20th > October > 1999 Archive

The Register breaking news

MS trial judge announces day of verdict

MS on Trial Exactly a year after the Microsoft trial began on 19 October, Judge Jackson has announced that his findings of fact will be issued on a Friday at 18:30 EDT, which is to say 23:30 BST. But he didn't say which Friday. The reason for this announcement was really a matter of courtesy to both sides, so that they can be equally prepared. The contestants will be given two hours private notice before the 18:30 release, and it is quite likely that this will quickly leak. Since the concluding arguments in September, it had been expected that the result might be out by the end of the year or even early next year, but it now seems more likely that it will be earlier than expected. We modestly draw our gracious readers' attention to our forecast on 1 April (we ain't fooling) that the result would be out on 25 November 1999 (a Thursday, alas), so Judge Jackson needn't hurry too much. ® Complete Register Trial coverage
The Register breaking news

MS pricing and ‘bounties’ nix Gates honorary degree

Canada's University of Victoria has decided not to award Bill Gates an honorary degree, with opponents arguing that Microsoft had often made computers less accessible to people with little money. Bill's failure to qualify is revealed in details of a closed University academic board meeting, details of which have fallen into the clutches of the Toronto Globe and Mail. In order to qualify for the award of a degree, says the paper, "a candidate must demonstrate an excellent record of distinction and achievement in either scholarship, research, teaching, the creative arts or public service." There must also be a two thirds majority of the board in favour of awarding the degree, and this is the hurdle Gates failed to pass. His opponents pointed out that Microsoft's (not to say dropout Bill's) performance in academia has been less than glorious. A change in licensing rules for education in 1997, for example, stopped students using University copies of Microsoft applications over the campus network, forcing them to buy their own copies if they wanted to use them. It was also claimed that a 1998 deal offered lecturers a $200 bounty if they used or mentioned Microsoft products in their presentations. This hilariously unsubtle initiative has been previously documented, although it is The Register's understanding that it was abandoned after adverse publicity. ®
The Register breaking news

NatSemi to build Linux version of Webpad info appliance

A NatSemi announcement yesterday reveals that the company is working on multiple operating systems, including Linux, for its Geode Webpad wireless information appliance. The Webpad has been on the stocks for some considerable time now, and had been expected by the middle of this year. NatSemi's sale of Cyrix however will have been one of the factors delaying its arrival. NatSemi is now however putting together Webpad reference platforms for OEM manufacturers. The device is an 8.5in x 11in tablet with a wireless range of 500ft (wireless technology used will vary depending on the market), and runs a Geode GXLV x86-based processor which integrates sound, graphics, memory control and PCI interface. So NatSemi's PC on a chip project isn't dead - it's just been sleeping. The current Webpad uses the QNX operating system, and according to NatSemi it will include Jot handwriting recognition technology from Communication Intelligence Corporation (CIC). But the NatSemi agreement with CIC also covers future Jot implementation on Linux, Windows XX (sic), pSoS and VXWorks operating systems. The embedded operating systems are logical, given the nature of the device, and the presence of A N Other Windows isn't a great surprise either - an implementation using CE or a successor/relation will certainly be required by some manufacturers. But the mention of Linux is interesting. It means that NatSemi thinks it's a logical operating system for low resource, high sales volume platforms, and that the company either already has or intends to commence Linux development. NatSemi doesn't seem to be ready to tell us which big-name manufacturers are going with Webpad, and when they're going to do so. But there's one official partner, Tatung, plus another likely one. A couple of weeks back NatSemi announced that VTech would be using a NatSemi 16-bit Risc chip, the Geode NSC1028, for a brace of email appliances priced at $79.99 and $99.99 respectively. VTech is also promising a cheap wireless email appliance for the US market before the end of the year. None of these are Webpad-based appliances, but VTech's relationship with NatSemi does suggest the company could be an early adopter. NatSemi will however need quite a few other companies to come on board if Brian Halla's assiduous courting of Taipei over the past 18 months is to be justified. And indeed, if Intel's proposed counterblast is to be stopped. Tatung's implementation of the Webpad, meanwhile, is due out in a couple of months, according to a NatSemi spinmeister. But Tatung is one of the Taiwanese companies that life has largely passed by, so you'll have to do better than that, oh spinmeister. ®
The Register breaking news

Tera: the chip that likes to say yes 128 times

Space is, of course, the final frontier. The place where you can boldly split infinitives where infinitives have never been boldly split before. We're not sure how we missed Tera, a chip fabbed up by Taiwanese outfit TSMC. But a reader has pointed us to an interesting Nasa document here which discusses how the company's microprocessor copes with parallelisation. And, incidentally, how the Tera chip fares against offerings from both Alpha and SGI. Compaq introduced its EV8 at the Microprocessor Forum a couple of weeks back but its future design, on the face of it, doesn't seem a patch on Tera's offering. (See Alpha: the chip that time forgot). Tera has taped out a chip which supports 128 thread contexts, which boiled down means that threads can be interleaved against memory wait states, thus keeping the throughput going. The company finished taping out its CMOS design at the end of July and is being fabbed up by TSMC as we write. The 64-bit design, on the face of it, beats any other similar processor that's around, and makes us wonder how the clunky Merced-Itanium will ever be anything more than a very big keyring indeed. But, we suppose, that's the triumph of marchitecture over architecture. ®
The Register breaking news

