19th > October > 2001 Archive

Intel announces Cloak Of Invulnerability™

MPF RoundupMPF Roundup Code morphing start-up Transitive has been touting the x86 potential of their Dynamite dynamic binary translation. We goofed in an earlier draft of this article: Transitive doesn't make or license any chip hardware,it's all done in software. Sorry, folks. Dynamite has many of the run-time optimization tricks you'll be familiar with from Transmeta's Crusoe line, and some of the adaptive technology similar to the now-discontinued FX!32 software from DEC/Compaq, which ran x86 binaries on Alpha processors. The PowerPC dhrystone benchmark running on Dynamite on a 1.4GHz Athlon turned in figures of 1.65 million per second. With the Apple 450Mhz G4 Cube clocking around 400,000 per second natively, that extrapolates to around a 1.2GHz G4, although of course no such beasty exists just yet. For RISC to RISC translations Dynamite could turn in 20 per cent faster code than native in the future, reckons Transitive. Dynamite has been used to run ARM and x86 instructions on MIPS, as well as PPC on x86. Talking of Transmeta, optical start-up Primarion seems to be recruiting faster than it can count. Recent PowerPoints list 100 staff, and the most recent press releases 150. Apparently, it's now north of 200. There's are few technical similarity between Linus' employer and Bill Pohlmann's venture, except that Primarion has assumed the pre-launch Transmeta role of being the voguish name to drop. It only lessens the mystery a little bit that we know exactly what they're doing. IBM gave a few performance indications for its latest cranked of the PowerPC handle, that we wrote about here. The 750FX you'll recall will support bus speeds of up to 200MHz, and have a larger L2 cache. SPECint performance is expected to hit 40 Dhrystone MIPS, compared to around 38 for Apple's current top of the range and 32 for its current low-end 733MHz PowerPC machines. There are a number of power enhancements such as voltage scaling, for mobile devices. It's scheduled to begin sampling in January 2002. Next generation chips should have the design elegance, reliability and economy of Sports Utility Vehicles (SUVs), according to Intel. Click to enlarge Or at least we think that's the message from the presentation given by Intel Fellow Justin Rattner at the Forum. Rattner, of Chipzilla's Research Labs, who said designers should emulate the reliability of SUVs - which if they ever crash, allow the occupants to walk away out unharmed, Superman-style. "Survival is almost certain" after crashing your SUV, according to the slide. Intel has yet to trademark Cloak of Invulnerability™ for this new technology. But it can only be a matter of time. ®
Andrew Orlowski, 19 Oct 2001

Harvesting passwords from DSL routers

Hackers have developed a trick for pilfering DSL account names and passwords right from subscriber's routers, a technique that provides hackers with untraceable Internet access, and potentially exposes subscriber email to interception. The method targets Cayman Systems' popular 3220-H DSL router, a combination modem, router and hub that allows DSL subscribers to share their Internet connections among multiple computers. The 3220-H is sold retail, and is distributed by Cayman's channel partners-- notably SBC Communications, which provides the devices to thousands of "Enhanced DSL" subscribers through subsidiaries Pacific Bell, Southwestern Bell and Ameritech. Like other DSL routers, the Cayman 3220-H allows users to easily configure their settings through a Web browser interface. But the router makes that interface accessible, not just from the user's local area network, but also from the 'WAN port' that connects to the Internet. The device is protected from unauthorized reprogramming by an administrative password set by the owner. But unless the subscriber also sets a separate 'user password', the router's configuration settings can be viewed, though not changed, through the browser interface. There, the 'PPPoE' password used to log onto the DSL service is masked as a series of asterisks, but it is plainly visible in the HTML source code of the page. Hackers can use the purloined password to download the subscriber's email from SBC servers, or view and edit portions of their account information. But sources say the vulnerability has found its greatest utility in the computer underground as a wellspring of free, anonymous Internet access. Because the same password works on SBC's dial-ups, without interfering with the subscriber's DSL use, the purloined passwords help hackers cover their tracks by borrowing other people's ISP accounts, according to 20-year-old Internet hacker Adrian Lamo. "Most of the people that I know of use them as disposal dial-up accounts," says Lamo, who discovered the hole over a year ago. "Looking at something in page source is not a tremendous technological effort." Privacy Problems An SBC spokesperson acknowledged the password theft vulnerability, and said it drove the company to begin disabling all Internet access to the router's configuration settings as part of its standard installation routine. "Cayman and other companies have a factory setting where the WAN port is disabled," says spokesperson Fletcher Cook. "Our technicians are trained to disable this themselves." But subscribers who received their routers over a year ago, before SBC enacted the more secure policy, may remain vulnerable, Cook admits. Newer subscribers are at risk only if they explicitly enable administrative access to the router's WAN port. He adds that the company educates users about security issues through its Web sites. Lamo says his scanning has turned up thousands of vulnerable routers in homes and small offices throughout Chicago, Los Angeles, San Francisco, Houston, Saint Louis, San Diego, and other cities. The problem has privacy implications for DSL subscribers. The same password that provides Internet access, is also used to control access to subscriber email. The passwords can also be used to access some account information over SBC's public customer service Web sites; a cyber snoop could learn a given subscriber's name and phone number, or change their billing address. In some circumstances, the sites also reveal one digit of the subscriber's confidential three-digit telephone account "customer code," Lamo notes. A spokesman for California-based Netopia, Inc., which acquired Cayman Systems last week, said the company is considering releasing a patch for the password revelation hole. In the meantime, customers should disable access from the WAN port, or set a separate 'user password,' on top of the administrative password, to block access to the configuration screens. "[Cayman has] been concerned about network security for some time," says Evan Solley, Netopia's vice president of product marketing. "But there has been back pressure from the channels about solutions, because it makes things more difficult for deployment." The issue is not the first for the Cayman router. In March of last year, security experts revealed that the 3220-H's administrative password was left blank by default, potentially allowing attackers to reconfigure or reprogram the devices remotely. In response, SBC technicians began setting that password manually upon installation. © 2001 SecurityFocus.com, all rights reserved.
Kevin Poulsen, 19 Oct 2001

