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Week of December 2, 2001 News Archive

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Monday December 3, 2001 Top


Intel Cuts Chip Prices

Intel dropped prices on its Pentium III chips for desktops and servers. The chipmaker continues its Pentium III closeout sale, eyeing the chip's eventual departure from the desktop PC market, where it will be replaced by the Pentium 4. Intel on Sunday sliced between 10 percent and 20 percent from the list prices of its desktop and server Pentium III chips. On the desktop front, the company dropped the price of its 1GHz Pentium III by 17 percent to $143. Meanwhile, it cut the 1.1GHz and 1.13GHz Pentium III chips by 10 percent each. Both now list for $173. Intel also dropped the prices on its 850MHz, 866MHz, 900MHz and 933MHz Pentium III chips by 12 percent each. All are now priced at $143. On the server side, Intel cut the price of the 1.26GHz Pentium III-S by 20 percent to $241, and the 1.13GHz Pentium III-S by 14 percent to $202. Intel also cut the price of a lone Celeron desktop chip, the 950MHz, by 7 percent to $64. CNET.com | Processor Price List


IBM Introduces New Transistor Technology

IBM will describe a new type of transistor this week that it says will vastly increase the performance and reduce the power consumption of chips in the coming decade. In a presentation at the International Electron Devices meeting that starts Monday in Washington, D.C., Big Blue will show off what it calls a Double Gate transistor. Transistors, which are microscopic on-off switches inside semiconductors, channel electronic signals that eventually get orchestrated into higher commands. Double Gate transistors improve on existing designs, according to IBM, because they effectively double the electrical current that can be sent through a given transistor, or, alternatively, lower the amount of electricity running through a given gate for better power management. "These are suited for very high-performance (processors) or for very low power," said Bijan Davari, vice president of semiconductor development at IBM Microelectronics. IBM has already made samples of Double Gate transistors, he added, which will likely start to appear in chips by 2006. With Double Gate, IBM is fiddling with the basic structural elements of transistors. Transistors generally consist of three basic elements: a source, a gate and a drain.


When the gate is charged, current passes from the source to the drain, and the completed circuit goes from a "0" state to a "1" state. The gate sits atop and at an equal distance from the source and drain--sort of like the top stone of a ziggurat. The source and drain, meanwhile, sit on top of silicon and--in IBM's case--on top of a layer called Silicon on Insulator (SOI). In Double Gate transistors, the gate, rather than merely sitting on top of the source and drain, wraps around the source-drain connection like a clamp. The whole structure then lays flat on the SOI layer. By shifting the ziggurat from a standing pose to its side, all three elements touch the SOI layer, further insulating the chip. SOI is one of the crucial elements of the new design, Davari said. A form of SOI is also critical to Intel's upcoming "Terahertz" transistor, which Davari finds ironic because Intel has criticized it for years. IBM will use Double Gate transistors in its own chips and license it to its foundry clients, Davari said. ZDNet.com


Micron and Hynix Confirm Talks

Micron Technology and rival Hynix Semiconductor announced talks on a possible tie-up on Monday while the South Korean firm said it is time memory chipmakers cut output to support prices. Micron and Hynix rank second and third globally in memory but, unlike larger and more diversified rival Samsung Electronics, have suffered quarterly losses due to a record downturn in memory chip prices. "Both companies are evaluating a broad array of strategic options," Hynix Chief Executive Park Chong-sup and Steve Appleton, chief executive of Micron, said in a statement issued in Seoul. If the exploratory talks were to lead to a merger, the combined company would overtake Samsung as the world's largest memory chipmaker. Hynix CEO Park told reporters major chip producers should consider cutting output, a step producers have been loath to take for fear of giving up market share. Hynix denied talks were on last week after the stock's furious gains prompted the Korea Stock Exchange to demand clarification. Monday's joint statement reversed that, saying talks "exploratory in nature" were planned as the firms look to weather the memory sector's worst decline. CNET.com



Tuesday December 4, 2001 Top


"Goner" Worm Quickly Spread Today

The Pentagone worm spread quickly on Tuesday, but slowed near the end of the day, as companies took measures to prevent infections. Antivirus experts expected infections of the Visual Basic Script program--also known as Goner and Gone--to surge again Wednesday when employees and home PC users open e-mail that may be infected, thus allowing the spread of the virus to continue. "With a consumer attack, (the infection rate) goes higher for a couple of days and then goes down," said Vincent Weafer, senior director of Symantec Security Response. The BadTrans.B worm followed just such a trend, peaking during the day, with each peak rising higher for the next three days. The worm affects only computers running Microsoft Windows and spreads through Outlook e-mail clients. Macs and computers running Linux or other Unix-like operating systems are unaffected.The worm arrives in a message with the subject "Hi" and the following text in the body of the e-mail: How are you? When I saw this screensaver, I immediately thought about you. I am in a harry, I promise you will love it! Attached to the message is what appears to be a screensaver file, Gone.scr, a compressed copy of the worm.


