18th > January > 2002 Archive

Microsoft profits down

Microsoft Corp said sales of Windows XP and its Xbox games console boosted net income for its second fiscal quarter, reported yesterday, but profits were knocked back by a $660m accounting charge related to a consumer class action suit. Redmond, Washington-based Microsoft reported an 18 per cent increase in revenue to $7.7bn for the period to 31 December, but saw net income drop 12.9 per cent to $2.28bn which included the accounting charge. Earnings per share on a diluted basis were $0.41, down from $0.47. Microsoft said 17m copies of Windows XP have been sold by OEMs since the launch on October 25 2001. Jim Allchin, vice president, said client operating system sales were up 24 per cent. Total revenue from desktop operating systems grew 23 per cent to $2.55bn. The company claimed it had met its goal of shipping 1.5m Xbox units between the time of its introduction and the end of the holiday season. Revenue from consumer software, services and devices - which also includes the latest version of MSN - were $1.19bn - up from $506m. Despite growth, company chief financial officer John Connors sounded a note of caution. Connors said Microsoft is concerned about the health of the global economy and has yet to see a recovery in many of the world's largest markets. © Computerwire.dcom. All rights reserved.
ComputerWire, 18 Jan 2002

IBM profit steady amid revenue decline

The adverse economic conditions in the world and the tough times that have fallen on companies in the information technology sector have taken their toll on IBM Corp, which yesterday reported profits of $2.3 billion in the fourth quarter of 2001, down 13% from last year, on worldwide sales of $22.8 billion, down 11% - Timothy Prickett-Morgan writes. After share buybacks, IBM was able to narrow the gap in earnings per share, with earnings of $1.33 a share, down 10%. Considering the severity with which IBM's competitors in just about all of the markets that it plays in have been hit, IBM's declining revenues and profits was a comparative party. And investors yesterday predictably drove up IBM's shares by 2.6% to just under $120. For all of 2001, IBM's overall revenue declined by 2.9% to $85.9bn. Global Services revenues were up 5.4% for the year to $35bn, while hardware sales for the year declined by 11.6% to $33.4bn. IBM's Software Group sales were up modestly by 2.7% to $12.9bn, and Global Financing revenues were off 1.1% for the year to $3.4bn. Net income for the year was $7.7bn, down 4.6%, with PCs and OEM hardware together contributing more than $500m in losses for the year. Earnings per share for all of 2001 were down 2% to $4.35. IBM chopped $1bn out of expenses in 2001, and says that it is on track to cut another $1bn from expenses in 2002. IBM's chairman and CEO, Louis Gerstner, made what could be his final statement on IBM's revenues and earnings yesterday, trumpeting the fact that its "Regatta" pSeries 690 servers are sold out and that mainframe revenues grew for the first time since 1989. The first isn't surprising, since IBM probably didn't expect to be able to build or ship many machines in the fourth quarter anyway, and the second is also not exactly surprising either since Amdahl and Hitachi have left the mainframe market, effectively leaving IBM with a mainframe hardware monopoly. Gerstner, who could retire as early as March or April from the top IBM jobs, said that the company had over $15bn in new signings in its collective services businesses during the fourth quarter, once again emphasizing the engine for stability (but perhaps not profits) that those services units represent for Big Blue. "We had our share of challenges, too," Gerstner admitted in his earnings statement. "But these were largely expected: slow PC sales and ongoing weakness in our OEM business. Our overall revenue decline came principally from these two units, and we've taken a number of actions to improve our long-term competitiveness in these areas." Like everyone else in the business world, Gerstner would love to know how 2002 is going to turn out. And like other top execs who don't want to make promises they can't deliver on, Gerstner didn't really give a whole lot of guidance on how 2002 might turn out. "Business conditions remain difficult as we enter the new year, although we believe that our business will strengthen as we move through the year," he said. "Further, and most important, we have absolutely no doubt that customer buying patterns throughout the world are continuing to shift in IBM's favor. Customers increasingly are demanding fully integrated technology - not the latest single-function offerings from the piece-part makers - and that plays directly to IBM's strengths." Big Iron IBM's hardware revenues were down 24% in the fourth quarter to $8.7bn. Revenues for zSeries mainframes were up a smidgen in the fourth quarter (but were up 15% for all of 2001). Mainframe MIPS shipments in the quarter were up 12% in the quarter. pSeries Unix server sales were up 35% sequentially from a dismal third quarter that was hit hard by the September 11 terrorist attacks and by over-capacity in the server market caused by the dot-com blowout. However, pSeries sales were off 20% compared to a very good fourth quarter of 2000, when IBM was shipping its "Turbo Condor" pSeries 680 servers at a healthy clip. John Joyce, IBM's chief financial officer, said that the low-end and midrange Unix server lines experienced weak sales, but that IBM would nonetheless see market share gains in this part of the market because others have fared worse. He also said that IBM would be introducing Power4 processors into low-end and midrange Unix servers later this year. In the quarter, sales of OS/400-based iSeries servers declined -Joyce didn't say by how much - but he said that the iSeries would gain market share in the midrange server market for machines costing between $10,000 and $1 million. Intel-based xSeries server sales were down in the quarter as well, and Joyce didn't get specific about how bad, only saying that this was a market phenomenon, not something just affecting IBM. He added that storage arrays were a relative bright spot, with overall array sales up 2% in the quarter and high-end Shark array sales up 6%; he said the storage array market had declined by 20% in the fourth quarter. PCs and printers PC and printer sales were off 31% in the quarter to $2.9 billion, and it is no wonder that IBM wants to outsource the manufacturing of its NetVista desktop PCs to distance itself from the losses that inevitably result from such steep revenue declines. Only a low-cost manufacturer can stay alive in the mature PC market, and maybe not even then if somebody doesn't start making some money. Software IBM's software sales were off by 6% in the fourth quarter of 2001 to $3.8bn. Operating system sales were down 2% (at constant currency) and middleware and database sales together were up 10%. Middleware and database sales on Unix and Windows platforms were up 5% in the fourth quarter according to Joyce, and host middleware sales - driven by database tools - were up 16%. IBM said that DB2 sales were up 13% in the quarter, and WebSphere middleware sales were up 43% (gain, these figures are at constant currency.) Sales of Lotus messaging and Tivoli systems management software were both down in the quarter, but Tivoli's switch to point solutions like security applications from systems management frameworks has resulted in three quarters of sequential revenue growth. He declined to elaborate on how well or poorly Lotus did, but customers are clearly waiting to see the "Rnext" next-generation of the Domino software right now before they make any big deployments. On a geographic basis, sales in the Americas were off 9% to $9.8bn in the fourth quarter. Sales in Europe, the Middle East and Africa were off 6% in the quarter, and sales in the Asia/Pacific region were off 10% to $4.5bn. Disk Drives Sales of technology to OEM customers - mainly custom chips and hard disk drives - were down 34% in the quarter to $1.6bn. IBM counts these sales separately in its geographic analysis because these OEM deals span geographies. The sales slump here has been and will continue to be caused by the downturn in sales of PCs,servers, and networking equipment. Moreover, IBM has had bugs in some of the 10K RPM and 15K RPM disk drives it was trying to sell in 2001, which meant that IBM didn't sell nearly as many raw disk drives as it had hoped. The indications are that IBM has cleaned up many of these problems and could start shipping revamped products in volume by the end of the first quarter. © ComputerWire.com. All rights reserved.
ComputerWire, 18 Jan 2002
server room