MS digital rights management scheme cracked

An anonymous coder named 'Beale Screamer' claims to have broken the Version-2 Microsoft digital rights management (DRM) scheme, and has produced the source code and a DOS utility to un-protect .WMA audio files. The author's zipped file, originally discovered on sci.crypt by Sam Simpson and posted by Cryptome's John Young, contains a well-written and lengthy description of the MS DRM weaknesses, a philosophical tract explaining why he thinks it necessary to crack, the source code, and the command-line utility. The alias Beale Screamer, incidentally, derives from the lines of 'Howard Beale' in the movie 'Network', we're told. "Just yell to the publishers 'I'm mad as hell, and I'm not going to take this anymore!'" The motive here is said to be an assertion of fair use and a check against the abuse of copyright for purposes of consumer extortion. A DRM scheme "used to give the consumer more possibilities than existed before," Screamer tells us. "I think the idea of limited time, full-length previews, or time-limited Internet-based rentals is excellent. If DRM was only used for this, in order to give us more options than we previously had, I would not have taken the effort to break the scheme. What is bad is the use of DRM to restrict the traditional form of music sale. When I buy a piece of music (not rent it, and not preview it), I expect (and demand!) my traditional fair use rights to the material. I should be able to take that content, copy it onto all my computers at home, my laptop, my portable MP3 player....basically anything I use to listen to the music that I have purchased." Well said; a tremendous amount of thought and effort has obviously gone into all this, and we have to wonder who this crusader is. A university connection seems all but certain. We've got a few feelers out, and hope very much that he'll submit to an interview soon. There's clearly more to this story than meets the eye. For one thing, the quality of writing in the text files exceeds that in the code files, suggesting more than one actor. Readers are encouraged to share their insights as they read through the texts and fiddle with the code, using the byline link above. ®
Thomas C Greene, 19 Oct 2001

Transmeta Q3 revenue plummets 52% on Q2

Transmeta's chairman and CEO, Murray Goldman, last night declared himself "pleased" with the direction his company is pursuing. The comment rings hollow following as it does the effective dismissal of former CEO Mark Allen, the admission that Transmeta is having problems getting its TM5800 chip out of the door and an unimpressive set of Q3 results. For the three months to 28 September, Transmeta lost $29.6 million (22 cents a share), including one-off charges of $9.1 million. That compares with the $27.7 million (83 cents a share) loss it announced for Q3 2000. During Q3 2001, Transmeta made sales worth $5 million, up from $3.5 million this time last year. Given that the company had revenues of $29.1 million for the Q1 through Q2, that marks a significant drop - around 66 per cent - on its average quarterly sales figure. From Q1 revenues of $18.6 million, sales fell around 44 per cent to $10.5 million in Q2 and now 52 per cent to $5 million. At this rate, Transmeta won't be selling anything during the current quarter. Certainly the prognosis doesn't look good, and you can see why the company's board might have sought and found a scapegoat in Allen. So where is the company heading? Having failed to ship the TM5800 as scheduled, Transmeta reckons it will achieve volume production next month. Hopefully the delay won't have knocked back the 1GHz version that world+dog has been waiting for since the company announced in its IPO prospectus that it would ship early 2001. The part is now due to ship early 2002. Its 1GHz+ TM6000 is due in the second half of next year - a very long way off if you're running out of revenue. Don't look to the first TM5800s to help much - Transmeta is declining to offer Q4 revenue and earnings guidance, which tells you all you need to know about how much money the company expects the chip to bring in this quarter. Worryingly, the company has no plans to increase its R&D spending. Money is tight, so savings have to be made, but since research is the foundation on which a fabless chip company is built, suggestions that R&D - together with, we should add, sales, general and admin spending - will be "approximately flat to slightly lower to the third quarter level of $25.8 million" is surely a matter of concern. Given that the company is "actively pursuing other markets in which our low power Crusoe microprocessor will provide competitive, energy efficient solutions", according to Goldman, we hope this essential increased sales effort doesn't harm equally essential product development work. ® Related Stories Transmeta CEO replaced after seven months Transmeta announces 1GHz integrated graphics Crusoe 6000 Transmeta slashes Q3 sales forecast
Tony Smith, 19 Oct 2001