Mondus seeks patent for way it does ecommerce

Two twenty-something e-ntrepreneurs who scored £1 million in venture capital after winning a competition in the Sunday Times six months ago have finally launched their new e-business. What's more, they're looking to protect their investment by patenting their e-commerce platform in much the same was as Priceline.com. Although Mondus.co.uk went live a fortnight ago they waited until yesterday before going public with the online tender service. Aimed at the SME business-to-business (b2b in Net speak) market, Mondus.co.uk enables customers to target a number of suppliers with a single request. According to Rouzbeh Pirouz, co-founder and UK MD of Mondus.co.uk, the service has already been used 50 times to request quotes for business products such as computers and stationery supplies. A number of orders have also been placed averaging at between £5000 and £10,000. One request for tenders was just shy of £2 million. Mondus makes its money by charging a commission for sales. "With 200 suppliers already signed up we offer a whole range of business services online through one purchase request form," said Pirouz as he also announced that he had secured a further $3 million worth of investment from British Internet fund ZOUK Ventures. "It saves customers money because they benefit from competitive bids and it saves them time because it's a lot quicker than using Yellow Pages," he said. For the suppliers, it's another route to market, and a cheap and easy way to generate sales leads, he said. According to Mondus, SMEs spend more money on ordering products and services than on the actual items themselves. It claims a $27 purchase for office equipment, for example, amounts to $107 spent on the manual ordering process. ® For more bubble-bursting Net hype tune into Cash Register and turn on to our daily Net Finance News
The Register breaking news

MS CFO doesn't expect Win2k revenues before mid-2000

Greg Maffei, Microsoft's CFO, cautioned financial analysts yesterday not to expect a spike in revenue when Windows 2000 was delivered. He expected to see a slow build up in demand, with little impact in the current financial year: "Don't expect Windows 2000 income in fiscal 2000 [end of June]," he said. This would seem to suggest that there is a considerable possibility that FY00 ending 30 June could show less revenue than the previous year. In the past, Microsoft has been very quick indeed to recognise Windows revenue before the cash was in the bank or the product in the hands of customers, contrary to its statements on the matter. This happened most notably when Windows 95 was released. So to say that he expected no income before 30 June gives considerable food for thought. Maffei added nothing directly to the official statement that release to manufacturing was expected to be before the end of 1999, and repeated the "wait until ready" mantra. But there is another interpretation for this exceptional conservatism, which was in sharp contrast with his otherwise upbeat mood: it may be that W2K will not start to roll properly until some time considerably later than February, which is where most opinion has it at the moment. What the financial analysts like to call "pre-shipment hesitation" (and what more sage observers call vapour) has been a fact of life for many quarters ("been in that state for some time"). Maffei did not think that this would translate into a sharp upturn when Windows 2000 is released. Apart from the initial introduction of NT, when sales were very poor for a long time, there is a general expectation that Windows 2000 sales will be massive ab initio. For Maffei to dampen this expectation in this way does strengthen the possibility of a considerable further delay. Microsoft would of course claim that customers had asked that something or other be improved. Release candidate 3 is now expected to be ready on 10 November, a week before Comdex. Maffei said that the Data Center version of Windows 2000 is expected 90 to 120 days after the initial Windows 2000 delivery. ®
The Register breaking news

Insight deal no big deal, says Action man

Action Computer Supplies said it would not be courting more suitors after getting dumped by its US beau this week. Henry Lewis, Action's chairman, told The Register there was a sense of relief at the reseller now that prospective US buyer Insight Enterprises had finally walked away from the deal. And he stated that the company was definitely no longer up for sale. "We look like a rejected bride," said Lewis, but maintained that it would be business as usual at the Middlesex-based reseller. However, Insight's withdrawal has not taken all the pressure off Action. Arbitrageurs, who snapped up Action stock before the Insight deal was called off, still own around 30 per cent of the company, according to Lewis. Investment experts in the City expect this to force the share price down further. George O'Connor, analyst at investment bank Granville, said: "There are strong grounds for Action's shares to come under pressure as arbitrageurs sell shares to longer term Action investors." "These arbitrageurs are currently looking at a loss, and need to decide whether to grin and bear it or hold onto the stock for a better price," he said. Insight's decision to walk away from buying Action ended months of uncertainty, not helped by the US giant reducing its offer price for Action. It eventually terminated the deal after Action announced poor preliminary financials for the year ended 31 August. But Lewis insisted the company would not be hurt by the arbitrageurs' holding. "They are not interested in running the business -– they want to make a margin," he said. "They will be offloading the shares, but not just at any price. They know Action is well funded and has no liquidity problems. "And as they sell, the long-term shareholders will soak up their shares." According to Lewis, the 30 per cent represents around 10 million shares. He said four million of these shares had been sold yesterday, with the exit of one main arbitrageur. He insisted that the company was on the up. "We have taken significant initiatives in the last year to push the business forward," he said. This included implementing a new IS system, and hiring 83 telesales staff for its web business this summer. He described the whole buy-out process as "pretty fatiguing and very distracting", but maintained his company had not been dependent on the deal. "Our first priority is to get our profit and growth back to speed. Then we have to get through Y2K," said Lewis. But he said the company expected to feel a recovery period next February. Action's shares were down slightly at 72 pence today, after rising 5.5 pence yesterday to close at 73.5 pence. ®
The Register breaking news