Proxim and Western create ‘wireless powerhouse’

In a rare genuine merger of equals, two Sunnyvale, California-based companies, Proxim Inc and Western Multiplex Corp, are joining forces to create a wireless equipment maker spanning across local and wide area networks - Patrick O'Brien writes. Under the terms of the deal, Western Multiplex will swap 1.8896 of its shares for each share of Proxim. Though this means paying a slight premium, in effect both sets of shareholders will own approximately 50% each of the combined company. It will retain the Proxim name and the Nasdaq ticker symbol PROX. Western Multiplex's chairman and CEO Jonathan Zakin will head up the company, with Proxim's chairman and CEO David King becoming president and COO. Proxim's CFO Keith Glover will retain his position. Proxim develops wireless LAN systems on Home RF, 802.11b, and most recently the higher specification 802.11a technology. Western Multiplex is hoping to be able to link Proxim's "last blink" equipment to its own fixed-wireless point-to-point and point-to-multipoint equipment, with the development of its "neighborhood concentrator" to create what Zakin described as a "worldwide infrastructure powerhouse." In a conference call, King said the merger will enable it to exploit the enterprise and government institution customer list of Western Multiplex, as well as attempt to sell 802.11a products to its service provider customers, which he believes are looking to provide in-building distribution. Wireless operators, he claimed, were all looking to see how 802.11 could complement their services. Zakin said that the new higher speed 802.11a products, which Proxim claims to have been the first company to ship, "provide an opportunity to play in the low end of the WAN area." Although it said it was too early to quantify cost savings, the most obvious ones to be made were in facilities and administration. There was no significant overlap of products, and little or no loss of revenue. The deal would be accretive from the third quarter of 2002, the first quarter in which its financials are united. Both companies struggled in 2001. Despite being in the high growth market wireless LANs, Proxim still managed to crash its revenues down to $16.1m in its most recent September 01 quarter from $33.6m in its December 2000 quarter, diving from the black to the red. Western Multiplex had a similar if slightly less dramatic fall, burning cash to finish the September '01 quarter with only $9.5m left. However, there is no guarantee that the merger will go ahead, and it should be remembered that both of these companies that are seeking solace in each other have been jilted before. Almost exactly a year ago, Adaptive Broadband Corp halted a merger with Western Multiplex, blaming weakness in the fixed-wireless market. In March 2001, Proxim and Netopia agreed to call off their merger when their stocks fell sharply after Intel withdrew support for Home RF 2.0 technology, of which Proxim was a major cheerleader. Another benefit of the merger is that Ripplewood Holdings LLC the majority owner of Western Multiplex will be able to sell its stake with less disruption to the company's share price. In the conference call, Zakin denied that this was a driver behind the deal. © ComputerWire.com. All rights reserved.
ComputerWire, 18 Jan 2002