Microsoft's telco write-offs reduce net income by 42 per cent

Microsoft's has announced a 42 per cent fall in net income this quarter, thanks entirely to a hefty $1.24 billion write-off over its cable and telco investments. One can perhaps sense the ghost of former CFO Greg Maffei moaning and clanking his chains through the portfolio. Greg it was who, around two years ago, circled the globe pressing money (frequently in $5 billion-sized packages) into the hands of cable and telecoms operators. Revenues were up 6 per cent over a year ago to $6.13 billion, defying the general IT industry trend and beating analyst expectations - hence its share price has gone up 2 per cent. Operating profits rose 4.3 per cent to $2.89 billion. Microsoft's CFO John Connors said: "This has been a challenging period for us on many fronts. But we were happy to see our results meet, and in some cases, exceed expectations." He went on to give optimistic estimates of future quarters but then this is hardly surprising since Windows XP is due to laucnh next week and the Xbox games console is expected in November. To do anything but say the future was rosy (while accepting that there was a general PC slowdown) would have been madness. It does seem however that Microsoft is excellent at weathering the storm. ® Related Story MS takes $2.6bn hit on cable, telecoms stocks
Kieren McCarthy, 19 Oct 2001

Sun has biggest ever quarterly loss

Sun Microsystems made a Q1 loss, as expected, of $180 million. The biggest quarterly loss in its history. The company had made a profit of $456 million a year earlier. Sales for the period, ended 30 September, dropped to $2.86 billion, which was at the high end of the company's lowered targets, but 43 per cent down on the period a year earlier. This follows the announcement earlier this month that it was going to can 9 per cent of its 42,000 staff, an unprecedented number in the company's history. In the results statement Sun CEO, Scott McNealy said the company was going to 'resize' some areas of the company "to help ensure the long-term health of the business". He stressed he's going to protect field sales and service, and R&D. The company also stressed it has $6 billion in the bank, and blamed lower demand, rather than competition for the situation. "The computer industry continues to consolidate and downsize but Sun will stay focused on developing the technologies and products that have been the hallmark of our company," said McNeally. Low-end servers will be launched at the end of the month - Daktari and Cherrystone 4-way and 8-ways, in other words - and a big storage revamp is due in early December. Until this year, Sun last suffered an unprofitable quarter in 1989. ® Related Stories How Sun swerved to avoid Rambus Sun peppers low-end with McKinley-killer Jalapeno Sun lures IIS defectors with iPlanet price cuts Sun Micro Cuts 3,800 Jobs
Robert Blincoe, 19 Oct 2001

My Net shed nightmare, by Net shed nightmare man

Steve Riley - the Blackburn man locked in a shed and rescued only after his SOS was picked up on the Net - has spoken to The Register about his ordeal. It happened last week, explained Steve, who is grateful to the US Net user called "Dennoginator" who picked up on Steve's cry for help and contacted police in the UK. It all started when Steve went to his garden shed - which has a phone line installed but no phone - to plug in his laptop and check out the Web. That was about 11.00pm on Thursday, October 11, after his wife had gone to bed. At around 2.30am the door slammed shut, the bolt outside slid across and Steve was trapped inside unable to get out. Steve's convinced it was done by some "yobs" outside and dismisses those who believe the door was blown shut by the wind. "There was no way the wind could have blown the door shut and slipped the bolt," insisted Steve. Trapped inside unsure what was about to happen, the next few minutes were nerve-wracking for Steve. Fearing the worst, he believed that those responsible for locking him in the shed might set it on fire. Worse still, his wife was asleep in the house and he feared that they might try and break-in. "It was a really scary situation," recalls Steve. Thankfully, as the minutes ticked away and nothing happened, he became calmer and began to realise that he was safe. This reassurance was welcome - but he still had to find a way to get out of the shed. He tried to download some phone software so that he could make a call - but that didn't work. He tried emailing friends in the hope that someone also shared his nocturnal online habit, but no-one replied. He posted messages on Web sites and newsgroups in the hope that someone might be around to help him. "This is not a hoax. I am trapped in my shed with no phone. Help please," he wrote, giving the phone number of the local police and his address in Blackburn. Three hours after becoming a prisoner in his own garden shed, he finally made contact with Dennoginator, a US Net user, on ebay's UK site. Steve is just grateful that Dennoginator believed his story, picked up the phone and called police in the UK. Minutes later - at 5.45am - Steve was freed and his ordeal had come to an end. Steve tells us he's now installed a phone in his shed and beefed up security with a five-lever mortise lock. ® Related Story US Net user saves Brit trapped in shed
Tim Richardson, 19 Oct 2001

