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Week of April 29, 2001 News Archive

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Monday April 30, 2001 Top

Windows XP May Not Make It Out This Year

Microsoft is aiming to get the final version of Windows XP out in the summer, but if it misses its target, the sofware company may delay the operating system's launch until next year, several PC makers and analysts say. Much depends on whether the company can meet its target date for releasing the Windows XP final, or gold, code to computer makers. Computer makers contacted Monday said that late last week Microsoft told them it would release the final code for XP--an upgrade to Windows 95, 98, Millennium Edition and 2000--in late July or early August. If Microsoft meets that target, the company can launch Windows XP this year as planned. By releasing the software to manufacturers by the end of July, some PC companies could start selling it at the tail end of the "back-to-school" season, which is the second-busiest buying period of the year. But Microsoft described its window for delivery as tight, telling several PC makers that if the date slipped, Windows XP's launch would be pushed back to 2002. Postponing it that long would also mean missing the holidays, the busiest consumer shopping season, and the end-of-the-year budget blowout at corporations. "Microsoft broke the news on Thursday or Friday last week that if (gold code) went beyond early August, they would hold back Windows XP until early '02," one PC maker said. "We were briefed at a fairly high level and exited the meeting with the impression all bets were off for this year."

The issue apparently revolves around Xbox and Microsoft's concerns that marketing for Windows XP could interfere with the gaming console's introduction, slated for the fall--just in time for the holiday shoppers. "If they found themselves in a position where they were messaging on Windows XP and Xbox at the same time, they would give on XP," Guernsey Research analyst Chris LeTocq said. "Microsoft would push back XP until next year." The date that Microsoft releases the final code to Windows XP is crucial for PC manufacturers, which typically take anywhere from four to eight weeks getting the software onto new computers. The later the delivery date, the more likely computer makers--and retailers selling shrink-wrapped copies of Windows XP--will miss the lucrative holiday sales period. Windows XP initially will ship in two versions: consumer and professional. Given how revolutionary the consumer upgrade is from earlier incarnations, "even early August doesn't give us much time for the holidays," one PC maker said. "Any later, and it's game over." The issue is testing, because computer manufacturers must certify the shipping version of Windows XP for a variety of PC configurations. The more lead time, the less likely PC customers will encounter troubles with the operating system later on.

Next Version of Windows 2000 Server to Be Windows 2002

Microsoft has gone back to the calendar to name the upcoming server version of Windows--but the company has given itself six more months to get the product out the door. Microsoft announced Monday that it has chosen the name "Windows 2002" for the operating system that will supplant Windows 2000 Server, Advanced Server and Datacenter--the versions that run the powerful networked computers called servers. Windows 2002's close cousin, Windows XP, is intended for use on desktops, laptops and workstations and is the first of the products Microsoft based on the software code-named Whistler. Using "2002" carries on a date-oriented naming tradition that began with Windows 95 but that Microsoft veered away from for its upcoming Windows XP, short for "experience."

But Windows 2002 likely will arrive later than hoped--possibly by the end of 2001, a spokeswoman for Microsoft said, but more likely in the first half of 2002. Last October, Microsoft said in a statement that versions of Whistler--now known as Window XP and Windows 2002--"are expected to be generally available in the second half of 2001." The delay carries on a tradition of delayed operating system releases that has plagued Microsoft as well as its competitors. For Windows 2002, Microsoft decided to stick with the calendar-based naming convention because of its familiarity to corporate computing personnel. "It seems prudent to continue with a similar naming paradigm," Bob O'Brien, group product manager for the Windows .Net server marketing program, said in a statement. The slipped schedule is in response to comments from customers, Microsoft said. "Microsoft is very focused on listening to customer feedback, and feels strongly about not shipping the product until customers tell them they are ready," a spokeswoman said. One of the major features coming with Windows 2002 is easier use of Active Directory, a Microsoft feature that keeps track of computers across company networks and what they can do, said Summit Strategies analyst Dwight Davis. A delay might hold up adoption of this feature, but otherwise is unlikely to affect Microsoft too much, he said.

VIA Continues To Increase Its Share of the Chipset Business

Via Technologies, the world's second-largest chipset maker, said Monday its quarterly profit more than doubled, though it's unlikely to repeat that performance in the current quarter because of slowing demand. Sales surged 84 percent as Via expanded its main business at the expense of Intel, its biggest rival. The company bucked slow demand in the PC business by more than doubling its market share for chipsets, which manage the flow of data between a computer's CPU (central processing unit) and other components. But the company acknowledges it may have difficulty sustaining that. Intel, Taiwan's Silicon Integrated Systems and Acer Laboratories are Via's main rivals in the chipset business. All of Via's competitors lost market share last year in the chipset business, as Via's strategy of making products compatible with new memory chips paid off. Via last year made chipsets for synchronous dynamic RAM, or SDRAM, while its competitors experimented with other strategies that failed to increase their business. This year, Via's strategy hinges on another memory technology called double data rate, or DDR. Via is already offering DDR chipsets for rival company AMD's processors and plans to offer DDR chipsets for Intel's latest PC processor, the Pentium 4, later this year.