Metered Net calls are damaging UK economy

The UK economy will suffer long term damage unless the country changes its policy towards charging Net users for every second they spend online. Andreas Schmidt, AOL Europe's president and CEO, delivered this now well-worn message yesterday as part of his keynote speech at the Jupiter Consumer Online Forum in London. He used the occasion to call on all business leaders to unite behind the company's campaign against the high cost of metered Internet telephone calls in the UK. And he said that the continuing low levels of Net usage in the UK undermined the government's vision of the country being at the centre of the European e-commerce revolution. Schmidt said: "If you let consumers stay online as long as they want, you will turn the Internet into a consumer mass medium -- where people are comfortable about buying online. "If you leave the clock ticking, the e-commerce revolution will not happen. Who would buy goods on a high street where shoppers were charged for every minute they spent looking through shop windows and browsing the shelves? "Industry, government and regulators must unite to 'stop the clock' -- to end metered telephone access charges", he said. "Our campaign has to succeed. If it doesn't, the Internet will never become a true mass medium in Europe, and the e-commerce revolution Mr Blair is calling for will simply not happen." If his final words have a hint of desperation about them, it may be because AOL is feeling the pressure from the competitive threat posed by the wide variety of subscription-free ISPs. Today, representatives of the Campaign for Unmetered Telecommunication (CUT) meet e-commerce minister Patricia Hewitt to bend her ear about the cost of Net access in the UK. ®
The Register breaking news

Are you being served by Intel Xeons?

Roadmap In the last instalment of our Intel roadmap roundup, we'll look at the IA-32 server market. It's a cash cow both for Intel and its PC customers. If this high end market ever dries or ever becomes seriously threatened by rivals the chip giant will be in deep trouble. Intel segments its server processors in six price categories. At the bottom end of the market, for machines less than $6,000, it supplies Pentium III processors without the Xeon tag. Some of the Coppermine processors which launch next Mondayare aimed at this market, the internal roadmap we have obtained shows. 667MHz and 733MHz processors with 256K of cache are aimed at this market for single processor rather symmetric multiprocessing (SMP) systems. The map shows Intel introducing a 800MHz Pentium III with 256K cache in the second half of next year. However, we have good reason to believe that introduction will come much earlier than that. Beyond the entry level, Intel positions its Pentium III (slot 2) Xeon systems as chips for two to four way systems and four to eightway SMP systems. Towards the end of August it introduced Xeons with large caches and this set to increase during the course of this year and next. Midrange systems, with price tags from $6,000 to $25,000 dollars, are shown on the map as as rising to 700MHz Xeons with 1Mb of on-die cache in the second half of next year. However, Intel is on record as saying that we can expect to see faster Xeons with larger caches than this during the year 2000. All of these high end Xeon processors only use the 100MHz system bus rather than the 133MHz bus, a fact which baffled us a little when we wrote our workstation roadmap. But one of our readers has supplied us with what we believe is the answer to this bus conundrum. He writes that signalling issues are currently preventing a 133MHz bus from working on four way and eight way SMP systems. Little known chipset vendor Reliance, he adds, will only use a 133MHz front side bus for two way systems and a 100MHz front side bus for four way. Intel's Profusion chipset also suffers from the same problems, and so those Xeon processors, too, will only run at 100MHz. It is a strange but true fact that the most expensive of Intel's entire range of microprocessors will not have this capability, while its up-and-coming Celeron III, using a core P3 and costing peanuts in comparison will run at 133MHz bus speed. The roadmap for the high end of the server market covers four to eight way and systems with pricing starting at $25,000 and rising above $50,000 depending on the configuration. When Intel is asked for the reasoning behind the high prices of the Xeon, it usually comes up with the answer that there is "manageability" built into the processors. No one is entirely clear as to why that word attracts such a high price tag. The real reason, of course, as we have suggested above, is that this is very good profit margin business for Intel. It is true that the processors use relatively expensive SDRAM for their caches, but it isn't that expensive. The pricing is also related to future introductions of both IA-32 and IA-64 processors. With a price tag of over $50,000 for an eight way system, Intel is ensuring that it can charge through the nose for the Itanium-Merced, when that is released. Expect to see, as we have reported here earlier, Xeons with even larger caches than 2Mb through the course of 1999. Intel has just placed its own roadmap for server chips in a public place on its web site, and the tale this has to tell is of considerable interest. It shows Intel will continue selling .25 micron Xeons right through the first half of next year. How you tell whether you will have a .18 micron Coppermine Xeon server or a .25 micron Xeon will be tricky. The reason for the company continuing to fabricate and sell .25 micron chips is that it takes time to switch fabs over to the newer .18 micron process. But now it has perfected the technology, we can expect to see more and .18 micron manufacturing coming on stream. As they do so, the price of quite a few of these Xeons will drop considerably, while Intel will push the chips with larger caches into the high end of the market. ® See also Intel's workstation roadmap Intel's desktop roadmap
The Register breaking news