Hynix Q3 loss balloons to $1.3 billion

Much-troubled memory maker Hynix had more bad news for its creditors and investors this morning: its Q3 loss totalled 1.6 trillion won ($1.3 billion) - larger than the company had forecast and well below the 66 million won profit it made this time last year. In the year-ago quarter, Hynix recorded sales of 2.4 trillion won. This time round, quarterly sales fell to 552 billion won, a fall of 77 per cent. Hynix has been hit very hard by the collapse in the global memory market. According to market research organisation Gartner, the DRAM business will contract 67 per cent this year. And 2002 won't see any improvement: Gartner reckons the market will shrink a further 19 per cent next year. Which means Hynix can't expect the market to help it out of its predicament. That leaves it relying even more closely on its creditors. In the light of today's results, they may withdraw their favour. Hynix is currently asking its creditors for effectively seven trillion won through a mix of further loads, debt reduction schemes and repayment extensions. Creditors have given the memory maker more time to pay off its debts and have agreed to its debt-for-equity plan, but they seem increasingly unlikely to offer it more money. The level of the biggest creditors' exposure to Hynix suggests they're unlikely to be willing to let it go, but Gartner's gloomy - nay dire - prognosis for the memory market for the next 12 months and more may persuade them that Hynix hasn't a hope of ever paying them back. As it matters now stand, the current bailout plan, even if accepted in full by Hynix's creditors, may prove insufficient to keep the company afloat. Selling off older production facilities may not help much either. But without the cash, Hynix can't invest in next-generation plant, leaving it behind its competitors when the market does, eventually rebound. ® Related Stories DRAM market to shrink 19% next year - Gartner Hynix creditors meet to ponder $759m loan request Hynix bail-out plan sets Micron a-grumbling
Tony Smith, 19 Oct 2001

Fibernet to offer unbundled services

Fibernet is on the verge of offering unbundled telecoms services, the high-speed data communications outfit confirmed yesterday. One of the few companies to remain in the local loop unbundling process, it is set to announce at the end of the month that it is ready to offer SDSL (Synchronous Digital Subscriber Line) services from around 30 exchanges. Fibernet has highlighted a total of 221 exchanges, which it believes will enable it to offer broadband services to more than 55,000 small and medium sized business. Announcing its preliminary results for the year ended 31 August 2001, Fibernet reported increased turnover and profits at that Basingstoke-based company. Turnover was up 30.5 per cent to £54.6 million from £41.8 million the year before. Pre tax profits were up 7.4 per cent to £3.6 million from £3.4 million in 2000. Chief exec, Charles McGregor, reported: "Despite worsening economic conditions, Fibernet's services continue to be in demand. "Our customers still have to communicate but their purchasing criteria have largely moved towards saving money rather than expansion," he said. Despite an upbeat assessment Fibernet's shares dipped over concerns that over capital expenditure in France and Germany. ®
Tim Richardson, 19 Oct 2001

Nokia sees across-board drop but shares jump 5 per cent

Nokia has seen across-the-board drops in its third quarter results but beaten expectations and been awarded with a five per cent share price increase this morning. Sales were down nearly seven per cent to £4.42 billion; pre-tax profit down 21.8 per cent to £670 million; net profit down 17.7 per cent to £477 million; and operating profit down 20.8 per cent to £670 million. However shares rocketed on the news, coming down just as fast to settle around 1400p (4.5 to 5.0 per cent up). Nokia spent the week telling journalists and investors that the mobile phone industry was going to take off again next summer what with new phones, better, faster infrastructures and upgrades in technology - so when the results beat expectations, its shares took off. It's been a tough year for mobile manufacturers, prompting profit warnings and a complete readjustment of the market as companies switch to a tecnhology licensing model. As the clear leader in the market, Nokia has suffered less than most, and with it looking upbeat about the next year - sales up 20 per cent it reckons next quarter - we should see mobile stocks on the increase again. We say this of course at the same time as Ericsson shares have fallen five per cent. The company pointed out that the shift to new mobile protocols and the state of the economy at the moment had caused postponement of network investment, but that it would pick up again soon. Chief exec Jorma Ollila said: "Nokia, as a flexible, lean and focused organisation has done more than just weather the storm of the past several months. We succeeded in sustaining solid profitability and high cumulative operating cash flow of EUR 3.9 billion for the first nine months in an intensely competitive and volatile environment." ®
Kieren McCarthy, 19 Oct 2001

Ebay revenues up

Ebay is in chipper mood today after reporting improved revenues at the online auction house. Third quarter net revenues for the three months ended September 30 leapt 70 per cent from $113.4 million in Q3 2000 to $194.4 million. Consolidated net income for the quarter was $18.8 million, or $0.07 per diluted share. And eBay's pro forma consolidated net income, excluding certain charges, skipped in a record $34.9 million, or $0.12 per diluted share. Said Meg Whitman, President and CEO of eBay: "In these extraordinary times, we continue to be impressed by the strength and resiliency of our user community. "We're continuing to see sustained growth across our US and international markets, deeper penetration into many vertical categories and expanded adoption of our fixed price trading formats," she said. Despite the current economic uncertainty, eBay remains upbeat about the immediate future and believes Q4 net revenues will exceed earlier estimates. It reckons it will see net revenues of between $200 and $210 - up $5 million from what the market had expected. eBay added some 3.5 million users during the last quarter giving it 38 million registered users world-wide. ®
Tim Richardson, 19 Oct 2001

STMicro back in the black

STMicroelectronics saw its sales slide 11.8 per cent last last quarter from the previous three-month period and 31 per cent down on the same period last year, the company reported yesterday. However, ST forecast that its Q4 sales will show little or no decline over Q3 suggesting that it at least thinks the downturn has bottomed out. More importantly, the chip maker - Europe's largest - returned to profitabilty, albeit at a level far below the income it achieved in Q3 2000. It reported earnings of $35.8 million, compared to last year's $415.3 million. ST's revenues came in at $1.4 billion, rather less than the $2.04 billion worth of sales it recorded a year ago, but within the guidance it had already offered and better than analysts had anticipated. ®
Tony Smith, 19 Oct 2001