New Tool Circumvents Internet Blocking

A computer hacking group best known for creating tools for hijacking computer systems is turning its hand to civil disobedience and plans to release an application that could scupper government and corporate censorship around the world. The tool--to be called Peekabooty--will be based on peer-to-peer network technology. This allows data to be distributed directly between computer systems and has attained fame through the emergence of music-sharing technologies such as Napster and Gnutella. Peekabooty hosts will cooperate in a similar way to Gnutella--without a central server--but in this case will share and distribute controversial Web pages. The group behind the application is the Cult of the Dead Cow, a team of white hat (non-criminal) computer hackers best known for producing security tools that exploit weaknesses in Microsoft software. Their best-known tools are BackOrifice and BackOrifice2000, which allow a computer hacker to take control of computers running Microsoft operating systems. A source close to the group said it plans to produce the tool for circumventing government Internet blocking at Defcon, the world's premiere computer security conference, to be held in Las Vegas this July.

According to the source, Peekabooty will enable those living in oppressive regimes to access prohibited material through fellow Peekabooty clients located in more liberal countries. The client grabs the requested content and sends it back to the original computer in a compacted and encrypted form that cannot be filtered out using conventional technology. Because there is no central authority, unlike Napster, it would be more problematic to control. "[It's] completely distributed and impossible to shut down," said the source. "Users will be able to request proscribed Web pages with a client through a distributed server cloud. An intelligent agent will be dispatched from the server to the Web page, grab the content, zip it down, take it back to the server, then punt it back to the client."

Pirated Copies Of Office XP are Loose In Asia

Illegal copies of Microsoft Office XP have been selling briskly at less than $3 in the Malaysian capital of Kuala Lumpur. The pirated software is readily available at night markets around the city as well as in open-air food stalls and walkways in suburbs. In an interview Monday, a Kuala Lumpur-based IT consultant, who requested anonymity, said he paid $2.60 (10 ringgits) for a single, Office XP Professional CD, which comes with Word 2002, Excel 2002, PowerPoint 2002, Outlook 2002, and FrontPage 2002 for Web authoring. He said pirated copies of Office XP have been available in Kuala Lumpur since "before April." "Once the (Internet) newsgroups started posting the code, I knew that someone would port it to CDs and start selling them," he said. The company is aware of such pirated copies in the open market, said Moses Wan, product manager for desktop productivity at Microsoft Malaysia. He said Office XP code was illegally posted on newsgroups a "few weeks ago" but later removed. "Although there has been speculation that the build was final code, Microsoft cannot comment on the integrity of the code, as we were not able to view it prior to its removal from the Web site," Wan said.

While the software giant is aware that illegal copies of Office XP are readily available in Kuala Lumpur, the company has yet to file a complaint with local authorities. "We are investigating to gather information to file a compliant," said Kenny Cheung, a legal associate with Microsoft's Law and Corporate Affairs Department based in Singapore. Cheung stressed that the pirated software contained beta versions, as Microsoft has yet to release the final code. Microsoft is selling an official 30-day trial version of the software for $9.95. The company is expected to officially launch Office XP in the United States on May 31. Microsoft representatives said Office XP would cost about $526 in Malaysia, or close to the retail price of Office 2000. Malaysia is on the Priority Watch List of the U.S. Trade Representatives office, which means that if insufficient action is taken to curb software piracy in the country, there is a risk of trade sanctions, warned Microsoft's Wan.

Tuesday May 1, 2001 Top

Serious Vulnerability Found In Microsoft Server Software

Microsoft announced a serious security hole Tuesday in its flagship Web server software and raced to convince system administrators to patch their Web servers before online vandals compromise their systems. The flaw affects Window 2000 server software running version 5.0 of Internet Information Server (IIS). The hole is in Windows 2000's Internet printing module but can only be exploited if IIS is activated. "It is a serious vulnerability," said Scott Culp, security product manager for the software giant. "We are going to some extraordinary steps. We want to make sure the people know about this vulnerability and apply the fix now." The vulnerability affects servers with Internet printing turned on, the default setting with the software. By sending a specially formatted string of characters, the printing module can be made to give the remote user full access to the Web server.

Marc Maiffret, chief hacking officer for network protection firm eEye Digital Security, said the vulnerability is very serious. "There are at least a million web servers sitting on the Internet that, within a few minutes, you can get system level access to them," he said. The Aliso Viejo, Calif., company discovered the flaw two weeks ago and notified Microsoft immediately. The flaw allows properly written remote commands to overflow the memory for the Internet printing service's ISAPI (Internet Service Application Programming Interface). Web servers using Microsoft's IIS 4.0 software are not affected by the flaw. Companies that have set up their Web server with the printing turned off--as outlined in Microsoft's "IIS Security Checklist" guidelines--or used the IIS Security Lockdown Tool don't need to worry about the vulnerability, either. Microsoft has taken extraordinary steps to try to convince system administrators to patch the software. Microsoft posted a patch and security advisory on its site at 10 a.m. PDT describing the vulnerability.

Unofficial Windows Media Player 8 Beta is Released

Microsoft is taking legal action against Web sites circulating a rogue version of Windows Media Player 8. The Redmond, Wash.-based software maker started issuing letters late Monday demanding Web sites pull down a supposed beta, or trial version, of the software. "We first contacted all the Web sites that have the bits up there right now with (warnings) of legal action to remove it immediately," said Dave Fester, Microsoft's general manager for digital media. "We started doing that last night. I'm sure they will be more than eager to comply." Distribution of the program raises further controversy and confusion over Windows Media Player 8, which Microsoft said it would integrate with the forthcoming Windows XP operating system rather than offer as a separate downloadable program. A separately available beta of the media player would seem to contradict Microsoft's position.

