21st > October > 1999 Archive

The Register breaking news

FSA warns of Net trading dangers

The head of the Financial Services Authority (FSA) is warning investors about the hazards of day trading on the Internet. Howard Davies, chairman of the UK persoanl finance industry regulator, said investors needed to be made aware of the risks associated with using the Internet to buy and sell shares on the same day, in the hope that such fast transactions will net a profit. He said that only three out of ten day traders in the US made any money, while the rest lost out. "Seventy per cent of day traders in the United States lose money and it is important that people are aware of the risks and understand the nature of the expenses they will need to cover before any possibility of making a profit," said Davies. "There is nothing illegal or unethical about day trading. But investors need to know what they are doing." He also warned companies and investors about the gossip and misinformation that circulates on the Net. Firms need to monitor chat rooms for unauthorised investment advice, or share ramping through suggestions or gossip, he said. "Investors need similarly to be on the alert. They should beware of stocks which appear to be being 'promoted', when the interests of the promoter are unclear," he said. In July, US investor Mark Barton ran amok killing his wife and two children before shooting dead nine other people at the Atlanta offices of day traders Momentum Securities after he had suffered substantial losses. ® For more financial lead for your Net Smith & Wesson, tune into Cash Register and turn on to our daily Net Finance News
Tim Richardson, 21 Oct 1999
The Register breaking news

365 to IPO – but not exactly a pure Net company, is it?

365 Corporation has confirmed its intention to IPO on the London Stock Exchange. Blue blood broker Cazenove is to be joint lead bookrunner alongside Durlacher, the niche investment bank which has re-invented itself as successful Internet upstart.
Team Register, 21 Oct 1999
The Register breaking news

Palm fuzzes on colour, hides behind IPO smoke screen

Analysis Coming less than a week after Palm commenced pre-nuptials with Symbian, and Nokia in particular, you'd have thought that Palm executives wouldn't arrive empty handed at their annual PalmSource conference. But instead they've come over all coy. Since we now know that 3Com and Symbian have been talking for the best part of a year, you'd suppose that some kind of red meat would have been cut ready to throw at Palm ISVs, along with an explanation of just how they're going to tie the knot. More of that in a tad - but if you're feeling nervous about Palm's IPO, don't read beyond the next few paragraphs. But first, thanks to our American friends who felt moved enough to write to us rubbishing CNet's prediction that colour Palms would appear in the New Year. "I was in the room, and he didn't say that" says one. In fact Palm seemed even more at pains than usual to stress that it prized the monochrome Palm's battery life and performance. Colour has done as much to cripple Microsoft's Windows CE as it has to help it, after all. And perhaps more revealingly Palm reckons that hardly any applications will look better for it. The clincher for us is that since there are no plans to lift the fixed 160x160 screen resolution - for Palm themselves, let alone their licensees - until the EPOC'd PalmOS version 4 (wait, wait...) they've probably sealed themselves in on that count. So it looks like CNet, having caught wind of both the upgraded Dragonball processor which will support colour, and the colour support due in the OS at that time, wilfully misheard. Of course Palm could be leading everyone a merry dance, but given the state of the current technology the smart money must be on Palm letting one of its licensees take the fall for a colour clunker, leaving the Palm brand unsullied. But back to the gripes. We're told that the Q&A sessions had plenty of Qs but no As - and our moles were pretty livid about the fact. We couldn't help noticing that Palm's official explanation - on offer to anyone who would listen last week - is that Nokia will use the EPOC kernel. Kernels can be dropped in, reckons Palm, and kernels can be dropped out. (Palm uses a kernel licensed five years ago from Kadar). Taken at face value this stretches the dictionary definition of 'kernel' way beyond what might be considered decent -and certainly beyond what common-sense suggests in this case. It's becoming clunkingly obvious that Palm's own comms cupboard post-IPO is pretty bare, and it's going to be leaning on EPOC for pretty much everything other than the GUI and Graffiti input. But Palm knows that this is a very bad time to admit it. How so? For a start, EPOC's TCP/IP is pretty low level, but certainly not kernel mode, and relies on EPOC's baroque but essentially watertight resource architecture. OK, so the IP is Symbian's. And having wasted so much time on the albatross of web-clipping, it's going to be borrowing Epoc's WAP libraries too. In fact, it's an EPOC phone with the Palm UI in place of the Symbian EIKON layer: Nokia sensibly is 'licensing' PalmOS in the same way most of us 'license' ale. Back to our developer friends - "The PalmOS IP stack stinks - it's good fortune if it works. We know it's going overboard, but there's no indication of what new APIs will appear or when." Developers won't know until late 2000/early 2001 it seems, by which time they'll be trailing native Symbian ISVs by nigh-on three years. Version 3.3 went out this week and 3.5-based devices are due next Spring, so there's plenty of work to be undone. This also appears to be undoing a lot of the goodwill from IHVs. Given the lack of direction we're not surprised the ISVs are whinging - but Palm's get-out - execs were claiming a pre-IPO vow of silence this week - is half the trouble. They're stretching the truth here, if not being blatantly dishonest. Can it get worse? It can. Palm has taken the step of letting licensees undercut it for value (TRG and Handspring) and expandability (Handspring again), at the cost, of course, of cutting itself off from creating lucrative volume and high-margin segments. A 'Palm Industrial' and 'Palm Expandable' (read bolt-on consumer gadgets) would surely have made far more sense. After all, market leaders don't usually need to license, and Palm is so far ahead it could surely afford to turn the screw. On top of all that, it only takes Wall Street to take a closer look at PalmOS and discover that very little of it will be at all usable in two years time for the IPO valuation to come clattering down. So there's your reason for Palm executives keeping quiet - they just think we haven't noticed… Register stock tip: save your money instead for Handspring's IPO (no, it's not been announced yet). ®
Annie Kermath, 21 Oct 1999
The Register breaking news