VIA chipper about mobo market moves

There's plenty of room in the market for our motherboards, VIA representatives told us yesterday. But that belief hasn't stopped the Hong Kong branch of broker ABM Amro from downgrading the Tainwanese venture's stock to Reduce. ABN Amro's reasoning, according to a DigiTimes report, is that SiS' SiS645 chipset - designed, like VIA's controversial P4X266, for the Pentium 4 and DDR SDRAM memory - will beat the VIA part in both performance and sales. Certainly it's likely to be selected by top-tier mobo makers, who have so far rejected VIA's product, largely because its lacks Intel approval. The P4X266 is the subject of an increasingly bitter legal battle between Intel and VIA - who are hardly what you'd call firm friends at the best of times. ABN Amro reckons VIA's move into the motherboard market will help boost the profile of the P4X266. VIA itself sees the part not only as a promotional tool to market not only the P4X266 brand but the company itself, but as a profit centre in its own right, international marketing director Richard Brown told The Register. ABN Amro disagrees. It believes VIA will need time to build up brand awareness and customer acceptance. We're less sure of that since the company has plenty of experience developing reference motherboards, and it's well known as a chipset designer. VIA isn't worried about incurring the wrath of motherboard makers who buy its other chipsets and might regard the launch of VIA mobos as competition. In this market, Brown said, they're not our customers so there's no direct competition. In short, if they're not buying the P4X266, they can't complain if VIA offers P4X266 boards of its own. Equally, it doesn't encourage them to do so at a later date, but again VIA is apparently unconcerned - the market is big enough for all of us, it reiterates. VIA's various mobos, aimed at low- mid- and high-end PCs, will begin shipping at the end of this month. ® Related Stories VIA preps Pentium 4 'clone' VIA enters mobo market
Tony Smith, 19 Oct 2001

Intel culls consumer electronics operation

Intel is ridding itself of its cheap plastic toy operation, better known as the Connected Products Division. The chip giant yesterday confirmed that it will sell off its existing stock of blue'n'white-hued digital cameras, Web cams, microscopes, keyboard, mouse and MP3 players, but not more of the gadgets will be produced. We can't say we're surprised. Intel has been shutting down or slimming its non-core operations throughout the year, starting with its iCat business, an e-commerce software and hosting unit of Intel's Online Services division. Soon after it shut its streaming video division, Intel Internet Media Services, with the loss of 200 jobs. In March, its Internet services wing "redeployed" up to 600 workers - staff are helped find other work inside Intel, or a offered severence if no suitable jobs can be found. The move to close the Connected Products Division comes in addition to the giant's plan to shed 5000 staff this year. An Intel UK spokesman told us that plan was on target and that yesterday's closure was a "separate business decision". All these operations were part of a bold attempt to move beyond the processor market by leaping on the Internet bandwagon. But with the Net bubble's rapid deflation last year and the the chip business slowing down as much as it has during this one, Intel has clearly had to retrench a little. The decision was undoubtedly made easier by the business units' performance largely failing to meet senior management's expectations. "The business didn't meet our requirements for long-term growth potential," is how an Intel US spokesman put it last night. Related Stories Intel axes 300 Danes Intel Online Services 'redeploys' up to 600 Intel retires hurt from streaming media biz Intel ate my iCat
Tony Smith, 19 Oct 2001

Losses pile up at Nortel

Nortel Networks has reported Q3 net loss of $3.47 billion on declining sales as demand for its kit from telecoms carriers continues to remain modest and difficult to predict. The disappointing results came as little surprise - the Candian telecoms equipment manufacturers issued profit warning earlier this month - and show that incoming CEO Frank Dunn has his work cut out implementing the firm's ongoing restructuring. Nortel Q3 revenues from continuing operations were $3.69 billion compared to $6.73 billion in the year-ago quarter, continuing a loss-making run that continues back to last year. The firm is cutting staff and restructuring so that it can reach break-even at a quarterly of $4 billion and expects to have finished this painful process by the first quarter of 2002. By this point Nortel expects to have a workforce of 45,000. After it divests itself of non-core businesses (which will affect around 10,000 people), Nortel will focus on metro networks (which encompasses metro optical networking, IP networking, IP services and voice over IP products ), wireless networks and optical long haul networks. Dunn, who replaces long-standing Nortel chief executive John Roth on 1 November, said the firm was seeing "early indications that capital spending by service providers is approaching sustainable levels" but he said demand was still difficult to predict. Because of this, and the overall slowdown in IT spending, Nortel is not providing predictions for its fourth quarter results or 2002 as yet. ® Related Link Nortel: Q3 results statement Related Stories Nortel reaches rock bottom Nortel posts losses of $19.6bn Nortel axes 10,000 more jobs Nortel in the poo MemoWatch Nortel 're-aligns' 10,000 employees Battered, bothered, bewildered - Nortel and Lucent shareholders Lucent to restate sales and cut 10,000 jobs Marconi set to announce loss of 3,000 jobs Cisco splits into 11 technology groups Cisco loses $2.69 billion on declining sales Where have all the Cisco customers gone?
John Leyden, 19 Oct 2001