Jonathan Usher, Microsoft's group product manager for Windows Media Player, said the rogue program is lifted from the latest beta release of Windows XP and repackaged as a standalone version. "An unauthorized person basically took files from Windows XP Beta 2 and created their sort of rough-and-ready install program around the files, which they called Windows Media Player 8," he said. Usher said the "origin of the files is unknown," and he warned that installing the program "could put customer PCs at risk. " While the program indicates support for some features available with the version of Windows Media Player 8 found in Windows XP Beta 2, they are in fact missing. The options menu for setting the program's functions offers access to DVD playback and CD burning, neither of which work. Those features require access to Windows XP, which is one reason Microsoft chose to integrate Windows Media Player 8 with the operating system, Usher said. Other missing features include enhanced video playback, integration with the Windows interface and improved media file management features, he said.

Major Event in Rambus-Infineon Trial

A federal judge has tossed out all but three claims in a patent infringement case brought by Rambus, which designs and licenses computer memory, against German semiconductor maker Infineon Technologies. U.S. District Judge Robert Payne, who is presiding over the ongoing jury trial here, also will consider a motion by Infineon to throw out all the remaining claims after receiving legal briefs from the litigants, the Richmond Times-Dispatch reported Tuesday. Rambus sued Infineon for allegedly infringing on its patents on two types of computer memory. The original suit included 57 claims covering four patents. Infineon, one of the top global producers of computer memory, countered that Rambus improperly obtained technical specifications that led to some of the patents and was seeking to broaden the scope of its patents in the suit. In tossing out the bulk of Rambus's case, the judge dismissed a key charge of willful infringement against Infineon. Rambus had alleged Infineon knew it was infringing on computer memory designs invented by Rambus more than seven years ago.

Virus Attacks MSN Messenger

For the first time, a virus has wormed its way into Microsoft's popular MSN Messenger Service--but the slow-moving, crash-inducing pest is unlikely to cause significant damage. Microsoft posted a warning late Friday night about the so-called W32/Hello virus on a special site and has been working with security companies to kill it. A Microsoft spokeswoman said few instant messenger users have been tricked into opening the virus, thereby slowing its potential to make other machines crash. W32/Hello, an Internet worm that affects computers with the Windows operating system, arrives via MSN Messenger as a file called Hello.exe. If someone clicks the Visual Basic 5 application, the worm creates an unnamed shortcut in the Windows Start-up folder. It will then send a copy of itself and the message "i have a file for u. its real funny" to people on the MSN e-mail contact list of an infected IM user's machine.

New iBook and Upgrade to OS X Announced

Apple Computer CEO Steve Jobs on Tuesday unveiled a new version of the iBook laptop that is thinner, lighter and cheaper than its predecessor. The unit is all white and bears more resemblance to the sleek Titanium G4 PowerBook than the curvy, bulky iBook it replaces. The new iBook has a 500MHz PowerPC G3 processor, weighs 4.9 pounds--2 pounds lighter than its predecessor--and is considerably thinner at 1.3 inches thick. The notebook's 12-inch screen can show 1,024-by-768 pixels, as opposed to the 800-by-600-pixel resolution of many 12-inch screens. "We think this will set a new standard," Jobs said at a briefing with reporters at the company's headquarters here. Jobs also used the event to announce that a second upgrade to Mac OS X will come out Tuesday with the ability to burn CDs. The new iBook, which will start shipping in about two weeks, comes in four versions, each identical in appearance but with a different optical drive.

The entry-level version, which comes with 64MB of memory, a 10GB hard drive and a CD-ROM drive, will sell for $1,299--$200 less than the previous low-end iBook. All of the other models come with 128MB of memory. One of those models, which can play DVD movies, will sell for $1,499. A version with a CD-rewritable drive will cost $1,599. The highest-end iBook, which has a combination drive that can record CDs and play DVD movies--but not record DVDs--will sell for $1,799. Meanwhile, the second upgrade to Mac OS X will be available for download on Apple's Web site Tuesday afternoon. Mac OS X also has a feature that allows people to get their software updated automatically. It will take about a week to send the upgrade to all OS X owners because it is done in blocks, Apple said. Jobs had promised at the time of the new operating system's launch that the CD-burning feature would be available by the end of April.

Wednesday May 2, 2001 Top

AMD Lowers Prices on Athlon Chips

AMD quietly cut prices on its Athlon line of processors earlier this week, according to sources. Later this week, the company is expected to announce the price cuts and declare them retroactive. Under the new cuts, the official price for the 1.3GHz Athlon will drop 45 percent from $318 to $175 and the 1GHz chip will drop 31 percent from $204 to $140. The cuts will also help pave the way for a 1.4GHz Athlon coming in a few weeks. The price drops aren't nearly as drastic or sudden as the math might indicate, however. The chips have actually been selling for less than the posted price for the past few weeks. Computer dealers, for instance, are currently selling the 1.3GHz chip for $193 to $203 at retail, about the same as a 1.3GHz Pentium 4. The 1.2GHz Athlon sells officially for $294 at wholesale, but can be bought at retail for $153 to $166. The official wholesale price for 1.1GHz Athlon chips will drop from $241 to $150, which is currently selling for about $150 at retail anyway.