AOL-Gateway deal paves way for Linux Web appliance

The appliance strategy AOL announced earlier this year when it bought Netscape has started to take on clearer form, with the announcement of an $800 million alliance between AOL and Gateway. This ties Gateway PC hardware and AOL online services closer together, but is also intended to take the pair way beyond the PC. You don't really need anybody to draw a picture for you, but in a note in its Q3 report yesterday Gateway does anyway: "Gateway and America Online today unveiled a strategic alliance to accelerate distribution of each company's products and services, create a host of new personalised Internet services and ramp up the 'AOL Anywhere' vision of Internet access across multiple devices for consumers in the home and on the go." Of Gateway's old buddies, Intel will be pleased with the deal, but it's ominous for Microsoft. Intel is the likely winner as far as much of the basic hardware for the proposed appliances the pair will develop, but independently (?) both AOL and Gateway have been turning to Linux as the base OS for their post-PC efforts. Gateway has been beavering away at the cheap/subsidised Web PC area already, and is also getting into the appliance market via Cobalt, so the AOL alliance is clearly designed to take it further in and - as we noted would be necessary when AOL first started talking about Internet appliances - provide AOL with a hardware arm that can build the devices its corporate visions require. There are Gateway connections worth noting - the long-standing one with Intel and the more recent one with Cobalt. As a long-standing Intel loyalist Gateway can be expected to support Chipzilla's efforts in the appliance market, and by a massive coincidence you'll recall that Intel managed to muscle in on AOL's "AOL TV" efforts earlier this year. With this AOL envisaged set-top box type devices that would facilitate a merger between Web-type services, TV and satellite. Intel of course envisaged millions of chip sales, and it's safe to presume that Gateway must now be in on that deal. And Philips out? It's like those old Westerns - Philips always gets it. Cobalt's switch from MIPS to Intel as a platform meanwhile seems massively convenient to Gateway. When we reported the Gateway-Cobalt server appliance deal we did wonder how long Gateway would be able to sustain selling devices with non-Intel chips, but the speed with which Cobalt decided Intel-Linux was a more viable combination than MIPS-Linux surprised even us. And of course it's a happy coincidence from Gateway's point of view. The Cobalt deal gave Gateway an entrée to the market for cheap, simple email, Web access and low-rent Web server boxes for small business, and the Cobalt switch of platforms will allow Gateway to use more of its own and Intel's technology. The AOL relationship will give Gateway easier channels to sell these through, and plenty of scope to produce other classes of box in furtherance of AOL Anywhere. The mechanics of the deal are that AOL will invest $800 million in Gateway over two years (worth about a 5 per cent stake), $150 million of that being in AOL stock. AOL will take over the admin of Gateway's online service, Gateway.net, and Gateway will spend $85 million in marketing via AOL. AOL gets prominent placing on Gateway desktops, and AOL will promote Gateway PCs. The two will jointly develop hardware and software products. Separately, both companies reported record quarterly earnings yesterday. Gateway's Q3s showed a 39 per cent increase in unit shipments, revenues up 20 per cent to $2.18 billion and net income up 40 per cent to $113.2 million (nice, but we're talking narrow margins here). AOL's Q1 income was up 47 per cent to $1.5 billion, and net tripled to $184 million. But you can never be sure about AOL results until you've consulted flotillas of tax accountants. ®
John Lettice, 21 Oct 1999
The Register breaking news