Increasing Nvidia orders boost TSMC output

TSMC is clearly doing very nicely, thank you out of its relationship with Nvidia. The foundry's insitutional investors claim that 80 per cent of its 0.15 micron and 0.18 micron production lines are punching out parts to the graphics chip designer's specifications, according to a report in the Commercial Times. It seems Nividia, which uses TSMC to produce its various grapics chips, along with its nForce chipset and the core logic it designed for Microsoft's Xbox console, is flooding the foundry with orders. That's good news for TSMC, which had a bit of a rough ride through the early and middle stages of the year thanks to the downturn in world semiconductor sales. It's also good new for Nvidia investors. The more orders it places with TSMC, the more orders it itself is receiving from OEMs, Microsoft and others. ®
Tony Smith, 19 Oct 2001

UK govt twists National Audit Office report into 3G licence auction

The National Audit Office has today released its report into the auction for next-generation 3G mobiles licences, and concluded that the whole thing was well run and will not have a damaging affect on the mobile industry. Or has it? We were surprised to find ourselves disagreeing strongly with parts of the NAO report when normally it is the epitome of fairness and understanding. While its review of the auction system set up to allocate five 3G licences back in May last year was spot-on, the "indications" it claimed to have found that show the mobile industry will not be unduly affected seemed unduly confident. Then, it struck us. Like most lazy journalists, we were reading only the official government press release rather than the report itself. A review of the report's executive summary and a scan of the full report told a very different story. According to the press release: "Though there has been a downturn in confidence in the industry since the auction, difficulties are not solely due to auctions and operators are still able to invest in developing services. The high cost of the licences to operators gives them an added incentive to roll-out services more quickly than if the spectrum had been given away." This, we thought, is clearly bollocks. But where exactly does the report say this? It doesn't. Oh yes, hang on, an NAO spokesman told us - paragraph 22. "Vodafone and Hutchinson told us the high cost of their licence gave them an added incentive to roll-out 3G services..." Not exactly the same as saying the report says that though, is it? "Well, we were told that and we agree with it." Another example: "Mobile telephone services in the United Kingdom are usually priced according to what the market will bear, as opposed to simply passing on costs" - that is true, and in the report, but it continues: "If operators' business plans prove to have been over-optimistic the main effect will be on the companies' share prices rather than on their investment plans or consumers." There's no evidence of that at all. And we don't reckon it's right either. And, would you believe it, it's not in the report either. Well, it is, to a degree. It's just a small extrapolation of what is in the report. But, again, the press release purports to say what is in the report - not what they believe the report means. Most of the rest of the press release strays less from what the actual report says but bends it to make the auction of the licences come out as a shining example of how the UK government has got it right. It also carefully avoids any criticism of the process. The real report showers the auction in far less praise and makes various conclusions and recommendations. Why would the government wish to make a scrutinising report in the auction look better than it was? Er, probably something to do with the fact that BT and One2One are trying to take it to court for £85 million a piece. And then perhaps growing criticism over the subsequent auction for fixed wireless spectra - that was a complete disaster and has just been re-re-released for the fourth time. And of course the next swathe of spectrum auctions coming up soon - that have already been delayed for a year. The report itself - in pdf format here in full and here in executive summary - is in fact as excellent as ever and worth a read if auctions are your thing. But we remain concerned that the government is applying a sheen on official documents (or "spin" as we should call it). Then again, it wouldn't work unless journalists were as lazy and unquestioning as they are. ® Related Links Full report Executive summary Press release
Kieren McCarthy, 19 Oct 2001

Who'd want to merge with Gateway?

Gateway announced its Q3 loss yesterday, a tidy $520 million. Sales dropped to $1.4 billion for the quarter, compared to the $2.5 billion it posted in the same period last year, which made it $132 million in profit. The company tried to balance the news with a message of optimism for the future, swearing to become profitable again by the end of the current quarter. Exiting its foreign markets is costing the company dear. It allocated $571 million for closing overseas operations, call centres and manufacturing plants, as well as writing down investments. Of course, these are one time costs, which is why it is able to keep hoping for better times in this quarter, The PC maker is battling at the moment. While Dell is taking advantage of Compaq/HP confusion to grab a little extra market share, Gateway is just trying to keep its head above water. Not long ago, analysts were recommending that it find itself a merger partner, but it is difficult to see who would want to merge with the business right now. ® Related Stories Q3 PC shipments down Gateway US sales fall
James Watson, 19 Oct 2001

US broadband goes mass-market next year

Broadband is on the cusp of becoming a mass-market product in the US, according to research from Jupiter Media Metrix. It claims companies in the broadband sector should begin preparing now for the coming broadband mainstream which it believes will kick in next year. And it predicts that one in four US homes (35 million) will be hooked up to a broadband Internet connection by 2006 - up from one in ten (five million) last year. Said Joe Laszlo, a senior analyst at Jupiter: "Despite the recent failures of several broadband pioneers, and slower growth of the overall online population, broadband will find the masses in the US shortly. "While consumers' awareness of broadband has grown considerably, improved and increased marketing by cable and DSL providers will finally help overcome lingering resistance to the cost of broadband subscriptions. "It is absolutely critical for companies with relevant content, products and services to time their business initiatives to reach the anticipated broadband audience," he said. Earlier this week NTL called on the Government to use education to help hasten its progress to a mass-market product. ® Related Story NTL calls for 'new, bold' broadband initiative
Tim Richardson, 19 Oct 2001