2001 ‘bloodbath’ for PC vendors

2001 was a "bloodbath" for vendors after the number of PCs shipped last year dipped for the first time since 1985, according to the latest figures from Dataquest. Despite the fall the PC market could begin to pick up again during the second half of the year as long as economic conditions begin to improve. That's the assessment of analysts at Dataquest who revealed that 128 million PCs were shipped world-wide in 2001 - a drop of 4.6 per cent on the year before. In the US, PC shipments slumped 11 per cent amid worsening economic conditions and the belief that the market is reaching saturation. The fall in demand for PCs hit all the leading vendors except Dell, which saw its shipments increase 13 per cent to 17 million units. According to Dataquest, the PC industry has not experienced such a difficult year since 1985, when world-wide PC shipments fell 2.3 per cent and US shipments dropped a massive 21.8 per cent. Despite the gloomy news analysts believe that 2002 could see a modest upturn in demand. Analysts said current estimates suggest that world-wide PC shipments are set to fall 4 percent in Q1 2002 but finish the year with a growth rate of 4 percent. Said Charles Smulders of Gartner Dataquest's Computing Platforms Worldwide group: "While there is a mood of optimism in the industry, having made it through the bloodbath that was 2001, evidence for an immediate improvement in the first quarter of 2002 is far from clear. "On the positive side, it does not appear that the market is getting worse. We do not expect to see a significant upturn in growth until the fourth quarter of 2002. This based on an economic upturn in the second half of the year, he said." ®
Tim Richardson, 18 Jan 2002