IBM Announces New Method To Lower Flat Panel Prices

IBM has created a new way to manufacture flat-panel displays that it asserts will improve production and lower costs. The technique, which officially will be announced Thursday, could improve production efficiency for manufacturers in what is quickly becoming a commodity market. This could translate into cheaper laptops and handheld computers for consumers because flat panels, or liquid crystal displays, are often the most expensive component in such products. The new technique is "remarkably simple" and consolidates a number of manufacturing steps, said Praveen Chaudhari, the IBM researcher who first thought of the idea. "We basically replaced a technique that involved a rubbing process using a roller that looks like a paint roller to align a substrate for the addition of crystals," Chaudhari said Wednesday. "Now what we can do is, using an ion-beam gun, shoot atoms at a substrate to align it and prepare it for the addition of liquid crystals."

Crystals that are properly aligned turn pixels on and off when they twist and rotate in response to electronic signals from a computer. The rolling technique is commonly used by flat-panel manufacturers and introduces inefficiencies, as it entails a number of steps--steps that become unnecessary in the IBM method. "Four steps are replaced by two from the process," DisplaySearch analyst Ross Young said. Rubbing also increases the likelihood of streaks and contaminants on the displays. IBM is already testing a manufacturing line using the new technique and expects production to begin by the end of the year. "This is definitely an innovation that will lead to improved yields and lower costs, which means higher margins for manufacturers," Young said. "But it probably won't have a near-term impact because it will take time for manufacturers to adopt and implement the new technique."

Rambus Royalty Rates Disclosed

Rambus executives disclosed the royalty rates it is seeking from memory manufacturers, and the numbers are higher than expected. Testifying on Wednesday in the company's patent infringement trial against German chipmaker Infineon Technologies, Rambus executives disclosed that the company charges memory chipmakers a 3.5 percent royalty on the manufacture of DDR DRAM, a high-speed memory design that competes with chips based on Rambus' RDRAM, according to reports on Electronic Buyer's News. A Rambus official confirmed that it is charging the licensees approximately 3.5 percent on DDR DRAM. Rambus levies a 0.75 percent royalty on output of SDRAM, the most common type of memory used in PCs today, according to testimony. The royalty rates also illustrate why Infineon, as well as Micron and Hyundai, have landed in court. In the intensely competitive memory market, every cent counts. Some companies recently have had to sell SDRAM for less than cost, so royalties are especially painful.

Rambus has signed royalty agreements with a number of memory makers, including market leader Samsung . These companies have agreed to pay royalties on the production of DDR DRAM and SDRAM. Royalties will shrink drastically, however, if a court rules the patents can't be enforced. To date, Rambus has said that the royalty rate on DDR is higher than on RDRAM and that the SDRAM rate was lower, but it has not provided specific figures. The rates also highlight the sort of majestic returns that Rambus stands to reap if the patents are upheld. Under current memory prices, Rambus would likely earn close to $2 from the sale of a PC containing 128MB of DDR DRAM from one of its licensees. A similar PC with 128MB of SDRAM would end up earning around 17 to 20 cents for Rambus. The royalty rates are "very high by traditional standards for semiconductor licenses, which tend to be below 1 percent," said Insight 64 analyst Nathan Brookwood. Rambus charges a royalty of 1 to 2 percent on RDRAM, said Dan Scovel, an analyst at Needham & Co. "I am surprised that DDR is that far above RDRAM," he added. RDRAM costs more than DDR, however, so the return is about the same for Rambus.

Windows 2002 is Falling Behind Schedule

If the state of application compatibility for Windows XP clients is in its infancy, app compatibility for the various Whistler server betas is embryonic. And that fact, more than almost anything else, is a guarantee that Microsoft won't ship the 32-bit or 64-bit version of Windows 2002 until 2002, according to testers working with the beta builds of the product. Microsoft announced officially earlier this week that it is christening the various Whistler server builds as "Windows 2002." The company has been saying since earlier this year that its Whistler server products would follow, by several months, its Windows XP client products in coming to market. While various Microsoft partners and industry watchers have speculated that Microsoft is running late on its Windows XP clients--citing alleged internal Microsoft schedules that have leaked onto the Web as proof--Microsoft itself is still targeting this summer as the date it plans to release to manufacturing its Windows XP Home and Professional clients.

Why is Windows 2002 lagging Windows XP by six months at the moment? Testers working with Beta 2 releases of the Windows 2002 server iterations (Server, Advanced Server and Datacenter Server) note that--just as in the case of the client--application compatibility is a problem. According to a copy of the Whistler server Beta 2 release notes viewed by Ziff Davis, quite a few of Microsoft's own .Net server applications aren't working at all at this point. These include Microsoft's core applications, such as Exchange 2000, Application Center 2000, BizTalk Server 2000, Systems Management Server 2.0 and Internet Security and Acceleration Server 2000. According to the release notes, Microsoft is telling testers that these products will work with a future beta release. At the same time, Microsoft admitted that it has no intentions of providing compatibility between Windows 2002 and older versions of some of its enterprise applications products, such as Exchange 5.5, SNA Server 4.0, Proxy Server 2.0 and SiteServer 3.0. "The .Net Enterprise Server applications will support Whistler server compatibility in an upcoming beta," said Michael Stephenson, lead product manager with Microsoft's Windows.Net Servers group. "Microsoft's goal is to have all the applications that run on Windows 2000 Servers today also run on Whistler server."