Freeserve bares all

El Reg doesn't often dish out praise. But when we do, you can be sure it's well earned. So let's hear it for Freeserve and its cheeky ad campaign featuring naturists flogging its unmetered dial-up service. The ad - on the TV and in print - features naturists of all shapes and sizes going about their normal business with catchy selling line: "complete freedom costs next to nothing". "Complete freedom"..."next to nothing"...naturists...geddit? We certainly did. How we laughed. Question is, where did Le Freeserve's creative geniuses get their inspiration from? Wouldn't have anything to do with some staff at its offices peeping into their neighbour's bedrooms, would it? Related Story Freeserve shamed by peeping Toms
Tim Richardson, 19 Oct 2001

World's biggest luddite strikes again!

The world's biggest luddite, Senator Richard Alston - who unfortunately is also the minister for Communications, Information Technology and The Arts for the Australian government - has struck again. Not content with outlawing email, gambling and any material ever that is not suitable for children, he has now attacked a plan to roll out broadband Internet access across Oz. A proposal in the Labour party's policy statement (stolen from the Internet's Industry Association) that all homes should have cable by 2006 has been rubbished by Senator Alston, who called it "a costly waste of time" and "horrendously expensive". Maybe it is if he has his way - there would be no point in using the Internet in the first place. He then claimed that despite 98 per cent of households in Singapore having a cable connection, only two to three per cent of them have taken it up. The only reason South Korea uses so much broadband, he continued, is because kids are playing games. "There's no role for government in facilitating that roll-out," he said. "My kids don't need any help in that regard." This, may we remind you again, is Australia's minister for Communications, Information Technology and The Arts. Proof, were it needed, that Richard Alston retains his crown as Greatest Luddite in the World. Well done Richard. ® Related Stories This man must be the biggest luddite in history Australia to make online gambling illegal Heads Oz wins; tail you lose
Kieren McCarthy, 19 Oct 2001

Acer spouts the biggest load of management guff

Today, New Acer revealed its 'MegaMicro e-Business'. The name, and the move, is a confusing one. Chairman and CEO Stan Shih first outlined the 'New Acer' in a keynote at Taiwan's e-business expo on Tuesday. (Obviously lusting after yet more titles for his business card, Shih has also added Chief Business Architect (CBA) to the list.) In the speech, he talked about moving from 'technologies to services' and from 'box movers to service providers' (i.e. from selling physical stuff to selling not-so-physical stuff). He then waxed lyrical about how brands, a customer-centric culture and higher customer loyalty are important things for an e-business. It gets more exciting. From today's release, Shih now has a reason why New Acer MegaMicro e-Business (NAMMEB) is different to "general e-business models". In his opinion, it will offer "affordable and scalable products, services and solutions to both individuals and SMEs". This is compared to others that "typically only provide expensive tailor made solutions to larger corporations". Wait, there's more. If you're wondering, as we are, about this mega and micro business, there is an explanation: "NAMMEB provides a "real" total solution to companies of all sizes, as well as to individual users. New-generation MegaMicro e-Business powered by the New Acer will be fit to handle all the end-to-end "Micro" needs of clients through the most advanced "Mega" e-infrastructure." Further on, the company boldly claims that, "with its unique MegaMicro e-Business technologies, know-how and business strategies in place, the New Acer foresees that its PC, notebook, server, and PDA lines will be positively differentiated from those of its competitors." Accordingly, New Acer and its chairman, CEO and CBA will invest in building an "e-infrastructure", which will offer things (it likes to call them 'e-services') like mobile data services, remote server management and certificate authentication. Investment comes in the form of about a billion dollars over the next three years, as well as many strategic partnerships with telcos and software companies. NAMMEB will focus its attention on Asian markets, especially Greater China, where it hopes to derive about 40 percent of its revenue by 2004. Acer cashes in on Middle East In a turnaround from the usual line, New Acer is blaming September 11 for increasing its sales. It says negative American sentiment in the Middle East has boosted the company's sales in that region. Shih says sales in the quarter leading up to December will rise 25 percent from the previous quarter. However, the company did lower its Q4 forecast to around £422 million from £542 million due to shipment disruptions following the attacks. The Middle East boost will aid it in breaking even, although profits probably won't be forthcoming, says Shih. In the first half of the year, the company posted losses on its PC sales. Its Q3 results are expected soon. As part of its assault on the Chinese market, the company also showed off its new handheld organiser, based on a new Chinese version of the Palm OS. ® Related Links Stan Shih Reveals 'The New Generation e-Business' A New Generation of e-Business: Acer's MegaMicro e-Business
James Watson, 19 Oct 2001

Big fat 5GB PC card for photographers

Storage gizmos for mobile devices continue to increase in popularity, with Kingston Technology this week releasing a new version of its DataPak device, which is essentially a 5GB hard drive on a PC card. The previous device from the company was only able to store 2GB of data. Users can slip it into their type II PCMCIA drive (mostly found on notebooks, as well as some cameras and PDAs). Kingston is recommending the drive for photographers, who would be able to store a decent amount of images and then easily whip it over to their notebooks for editing (assuming they have a notebook, of course). It has a suggested retail price of £359 (excl. VAT). ® Related Story Big storage for little laptops Related Link DataPak 5GB and 2GB PC Card Type II Hard Drive
James Watson, 19 Oct 2001