Linux Quake3 rocks Win-XP Quake3 on new P4

The new Northwood 2.2gHz 0.13-micron P4, as I mentioned earlier, seems made for Windows-XP. It's got special chipset drivers; it's got an 'application accelerator'; it's got Rambus working overtime. For Linux it's got nothing special to offer -- no accelerators or drivers. Just 2.2 in clock speed and a memory controller that exploits RDRAM nicely, which is definitely nothing to sneeze at. But it's got that on Windows as well. So imagine my surprise when I benchmarked it with the only test I know that crosses the great divide between Linux and Windows -- the Quake-3 FPS benchmark -- and found that the performance of this Windows-loving kit was considerably better on Linux, at least in that context. A brief re-cap of the hardware: One Intel D850MVSE mobo with Northwood P4; 512M PC800 RDRAM; two Maxtor D740X 20G ATA-133 drives on the mobo's onboard ATA-100 controller, one booting Win-XP Pro on FAT and one booting SuSE 7.3 Pro on ReiserFS and both installed clean and subsequently patched; and a 64M DDR GeForce AGP4. The Windows drive is patched with whatever the MS auto-update cloak-and-dagger process does to it. The Linux drive is patched to kernel 2.4.17. The video and OpenGL drivers for both OS's were upgraded with the most recent files from Nvidia's Web site. On the Windows drive I installed all the Intel chipset drivers and the Application Accelerator. The Linux kernel is reasonably optimized for the HDD and the P4, but with APIC disabled, as it just won't run on the 850 mobo otherwise. But that's hardly a problem. Both operating systems, obviously, had to be running at the same level of display detail, and the limitations of XFree86 pretty well determined that for me. Both desktops were set at 16-bit color depth, and in both cases Quake was set with the following display options for the first series of runs: Mode: 1024x786 Color depth: 16-bit Lighting: lightmap Geometric detail: high Texture Detail: maximum Texture quality: 16-bit Filter: trilinear It seems a bit skimpy, but rich detail takes more from the graphics accelerator whereas less detail gives us a better look at the CPU, chipset and system memory. Win-XP returned an average of 72.7 FPS, which is worse than I'd expect from a P3 800 on '98 with about 128M RAM, or a 486DX 100 on Win 3.1 with about 16M RAM. (You see the pattern here....) Linux returned an average of 80.2 FPS, which is significantly better, though hardly brilliant. But let's keep in mind that the system I'm using here is virtually Linux-hostile. The next one won't be. With even less detail, further reducing dependency on the graphics card, we got better numbers from the CPU. The breakdown was similar, though Windows narrowed the gap a bit. Mode: 640x480 Color depth: 16-bit Lighting: vertex Geometric detail: low Texture Detail: minimum Texture quality: 16-bit Filter: bilinear This gave us averages of 272.2 FPS on Windows and 304.7 on Linux. We can infer that Win-XP is so greedy for system resources that even the most potent (and most expensive) CPU on the market, coupled with a hefty chunk of very fast RDRAM (also very expensive), only suffices to make it work nicely. Other considerations It's quite difficult to compare the performance of a given system on both Linux and Windows. The Quake benchmark is a rare exception, but basically it's apples and oranges. For example, what can we learn from evaluating the performance of Photoshop on Windows and the Gimp on Linux? Damn little, I reckon. For that matter, what can we learn from running Netscape, StarOffice and the Gimp on both? It's entirely possible that these applications could have performance issues on a given OS which would skew the results. I'll certainly try a number of tests like that during the weekend. This way, I hope, a single performance oddity won't cause too much distortion. It's also worthwhile trying to match a system with an OS. For insight we can look at some of the everyday tasks common to both OS's, and compare them on different systems. I've taken a few common-sense measurements on both SuSE and Win-XP with the Intel 850/Northwood combo, but these won't have meaning until I repeat them on a different system and see where they differ. Which I'll do, early next week. ®
Thomas C Greene, 18 Jan 2002

Philips moves to put ‘poison’ label on protected audio CDs

Netherlands giant Philips Electronics has lobbed a grenade into the audio copy protection arena by insisting that that CDs including anti-copying technology should bear what is effectively a plague warning. They should in Philips' view clearly inform users that they are copy-protected, and they shouldn't use the "Compact Disc" logo because they are not, in Philips' considered view, proper compact discs at all. The Philips move comes as the major record companies start to introduce copy-protection as quietly as they can. Unfortunate incidents such as Bertelsmann's Natalie Imbruglia lash-up have had the humorously opposite effect, widely publicising copy-protected CDs as poison packages to be avoided at all costs, and they've also clearly had an effect on Philips' thinking. As custodian of the standard, the company has decided it will oppose anything that will degrade it, and detract from the consumer's experience of it. But we mustn't at this juncture run away with the notion that :Philips is going to fight a long-term heroic battle from the standpoint of the company that supports our MP3s. So far, it is opposing the copy protection technology because it is "troublesome and cumbersome," not because it thinks an audio free-for-all should be maintained (well, it wouldn't think that, would it?) That probably means that Philips will act to impede the introduction of the flakier copy-protection mechanisms, but that as and when technology that doesn't break things is available, it may be open to cutting a deal with the record companies. Even that, however, is a serious set-back for the music industry's plans, because practically every test CD they're putting out now will have to be relabelled in some way. The labelling itself will be an interesting issue. It's not clear that Philips could require protected CDs to be prominently labelled as such, and although it can force the removal of the logo, you'll note that this is generally on the CD itself, inside the packaging, so you're probably not going to get a prominent skull and crossbones to prompt you to pass on to the next rack in the store. Philips might however be able to argue that companies are "passing off" by selling something that consumers think is a CD, but isn't. Meanwhile, the second barrel of the Philips shotgun is CD burning. In a Reuters interview Gerry Wirtz, general manager of Philips' copyright office, said that the company would be building CD burners that can read and burn copy protected CDs. He argues that the protection system is not a protection system as such, but simply a mechanism for stopping the playback of music. This interesting claim allows him to contend that the protection systems are not covered by the Digital Millenium Copyright Act, and lays the ground for the mother of all sue-fests with the number of large and rich companies who are most certainly not going to agree with him. Tin hats all round. ®
John Lettice, 18 Jan 2002