MS turns in whopping 41 per cent net profit

Despite Microsoft's first quarter ending 30 September showing 7 per cent lower revenue than the previous quarter, as well as net income down 0.5 per cent, this is not the story being reported today. Microsoft prefers to make comparisons with the year-earlier quarter, which shows its results in a better light. Revenue was $5.38 billion for the quarter, and net income $2.191 billion - a whopping 41 per cent profit. Looked at Microsoft's way, there was a 28 per cent increase in revenue and a 37 per cent increase in net income, compared with a year earlier. Cash and short-term investments amounted to $18.9 billion at the end of September. Earnings per share were 40 cents, two cents more than the First Call consensus estimate of 38 cents. It is suspected that Microsoft waits until the last minute to decide what the EPS will be, in order to be able to "beat the Street". On Monday, the Securities and Exchange Commission chairman Arthur Levitt criticised the behaviour of financial analysts in a speech, saying that there were "dysfunctional relationships" and that company results were tailored with an eye to consensus estimates [i.e. beating the Street], rather than "the ups and downs of business". At last it seems that these practices have caught the eye of the SEC. They are used outrageously to manipulate the share price by analysts whose employers (and who personally) often have significant stakes in the companies they're commenting on. Microsoft also uses the trick of excluding certain "special" items to make the results look better. This quarter it was Sidewalk, which had been sold for $160 million (possibly at a loss), while the year-earlier quarter included $160 million from the sale of Softimage. The result of this jiggery-pokery is to suggest a bigger percentage increase of net income. Speaking up for Microsoft's approach to the figures, CFO Greg Maffei claimed that sequential analysis of the results should not be used because of seasonal factors. However, an examination of Microsoft's revenues shows no such seasonal changes that justify using year-earlier figures. Revenue goes up or down depending on product cycles, and specifically the release dates of new versions of Windows and Office. In the past three years, revenue and income have decline sequentially in four quarters, twice in Q1, once in Q3, and once in Q4. Maffei became noticeably tense when he was questioned by an analyst from JP Morgan over the unearned revenue drop - the first ever. Maffei also made a comment that in "virtually every quarter" there had been a drop from Q2 to Q3 and from Q4 to Q1, and that this was seasonal. A glance at the quarterly data however quickly shows this is just not the case. Microsoft also makes a point of trying to turn bad news into good news, in the sure and certain knowledge that in most cases its headlines will be reported as it wishes. The "continued excellent Office sales" headline turns out differently in practice, since US Office sales were significantly weaker than expected as a result of competing products, especially in the consumer market. Office is seen to be too expensive to be bundled with most home PCs. Geographically, the bad performer was the Americas, which was up only 16 per cent on the year-earlier figures; EMEA was up 32 per cent; and Asia up 82 per cent - but the dollar amount of this increase was only $268 million. OEM sales worldwide were up 27 per cent on a year earlier. In all cases, there is a direct correlation between new PC sales and revenue. All Microsoft has to do is to sit at the till collecting the money: downward trends in PC prices are matched by upward trends in Microsoft software prices. Windows sales increased 17 per cent over the year, with productivity applications and developer tools showing an increase of 40 per cent. The Internet area grew 30 per cent, but is still only grossing $685 million. Maffei was in a strange mood during the conference call with financial analysts. He was much more upbeat than usual, and gave the impression at times of whistling into the wind. Uncharacteristically, he suggested that analysts should increase earnings per share by 3 cents above the current consensus of 39 cents for the next quarter: normally he is very conservative in such comments. Maffei is known for the extent for which he engages in "guidance bias" however. The conference call was surreal in that there was an implicit assumption that it would be business as usual for Microsoft, and that the trial would have no effect. It certainly was not mentioned, but all the signs are that Microsoft's share price could take a massive hit after Judge Jackson announces his decision on the findings of fact. "Software as a service is a reality" Maffei said, pointing the way to the future. He expects that smaller businesses will sign up first, and that the "annuity stream" will have "virtually no impact on the revenue stream" for the next "two to three years". The reason's clear enough: Microsoft will have to offer an incentive to get people to burn their boats and sign up for a lifelong cruise in the SS Microsoft. Maffei also observed that there were "a plethora of ASP models" and that Microsoft would be trying several. At some unspecified future stage, Maffei expected that Windows and Office upgrades would be released at the same time. So far as future quarters were concerned, Maffei said there was potential for a flat Q2, Q3 and Q4, with greater potential for Q4 to be up. He saw a trend to more and more corporate agreements, with less retail. So far as Windows CE was concerned, Maffei said it was "a very competitive environment" and a long-term bet. It was especially interesting that Maffei should say that it was "less than great news with Philips" (which announced recently its withdrawal from CE for hand-helds in favour of a move to smart phones). Financially, CE has little impact on Microsoft's results, Maffei said, and it did not generate any significant current revenue. Jill Barad, the former Microsoft director who announced her resignation recently, reported the proposed sale of two parcels of shares recently, one on 1 October for $3.6 million, and one a week later, for $3.8 million. The timing was perhaps unwise: it was between the end of the quarter and the announcement of the results. If Microsoft's share price falls dramatically in the near future, she could be the subject of shareholder action or an investigation. Maybe, however, she was symbolically washing her hands. ®
The Register breaking news

Free Britannica to cut off Encarta's air supply?

