7th > October > 1999 Archive

The Register breaking news

Cadence ‘still committed to Scotland’

Scottish hacks were yesterday celebrating one of the first leaks to come out of the new Scottish Parliament. Senior Cadence US management met Scots MPs behind closed doors a week back, but unfortunately, governmental mouths remained firmly open a few days later in unguarded conversations with the gentlemen of the McPress. A story in the Glasgow Herald claimed that chip designer DeCadence had unilaterally cut employment targets by 50 per cent and called into question the US outfit's commitment to Silicon Glen. "It's complete nonsense," spluttered an outraged DeCadence spin paramedic. "We've bought and paid for a custom-built, £18 Million design centre which we're moving into next week - what more proof of commitment do you want?" The spinmeister also claimed that recruitment was running slower than the company wanted due to a World shortage of experienced chip designers. "There's a pool of really talented graduates in the area which was one of the reasons for moving to Scotland in the first place, but we need senior people too and they're hard to find," he said. In 1997 DeCadence and Scottish Enterprise jointly announced a target of 1,900 employees by 2004, but talks are now under way to revise this figure in the light of the shortage of skilled people. ®
The Register breaking news

Sony to launch Playstation-based (Linux?) workstation

Sony is to follow up the launch of the Playstation 2 next March with a move into the business workstation market, according to this morning's Nihon Keizai Shimbun. The new line of machines will use the Playstation 2's Emotion Engine processor, and although the company doesn't seem to have said anything about the OS as yet, Linux would seem the logical choice. The news reinforces what Sony's Ken Kutaragi was saying about the Emotion Engine in San Jose yesterday. (Playstation 3 to ship 2002). Kutaragi puts the Emotion Engine as being equal in transistor count with the Pentium III right now, but says Sony will surpass Intel with 50 million transistors on the Emotion Engine 2 in 2002. So for workstations, that would roadmap a product based on current silicon for second half 2000, probably moving to 0.13 micron the following year (if Sony doesn't go for this process immediately), and then an upgrade to the next version the following year. Sony intends to aim the workstations at broadcast, film production and software developers. This morning's Japanese reports also extend Sony's processor roadmap a tad. Yesterday in San Jose it went to 2002, but this morning we've a second refresh in 2005. Things move fast in IT... ®
The Register breaking news

Tailored Linux systems will supplant Windows, says Torvalds

Monolithic operating systems consisting of "standard blocks" are on the way out, said Linus Torvalds yesterday, and they will be replaced by specially tailored and personalised systems. Torvalds was speaking at Internet World on the subject of Linux in business, and it appears he's now thinking about how the characteristics of open source software will give Linux an advantage over rival models. Open source allows rapid and varied development, and taking tow examples used by Torvalds yesterday, that means stripped-down versions can be produced quickly for, say set-top boxes, or at a more individual level companies can have their own tailored Web interface produced for their staff. As Linux was originally designed to run on pretty modest hardware anyway, it's also inherently easier to get it onto a diverse range of platforms, particularly because the vast majority of new (and high volume) platforms will be low resource. The contrast between this and the traditional/Microsoft model is pretty clear. The base OS is big, getting bigger, and isn't obviously or easily shrinkable to smaller platforms. In terms of branding at least Microsoft is getting away from one size fits all (more varieties of Win2k than you can shake a stick at), but each new platform size seems inevitably to lead to the development of a new OS. Developers don't have the ability to make changes to the code off their own bat, so tailoring for different classes of platform and customer tends to be bottlenecked in the Microsoft development process. You could say that Windows Everywhere means an ever-increasing number of different platforms designed and controlled by Microsoft, while Linux Everywhere just sort of grows, as a feature of the model. Linux Everywhere looks more do-able, and could be fed by exponential growth in developer effort. Torvalds also warned that open source does not automatically succeed, giving Mozilla as an example of one that went wrong, because Netscape failed to get enough outside momentum behind it. As far as 'sort of' open source models are concerned, he doesn't see either Microsoft's or Sun's approach cutting it. Microsoft actually hasn't gone much further than repeatedly saying it's thinking about opening up some of the NT code, and Torvalds doesn't believe that's going to happen anyway. He's critical of Sun's recently announced Community Source plan for Solaris, which he said leaves Sun in control, and won't work for that reason. ®
The Register breaking news