Oftel gets new second in command

Anne Lambert is stepping down as director of operations after three years at telecoms regulator Oftel. She is returning to the Department of Trade and Industry (DTI) having played an important role in helping to introduce unmetered Internet access to the UK. Ms Lambert has also overseen the difficult and testing introduction of local loop unbundling in the UK. Her replacement as second in command is Peter Waller who joins Oftel from the DTI where he is deputy chief executive of the small business service. He starts work on Monday and will oversee the day-to-day work of the telecoms regulator. According to a statement, he has extensive knowledge of the current issues facing UK businesses. Which is handy. Separately, the Government announced yesterday that £24 million was being made available to support the UK's computer and information technology industry. Half the cash will come from the DTI and the Engineering and Physical Sciences Research Council (EPSRC). The rest will be funded by industry. The cash will be used to fund projects between companies and universities designed to develop new display and storage products. Which is nice. ®
Tim Richardson, 18 Jan 2002

Nortel in black pit of despair

Losses keep pilling up at Nortel Networks as the firm announced a Q4 deficit of $1.83 billion, bringing net losses for the year to $ 27.30 billion. Nortel's revenues from continuing operations for Q4 2001 were $3.46 billion compared to $8.20 billion in the same period in 2000. Revenues in 2001 for the Canadian firm were $17.51 billion compared to $27.95 billion in 2000. Restructuring and job losses have resulted in Nortel ending the year with half the workforce it began with. Nortel is in the process of slashing its workforce from 95,000 workers down to 45,000. The results came out slightly ahead of those predicted in a profit warning in December and Nortel's CEO Frank Dunn tried to put a positive spin on its future by saying it expected "gradual growth" in revenues to begin in its second quarter and a return to profitability by Q4. The firm also announced that it had a cash balance at the end of the fourth quarter of 2001 of approximately $3.5 billion Metro and Enterprise Networks segment revenues for Nortel decreased 53 per cent in the fourth quarter of 2001 compared to the fourth quarter of 2000. This reflects substantial declines in the circuit switching, packet networking and services, and metro optical portions of this segment, across all major regions. Wireless Networks revenues decreased 21 per cent over the same period. Optical Long-Haul Networks was even more badly hit, with revenues down 89 per cent in the fourth quarter of 2001 compared to the fourth quarter of 2000. The collapse of competitive carriers and dotcom firms in the States, has had a disastrous effect on networking firms, while a slowdown in IT spending in general has piled on the misery. Badly timed high-price acquisitions and questionable lending to new customers have compounded Nortel's problems. ® External links Nortel's Q4 results statement Related stories Losses pile up at Nortel 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 Where have all the Cisco customers gone?
John Leyden, 18 Jan 2002

Compaq revitalises depressed disclaimer market

Those readers who remember the result of our astounding 2001 email disclaimer contest, will doubtless enjoy the following effort from Compaq, courtesy of our man in the land of coffee and maracas. The company recently donated 10 PCs to an Indian community centre in Chiapas, Mexico. Very laudable, but the subsequent press release regarding this piece of IT munificence had a couple of notes attached: Founded in 1982, Compaq Computer Corporation is a world-class leader in the supply of technology and solutions. As industry leader, Compaq designs, develops, manufactures and markets hardware, software, solutions and enterprise services, in addition to critical business solutions. It also supplies communications products, desktop and laptop computers in over 200 countries. Compaq is a market leader in Latin America. Here it offers products by direct sale through its Internet stores and customer service centers, and through the distribution channel. More information about Compaq, its products and its services is available at clac.compaq.com. Compaq and the Compaq logo are trademarks of Compaq Information Technologies Group, L.P. All reports, excluding those of historical fact, may be considered speculative. Risks, unforeseens and presumptions include: the posibility that the Hewlett-Packard/Compaq merger might not be fulfilled; that the companies be required to modify aspects of the proposal in order to achieve the approval of the regulatory bodies; that before the close of the proposed merger the business of both companies suffer due to unforseen circumstances; that the markets for certain products and services will not behave according to projections; that Compaq and Hewlett-Packard are not able to sell the transition to their clients, succesfully execute their integration strategies or achieve the planned synergies; other risks as described in the Securities and Exchange Commision reports regarding Compaq and Hewlett-Packard (including, but not limited to, the general ledgers of Compaq in the 10-K form for the year ended 31 December 2000, and the general ledgers of HP in the 10-K form for the year ended 31 October 2000 and other reports filed later). If any of these risks or unforseens became reality, or if it were to be proved that any of these projections is incorrect, Compaq's results may materially differ from Compaq's expectations in these reports. Compaq assumes no liability whatsoever and does not intend to revise the same. Yup, that just about covers it. Don't say we didn't warn you. Now, if that corporate caveat really rattled your cage, there's more bad news. In a move that has a ring of horrible inevitability about it, US company Red Earth Software has released Policy Patrol. Apparently, this NEW DISCLAIMER SOFTWARE IMPROVES EFFECT OF DISCLAIMER NOTICE (their caps, btw), offering advanced disclaimer functionality such as user-based disclaimers, formatting and merge fields. These features increase the relevancy of disclaimers and thus improve their efficacy. But how, you gasp, is this possible? Well, Policy Patrol allows companies to add more specific disclaimer notices by offering user-based and context sensitive disclaimers. The user-based disclaimer functionality enables companies to adjust statements according to a particular user or department, therefore increasing the relevance of the disclaimer. Magnus Andersson, technical director of Red Earth Software, continues: "We designed Policy Patrol because the current offer of disclaimer functionality is very basic. Larger companies cannot settle for the same disclaimer for everyone within their organization. They need a flexible, professional disclaimer solution that can be adjusted to their exact needs. With the increasing use of disclaimers, non-specific disclaimers are simply not having the desired effect any more." Spot on. And when people start to ignore html formatted disclaimers, we can look forward to Flash pop-up disclaimers and DHTML drop-down caveats. Onwards and upwards.® Bootnote Since you're no doubt now fired up with renewed enthusiasm for the future of email disclaimers, why not download the Red Earth Software's 'Email disclaimers' white paper here. Disclaimer: We have not in fact ourselves downloaded this disclaimer white paper and can therefore not be held responsible for its content or any side-effects resulting from exposure to same. Your statutory rights are not affected. May contain traces of nuts.
Lester Haines, 18 Jan 2002