Encyclopaedia Britannica, founded in 1768 by three Scottish printers, became free on the Web from yesterday, at www.britannica.co.uk It had previously made most of its revenue from sales of a $60 CD-ROM, and online access fees. Britannica.co.uk is a new company that may seek an IPO, and is run by Don Yannias, who was previously CEO of the publishing company. The print edition will continue to be sold for $1,200, but it will be slimmed down. The companies are privately held by Swiss investor Jacob Safra. The new Web site could become a significant portal, linking to current news in newspapers, wire services and some 70 magazines, including Science, Newsweek, and Fortune, as well as weather forecasts and the like. A link to Barnes and Noble so that Britannica articles can reference books that can then be ordered online is being discussed. Gateway is a sponsor, as is 1-800Flowers. An online store is also being developed, but ad revenue is planned to be the primary source of income. The latest management chewing-gum tome Blown to Bits by Philip Evans and Thomas Wurster of the Boston Consulting Group (Harvard Business School Press), gives an interesting account of how Britannica was knocked from its pedestal by Microsoft. In 1990, Britannica sales were $650 million, but the decline-and-fall story is one of riches to rags. With Encarta, Grolier, and Compton being mostly given away with PCs, it proved impossible for Britannica to continue its pricing model. The door-to-door sales teams were dropped three years ago, and Britannica had spurned an approach from Microsoft, so Microsoft did a deal with Funk & Wagnells and first produced Encarta in 1993. When the then-owners, the Benton family, finally decided to sell the company in May 1995 after an impossible battering from Encarta, Microsoft was no longer interested in buying it. Safra bought the company for less than half the book value. Microsoft meanwhile finds it cannot generate sufficient annual renewal sales of Encarta, which is edutainment adapted to cater for regional user prejudice, rather than scholarship. Until this move yesterday, it had been feared that Britannica would go to the wall, and with it the destruction of the serious encyclopaedia industry. Perhaps there is now hope. ®
The Register breaking news

Cobalt drops MIPS for x86 in next-gen server appliance

Server appliance specialist Cobalt has thrown out MIPS and embraced x86 for the next generation of its RaQ server line, due to be launched new week. And it is likely to migrate its whole line over to x86 within six to eight months. The current RaQ 2, launched last March, is based on a 250MHz MIPS chip. The new model, the RaQ 3, will instead contain a 300MHz AMD K6-2 processor. Cobalt's decision to ditch its support for MIPS essentially boils down to the wider availability of software written for Linux, the RaQ's OS, on the x86 platform compared to MIPS, according to Cobalt's Western Europe channel sales director, John Fleming. With the launch of the RaQ 3, due to take place next week on 26 October, Cobalt is pushing its server appliance further towards the high end, primarily at ISPs and big business who want provide for others or host their own e-commerce and database applications. Given so much commercial Linux development work is centring on the x86 platform, anyone who wants to get in on the act quickly clearly can't wait for the big ISVs to port their offerings over to other chips. So, in the spirit of the old cliché -- if the Mohammed won't come to the mountain, the mountain must come to Mohammed -- Cobalt is moving to x86. Gunter Kraft, Cobalt's EMEA marketing director, said that many of the big name database vendors, including Oracle and Informix, are porting their apps over to the RaQ 3. But since the RaQ 3 runs standard Red Hat Linux 6 so that, according to Kraft, the server will run almost all x86 Linux software, these companies' support is rather broader than Cobalt would have us think. Applications that won't run straightaway (the restriction centres on keyboard, mouse and monitor support, since the RaQ doesn't offer any of these devices) can be ported in a matter of hours, compared to days or weeks for MIPS, said Fleming. For now, the RaQ 3 will sit at the top of the RaQ product line, backed up by a handful of RaQ 2 configurations. However, since Cobalt is committed to releasing new versions of the product every six months, the existing MIPS-based machines can't be long for this world. Ditto its Qube, small office-oriented intranet server appliance. Praveen Bhatia, ISP product line manager, told The Register not to expect an x86 version for "six to eight months", so it's clear there's a version on the way, even if it won't be released in the short-term. The RaQ 3 will ship with 512MB RAM, a 20GB SCSI hard drive, dual 10/100 Ethernet ports and an single PCI slot. It consumes just 35W of power. The machine will ship with new e-commerce-oriented security and storefront software, plus bandwidth management tools for ISPs hosting multiple customer sites. ®
The Register breaking news