QXL eight times oversubscribed

QXL has struck its IPO share price at 195p -- at the top end of the indicative range -- after its offering was oversubscribed 8 times. This gives the online auction house a market cap of £263 million when shares start trading today on the London Stock Exchange and Nasdaq. The company is raising £54.6 million in new money ( before expenses), with British retail investors each receiving 256 shares. And fair play to the "suppliers and friends of QXL.com", who accepted QXL paper, instead of hard cash. They now divvy up one million shares between them. ®
The Register breaking news

DoJ's MS-busting budget a bargain – but what has MS spent?

MS on Trial The DoJ's action against Microsoft seems to have been something of a bargain. Total costs since 1989 have added up to a budget $12.6 million, or thereabouts. For the present case, in 1998 to February 99 (the period of the current action), costs were under $7 million. The sum was revealed in an answer to Senator Slade Gorton, who was probably disappointed. Gorton (Rep, Washington state) is a staunch supporter of home team Microsoft, and evidently thought that finding out how much the DoJ had spent on the trial would help the boys in Redmond. In fact it didn't, because in terms of the cost of previous antitrust cases, the money spent is modest, to say the least. The amount includes the first case that the DoJ took over from the FTC in 1993 that resulted in the consent decree; the second so-called contempt case; and the present case. FY 1998 costs were $4.8 million, and for FY 1999 to 26 February the amount was $1.62 million. In 1999 dollars, the cost of the IBM case, abandoned on instructions from President Reagan (never mind that the judiciary and executive are supposed to be independent), was more than $29 million. The Exxon FTC case cost about $30 million, and the AT&T case $34 million in 1999 dollars. Gorton's response was to claim that the money was misspent. Gina Talamona for the DoJ said that "we feel that the American public was extremely well-served". Lawyers are thicker on the ground in the US than discarded hamburger wrappings because in most cases successful litigants do not get awarded their legal expenses (there's also the fact that lawyers can take cases on a contingency fee basis, of course). The DoJ has asked that Microsoft pay its legal costs in this case, and its chances of getting them are probably increased by Gorton's ill-advised intervention. This is not the first time that Gorton has fouled things up from Microsoft. He described Judge Jackson as "a second- or third-rate judge" by way of trying to find an excuse for his inevitable conclusion that Microsoft had transgressed. The story made the headlines in the US. The states have refused attempts to specify how much they have spent on the case, but the amount is likely to be quite modest, since they do not have a large team. The DoJ has refused to say how much it paid its consultants, but we know that Professor Fisher was on $500/hour (and Microsoft's Dean Schmalensee on $800/hour). Steven Weadock admitted he was paid $100/hour. Gorton's demand for information also elicited that the DoJ spent $194,140 on public relations, most of which went on its Internet site. Fees for outside lawyers - mostly David Boies - were $213,731. David Boies initially agreed to a fee of half his $250 hourly rate, but later this was made into a pro-rata salary of $104,000. He estimates he is currently paid around $50/hour, but look at the clicks he is getting: he won't starve in the future. Everybody seems to be agreed that Microsoft has spent a very large sum on its defence. Microsoft refuses to discuss this, but looking at its accounts, legal costs probably increased around $200 million between July 1998 and June 1999, and about $50 million the previous year. This sum would include legal fees for all the cases where Microsoft is defending itself. We'd be surprised if Microsoft's true expenses so far for the present case were less than $150 million. Since Ballmer's remark about Microsoft's over-high share price cost him personally a billion dollars, this is chicken feed to the Redmond hen. ® Complete Register Trial coverage
The Register breaking news