French telco has designs on UK mobile licence

France Telecom is to join the bidding for one of the UK's next-generation mobile phone licences. The telecomms giant will be gunning for the contract via its UK partner NTL, and believes the cable group is well placed to beat off the opposition due to its strong market position, according to today's Financial Times. Five UMTS licences are planned to be auctioned off next year. Michel Bonn, chairman of France Telecom, said: "In the UK there are already four licences. I think it would be difficult for us to buy one of those four. "For mobile in the UK, we are aiming rather at the UMTS licence, where it seems to us that NTL –- which is the main competitor for British Telecom in fixed telephony -– is an ideally placed candidate." The French telco giant has a 25 per cent stake in NTL, for which it has to part with $5.5 billion. Bonn's announcement follows the DTI statement in March that it would be putting aside an extra, larger licence, reserved for a new entrant to the market. It will add an extra competitor into the market currently dominated by Vodafone, BTCellnet, Orange and One2One. France Telecom was reported back in April as a possible bidder for the extra licence, along with Tesco, Sainsbury's, Virgin and Deutsche Telekom. The UMTS licences auction had been planned for this summer, but was forced back following problems at the DTI. The next-generation technology will allow mobile users to surf the net, access email or hold videoconferences. ®
Linda Harrison, 21 Oct 1999
The Register breaking news

Yac debuts free unified messaging service

An Irish company is set to offer a free unified messaging service (UMS) to Net users. Yac.com -- which stands for "You're Always Connected" -- has one million telephone numbers to give away so that anyone who wants to be contactable all the time can be literally just a phone call away. By simply using one yac.com number, users will be able to divert al their messages to their home, office, mobile -- or even e-mail -- depending where they are. A number of big-name Net companies, including AOL, are interested in the service as another nifty offering for users in order to maintain loyalty and stickiness. Yac.com makes its money by taking a cut of the call charge when people call the Yac number. Around 18,000 people have already registered their interest for Yac.com, VP Piers Mummery told The Register. ®
Tim Richardson, 21 Oct 1999
The Register breaking news

Equiinet boss savages BT over ADSL fiasco

Bob Jones, chairman of UK Internet company Equiinet, has condemned BT for announcing that its ADSL beta trial will feature slower access speeds at a higher price. The monster telco informed triallists last week that the move was part of BT's plans to introduce the service nationwide next year. In a prepared statement, Jones said: "BT should be ashamed of itself. The government is pushing our businesses to embrace ecommerce, which will rely upon better Internet access. But by watering down its ADSL offering BT is narrowing the roads and is in danger of slowing Internet traffic back to a crawl. "BT is already months late in rolling out ADSL and the technology exists to support the service: our customers are trialling it and like it. If BT isn't interested in ADSL, it should get out of the way and let other operators handle it." This is not the first time Jones has stepped up to chin BT on behalf of UK Net users. Back in June, he accused BT of holding the country to ransom. He was responding to comments made by BT that it would not want to invest heavily in broadband services "unless the authorities reject demands from BT's rivals for immediate and full access to the new system". ®
Tim Richardson, 21 Oct 1999
The Register breaking news

SGI loss deepens to $213 million

SGI blamed its Q1 2000 loss of $68 million, announced yesterday, on a "temporary loss of momentum", but it's hard not to see it as a sign the company is grinding to a halt. The loss was five times worse than Wall Street had been expecting, and to make matters worse, that's before anyone took into account SGI's restructuring charges, which dragged the loss down to a staggering $213 million. This time last year, it lost $44 million. Revenues for the quarter reached $425 million, down slightly from the $475 million it recorded for the same period last year. CEO Robert Bishop put a brave face on the news, claiming that the company's restructuring is continuing apace and that "solid progress" has been made in the past few months. Possibly, but the outlook isn't too good. The restructuring charges incurred in the quarter included $86 million which SGI had hoped to make selling off its Windows NT workstation product line, but clearly no one was willing to pay the asking price. That doesn't bode too well for SGI's plan to sell of its Cray supercomputer division, announced, like the NT workstation sale, back in August by then CEO Rick Belluzzo. Soon afterwards, Belluzzo bailed out to go and work of Bill Gates, and we now wonder how seriously he considered staying with SGI. The company announced last month that it had found a partner to join with it in taking a stake in a spun-off Cray operation. That said, it has yet to say who the partner is, which suggests that both parties have yet to finalise terms. Given that's what it was saying about the NT workstation line not so long ago, confidence that it can pull off the Cray sale can't be high. At least it appears to be still selling computers -- it's revenue wasn't down too much -- so some money is coming into the company, though it will need to work very hard to increase sales, if it wants to pull out of its loss spiral. You can see the logic of focusing on high-margin Net servers here, but going right up against Sun, IBM, HP, et al and making a go of it is going to take some doing. ®
Tony Smith, 21 Oct 1999
The Register breaking news