Distributed computing case ends with probation

A sys admin who installed distributed computing software on computers at an American college has been sentenced to probation. This may seem harsh but David McOwen, the former BOFH at the state run DeKalb Technical College in Georgia, can consider himself fortunate - since the authorities brought charges against him that might have sent him to jail. McOwen has been given a year of probation and a $2,100 fine for linking up college PCs to Distributed.net, a communal code breaking network that takes advantage of spare computing cycles to crack codes. Since February 2000, McOwen has been the target of a "computer trespass" investigation and then prosecution. Last autumn McOwen was charged with one count of computer theft and seven counts of computer trespassing (one for each of the school offices where McOwen downloaded the distributed.net client), Newsbytes reports. He faced a fine of $400,000 and the prospect of prison if convicted at a criminal trial, which was due to take place later this month. Under the terms of the deal, announced yesterday, McOwen will receive one year of probation for each criminal count, to run concurrently, make restitution of $2100, and perform 80 hours of community service unrelated to computers or technology. McOwen will have no felony or misdemeanour record under Georgia's First Offender Act. "David never should have been prosecuted in the first place, but we're glad that the state decided to stop," said senior staff attorney Lee Tien of the Electronic Frontier Foundation (EFF), which campaigned on his behalf. "This is a very good result for David. He very likely could have won if the case had gone to trial, but trials cost money and you never know what will happen," Tien added. The case, which turned on whether McOwen had fair notice that installing the Distributed.net client software was prohibited, has taken a heavy toll on the sys admin. He resigned from his job at DeKalb soon after the school threatened him. Last August he was fired from his next job at Cingular Wireless because of the bad publicity surrounding the case. The issue raised by McOwen's prosecution isn't an isolated one. Last year, the Tennessee Valley Authority banned the SETI@home program from its computers, declaring it a risk to computer security. ® External links Free McOwen campaign site Related stories IT worker faces jail for installing screensaver at work 'I say fry him!' The crime of distributed computing SETI founder speaks about Intel P2P cancer project
John Leyden, 18 Jan 2002

Oftel cuts LLU charges

Oftel has ordered BT to cut some its charges linked with local loop unbundling, claiming they are too high. The telecoms regulator ruled that BT must cut the amount it charges for providing line test information from £5.30 to £2.60 per line. It must also halve the amount it charges for unplanned escorted access to exchanges. However, critics have been quick to play down today's announcements, claiming that they amount to little more than tinkering around the edges. In a statement David Edmonds, head of Oftel, said that today's ruling would reduce costs for operators and give them greater confidence in planning the roll-out of unbundled services. Said Mr Edmonds: "Today's announcement is another example of Oftel taking action to support the rollout and take-up of broadband services through competitive broadband markets." However, a spokesman for BT told The Register that Oftel had found in the telco's favour on many accounts and that today's announcement was little more than a couple of "minor changes". A spokesman for Bulldog Communications - one of the few companies still involved in LLU - said that while today's announcement was not necessarily earth-shattering, it was yet another ruling in favour of rival operators. "This shows Oftel is getting involved and cutting through the detail. Oftel is nibbling away at the cost base which is now moving in the right direction," he said. So far around 150 lines have been unbundled in the UK. ®
Tim Richardson, 18 Jan 2002