Nvidia goes bi-annual barmy

As my nan used to say, you won't get anywhere if you haven't got balls - and Nvidia has got them by the golf bag. CEO Jen-Hsun Huang promises to introduce a new and more advanced graphics processor every six months in his company's quest for worldwide PC domination. The wisdom of setting such an easily checkable roadmap will only be decided by time (just the provision of snappy, dynamic names will mean a dedicated division), but Huang didn't stop there. Not content with giving his special projects manager a heart attack, he then went on to liken Nvidia with Intel, comparing the two companies' business models. It's all very well to copy your bigger brother's actions, but let's hope Huang hasn't forgotten that essential childhood lesson: sooner or later big bro will crack, turn around and punch you. So don't come running to us, Jen-Hsun. ®
The Register breaking news

CHS canned by Intel

Intel has ditched CHS Electronics as one of its UK distributors. A representative at the chip giant today confirmed: "We have terminated our distribution agreement with CHS Electronics in the UK and Germany. We will still keep our key agreements with CHS in France and Turkey." The representative refused to comment on the reasons behind the decision, but added: "We often review our distribution agreements." In regard to whether any future review would bring CHS back into the Intel UK fold, she said: "We never say never. But at the moment we have only the franchises in France in Turkey." Sources said that CHS' well-documented financial difficulties may have been behind the move. One source warned: "CHS is definitely suffering from stock supply issues in the UK. Expect more vendors to follow Intel's lead." Peter Rigby, CHS group marketing director, was unaware of Intel's decision when we spoke to him this morning. ®
The Register breaking news

The channel is revolting – against CTS prices

The channel peasants are revolting and threatening to boycott next year's Computer Trade Show because of price hikes. Around 20 top distributors and resellers have grouped together to complain about floor space costs, which they claim have shot up by around 50 per cent. One square metre of floor at CTS 2000 will cost £375 at the full rate, according to organisers Imark Communications. A leaked email to the CTS organisers shows that companies spent between £20,000 and £70,000 each on this year's two-day event in Birmingham. However, it said the increased floor space costs meant that many companies would not be able to afford to attend next year's show. "This has prompted investigation into the cost of hosting the show and it has been ascertained that the true cost of stand space is disproportionately lower than the prices we have been quoted from you. "This has prompted us to group together and ask for your help in continuing our presence at the CTS trade show. "The prices we need for stand space need to be lower than last year due to the hard times we all face currently." The email warned that the 17 companies listed would be unable to support the show unless a lower price could be arranged. The companies included Hugh Symons, Flashpoint, Karma, Computer 2000 and Rock Computers. Alan Stanley, general manager of Dane-Elec, told The Register that his company would not attend next year's show if prices were not cut. "It's about the only trade show worth going to in the UK. But it won't stay that way if they price it out of the market," he said. Les Billing, MD of Microtronica – another company listed in the email – said: "There simply isn't enough margin in the industry to cope with these price rises. The organisers are trying to capitalise on the situation." Others thought it would push smaller players out of the event. Jon Atherton, general manager of Enta Technologies, commented: "There will be some people who won't be able to afford to attend. Shows like this are only healthy for the industry if lots of people with a variety of products and services attend." The group's Wat Tyler, Realtime Distribution's sales and marketing director Mark Reed, confirmed: "As a group of prominent dealers and distributors, we are in discussion with Imark over the forthcoming CTS." He declined to offer more details. David Barr, Imark sales manager for CTS, said he had scheduled a meeting for Monday, when the channel would be asked to raise their concerns. "We want to take the show forward with all the channel next year," said Barr. He refused to say whether the company would be willing to cut prices, but added: "The show is going forward. If there are issues of concern we'd like to address them. But the show cannot be perfect for everybody." ® Register fact: In the real peasants' revolt of 1381, Wat Tyler led thousands of poll tax protesters to the gates of the city of London. King Richard II invited Tyler into the city on the pretext of negotiating concessions and then stabbed him in the heart.
The Register breaking news