Be revenues rise – but profits don't much

Alternative OS developer Be saw its revenue show its latest quarter-on-quarter rise, yesterday, when it reported its Q3 1999 figures. Alas, though, as revenues rise, Be continues to lose money overall. This time round, Be lost $4.5 million, compared to a slightly greater $4.7 million last quarter and $2.4 million for the same period last year. Factor in various charges due to "the amortisation of deferred compensation and preferred stock accretion", Be's latest loss rises to $6.1 million, compared to $6.6 million and $3.6 million for Q2 99 and Q3 98, respectively. Revenues for Q3 99 -- Be's second quarter as a public company -- totalled $775,000, up from Q2 99's $537,000 and Q3 98's $226,000. Be's increased revenue is derived from sales of BeOS, which have grown as the company has begun to pump the OS through new supply channels, such as Dell's online store. Increasing disenchantment with Windows, helped by some users' concern over the complexity of Linux, should boost Be's sales here, but are either of these really enough to build a successful business? We think not. Linux may be complex to some users, but it's getting easier to install, set-up and use all the time and, frankly, gets far more headlines than the BeOS does. Want proof? Red Hat's most recent revenues were $7.2 million -- just under ten times Be's. Be is making valiant attempts to get software developers to port over applications, but by and large the BeOS has a shortage of solid, mainstream apps. Roy Graham, the company's VP for sales and marketing, said in the results release: "To enhance our future product offering, we teamed with RealNetworks to bring the RealPlayer G2 to BeOS users, with Roland to bring USB audio support to BeOS and with Monolith Productions to develop Shogo: Mobile Armor Division, an interactive computer game." All good stuff, to be sure, but is that the best the company can do? Perhaps, though, that doesn't matter much to Be, which appears to be increasingly targetting the Internet appliance and embedded markets. So far, Be has little to show for its work here, but Microworkz' iToaster and a prototype BeOS-based appliance. If Be is to move rather more quickly toward profitability than it currently is, it really needs to get some solid appliance design wins, and step up its marketing in the face of the Linux onslaught. ®
Tony Smith, 21 Oct 1999
The Register breaking news

Fujitsu Siemens takes on Sun in Europe

The new company formed from the union of Fujitsu and Siemens has revealed that it will use a Sparc clone running 100 per cent binary-compatible Solaris for a future range of servers which will displace the RM MIPs-based servers it currently sells. According to Dr Josef Reger, strategic VP at Fujitsu Siemens Germany, it already has four and two-way machines available using a Sparc processor produced by Fujitsu subsidiary HAL and licensed by Sparc International. Next year, it will introduce eight-way systems in Q2 of next year, and will introduce a 64-way system at the end of the year 2000. Reger said that computer companies such as Fujitsu Siemens needed to be able to offer Unix, NT and mainframe machines, and that the Sun clone fills this need. Perhaps more interestingly, Siemens has lost market share to Sun in the last two years and wants to regain that position. The company said that it would be able to offer elements around the Sun clones that Sun could not offer itself, including integration, and a range of other services and products, including storage systems and software from third parties. Further, said Reger, it would compete aggressively against Sun in the European market, and, overall, he claimed that Fujitsu Siemens would be the number one supplier of PC and servers in Europe by the year 2001. The decision to adopt the Solaris model and to use the Sparc chip did not affect the relationship it has with Intel. He said that it would continue to develop Solaris for Merced-Itanium, and would also port the strangely named BS2000 mainframe software to the Merced-Itanium platform too. There are complications. Amdahl sells Sun Solaris systems and makes a considerable amount of dosh out of the deal. Reger says it is in negotiations with Amdahl to resell these systems but it is unclear what the outcome of these negotiations might be. But Siemens will put the US operations it currently has under the Amdahl wing towards the end of the year, executives confirmed. ®
Mike Magee, 21 Oct 1999
The Register breaking news

Avnet pops out for a little Italian

Avnet is to buy two Italian distributors as part of its European expansion. The Arizona-based distributor will add PCD Italia and Matica, both based in Milan, to its growing stable of European companies. Earlier this year, Avnet landed itself an AMD franchise in the UK by acquiring UK distributor Flashpoint via its buyout of Marshall Industries. PCD Italia and Matica reported combined sales of $120 million for the year ended 31 December 1998, and will add their 60 employees to the Avnet group. PCD Italia is a distributor for IBM and Sun Microsystems, while Matica sells Hewlett-Packard. Both will join Avnet's Computer Marketing Group as part of its Hall-Mark Global Solutions division. PCD's main products include IBM AS/400, IBM RS/600, IBM printing, storage and software and Sun workstations and servers. Matica's include HP servers. Roy Vallee, Avnet chairman and CEO, said the company was looking to acquire more companies in the area to enable it to break into new sectors. "We are seeking to acquire companies on the Continent that will strengthen our efforts in providing the highest value relationships to our customers and suppliers, and expand our business into new markets," he said. The company said the integration of the Italian companies should run smoothly as both showed a similar culture to Avnet. Hall-Mark's sales in Europe reached $117 million for this financial year. This figure will be doubled by these latest acquisitions. The Hall-Mark division also operates in North America, Austria, Australia, the Czech Republic, Germany, Hungary, Poland and Switzerland. ®
Linda Harrison, 21 Oct 1999
The Register breaking news