CHS sheds seven to boost confidence

CHS Electronics is culling seven of its operations in a bid to cut debts. The distributor said it had returned its interests in four subsidiaries to the original owners of each company in non-cash deals. It will keep a small part interest in each company, with an option to re-buy the rest later. In a company statement, CHS said this would reduce outstanding debts by around $146 million, in what is the first of a string of announcements aimed at regaining the confidence of the market. It is also in similar talks with the original owners of three other subsidiaries to cut outgoings by a further $81 million. This would reduce its debts from the $229 million owed on 30 June 1999 to $72 million. For the first six months of this year, the seven groups made sales of $516 million, or around 11 per cent of CHS' total revenue, with net profit of $15.6 million. Peter Rigby, CHS group marketing director, said the company was not disclosing which companies were effected by the move. The only clues given were that all seven were acquired by CHS in the first half of 1998, with five located in Europe and two in Latin America. This points towards Metrologie, the French-owned company bought for $87.7 million in a deal finalised in April last year. Also acquired during the period were Raphael in Italy, and Mc Dos in Germany and the Netherlands. Rigby said none of the companies affected were in the UK. "These moves reduce the debt on the balance sheet," he said. "There have been a number of issues that we had to show potential resolutions to. Vendors were looking at our credit limits. There will be further announcements over the next few days to re-build confidence to our lenders and suppliers," he added. CHS will gain an extra $155 million of working capital if all seven deals go through. Goodwill will be cut by $222 million and net worth will go up by $165 million to $42 million. Exceptional items of $59 million related to the seven transfers are expected to be recorded in the fourth quarter. The move follows CHS losing its franchise with Intel earlier this month. ®
The Register breaking news

ATI brings Rage 3D acceleration to open source world

ATI has followed rival 3D graphics specialists 3dfx and Nvidia onto the Linux bandwagon with the open source release of its Rage chips' 3D acceleration and multimedia specs. The company also said it has contracted software house Precision Insight to develop a set of open source Linux drivers for its Rage 128 technology. ATI said the results of the development effort would be released "to the open source community" next Spring. Of course, ATI's motivation here (or its rivals', for that matter) isn't quite as altruistic as it at first sounds. Quite apart from allowing it to sell its graphics cards to Linux users -- and, perhaps, OEMs keen to offer complete x86 systems based on the open source OS -- the move will make it easier for all those programmers out there who want to get 3D graphics cards running on their own systems, or running rather better than existing official drivers allow. For example, Apple's Power Mac G3, with its bundled Rage 128 card, has long suffered from buggy drivers, not least because it's never been entirely clear whether their development was the responsibility of Apple or ATI. Today's news should allow the creation of third-party drivers that could well work better than the current ones. ATI isn't new to the open source arena, having long made its 2D specifications available to the Xfree86 group to allow Linux's X Window GUI to support ATI's cards. However, this is the first time ATI's 3D, TV tuner and video capture technologies have been exposed to public scrutiny. ®
The Register breaking news

Palm pledges colour screen handheld for 2000

Palm Computing finally responded to Palm users' most frequently made request, yesterday, when it pledged to release a Palm handheld with a colour screen during the first half of 2000. The announcement was made at the PalmSource developers conference by one Michael Mace, Palm's chief competitive officer, whatever the heck that is. We can only assume he's simply more ambitious than the company's other executives. Palm's promise was, of course, widely anticipated following Monday's launch of Motorola's latest Dragonball CPU, the 33MHz VZ. The new chip, due to ship early next year, is the first to integrate colour LCD and touchscreen control technology onto the die, allowing Palms to ship with colour screens but without extra motherboard logic. Still, Mace admitted the colour Palms would be larger than the current monochrome devices, but not, he promised, as big as Windows CE machines, which have offered colour for some time. Palm won't give an exact ship date for the new Palms, but the February/March timeframe is the company's traditional launch point for new models, and that would tie in very neatly with the anticipated volume shipments of the Dragonball VZ. ®
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RealNetworks slides out of the red

RealNetworks, the Internet media streaming market leader, has finally begun making money: its latest fiscal figures, released yesterday, showed a profit of $3 million for its third quarter on revenues of $34.9 million. This time last year, the company recorded revenues of $17.7 million (making for a 97 per cent increase year on year), and a loss of $2.5 million. RealNetworks' profit was knocked down slightly thanks to the company's acquisition of MP3 software developer Xing. Without the charge it would have posted a profit of $4.4 million. The company said growth had been strong across its product line, but it highlighted both its RealJukebox digital music system and the revenue it generates from advertising on its portal site, which grew from $2 million to $4.1 million. RealJukebox is central to RealNetworks' ongoing success, as other companies, most notably Microsoft and Apple, try to muscle in on the streaming market. Microsoft's pitch here is the way it can integrate its Windows Media Technologies into the OS and thus into a good proportion of the Net's servers. Apple, on the other hand, has been leveraging the open source movement, the very low cost of its media server and QuickTime's role to as the media creation standard. RealNetworks' profit suggests that both initiatives have yet to bite into its chief money-spinner: the hefty licences it levies for its server software. That said, Apple and Microsoft will begin to hit RealNetworks here, which is where RealJukebox comes in. By building up a significant userbase for RealJukebox -- 12 million users and counting -- RealNetworks is getting itself nicely prepared for the inevitable explosion in the digital music market. It's a canny move, since the Net music business will ultimately be worth much more than the streaming market, and will have matured long before the Net's available bandwidth can support Net-streamed video that's of sufficiently high quality to become a medium on a par with TV. RealNetworks' skill has been to leverage its RealPlayer userbase to promote RealJukebox to the point where it has sufficient critical mass to be the obvious choice for a music industry keen to offer a standard download and track management interface for digital music. No one wants a market fragmented by umpteen formats, and RealNetworks is one of the very few companies capable of offering a unified digital music front end. The big labels are likely to end up supporting RealJukebox -- if not by intent, then simply by default. So even if Microsoft and Apple -- or anyone else, for that matter -- cuts deeply into RealNetworks' streaming business, it really won't matter too much. Instead, the company can sit back and reap the rewards of a far more lucrative market. ®
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MS wireless deal with Symbian on the cards?