Microsoft's Satanic Majesty requests

What is "more evil than Satan himself"? Well, if you put this search term in the rather interesting www.google.com search engine, you get www.microsoft.com ranked first. Fancy that. We thought we had better check the page, and what did we find? Well, Exchange 2000 Server Beta 3. Being a little frightened of matters Satanic, we decided to decline the kind offer of a download of Microsoft's messaging and collaboration product, lest we reached the wrong connections. At least Text100, Microsoft's UK press office, should be pleased that we mentioned the product as it has been pestering us to do, although they it didn't tell us how diabolical it was. So why does Google produce this giggle? It's not a fix, but a result of the ranking being according to the external links, so it merely shows the weight of opinion, in terms of words like "evil" and "Satan", in other sites referencing microsoft.com. Google's worthy objective is to prevent the abuse of metatags in site promotion. It also only allows AND operators in searches, and there is no way to override this. And please, please don't tell anybody about google - it's wonderfully fast at the moment. ®
The Register breaking news

Microsoft uses (some) Macs in Redmond

For some important documents, like its Annual Report, Microsoft uses Macs. Kerry Leimer Jay used Word 98 for the Mac on his G3 system, and his file - with a path name that will be familiar to Mac users - was msft:ar99:downloads:ar99.doc. The discovery was made by Richard M Smith, a MacInTouch reader. The Word version of the Annual Report has the metadata that provides the proof. All you need is to download the .DOC file and put it though a utility to display the content. In July, The Registerpointed out the perils of using Word if you want to keep any little secrets contained in so-called hidden text fields. Microsoft is aware of the problem, and has even produced a product support document "How to minimize metadata in Microsoft Word documents" that warns that Word documents "may contain content that you may not want to share with others when you distribute the document electronically". Not all the data is readily available (through the "Word user interface", Microsoft says -- but WordPerfect is a better tool for looking at it). Some data needs what Microsoft calls "extraordinary means" to see it -- like a simple file dumper. Microsoft's advice for the removal of metadata says that "there is no single method that you can use to eliminate all such content" and goes on to describe some 20 cases of "how to eliminate" this or that potential problem, and then proposes eight more papers to read about the subject. A quicker way would be not to use Word , especially in view of the extra bandwidth for all those useless bytes, and the security problems (like an embedded virus) in Word files attached to emails. Perhaps this is the beginning of a case for an Internet tax. You may ask, what's wrong with using Macs. Nothing at all, squire, but we thought you'd like to know that Microsoft guys can be human. Related story Exclusive: We reveal Gateway exec's secret MS evidence
The Register breaking news

HP gears up to go direct

A server configuration programme unveiled yesterday by Hewlett Packard is set to put the US giant on the road to direct selling, with its resellers left sitting on the services sidelines. With its eyes firmly fixed on the runaway success of Dell, HP is boasting that by taking NetServer configuration work away from its resellers and handling it in-house, it will be able to offer users Dell-beating prices and rapid order turnaround. Resellers will be left to concentrate on software and after-sales services, the company said in a prepared statement. Asked if HP was preparing to abandon its channel, Jackie Bakhai, HP's NetServer business manager, told The Register: "We have too much investment in the channel to drop it and sell direct," but she wouldn't deny that HP is putting itself in a 'direct seller' position. Whatever happens, by undercutting Dell, the program is likely to buy HP some time while it tackles the difficult task of merging the new and established selling models without treading on people's toes. The programme will be available to all HP resellers in the UK - provided that is they put forward the necessary money (£1.8m) and commitment (EDI) - and is to be extended to Europe next year. ®
The Register breaking news