Aimster Looks for Court Protection Against the RIAA

File-swapping and instant messaging company Aimster has opened a new front in the online music wars, asking for court protection as legal troubles threaten to send it down a path similar to Napster's. Aimster, one of the most high-profile file-trading services to launch in Napster's wake, on Monday asked a New York federal court for a "declaratory judgment" stating that its service doesn't violate U.S. copyright law. Like several of its rivals, Aimster received a letter from the Recording Industry Association of America in the aftermath of court rulings against Napster, asking it to block trades of copyrighted music through its service. Now, the company is telling a court that it is primarily a service for private communications and that it should not be forced to dig into each subscriber message to determine whether it might contain copyrighted music. Aimster attorney George Carpinello declined to compare the company's case with the ongoing record industry suit against Napster. In that case, Napster has consistently lost its attempts to seek copyright law protection for its service. "Our position is that we are an ISP, and we comply with the safe harbor provisions" of copyright law, Carpinello said, referring to legislation that protects Internet service providers from liability for copyrighted content transferred through their networks. "The RIAA is trying to impose on us a duty to patrol and censor what goes through a private network."

Thursday May 3, 2001 Top

Rambus Predicts Big Drop in RDRAM Prices

Memory chip designer Rambus said Thursday it expects the cost of chips based on its design to fall significantly compared with standard chips. Rambus believes that by the end of the year, RDRAM chips--based on Rambus' design--will only cost 20 percent more than SDRAM chips, used in the vast majority of current PCs. The price differential now is closer to 40 percent, Rambus's Chief Financial Officer Gary Harmon told investors at the J.P. Morgan H&Q Technology conference in San Francisco. By the end of 2002, that price differential will likely narrow to 10 percent more than SDRAM chips, Harmon said. Rambus does not make or design chips. It licenses its performance-enhancing technology to chipmakers and personal computer makers, who then incorporate that technology into their products. Rambus charges royalty and up-front contract fees, which is how it generates revenue. Harmon said royalties on memory chips typically run 1 percent to 2 percent. The exact royalties Rambus charges, long an industry secret, were disclosed Wednesday in Rambus' patent infringement trial against German chipmaker Infineon.

Memory Demand Expected to Stay Low, Keeping Down Prices

Korean semiconductor makers, which supply more than 40 percent of the world's memory chips, are unlikely to see a market recovery until the fourth quarter, with chip prices stymied by uncertain demand and inventory overhang. "As of now, I don't see any concrete signs of chip demand picking up," Jay Kim, an analyst at ING Barings in Seoul, said Thursday. "Slower demand could lead to an inventory buildup, dimming prospects for any early recovery in prices." "I thought that the DRAM market had hit bottom," Stephen Buckler, a commodity manager at, an online global electronics trading network, said in a report issued last week. "Yet the recent slide in pricing indicates that we should expect another rough quarter." Prices of all standard chip products have been near or below production costs. "No DRAM maker in the world would unilaterally say 'We're cutting production,'" said James Chung, a spokesman for Samsung. "A cut in output would lead to a drop in sales, which simply means forfeiting market share." Memory suppliers said they would take a more tactical approach this year to tide over the trough of the chip downturn by diversifying their product portfolios into more profitable forms of memory chips, including EDO (extended data out), DDR (double data rate) and Rambus.

Flaw Found In TCP

The Computer Emergency Response Team (CERT) warned companies this week of security problems caused by a fundamental flaw in the way PCs and servers talk to each other across the Internet. Two papers providing detailed analysis of the vulnerability were released recently by security firms Guardent and BindView. The vulnerability occurs in the so-called "initial sequence numbers," or ISN, computers use to reconstruct data sent over the Internet back into the original file. While some details had been released three months ago, the two papers point out deficiencies in the way such numbers are created by many operating systems, such as Microsoft's Windows 95 and Window 98 and Sun Microsystems' Solaris version of Unix. The problem, said Jeffrey S. Havrilla, internet security analyst for the CERT Coordination Center, a computer security organization based at Pittsburgh's Carnegie Mellon University, is that the Internet's fundamental data control mechanism known as TCP (transmission control protocol) was meant to improve reliability, not ensure security."TCP was designed to be a reliable protocol, and one to insure that it was designed to be somewhat predictable," he said. That predictability could let an attacker guess the next number in a sequence, allowing him to send data to a victim's computer and masquerade as a legitimate connection.

That could allow a network intruder to grab e-mail, monitor a chat exchange or simply use the connection to start a more complete compromise of the system. The most recent vulnerability in the way that many operating systems generate the initial sequence numbers was originally outlined by Guardent, which only recently released its research on the topic. But using the new method will not be easy, Havrilla said. "In order to use the new vulnerability, you need to have a new set of tools to do the statistical analysis, and we haven't seen that sort of intelligence in the tools to date," he said. According to the analysis completed by BindView, operating systems such as the Linux 2.2 kernel and the most recent version of OpenBSD create strong ISNs, while operating systems such as Windows 95, Windows 98, older versions of Windows NT, AIX and HPUX have relatively weak procedures for generating ISNs. The latter operating systems could be exploited by an attack using the new vulnerability.