Microsoft and the Symbian alliance are deadly rivals, but the evidence that sooner or later (probably sooner) they're going to have to work together is becoming compelling. The latest signpost is a mobile data alliance between Microsoft and NTT DoCoMo which is due to kick off later this month, according to Japanese reports. The interesting connection here is that DoCoMo, the mobile communications arm of Japanese giant NTT, is a development partner with Symbian and intends to ship an EPOC-based Communicator device next year. So by teaming up with Microsoft DoCoMo seems to be building a bridge between the Symbian camp and Redmond. Microsoft's mobile data deals so far have involved CE-based client devices and Microsoft BackOffice apps, whereas in this case it looks like it'll be Symbian devices and BackOffice apps. This could turn out to be part of the breakthrough that nearly happened last week when, according to reliable sources, Microsoft ducked out of the Ericsson-led GPRS Applications Alliance at the last minute. Microsoft still won't have joined in with the others via the DoCoMo deal, but it should at least have offered tacit recognition that by pushing the CE-client/MS-server combination it risks losing the back end as well as the client. The DoCoMo deal will be a 50-50 venture, and seems to be specifically back end. It's intended to set up a database centre where mobile users' personal information will be stored. ®
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Acer, TSMC to expand in Taiwan despite quake

The two largest computer companies on Taiwan said today that they will continue to expand their operations, despite the earthquake that hit the island in September. According to the Computex trade show site, Acer and TSMC will continue to build fab plants in Taiwan, with TSMC putting plans in place to build six eight-inch wafer fabs and two six-inch wafer fabs next year. Acer, too, remains committed to manufacturing on Taiwan. According to Stan Shih, CEO of the company, 80 per cent of resources are on the island. The company is currently investing in LCD facilities in Taiwan, as demand exceeds supply. Meanwhile, Acer also claimed it will sell over 2.5 million notebooks next year, manufactured for PC companies including IBM, Toshiba and Dell. Chip company Intel predicted earlier this year that notebook shipments will eventually exceed desktop shipments. It introduces its SpeedStep (formerly Geyserville) technology in Q1 next year. ®
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Intel i820 update leaks

An internal Intel slide has revealed more details about the Rambus memory problem which scuttled the launch of the i820 Camino chipset, causing angry flushed faces at Chipzilla Central. And an Intel customer, who does not wish to be named, has now told us that he is expecting his two-RIMM mobos to arrive in late November. Another Intel customer says that the embarrassment is even greater because its Cape Cod mobo -- which uses SDRAM is ready to roll and works perfectly, but the company will not release it until its so-called flagship mobo, the Rambus-based Vancouver, is ready to roll. Sources close to Intel's plans add that it is under enormous pressure to ship the i820 mobo this year, otherwise it will lose enormous face both with Rambus Ink and the other six members of the Seven Dramurai. Kyle Bennett, over at HardOCP emailed us a copy of the Intel slide which makes interesting reading. As we reported earlier this week, the i840 chipset has no such Rambus problems, and that has prompted speculation that Intel may create an i840 lite for the desktop market. According to the slide, entitled Intel 840/820 Status Update W42.1, the i840 remains on target for W44 (that's next week, for us mere mortals on the planet earth). It states that for the i840 chipset, the final PTQ decision (whatever that is), considers a core kit only, comprising the MCH, the IHL, and the FWH. Decision on the P64H bridge technology, MRH-R and MRH-S will made at a later date. Intel now claims in the slide that it has identified the root cause of the memory errors. Its preliminary validation including simulation data on 2 RIMM only designs shows no failures, the slide says. But there is no launch date yet set, it adds. (In Intel speak, that's POR = plan of record). It adds that testing of the two RIMM design is the number one priority, and that Validation results now show that 2+2 RDRAM designs exhibit memory channel errors similar to those seen with 3RIMM designs. The PCG (that's the Platform Component Group in Intelspeak), is recommending a 0+2 design as the "time to market a MTH/SDRAM" solution. The PCG is providing a technical update in W43 -- err, that's this week. ® See also Camino egg on face to be wiped away by i840? Intel's i840 is a chipset that works Satan's little helpers get hammers out to i820 mobos
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MS cuts out channel to sell direct