Top exec quits BTInternet over lack of investment

BTInternet has seen its second senior exec walk out over frustration at the company's lack of investment in the Web. John Swingewood was head of BT's Internet division and was said to have quit the telecomms giant following "differences at the top". One source told today's Daily Mail: "It's because BT is less than fully committed to the multimedia division, especially certain board members." It may be worth noting that despite possessing some of the sharpest news values in the business, the Daily Mail sometimes trips over technology stories, as do many of the UK's national daily papers. It recently referred to IBM as IMB. An easy mistake to make, but also rather amusing. The source continued to tell the Daily Liam, sorry, Mali: "Sir Peter Bonfield (chief executive) wants more money put in, but it is a big organisation and the machine has defeated him many times. Its first priority is old-style telecomms. That was John's issue." According to one analyst, BT's cyber strategy is "a bit of a mess". Swingewood, who is believed to have gone to head up an Internet division in another firm, follows his predecessor's lead. Rupert Gavin was said to have quit the post two years ago for the BBC due to differences over BT's priorities. The company also lost its head of ecommerce, Eric Guilloteau, this summer. A BT representative described the departure as "entirely amicable", but did not name a replacement for Swingwood. ®
The Register breaking news

Taiwan quake sees PC vendors bin product launches

PC manufacturers have had to revise production and marketing plans for the Christmas rush because of a lack of components following the Taiwanese earthquake. NEC has shifted production to other sites and new product announcements from both Fujitsu and IBM have been put back. Taiwan is a key production centre for PCs and semiconductors, making about 80 per cent of the world's graphics chips as well as producing 40 per cent of the worldwide notebook market and 60 per cent of the motherboard market. The knock-on effects have already started with some experts predicting a 20 per cent slip in production by the end of the year. The earthquake has already caused DRAM prices to rise by 50 per cent. If other components end up in short supply, PC manufacturers will have to decide whether to soak up the extra cost or pass it on to the consumer. ®
The Register breaking news