Microsoft Executive Criticizes Open-Source Software

Microsoft on Thursday stepped up its long-running battle against the open-source software movement as one of its chief strategists compared the movement to business practices that helped sink hundreds of dot-coms. "A common trait of many of the companies that failed is that they gave away for free or at a loss the very thing they produced that was of greatest value--in the hope that somehow they'd make money selling something else," according to a white paper authored by Senior Vice President Craig Mundie. In the paper, which accompanied remarks Mundie made to an audience at New York University's School of Business, he argues that releasing source code into the public domain is "unhealthy", causes security risks and "as history has shown, while this type of model may have a place, it isn't successful in building a mass market and making powerful, easy-to-use software broadly accessible to consumers." The speech by Mundie--regarded as one of Microsoft's chief software strategists--is the latest move in a long-running public relations campaign by Microsoft to combat the open-source movement. Under the open-source model, which has created successes such as the Linux operating system, the underlying code of a program is freely available for other programmers to examine and modify.

Proponents of the open-source approach say it helps to improve software quality by finding bugs more quickly and combining the talents of multiple developers around the world. Microsoft argues that giving software away is, at minimum, a bad business decision, and, at worst, theft of intellectual property. Mundie's comments largely echo a similar message delivered by Jim Allchin, another Microsoft executive, in February. Allchin, at the time, said "open-source is an intellectual property destroyer. I can't imagine something that could be worse than this for the software business and the intellectual-property business." The comments from Mundie and Allchin are in keeping with Microsoft's long-held positions, said Waryas. "When Microsoft first came out with DOS and Windows (operating systems), the entire software market was based on sharing and open source," said Waryas. "Microsoft was the first to buck that trend and start selling their stuff." Not all large software sellers oppose the open-source movement. In the past year, IBM has been championing Linux, vowing to invest $1 billion on Linux development and marketing this year.

Apple Plans To Switch Completely To LCD Monitors

Apple has been quietly telling dealers that bulky tube monitors will be phased out as it switches to sleeker flat-panel monitors, say distribution sources. The Apple 17-inch cathode ray tube (CRT ) monitor--the last model available of this type--is being retired as the company makes a transition to all liquid-crystal display (LCD), or flat-panel, monitors. Apple currently offers 15-inch and 22-inch LCD panels. In many ways, say analysts, the move is reminiscent of other technological shifts led by Apple: the switch to computers without floppy drives, along with the inclusion of DVD drives, USB, FireWire, gigabit Ethernet and wireless networking. All are technologies made standard in the company's Macintosh computers, well ahead of PC makers. But unlike these other innovations, analysts warn, the shift in monitors could mean a substantial price hike for customers buying new Macs. Much depends on how Apple prices its existing 15-inch LCD monitor and new 17-inch model rumored to be unveiled as early as next month. With LCD monitor prices in free fall and nearly half of Apple monitor buyers picking flat panels, the time may be right to dump CRTs, analysts said.

Apple's 17-inch CRT, which offers viewable area of 16 inches, sells for $499. The 15-inch flat panel, known as the Apple Studio Display , costs $799. Buyers of the Mac monitor forced into getting the LCD model would have to pay $300 more for less viewable area and lower resolution--a maximum of 1,024 by 768 pixels, vs. 1,600 by 1,200 pixels for the 17-inch display. "Apple can't do this without a decrease in the display price," Guernsey Research analyst Chris LeTocq concluded. "I would anticipate maybe a $200 price drop in the Studio Display price and the introduction of a 17-inch (LCD) display to pull this off." Apple distribution sources report that at least one other Apple LCD monitor is expected in June or July, possibly 17 inches or 18 inches in size. Apple spokeswoman Nathalie Welch would not discuss new monitor models or plans to abandon the CRT market. LeTocq also believes that Apple's July 1999 investment of $100 million in monitor maker Samsung is a major asset. "They do have an investment in a panel provider and that means that they are assured of supply and an opportunity to be aggressive on pricing," he said. No matter what else, the shift to all LCD monitors should woo Mac enthusiasts, Deal said. "It's part of Apple's wanting to be at the forefront of technology innovation and the whole design thing," he said.

Friday May 4, 2001 Top

AMD and Intel Sign Processor Licensing Deal

Intel and Advanced Micro Devices said Friday that they have extended their gentleman's agreement yet again. The two companies signed a 10-year patent-licensing deal, the fourth pact between the companies since 1976. The deal is retroactive to Jan. 1, when the previous agreement expired. A source familiar with the deal said it is essentially similar to the last one, which calls for Intel to receive royalties from AMD. Intel has patents covering aspects of the x86 instruction set used in processors for Windows-based PCs. The new deal includes changes to the royalty structure and to AMD's foundry rights, sources said, although neither company would provide further details.

The last deal, which was announced in January 1996, had some more fundamental changes, namely that AMD would no longer have a license to make direct copies of Intel chips beyond the 486 processor and that it would not use the same bus--which connects the processor to other components on the PC motherboard--as Intel's chips. The current generation of processors--Intel's Pentium 4 and AMD's Athlon--can both run Microsoft Windows, but AMD uses its own chip design and bus. AMD got its start in the Intel-compatible world in 1976, signing a deal to serve as a second source for the 8085 chip. "We're always happy to license technology in exchange for fair value," said Intel spokesman Chuck Mulloy. AMD spokesman John Greenagel said his company is pleased with the terms of the deal. "They will give us the flexibility to execute our plan," he said.

