter, with disagreements over who would run the new operation cited as the principal problem. But next Tuesday's press conference will reveal the management, structure, sales strategy and product range for the new company and so puts paid to any doubts that the deal is most definitely on. The runners and riders in the Fujitsu Siemens joint venture –- which will be called Fujitsu Siemens Computers, oddly enough -- are still under wraps, but the smart money is on Fujitsu's European head honcho, Winfried Hoffman, to win by a neck. ® Related Stories Fujitsu takes control of Siemens PC business Fujitsu Siemens aims for top two PC slot Siemens turns to Fujitsu JV to save PC business
Sean Fleming, 18 Aug 1999