Nokia ambushes rivals with flashy, lightweight 8210

Column Nokia's weakest point in the handset market this winter has been the narrow selection of under-100 gram models. Currently the only entry is the 8810, which works in just GSM-900 and had no truly advanced features like voice-dialling. GSM-900/1800 dual-band competition from Motorola and Ericsson has given the competition manoeuvring room after being flattened in the 150-gram weight class by the triple punch of 6110, 5110 and 3210 product intros. In North America the competition in miniature models is only starting this winter, but in GSM markets nanophones have become a key indicator of competitiveness. Earlier this fall Nokia announced the 8850, which is 91 grams and has the necessary high-end stuff like a blue-light display and voice-dialling. The problem here is the price - anticipated at $1,000. This phone is apparently a pretty narrow luxury product aimed only at affluent customers. But today Nokia announced the 8210, which seems to suddenly put Nokia's strategy into a new perspective. It weighs 79 grams, has picture-messaging, voice-dialling, infra-red link, customisable covers, etc. Industry observers expect that it will be priced below the 8850 and will sneak into markets by Christmas. As a sportier version of the 8850 it broadens crucially Nokia's product range just as competition is heating up. Nokia may now be the only brand with a genuine product segementation strategy in the 90-gram weight class. There aren't many genuine performance differences here. Most contenders pack an infra-red link, voice-dialing, vibra-alert, etc. The importance of design and brand positioning is crucial right now. Next year the emphasis may shift back to incorporating new breakthrough technologies such as WAP, Bluetooth and GPRS. Ericsson and Motorola both have just one appealing ultra-light model. Nokia seems to be positioning the 8850 above the competition, which should translate into hefty profit margins. And now the 8210 is positioned below the 8850, offering a more hip, youth-culture oriented version of a miniature phone. This is how segmentation is supposed to work. The 8850 is more expensive and distinctive than most direct competition; the 8210 is cheaper, gutsier and more colourful - coming with high-volume advantages. The exchangeable colour covers will provide the same customisation edge for the 8210 that is currently boosting 3210 sales in Europe and Asia. So instead of trying to compete directly with Ericsson's T28 and Motorola's V3688, Nokia is redefining the concept of what a 90-gram phone is. It's not a sedate, muted sign of affluence for business people. It's rather either a genuine luxury item (8850) or a funky piece of street fashion with an individual theme cover option (8210). This is the very same guerilla war pincer-movement that worked so well last year. Motorola's and Ericsson's miniature phones resemble Audi - an understated, classical blend of conservative design and solid performance. In comparison, Nokia's new 8850 is a Ferrari; brazenly ostentatious piece of giddy excess. It's not meant to be classy. It's meant to be an eye-popping high-end extravaganza wrapped in a sheen of trashy pop culture glamour. Aluminium-magnesium alloy used in the moulding, metallic keypads and blue-light display lend it an ironic air of sci-fi aesthetics. This is miles from the conventional view of 90-gram phones as executive accessories meant to be dull and dignified. The new 8210 takes the iMac/Volkswagen Bug path of millennial design zeitgeist. It injects into the miniature phone market the same faux-naif Hello Kitty appeal that turned the 5100 series into a blockbuster last year. To some observers, both the 8850 and the 8210 may seem slightly off-the-wall. These would be the same people who scoffed when Apple and Volkswagen decided to take a gamble with their key products. I don't see Nokia as a Gorilla - I see it as a Guerrilla. Instead of directly confronting the enemy in their core product categories, you can attack the competition by moving upmarket and downmarket simultaneously - using new design approaches to make the rival models seem like moldy middle-of-the-road compromises. Nokia's Christmas shipping schedule for the 8210 is lightning fast - which would make this a classic ambush operation aimed at undercutting the momentum T28 is now building. Guerrilla product launches can create a lot more buzz than pre-announcing models 6-9 months in advance. The challenge for Motorola and Ericsson now is to break out of their design traditions and move into uncharted territory. Motorola is too tied to its wildly successful Startac franchise dating from the mid-Nineties; the look and feel of Ericsson's new phones still echo the 1997 glory days when the 7xx series revolutionized the industry. If these two giants can't morph into something new and exotic, someone else will meet the challenge. The buzz created by new Samsung and Bosch models this fall is a storm warning. ® Tips? Rants? Raves? Inside info? Give a piece of your mind to Tero. Confidentially: tpkuitti@operoni.helsinki.fi Tero Kuittinen is the Vice President of Wireless Telecommunications, an investment firm based in New York. The firm may hold positions in companies featured in his columns. The opinions expressed in the columns are personal views of Mr. Kuittinen and they should not be interpreted as investment advice.
The Register breaking news

Athlon Powers turns AMD loss into not-as-big AMD loss

AMD didn't lose quite as much money in its third quarter as had been expected, turning last Q3's profit of a tad more than $1 million into a loss of $105.6 million. In Q2 of this year, it recorded a loss of $162 million, excluding exceptional items. During Q3 sales dipped by 3.4 per cent from $686 million to $662 million. The period was dominated by the launch of the Athlon chip - the stick with which AMD hopes to give Intel a good hiding. Some 350,000 Athlons were made during the quarter, but only 200,000 were sold. This was blamed on the Taiwan earthquake, which disrupted supplies of motherboards to system builders. Looking ahead to Q4, AMD said it will make around 1 million Athlons, but acknowledges it will sell only around 800,000 - again citing the earthquake as the root of its problems. While the effects of the earthquake have been felt by almost everyone in the PC industry, AMD has other problems to face up to if it is to stop walking in Intel's shadow. The first such problem is what to do if Intel steals back its 'fastest chip on the block' crown before Athlon becomes a source of real profit. Another major headache for AMD is what to do about its money pit Dresden Fab, which is currently bleeding faster than anyone can apply band-aids. ® See related stories: AMD needs cash for the Dresden money pit Motorola mulls over AMD Dresden stake Massive quake hits Taiwan
The Register breaking news