Via Announces Plans for Future Processors

Earlier this week, Via took the wraps off a new roadmap for its processors, revealing plans to launch an x86-compatible chip running at 1.2GHz by the end of 2001. Shipments of the chip are to begin late this year or early next year. Via said it will continue to aim its chips at the low end of the market, particularly in developing countries like China, Brazil, India and Mexico, according to the company. Via's current top-of-the-line chip, the Samuel 2, runs at 733MHz. By the third quarter of this year it plans to release a more advanced chip, code named Ezra, based on the more advanced 0.13-micron geometry.

Final Claims of Rambus-Infineon Case Thrown Out

A federal judge in Virginia on Friday threw out the three remaining patent infringement claims brought by memory chip designer Rambus against European chipmaker Infineon. Rambus had sought a court ruling that Inifineon's production of standard SDRAM and DDR-DRAM memory chips infringes on Rambus patents. Other chipmakers already have agreed to pay royalties to Rambus for those chips. However, analysts say that should Rambus ultimately lose in court, those that settled would likely not have to pay Rambus. Los Altos, Calif.-based Rambus said in a statement that it will appeal Friday's ruling. "We are disappointed with the Court's decision and plan to appeal the ruling," Rambus CEO Geoff Tate said. "If today's decision is allowed to stand, all companies that innovate risk having their intellectual property rights unjustly expropriated." Friday's ruling the was the second blow to the company this week.

On Tuesday, the same judge tossed out 54 other claims of patent infringement covering four Rambus patents. Rambus noted in its statement that the Virginia case against Infineon involves only four of Rambus' U.S. patents, while there are a dozen U.S. and European patents involved in other infringement cases pending against Infineon, Hyundai and Micron. The company said it "intends to pursue all these cases vigorously," including at a trial against Infineon in Germany currently scheduled for May 18. Rambus said it also has newly issued U.S. and European patents covering Rambus inventions that it says are used in SDRAMs and DDR SDRAMs.

October 29 Expected Release Date of Windows XP

Windows XP will go on sale in stores Oct. 29, sources familiar with Microsoft's product plans told CNET late Friday. An October release is likely to be viewed as a mixed blessing to the PC industry, which has been battered by a severe sales slump. Many PC makers are hoping the upgraded operating system can spark a surge in sales as consumers and businesses upgrade their PCs. If Windows XP is released in October, they can expect a sales boost for the crucial holiday season but not for the back-to-school period, considered the second-busiest of the year. Microsoft's delivery date for Windows XP has been a moving target in recent weeks, say sources close to computer manufacturers. A little more than two weeks ago, the software maker told some PC manufacturers that it would deliver final, or gold, code in June--in time for the late half of the back-to-school buying season. Gold masters are used to make copies of the operating system for new PCs.

One week ago, Microsoft revised the date, promising delivery of gold master copies by the first week of August. But, as first reported by CNET, Microsoft also warned PC makers that if it missed that date, Windows XP's launch could be pushed back until next year. Sources familiar with Microsoft's plans said in setting the Oct. 29 retail release date, the company also pushed back the delivery of gold code again--for the third time in about a month. The news could be good for PC makers strapped by slow sales, Baker said. "The entire amount of money that Microsoft would spend to promote Windows XP would also serve to drive traffic into the stores, to resellers, to Dell's Web site, or wherever," he said. "That's all fresh money going into the (sales) channel that they wouldn't have without that promotion." Microsoft has indicated that the launch for Windows XP could be as big as Windows 95, which would mean a significant investment in straight advertising or co-marketing programs with retailers and PC makers.

Microsoft Buys Ensemble Stuidios, Creator of Age of Empires

Microsoft Corp. today announced that it had reached an agreement to acquire Ensemble Studios Inc., the games developer responsible for the top-selling, award-winning Microsoft "Age of Empires" game franchise. Under the terms of the agreement, Ensemble Studios will continue to create titles from its Dallas headquarters as part of Microsoft's growing pool of top-tier development talent. Microsoft and Ensemble Studios have worked closely during the past six years to develop the internationally popular "Age of Empires" franchise for the PC. To date, the "Age of Empires" series has sold approximately 8.5 million licensed units worldwide and has won five Academy of Interactive Arts and Sciences awards, including Strategy Game of the Year three times (1997, 1999 and 2000) and PC Game of the Year (1999). "We are thrilled to bring Ensemble Studios under the Microsoft banner," said Stuart Moulder, general manager of the Games Division at Microsoft. "The depth of talent and the leadership of Tony Goodman is a winning combination, and this acquisition will help strengthen our mutual commitment to remaining a PC games industry leader."

The agreement comes on the heels of other successful games developer acquisitions, including FASA Interactive, creator of the best-selling "MechWarrior" game franchise; Access Software Inc., creators of "Links" golf simulation games, the most popular PC golf franchise; and Bungie Software Products Corp. "This announcement today is a natural evolution from the relationship we've had with Microsoft," said Tony Goodman, president and CEO of Ensemble Studios. "Both companies have tremendous respect for each other. This deal gives Ensemble and Microsoft a long-term strategy for doing what we do best: working together to make world-class games." The "Age of Empires" real-time strategy series comprises "Age of Empires," "Age of Empires Expansion Pack: The Rise of Rome," "Age of Empires II: The Age of Kings" and "Age of Empires II: The Conquerors Expansion," as well as packaged sets of those games.