IBM sees Y2K issue hurting sales

IBM issued what amounts to a profits warning yesterday, with Lou Gerstner putting the blame on Y2K. He said that IBM would "continue to feel the effects of the Y2K slowdown in Q4 and early into next year". CFO Douglas Maine said "It is more than apparent that many customers had bought ahead to accommodate Y2K testing" and that this had "slowed the deployment of more complex systems". Gerstner thought that predicting next year was difficult, but once the "lingering Y2K effects" declined, "next year has the potential to be a very good year for IBM". IBM did make its Q3 numbers by announcing earnings in line with expectations, but it was not enough to stop a $5 drop in the share price to $102 overnight. The Q3 revenue was $21 billion, up 5 per cent from a year earlier but down 3.5 per cent from the previous quarter. Net income for the quarter was $1.8 billion, up 18 per cent on the year-earlier quarter but down 26 per cent on the previous quarter. Gerstner said that Q3 was "decidedly mixed", which is perhaps not surprising since the company is in effect five separate businesses. The negative side included large servers, and to a lesser extent services and OS software, but there was growth in services, non-OS software (especially Tivoli) and OEM business. Logically, if Y2K is to be the scapegoat, it is more useful to compare the previous quarter's results rather than those of the year-earlier quarter, in order to get a clearer picture of the trend. If you do this, what you find makes gloomy reading: hardware sales are down 6 per cent to $8.8 billion; global services are down 1 per cent to $8 billion; software is down 4 per cent to $3 billion; global financing is up 4 per cent to $0.77 billion; and enterprise investments are down 7 per cent to $0.62 billion. It is possible that the results will revive talk of creating baby IBM's to increase shareholder value, but the counter argument, cited by Gerstner, is that it was the breadth of IBM's business portfolio that gave it resiliency. Sales in the Americas were essentially flat compared with a year earlier; EMEA was down 2 per cent; and Asia-Pacific grew 28 per cent. The sale of the global network business to AT&T for $5 billion brought $730 million in the quarter, with IBM recognising a pre-tax gain of $586 million ($366 million after tax). The acquisition of Sequent, Mylex and DASCOM resulted in a pre-tax charge of $111 million. CFO Douglas Maine suggested that Q4 would probably yield 78 cents/share, compared with 93 cents/share for Q3 (90 cents after the one-time gains), with Q1 earnings next year probably being flat compared with a year earlier. With IBM coming clean about Y2K effects on its business, it could well trigger some more forthright statements from other companies that did not want to be first to break the bad news. Financial analysts were surprised at IBM's forecast of a future downturn. In the medium term however, sales are likely to pick up since Y2K has resulted in greater top-management awareness of the need for up-to-date systems to exploit e-commerce. Consequently, sales from the end of the first quarter next year could prove to be very robust. Meanwhile, IBM will be undoubtedly be subjected to close scrutiny for the next two quarters. ®
Graham Lea, 21 Oct 1999
The Register breaking news

US advertisers question Web rules for kiddies

The US Federal Trade Commission issued new rules governing the collection of children's personal information by Webmasters yesterday, as required by the Child Online Protection Act (COPA). Kids' Web sites will now be required to obtain parental consent before gathering demographic data on children below age 13. Numerous kids' Web sites function as little more than demographics clearinghouses, offering free entertainment and online amusements in exchange for the registration data which they analyse and sell to advertising firms. Advertising front groups have lobbied hard on Capitol Hill against parental verification requirements, chiefly because setting them up in any effective manner would likely push the cost of the data to a point exceeding its value, or at least close enough to it to make the whole operation more trouble than its worth. Advertising is a $600 billion a year operation in the US, with Web pitches representing roughly one per cent of that. Kids, whose entire commercial identities are overwhelmingly that of care-free consumers, represent a special target. A great deal of money and effort goes into marketing to children, whose incomes, strictly speaking, are entirely disposable. Separating them from their allowances has become something of a science unto itself. Privacy groups have been equally vocal in registering their contempt for the commercial use of kids' personal data, especially where very young ones, who may not have a clue what the information will be used for, are concerned. The FTC listened, and thought, and developed a scaled approach which would burden most heavily those firms gathering the most detailed data for sale to a third-party, and imposing the lightest burden on those that keep non-specific data in house. At the upper end, a fax, a signed letter (not in crayon), or a credit card might be required before a child could register on a site. At the lower extreme, a simple email and a follow-up phone call from a friend with a deep voice would do the trick. Early soundings from both industry flacks and privacy advocates have been remarkably positive. It may well be that vagueness in the regulations is producing considerable optimism on both sides, which can only be crushed by bitter experience when they take effect in April. ®
Thomas C Greene, 21 Oct 1999
The Register breaking news