Microsoft is usurping the channel through its re-launched Web site which sells products direct to customers. The software giant is selling its own software and hardware direct through its online store shop.microsoft.com. The Web site was originally launched in March, when customers could choose to buy through four resellers -– CompUSA, Insight, CDW and Beyond.com –- or through Microsoft. It was relauched in August, minus the resellers. Customers now using the service have to buy direct. The Web site may represent a small slice of the company's sales, and only service customers in the US at present, but it shows a marked change in channel policy. A representative of Microsoft UK today said there were currently no plans to bring the service to Europe. And Microsoft claimed the direct selling was only a temporary move, PC World News reported. "This is not a formal long-term decision," claimed Ken Schneider, Microsoft director of customer marketing. But no date was given for when resellers would be re-installed. It is unclear if an outside distribution company is being used for shipping the products. A $5 shipping charge per order guarantees second-day delivery, and $12.50 overnight delivery. Schneider was giving out confusing messages about the site; he maintained that sells a "mixture of products you can't get in the channel". Yet The Register found Office 2000 and Windows 98 for sale, as well as hardware such as Microsoft keyboards and mice, which we are reliably informed can indeed be purchased through resellers. ®
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Dreamcast Net access a ‘not access’ say users

Sega's European Dreamcast launch last week has been marred by the problems buyers of the next-generation games console have had using it to access the Internet. The Register has received a number of reports from Dreamcast users who have entirely failed to get online, including indications that no one at all has been able to get online since the weekend. Dreamcast ships with a built-in 56kbps modem, and Sega jumped into bed with BT and ICL earlier this year to bundle free Internet access with the console. Fine, and you'd have thought that if anyone can handle the necessary infrastructure to support all those Dreamcast users logging on the Net for nothing more than the price of a local phone call, BT could. But no. It's clear from numerous Register readers that from the launch on 14 October, the Dreamcast Net access server has been either down or so jammed that it may as well be down. Sega is currently claiming to have sold 185,000 units across Europe since the console's launch, 63,000 of them in the UK alone, so it's entirely possible that demand has outstripped BT's ability to connect everyone up. According to Sega, "25,000 users registered for internet use in the first hours of the launch weekend and BT registered 1.2 million Internet minutes over the launch weekend." Except the "unprecedented" demand should not have been unpredicted, so at the very least it looks like Sega and BT completely underestimated the number of buyers who would want to get online. Given the demand for other free Internet access services -- and, indeed, the demand Sega's PR machine was predicting -- this is surprising. Sega has at least recognised the problem. "I know that some people had difficulty in getting through to register," admitted J F Cecillo, CEO of Sega Europe, "but Internet on the TV is a first... Together with BT we have put the right measures in hand for everyone to be accommodated." Except it isn't a first -- WebTV has that honour. According to Sega, both it and BT "have dramatically increased both network and port capacities to ensure that all users can have the Dreamarena experience immediately." Fingers crossed... ®
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Consumers face PC confusion post-Coppermine launch

Unwary buyers of PCs in the run-up to Yule could find themselves buying a pup unless they closely question retailers about which Intel chip is inside. Next Monday, Intel will introduce its better Coppermine technology, and at the same time introduce a whole batch of variations on the Pentium III theme. The introduction is expected to be supported by a large number of large PC companies, and there are new flavours of server and notebook chips too. That will mean confusion because PC companies are unlikely to brand machines which use the new Coppermine technology and on Monday will also introduce other innovations such as a faster, 133MHz system bus One PC manufacturer, who declined to be named, said: "I'm not sure how customers will be able to tell unless they can ready POST screens very quickly. It will certainly be very confusing for some customers. So is that a PIII-600 with 512K cache/100Mhz or 512K/133Mhz or 256K/100 or 256K/133?" He added that in the world of retail, it's the Megahertz Mark that counts, and it will be difficult for some buyers to understand the subtleties of second level cache and system buses. Earlier this year, a corporate buyer of notebook machines complained to The Register about a similar problem, when Intel introduced its first .18 micron processor. He said that he was unable to find out which of the major vendors were using the new technology. It was important, he added, because the new process technology Intel introduces runs far cooler than the older, .25 micron technology. Those problems will be multiplied after Monday's launch because there are new .18 micron notebook chips being launched. ® See also Coppermine: we got the prices Intel Coppermine mobiles: we got the prices
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Copper Athlon hits 900MHz, AMD cranks 1GHz-plus production

AMD says it has already produced a copper interconnect Athlon running "at speeds in excess of 900MHz" at its Dresden Fab 30, which formally opened today. The chip was a pre-production version, but AMD intends to bring copper Athlon production fully on-stream at Dresden later this year. This however will be the qualification process, and from today's announcements it's clear AMD intends to keep users gagging for 1GHz Athlons for a while longer yet. Full scale production will commence over the next few months, and the company doesn't expect "revenue shipments" (i.e. real, live product on sale) until the second quarter of next year. At the fab opening ceremony AMD chairman and CEO Jerry Sanders said Dresden would produce 0.18 micron copper interconnect Athlons running at 1GHz and beyond next year. AMD also said that fab capacity would grow to 5,000 8in wafers per week. The lengthy run-up AMD is giving itself could mean that at last the company is boxing clever. It figures it has a lead over Intel in copper technology (AMD misses no opportunity to describe Dresden as the world's most advanced facility), and it has plenty pent-up demand, so it has the time to work on yields, maximise production and then hit the market in Q2 at full force. And then there's the matter of the Dresden Design Center, the R&D section running alongside Fab 30. At the opening ceremony Sanders made a point of stressing the Center's importance in designing a "total solution... including the processor and the surrounding circuitry." Advanced Athlon chipsets, anyone? ®