bin Laden hackmeister ‘flees’ Germany

UpdatedUpdated German glam-hax0r Kim Schmitz (aka Kimble), the founder of a group which made unsubstantiated claims to have hacked a Sudanese bank with /bin/laden accounts, has fled the country in fear of his life. At least that's what the man himself would have us believe from a farewell letter on his site which shows, if nothing else, that Kimble is not afraid to sing his own praises. The "500-million-mark" man, "super brain" and "Internet entrepreneur" was wrongly made out to be a "braggart" and "fraud" by people out to destroy his vision, he would have us believe. The authorities are unable to protect him against kidnap or death threats so he's decided to take his ego elsewhere. There's no mention of reported financial problems and, sadly, Kimble's site has also been stripped of pictures of him and his mates flying in private jets to exotic locations with a bevvy of busty strumpets. It's not clear what his plans are or where Schmitz is at the moment, and he's proving difficult to track down. CNN reports that the German finance community, and Letsbuyit.com which he reportedly helped by offering to invest $40 million early last year when it was close to collapse, are unfazed by Schmitz's exile. The hacking community will be hopeful that he's disappeared for good. Schmitz's self-created legend of hacking proficiency, based on a little fact combined with tasty bits from media interviews and movies, as this article makes all too clear, raised hackles in the community. After the September 11 attacks, Schmitz claimed to have created an elite squad of cyber ninjas called YIHAT (Young Intelligent Hackers Against Terrorism) whose goal was "eliminating the electronic foundations of terrorist activities worldwide". Last October Schmitz claimed that his YIHAT guard had obtained data on accounts held by members of Al Qaeda, including bin Laden, held at the AlShamal Islamic Bank in Sudan, but he offered not one shred of proof. Days later Yihat was re-christened Young IDIOTIC haxOrz and Terrorists after an attack on its kill.net Web site by infamous hacker Fluffy Bunny. Which say's it all really. ® Update Since we last looked, Schmitz has put up a fake headstone on his site announcing his death on Monday, which will be his 28th birthday. He's even put up a countdown clock and invited people to see his "death" live on the site. Really is there no end to this man's posturing? A story in today's Der Spigel suggests Schmitz has been arrested in Thailand. Here's a translation from the original German, with thanks to all the readers who submitted it: The End of the Road Kim Schmitz Arrested in Thailand Whatever he planned next, it will never materialise: Kim "Kimble" Schmitz has been arrested in Thailand. The 'King of the Hackers' has been accused of insider dealing, by which he allegedly made 1.5 million euros. Munich computer expert Schmitz, sought internationally for his fraudulent insider dealing, was apprehended in Bangkok. The public prosecutor from Munich I confirmed on Friday a report to that effect by 'Teleboerse Online'. The 27 year-old was accused of using insider knowledge to buy shares for 375,000 euros, then selling them off shortly afterwards for 1.5 million euros. Now we must wait to see how this develops, and when the accused will be handed over to Germany, said a representative of the public prosecutor's office. On the advice of the state supervisory office for bond trading, the Munich authorities have initiated inquiries and obtained the arrest warrant through Munich's law courts. Schmitz is regarded as an enigmatic figure. He became known in Munich as a computer hacker and later sold his knowledge of security holes to companies. Even now he is still ensuring sensation with one of his abstruse publicity tricks: on his Web site he is advertising his suicide on Monday - or at least his crossing "to a new world". External links Parting greeting from Kim Schmitz (in German and English) Related stories bin Laden hackers denounce founder bin Laden hack-meister in defacement, financial debacles Tables turns on Bin Laden 'bank crackers' We've cracked into bin Laden's bank - UK hackers Kimble.org offers $10m reward for arrest of bin Laden Letsbuyit awakes from coma
John Leyden, 18 Jan 2002

Dell takes 27pc of US PC market

More than one in four PCs sold in the US in the last three months had a Dell badge, according to analyst estimates cited by Dell today in an upbeat trading statement. In Dell's Q4 (not over yet - it finishes on Feb 1) , the company will account for 27 per cent of all PCs sold in the US, totting up to sales of $8 billion. This is more $400m than it had previously expected. Earnings per share will come in at 17 cents, when the company releases its full financial results on Feb 14. The consumer sector is leading the sales charge - and more to the point - sales in this notoriously tough segment - are turning a profit. Dell says the consumer business will achieve a sequential increase in product shipments of 50 per cent-ish, and revenue growth of 40 per cent or so. For the full-year, Dell's global market share will be 14 per cent, 3 per cent up on its previous financial year. Dell points out that it is making double digit shipments and revenue growth when, the PC market is contracting (anything between 4 per cent and 7 per cent in 2001, depending on which analyst firm you believe). Strip out Dell, and the performance of the other big name brands looks little short of woeful. ® Related stories 2001 bloodbath for PC vendors HP outsources more PC ops Compaq shows signs of recovery
Drew Cullen, 18 Jan 2002