QXL auctions off Wembley Stadium

QXL.com has won the contract to auction off Wembley Stadium, the British home of football, which gets demolished next year to make way for a new national stadium. Paul Fletcher, commercial director for Wembley national stadium, said the company would pump the auction profits back into the new arena. "Callers have expressed a desire to own everything from the Twin Towers to the taps in the players' dressing room," he said. QXL opens the bidding early next year, but it has already set up a pre-registration auction website at www.qxl.com. It's signed up commercial property specialist Weatherall Green Smith, to help it flog Wembley's plant and machinery. ®
Drew Cullen, 21 Oct 1999
The Register breaking news

Real3D dead – Intel buys bones

Graphics specialist Real3D has collapsed, though since the dust has yet to settle, it's proving rather difficult to see the state of the body. Real3D's parent and 70 per cent shareholder Lockheed-Martin last week shut the company down, and sold the remains to Intel, which owned 20 per cent of the stock. SGI owns just under ten per cent, but this may actually now be owned by Nvidia, following its deal acquire all of SGI's graphics development resources. Real3D developed Intel's lacklustre 740 graphics technology. That Lockheed-Martin would want to get rid of Real3D is clear from the industrial giant's statement of 27 September, when it said that under its current restructuring programme, it would divest itself of "non-core" business. That said, Real3D wasn't one of the eight companies specified, but in any such strategic and organisational review with a view to streamlining the business by cutting staff, Real3D could easily be added to the list of non-core activities, and this is clear what has happened. Non-core Real3D may have been, but it owns a stack of 3D graphics technology patents, and that appears to have been what interested Intel. Chipzilla also seems to have picked up some of the company's staff, although it has brought them on board as contractors rather than full employees, which suggests this is more of a goodwill gesture. Other staff, according to email 'zine The Wave Report, have been cherry-picked by ATI, which is ironic given Real3D's attempt to sue ATI last June over alleged patent infringement and, more particularly, misappropriation of trade secrets. The patents in question were originally assigned to GEC, and presumably were later acquired by Martin Marietta upon their merger. Finally they ended up with Real3D when it was spun-off from Lockheed as an independent company 1997, two years after Lockheed merged with Martin Marietta. Whether the case will continue now that Real3D appears to be no more, remains to be seen. Given Intel's vigorous legal team, we suspect it will, doubly so since it would be a handy favour for S3, currently Intel's favourite 3D graphics company and longtime ATI arch-rival. An Intel spokesman confirm the acquisition of the patents, but was unable to comment on the possible legal outcomes of the deal. ®
Tony Smith, 21 Oct 1999
The Register breaking news

Memcorp protects IP with acquisition of bust add-ons firm

Memory Corp, the company that has taken to describing itself as a "digital data management company", has bought up bust add-ons company Modtech from the receivers for an undisclosed sum. Or rather it has bought up certain assets and goodwill associated with the business -- the debts are left behind with the creditors. There's a certain amount of intellectual property protection here -- Modtech has been "involved in the qualification of MemCorp's SoulMate and will play an important role in the future development of both MP3-GO and other Memory products". ModTech also owns a proprietary operating system called Galaxy, which turns PCs into TVs, capabile of playing audio, TV, Teletext and Video. The nitty-gritty of the Modtech business is more mundane, namely the manufacture of internal modems and graphics cards. Sales for the year to December 1997, turnover was £8 million and operating profits stood at £0.184 million. ®
Drew Cullen, 21 Oct 1999
The Register breaking news

High UK Net call costs are hurting Intel

A senior executive at Intel has admitted privately that the high cost of dial-up access in Britain is "hurting" the chip company. He was speaking after a panel of Net industry professionals -- including execs from Intel -- were put on the spot about the cost of net access in Britain. Both John Woodget and Gordon Graylish of Intel declined to berate BT for its pricing structure deciding instead to take a more diplomatic tone. This is despite the fact that Intel held a secret meeting with the telco's arch foes, the Campaign for Unmetered Telecommunications (CUT). Intel's publicly diplomatic stance is in sharp contrast to that of AOL Europe which is stepping up its campaign against BT. This week Andreas Schmidt, AOL Europe's president and CEO, urged business leaders to unite behind the company's campaign against the high cost of metered Internet telephone calls in the UK. Schmidt 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 ecommerce revolution. ®
Tim Richardson, 21 Oct 1999
The Register breaking news