Barclaycard £25m blackmail crypto case cloaked in secrecy

The veil of secrecy has been thrown over the trial of a former encryption expert at Barclays charged with blackmailing Barclaycard, the credit card issuer. Pre-trial hearings behind closed doors, or in camera, have already taken place in the case of Graham Browne, today's Guardian has reported. But it's unclear what procedures will be followed during a trial expected to start at the end of the month. In a highly unusual step, public and press access during a preliminary hearing at the City of London Magistrates Court last October was barred, the paper reports. There is a long established tradition of open justice in English law and holding hearing outside the public gaze is a seldom used procedure normally reserved for cases involving national security, and even then only when discussing particularly sensitive matters. The Guardian reports that in the £25 million blackmail case against Browne there are fears that details of the security systems protecting Barclaycard's highly sensitive customer records might leak out. Barclaycard has an estimated 8 million customers in the UK. A spokeswoman for Barclays said there was no need for any Barclaycard customers to be concerned about the case. "No Barclaycard customers suffered financial loss because of this matter and card holders should continue to use their account as normal and with confidence," she said. Browne, 57, lives in a village near Crewe. He has pleaded not guilty at pre-trial hearings and denies any plan to blackmail his former employers. The alleged blackmail demands were made between March and September last year. ® Related Stories IT consultant denies £25m Web site blackmail Barclaycard swoops on ShopSmart.com Barclays goes down on customers Barclays beats Egg for top online bank crown Barclays online cockup Barclays cock-up the tip of an ugly, secret iceberg
John Leyden, 19 Oct 2001

P4 shortages cause Athlon XP drought

The serious shortage of Intel P4s has led system builders to chase extra Athlon XPs to keep assembly lines running. Every major UK system builder is saying the situation is very serious - for every other PC manufacturer except themselves. We've heard reports that several companies have been on line stop this week - which means they've had to shut down production becasue there's no processors to be had. Intel has confirmed its 478-pin Pentium 4 shortage problem in a memo to distributors, and printed here on the Inquirer site. It says that while overall supply is healthy, 478-pin P4s would be in short supply during October. It attributed this to heavy demand and recommended system builders to use 423-pin chips instead for now. It also mentions that both 423-pin and 478-pin P4 2GHz chips would be in short supply throughout Q4. In turn AMD has admitted to very brisk business and the appearance of some major players, who usually concentrate on building Intel boxes, asking for Athlons. Distributor Avnet has said AMD's Athlon 1500+ XP and Intel's Pentium 4 1.5GHz chips were in high demand. A spokesperson from the company says the market has rebounded tremendously in the past few weeks, leading to the supply issues from both competing vendors. The drought has seen the laws of supply and demand are kicking in on the grey market. 1.7GHz Pentium 4s have increased in price by £20 to £190 at some places over the last two weeks. Express Hardware, a components reseller, commented this week that it was completely unable to get hold of any 1.5GHz chips at the moment and was experiencing difficulty with other P4 lines as well. It was able to get the same 1.5GHz chips "a few days ago for about £107 ... now there is absolutely nothing," says a source in the company. Another reseller, Computer Junkies, says it has been told that chips are scarce due to excessive demand. Conversely, Tiny Computers repeated its message that it was having no issues with supply of the chips. The company's MD, Andrew Walwyn, in an interview this week, said "no red flags had come up regarding supply shortages for getting PCs to customers on time". But Tiny ditched using AMD chips in a high profile coup for Intel, so perhaps Chipzilla wouldn't dare let Tiny down on supply. Last week, Realtime Distribution added that some of its customers were cutting back on motherboard, graphics card and hard drive orders to bring those items in line with available chip supply. The official line coming from Intel is that the company recently moved over from producing more Pentium 4s than Pentium IIIs and is ramping up production to meet market demands. ® Related Stories Socket 478 Pentium 4 shortages to end in December Intel Q3 sales down 25%, income down 96% Pentium 4 and DVD shortages
James Watson, 19 Oct 2001

Hacker Web site up for sale

Security research site Hack.co.za is up for sale after its long term admin decided it was time to hang up his boots and make some money. The site, which we're told gets 900,000 hits per month, has acted as a resource for exploits, "utilities" and security tools along the same lines as Packetstorm, its bigger and more famous counterpart. Packetstorm (which was taken under the wing of Securify) before been released back into the wild because it proved uneconomical to run, and never looked likely to turn a profit. So how can Hack.co.za (which has no content up at the moment) be a good business proposition? Cami, the owner of the site who is looking to get around $20,000 for his property, reckons its future owners can make money from the security firms that regularly access the site. "Whoever buys it can begin to harvest rather large amounts of money from these companies, as well as keep the Hack.co.za reputation going (that being, we get most of the vulnerabilities before others do)," he told us. Somehow we can't see people queuing up to buy banner ads on the site, but that's not to say its not beyond the wit of someone out there to come up with a workable business model for the site. ® Related Stories Packetstorm rides again
John Leyden, 19 Oct 2001