Canon UK to shed 500 jobs

Canon is to axe 500 jobs in the UK despite having reported record global sales over the last 12 months. The printer and copier company said that it was not immune from the pressures being faced by the whole industry. Following a review of its business in the UK, the Surrey-based operation said its workforce would be cut from 3,000 to 2,500 over the next few weeks. In a statement issued this afternoon Canon UK MD, Lars-Erik Kennbert, said: "The decision we've taken is a tough but necessary one. "We are currently undergoing a fully inclusive consultation process with the staff affected and those who are not being re-deployed within Canon UK will receive redundancy packages and every assistance in finding new positions." Canon maintains that despite the job cuts it is in a strong position to weather the current economic climate. ®
Tim Richardson, 18 Jan 2002

Sun's sales slip, forecasts summer recovery

Sun Microsystems has posted a second quarter net loss of $431 million as its sales fell by more than a third. Losses for the quarter came in at $431 million compared with net income of $423 million in the same quarter last year. Excluding losses on Sun's equity investment portfolio, charges related to job losses and other charges, the firm lost $99 million. Revenues were down 39 per cent to $3.11 billion from $5.12 billion recorded in Q2 2000 but up 9 percent on the $2.83 billion recorded in Q1. The firm blamed restructuring charges of $511 million and a slow down in technology spending for the losses. Michael Lehman, Sun's chief financial officer, said: "compared with Sun's first fiscal quarter, bookings and revenue in the second fiscal quarter are up sequentially and inventory reductions are in excess of $200 million. We generated cash in the quarter on an operating basis, even with the payments we've made on our restructuring, and Sun's cash and liquid marketable investment position remains strong at approximately $6 billion." "Despite economic uncertainties, Sun still is investing in product development and core competencies to promote the long-term growth of the company," he added. The firm brushed aside concerns that heightened competition suppliers of lower-priced Wintel servers and Unix rivals would delay its recovery. Sun CEO Scott McNealy said the start of volume shipments of its Sun FireTM 15000 server, flagship high-end system, and low-end Sun FireTM V880 server, during the quarter helped position the firm well for recovery In a conference call, Sun executives said they expected the firm to return to profitability by the middle of this year. ® Related stories The Sun shines out of BEA's hind Intel sabotaged Solaris on Itanic - Sun
John Leyden, 18 Jan 2002

Avoid the Christmas rush with El Reg January sale

We've mucked out the Augean stables of the Register merchandising-warehouse, courtesy of our January clearance sale. Nearly. Only 90 sacks to get out the door - everything must go! Will no-one rid us of our fine El Reg-logo yellow button-down shirts? Only seven left, and at just £10 a pop, an absolute steal. We have Bastard Operator from Hell cartoon t-shirts - in four sizes! - they are definitely going, as we've discontinued this line. And it's the last chance on the cheap'n'cheerful black logo shirts... with the URL printed, unaccountably, but rather fetchingly, in red. No-one buys white t-shirts in winter, our retail advisor told us. Well it has to be summer somewhere, we replied. And what better garment to wear on the beach than this very fine limited technology (or is that edition?) Integrity t-shirt. ®
Team Register, 18 Jan 2002

Next-gen ISP peering network launches

PacketExchange, a provider of peering services to carriers and ISPs, has launched a network which enables service providers in different locations to peer directly with one another. The network (dubbed ProXimity) links traffic exchange points in London, New York, Paris, Frankfurt, and Amsterdam, and reduces the cost of transporting data over the Internet by at least 50 per cent compared to alternatives using older less exotic technologies. ProXimity is among the first networks to use Multi Protocol Label Switching (MPLS) technology, which labels traffic flows and makes it easier to manage the flow of traffic over a complex network, with a refinement called draft Martini. draft Martini, developed by firms such as Cisco and Foundry Networks, has been described as a "21st century Frame Relay" which allows Layer 2 (switching) over Layer 3 networks, such as the Internet. Privately-held PacketExchange was founded by personnel from Level 3 Communications and LINX (the London Internet Exchange) along with Giles Heron, the co-author of draft Martini. It plans to extend ProXimity to Madrid, Milan, Zurich, Washington and Stockholm and introduce other services. ®
John Leyden, 18 Jan 2002