Amiga users demand open source AmigaOS

Analysis Amiga users have begun a campaign to persuade Amiga, inc. president Thomas Schmidt that the success of both company and community depends on taking a leaf from Linux's book and releasing the AmigaOS under an open source licence. Initially, the plan is to focus on the open source release of the current, 'classic' AmigaOS, but according to Steve Crietzman, president of the Campaign to Open Source AmigaOS (COSA), if Schmidt is willing, it could also take in Amiga's upcoming Amiga Operating Environment. While the proposal sounds at first like just another attempt to hop on the open source bandwagon, the COSA's plan, which has won the backing of open source guru Eric Raymond, does make some sense. At the very least, since Amiga, inc.'s software-only strategy effectively leaves the current AmigaOS behind, going open source would allow the platform's proponents to continue the development that the company has now to all intents and purposes abandoned. If the Linux pattern is followed, the move could also see AmigaOS being taken to other hardware platforms, though it's not hard to foresee a minority of more reactionary Amiga supporters feeling this might be a sign of the dilution of the OS' purity. However, since the life of any IT product is only worth preserving if there are people out there who want to use it, winning new users is essential to AmigaOS' survival. The benefit for Amiga, inc. is, however, a little less convincing. COSA's pitch here centres on the way the open source movement can revitalise a product and help get it into new markets. And, indeed, it has, as Linux's expansion out of the server and desktop arenas into broader, embedded markets has shown. The snag, though, is that since Amiga, inc. isn't pursuing an AmigaOS-based strategy, widening that OS' market penetration actually doesn't help the company much beyond raising awareness of the name. The last thing Amiga, inc. wants is for developers to be turned on to AmigaOS through its openness only to find that the company is actually working with something completely different. Of course, the sub-text here may be that Amiga should bring AmigaOS back into the fold, issue it under an open source licence and then seek to make revenue selling ancillary services, such as packaged versions of the OS and services. COSA's focus on Red Hat would certainly suggest that. What this argument fails to take into account is the fact the Linux has always been offered on the single most widely-available computing platform, and Linux had already achieved a wide level of support, something that Red Hat was able to leverage. COSA's plan also makes the assumption that what worked once, for Linux, can work again, for AmigaOS, and that is open to challenge. Linux has some real benefits for a wider userbase than its techie early adopters, and the open source process has enabled those benefits to be easily evaluated and adopted. AmigaOS also has some distinct advantages, but whether they amount to something unique to win the support a wider range of users is open to question. Still, if Schmidt proves unconvinced by the business arguments, he should at least give COSA's proposals serious consideration since it will ensure AmigaOS has a longer lifespan than it might otherwise have and, in any case, making AmigaOS open source is really no skin off Amiga, inc's nose now. So why say no? In his last open letter to the Amiga community, Schmidt mentioned his willingness to talk to anyone interested in extending the classic AmigaOS. It's not clear whether that means he's keen solely in companies interested in licensing the OS commercially, or in any attempt to do something new and interesting with the technology. COSA's proposals, already submitted to Schmidt, certainly rate highly in the latter category. ® Details of the Campaign to Open Source AmigaOS's proposals can be found at the organisation's Web site
Tony Smith, 21 Oct 1999
The Register breaking news

Robot cat barred from flight to Moscow

A bizarre story in This is London tells of Reading University head of cybernetics Kevin Warwick's skirmish with British Airways. Warwick (is there a Kevin Reading at Warwick University?) allegedly tried to book his robotic cat a seat on a BA flight to Moscow. BA staff were adamant that the "cat" should go in the hold, as animals weren't allowed in the cabin. No amount of arguing would convince them it wasn't a real animal. Why was a top Brit cybernetics boffin trying to take a hi-tech cat to Moscow? Surely not a case of KGB Kev? No, Hissing Sid (clearly a mutant cat, from the name) was bound for a tour showing UK technology to Russian scientists. Faced with intransigence from BA staff, Warwick booked on Aeroflot. But even a first generation robot cat could have told him that wasn't a good idea, we reckon... ®
Kieran Skittles, 21 Oct 1999
The Register breaking news