SGI Cray C90 – blazingly fast, momentarily

It's official, the Cray C90 supercomputer really smokes. Well, it's worse than that actually - we're talking seriously hot technology here. The US National Centers for Environmental Prediction published a sad note to field operatives today concluding that the C90, which caught fire on September 27th, is most definitely a write-off. This after SGI engineers arrived and shook their heads, and after a second opinion was sought. They all agreed, the Cray was Croaked. The immediate effect is that "objective guidance beyond 10 days in the future will be unavailable for the next several weeks. Therefore, there is no objective basis for making forecasts at the 8-14 day range." So, anyone out there have a spare Cray or comparable Beowulf cluster machine just sitting around compatible with the software used to do atmospheric modeling while the NCEP/NWS awaits replacement Cray CPU horsepower? ®
The Register breaking news

Online Jewish bun-fight erupts

A fight seems to have broken out among the Jewish community in the UK. This has nothing to do with Talmud writings or kosher food, but is a war over who has the best Web site. First it was Benjamin Cohen, the teen entrepreneur who was rumoured to be worth around £5 million thanks to his Jewishnet site. Then Kosheronline jumped on the bandwagon, this week claiming it would be bigger and brighter than Cohen's enterprise. And now it's the turn of www.jewish.co.uk, which is hollering that it was the UK's first Jewish Web site, so therefore deserves a share of the glory. Not wanting to miss out, it has decided to court the press over its plans to expand and offer the ultimate Jewish "community" online service. Sorry, did someone say "community"? ®
The Register breaking news

Linux for credit cards ships

You could say it had to happen, but actually, it didn't really have to, did it? The Linux Fund has launched a Linux affinity credit card, issued by MBNA and resplendent with cartoon penguin on the front. Each time you use the card, you'll be making a contribution (unspecified, as far as we can make out) to The Linux Fund, which is incorporated in Oregon and says it has applied for non-profit tax status. It's intended to fund open source projects, and will be soliciting contributions once it has non-profit status. At the moment though, its only source of funding is the credit card, so the outfit had better hope that an awful lot of Linux fans are willing to commit to penguin plastic. ®
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Philips cans Velo, bows out of WinCE

Philips is dumping Windows CE along with its Nino handheld because of poor sales and tough competition from Palm. Philips says the market was smaller than expected, but that's a question of market definition. Palm sales are healthy enough, so perhaps it's the CE market that is too small and highly competitive at that, what with Casio, HP and Compaq panting away. The truth seems to be that the market for Windows CE handhelds is pretty colourless, even after the introduction of colour. Palm of course recently responded with its own colour announcement. A Philips spokeswoman told The Register it sees the market going quickly towards the integration of handhelds and mobile phones, and that an announcement of a WAP device is imminent. Now could it be that Philips is changing its status from being a drinking member of the Symbian club to a fully paid-up member? We suspect so, but Philips is not confirming this yet. The company might however have a problem getting in at a shareholder level. Symbian now professes itself happy with its current global clutch of stakeholders, it's got three in Europe already, so the door may well be closed. Philips mobile phone group is now running the show, with the expectation that the company will be focussing more on voice products and small cell phones. Although reports of the death of CE would be premature, it is looking in poor health. Palm's decision to license its operating system to competitors may well prove to have been an intelligent idea, and avoid the problem that Apple faced earlier in its development. Microsoft's reaction was pretty low key, with mutterings about brand or channel strategy. The clam-shell Velo, another CE handheld first shown in prototype at Comdex in 1996, was very quickly sent on its bike. One model, the 8MB Velo, was only sold online in the US, with Philips saying it "couldn't be more pleased with the success of the Velo Store". A more likely tale was that Philips found the US retail market very tough. Philips is collaborating with Microsoft with a set-top box for WebTV, and TV-Pak software, but is also involved with AOL's AOL TV project. The unusually quick decision by Philips to snuff-out Velo would appear to be one of the results of the company's desire to increase profitability by reaching a target return on net assets of 24 per cent. There has been increasing pressure for the group to be split up, which the company resists by claiming that the brand name brings added value to the group. Of course there is no real reason why the company could not be split into mini-Philips with separate accounting, especially as until recently it broke down its revenue by division. ®