Weekend May 5 & 6, 2001 Top

Microsoft Holds Back On Subscription Service for Office XP

Microsoft has temporarily nixed a controversial plan to sell Office XP on a subscription basis to some U.S. customers. The surprising turn in positioning comes less than a month before Office XP's official May 31 launch and days after Dell Computer started offering the productivity suite on new PCs. In an e-mail late Friday, a Microsoft spokeswoman explained the strategy. "(The) Office XP subscription offering will not be offered in the U.S. this year," she wrote. "It will be available in a few select locations when Office XP becomes available in those locations. Those countries plan to make their subscription offering announcements at a later date." Analysts have viewed selling Office as an important test of Microsoft's ability to sell software via subscription as well as for a flat fee. The Redmond, Wash.-based company is preparing to launch its .Net software-as-a-service strategy sometime next year. Office subscriptions would have been a good gauge of Microsoft's subscription mettle, said Guernsey Research analyst Chris LeTocq.

SBC to Bring Fiber-Optic Connections Into Homes

Local phone giant SBC Communications will announce a step forward in its broadband Internet plans next week, touting superfast fiber-optic connections directly to homes and small businesses. So-called fiber connections have long been viewed as the next step in broadband because they provide Internet access speeds beyond what is available through cable or DSL connections, or business-grade T1 or T3 lines. The new speeds would range from 10 megabits per second to 100mbps--or 200 to 2,000 times faster than a dial-up modem. SBC will initially target small businesses, but it plans to extend the superfast connections to homes, a spokeswoman said. Further details on timing and availability were not immediately available, though the company's plans will be detailed in a keynote address by SBC Senior Executive Vice President Ross Ireland at the Networld+Interop networking industry trade show next week in Las Vegas.

Divisions of SBC have said they will install fiber connections into new housing developments, including one in San Francisco, which would provide Net connections of about 5mbps. Although direct fiber-to-the-home connections are within the realm of today's technology, most carriers have said it's hard to make a business case for the expense at this point. BellSouth has moved the farthest of any of the large telephone companies down this path, with a trial project involving more than 400 people in the Georgia town of Dunwoody. These individuals have connections of about 10mbps, blazingly fast even compared with cable modems or DSL. Despite this promising start, BellSouth says it's in "wait and see" mode with the technology. Even beyond the cost of laying fiber cables to individual homes, the components needed to turn on high-speed connections are still expensive.

Microsoft Investment In Corel Being Probed

Microsoft CEO Steve Ballmer said Tuesday that a $135 million investment in competing software developer Corel--the subject of a U.S. antitrust probe--does nothing to crush Corel's fledgling Linux business. "Nothing in our agreement supports that," Ballmer told reporters after a speech at the University of Toronto's business school. "Corel is free to do whatever it wants with Linux." Corel said after the Microsoft investment in October that it planned to spin off and sell the Linux unit, which has a desktop version of the open-source operating system that is an alternative to Microsoft's market-dominating Windows. Corel has said it plans to keep Linux versions of its software. The antitrust investigation into the competitive effects of Microsoft's investment is also believed to be studying terms of a contract under which Corel committed to develop software for the Microsoft.Net Internet initiative before developing similar programs for other operating systems. "All companies have the right to continue to extend and improve their products...the business philosophy in capitalist countries encourages competition," Ballmer said. "We have had an interesting relationship with Corel over the past several years."

AT&T Raises Cable Modem Access Rates

AT&T said Tuesday that it will raise monthly cable modem Internet fees by $6 per month on June 1. AT&T Broadband will increase its high-speed Net access rates next month to $45.95 for most of its nearly 1.3 million customers, the company said. Customers of both AT&T@Home and Road Runner will be affected in various markets. Because of local regulations stipulating a certain period of notice before a rate hike, some AT&T customers will begin seeing the higher fees on July 1 or Aug. 1, AT&T Broadband spokesman Steve Lang said. Legal notice advertisements began appearing in major metropolitan newspapers Tuesday, and AT&T Broadband has begun informing consumers via e-mail and letters, Lang said. With the increase, AT&T continues a trend toward higher broadband subscription rates.

Competitors in the DSL (digital subscriber line) business, such as SBC Communications and EarthLink, recently raised their high-speed Net access rates to about $50 per month. AT&T believes it offers better-quality service, which, even after the higher prices, will cost less than most comparable alternatives. Steady at about $40 per month for years, AT&T's cable modem service will now cost $45.95 for most of its customers. Some consumers who own their own modem, rather than leasing one from AT&T, will pay $35.95 under the new plan. Consumers in Atlanta, where the price already is in the $45 range, and in Seattle, where AT&T previously promised regulators it would not raise rates, will not be affected, Lang said. Some Road Runner customers that already pay $49.95 also will not face rate hikes.

Latest AMD Prices

This listing reflects pricing for direct AMD customers in 1000-unit tray quantities as of April 30, 2001.

AMD Athlon Processor for Desktop:
  • 1333MHz (266MHz Front-side Bus) $253
  • 1300MHz (200MHz Front-side Bus) $230
  • 1200MHz (266MHz Front-side Bus) $219
  • 1200MHz (200MHz Front-side Bus) $199
  • 1133MHz (266MHz Front-side Bus) $197
  • 1100MHz (200MHz Front-side Bus) $179
  • 1000MHz (266MHz Front-side Bus) $176
  • 1000MHz (200MHz Front-side Bus) $160
  • 950MHz (200MHz Front-side Bus) $149
  • 900MHz (200MHz Front-side Bus) $140

  • AMD Duron Processor for Desktop:
  • 900MHz $115
  • 850MHz $99
  • 800MHz $81

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