CHS names the ditched divisions

CHS Electronics has revealed the names of subsidiaries offloaded to improve its balance sheet. The US-based distributor told The Register it had handed back the following operations to their original owners: Memory Set and ARC Espana Cartera, both in Spain, and Arena Bilgisayar Sanayi ve Ticaret and Armada Bilgisayar in Turkey. Yesterday CHS announced it was shedding seven of its subsidiaries in Europe to cut outstanding debts and win back the confidence in the market. Richard Kaminsky, director of investor relations and assistant treasurer at CHS, today said the names of the other three subsidiaries could not be disclosed as negotiations were still ongoing. He said that of the three, two were in Latin America and one was in Europe. Kaminsky believed the cost-cutting measures would help put CHS back on track. "There are a number of things that we need to do. This is one step of several that need to be taken," he said. "First, there is the balance sheet matter to address via reducing earn-out liabilities. "The other concerns profitability issues – and the COO and his team are working very diligently in that regard." Kaminsky said the moves were part of the overall restructure announced by CHS in March, which included cutting 10 per cent of its staff and closing 25 warehouses. "Investors, vendors and lenders need to see a stronger balance sheet. This should move us in that direction," he said. ®
Linda Harrison, 21 Oct 1999
The Register breaking news

Big Blue and PSINet team up to offer RS/6000 e-services

PSINet has jumped into bed with IBM to become the first ISP in Europe to offer hosted e-business solutions using its RS/6000 SP server. This marriage of convenience is designed to let companies gain a scaleable and powerful presence on the Web using Big Blur's supercomputer and its associated technology. Even the base line offering from IBM and PSINet is capable of handling one million "hits" a day. The catch? Well, earlier this afternoon it would have cost £2,500 a month for this entry-level offering. Half-an-hour later The Register was contacted to be told that the figure was, in fact, £5,000 a month. ®
Tim Richardson, 21 Oct 1999
The Register breaking news

Intel porn squatters stick up for AMD

Intel today found itself pushing AMD products over the Internet. This was via the Web site intel-inside.com –- originally a hardcore porn site hiding behind the Intel name. Earlier this month Intel got the lawyers in to sort out the cyber-porn masquerading under its squeaky clean trade mark. The owners of the site then in turn masterminded a plan to bribe Intel into handing over loads of wonga to buy back the name. The registered owner of intel-inside.com, Thomas Puntman, put the domain name up for sale on EBay, asking a cool $400,000 for the URL. Intel's legal firm were no doubt working around the clock to crack this one. Today the intel-inside.com Web site was displaying the following message: "21 October '99: Ebay wrote today after 25 Bids up to $3000,- and 6 Days to go: Dear Intel-Inside, We regret to inform you that your auction: 182577329 Domain for sale www.intel-inside.com has been ended at the request of Intel, a member of eBay's Verified Rights Owner (VeRO) Program". Yet the cyber squatters managed to have a final pop at Intel. At the bottom of the Web page today was a link informing readers to Click Here for "The best processors". And what did the link lead to? AMD's Web site, of course. ® Related Stories Porno cyber squatters target Intel
Linda Harrison, 21 Oct 1999
The Register breaking news

Canadian pedo vindicated by appellate court

The British Columbia Court of Appeal yesterday upheld the acquittal of retired civil servant John Sharpe for possession of child pornography on grounds that banning possession violates citizens' rights to privacy and freedom of expression. Judge Mary Southin, the ruling's author, also found that banning simple possession would do little to discourage child exploitation. Loud calls for her resignation followed immediately. The Canadian Family Action Coalition (CFAC) demanded that she be fired. "Canadians from coast to coast are outraged at this court's decision," CFAC director Peter Stock announced. And no doubt they are. Prime Minister Jean Chretien wisely dismissed suggestions that he call an emergency Parliament session to overturn the ruling. The PM said he would leave the matter to the Supreme Court, rather than invoke special powers to intervene. "The government of British Columbia will appeal to the Supreme Court," Chretien said. "We'll have to let due process take place." Fair enough, especially as the contest is a no-win situation for any politician. The protection of adult privacy, and the protection of children from sexual exploitation, are equally laudable goals. The B.C. Ministry of Justice will bring the case before the Supreme Court, which is obliged to hear it because the appellate ruling was not unanimous. Justice Minister Anne McLellan expressed confidence that the Supreme Court will find the national law banning possession of child pornography to be constitutional. She may have a slight problem with arithmetic; she's 0 for 2 just now, and confidence is the last emotion one would expect her to be feeling. And as for Sharpe, he's got his porn, all right; but he must be running out of friends quite rapidly. He can't be much admired by his neighbours; he's become a libertarian poster boy with whom no privacy advocate could possibly wish to be associated; and countless other envious pedos, presently doing hard time for simple possession, have got to be adding his name to a very special list. ® Full Register Net child porn coverage
Thomas C Greene, 21 Oct 1999