When the file is opened, Pentagone will infect the victim's PC, attempt to stop a variety of antivirus and security applications and then, if successful, delete all the files in the folders containing those applications. AtGuard's Personal Firewall, ConSeal's PC Firewall, Kaspersky Lab's AVP, Network Associates' McAfee VirusScan, Symantec's Norton Antivirus and Zone Labs' ZoneAlarm are among the programs that the worm attempts to deactivate. The technique fails to eliminate the security in many instances. Zone Labs claims that, while the user interface component of ZoneAlarm may be deleted, the main program will continue to run. Next, the worm opens up a dialog box containing its name, Pentagone, and the handles of its creators. The dialog box also includes acknowledgements to other people on the Net, in a style similar to that of online vandals who deface Web sites. The worm then installs a backdoor program linked to mIRC, a popular Internet Relay Chat program. The backdoor can be used to execute denial-of-service attacks against IRC servers. In addition, the virus attempts to spread using e-mail and ICQ. CNET.com


Nine States Prepare Proposal In Microsoft Antitrust Case

A group of nine states plans to propose stiff sanctions against Microsoft that could include further opening the Windows source code and could extend to technologies not directly covered by the landmark antitrust case, sources say. The states are preparing to deliver a remedy proposal to U.S. District Judge Colleen Kollar-Kotelly on Friday to meet a court-imposed deadline. Microsoft has until Dec. 12 to respond to the legal filing. The remedy, if accepted, could go well beyond last month's settlement between the company and the government, which includes the Justice Department and half the states that were co-plaintiffs with the federal agency. The nine states and the District of Columbia--groups that didn't sign onto the settlement deal--are taking aim at what they consider to be glaring weaknesses in the agreement, which was widely considered to be a victory for Microsoft. One of their areas of focus, sources said, is middleware, which is software such as Web browsers that runs atop an operating system to perform specific tasks.


Microsoft's bundling of its Internet Explorer browser with its Windows 95 and 98 operating systems was one of the cornerstones of the Justice Department case. Some of the state attorneys general believe that the settlement almost completely ignored that issue, said sources familiar with the matter. The dissenting states also are looking at the possibility of extending their remedy proposal to include Windows XP, streaming media and Microsoft's .Net software-as-a-services strategy. However, it remains to be seen just how strong the coalition of the dissenting states will be. Some, including Iowa, which has been a leader among the states in pursuing Microsoft on antitrust grounds, gave signs last month that it would still be willing to settle with the software maker under the right circumstances. On Tuesday a spokesman for Iowa Attorney General Tom Miller would only say that the proposal would be filed Friday. ZDNet.com


Motorola Announces Upgraded G4 Will be Soon

A Motorola spokesperson told MacCentral that the company's next generation G4 processor, codenamed Apollo, announced at last year's Microprocessor Forum, "is on schedule to ship in early 2002." The G4s that are currently available are manufactured using Motorola's 0.18-micron copper process (HiP6 .18-micron copper). One of the stated goals for Motorola's Apollo part was to move the desktop G4 to a 0.18-micron SOI manufacturing process (HiP6 .18-micron SOI). Among other design changes that will also increase performance for Apollo is the use of SOI -- Silicon On Insulator -- technology that will provide a twenty to thirty percent performance gain. SOI adds tiny insulators to strategic parts of the transistors that make up a processor. This insulation allows those individual transistors to operate using less energy while also generating less heat. These two improvements allow the clock speed (the MHz rating that is used on the processor) to be increased.


Apollo is set to run at "GHz+ speeds" said David Bearden, Senior Member of Technical Staff, Somerset Design Center at Motorola during Apollo's announcement presentation at last year's Microprocessor Forum. Motorola's spokesperson told MacCentral that the company is committed to the G4 roadmap, but would provide no further particulars. During the 2000 Microprocessor Forum presentation, Bearden said that the Apollo processor would have a seven stage pipeline, four AltiVec execution units, a 256-bit internal memory subsystem, a 256KB on-chip L2 cache, and support for an up to 2MB off-chip L3 cache. Apollo's memory subsystem will support 36-bit memory addressing -- allowing up to 64GB of physically addressable memory. Finally, Apollo will support either a 60x system bus or an MPX system bus.


Motorola declined to comment about if the Apollo processor, or when an undisclosed G5 processor, would be used on any new high-end Power Macs. However, a G5 based Power Mac in the near future seems unlikely with the Apollo processor scheduled to ship so soon at a significant performance boost. Additionally, both Motorola and IBM typically announce new computing processors publicly before their adoption by major customers like Apple. Recent examples of this practice include the 7410 G4, which was announced by Motorola shortly before the Microprocessor Forum last year and later used by Apple in the Power Mac G4, and the 750CX and CXe, both introduced by IBM at last year's Embedded Processor Forum and later used by Apple in iMac and iBook models. MacCentral.com



Wednesday December 5, 2001 Top


Connectix Releases Virtual PC 5.0

Connectix today launched a new release of its Virtual PC compatibility software that runs PC-based operating systems and applications on Macintosh computers. Designed for maximum compatibility and integration between Windows and Mac, Virtual PC 5.0 runs in both Mac OS 9 and Mac OS X environments, thereby giving users a smooth transition to OS X and its exciting new capabilities. Loaded with new ease-of-use features, Virtual PC 5.0 includes Windows XP support, DVD-ROM data support, and Virtual Switch for increased networking capabilities. Connectix has also added "undoable" drives, which give users the option of leaving the original drive image file unchanged and easily backing out of any Windows session. Capping off the powerful package, Connectix is providing Connectix Care, a full suite of support services and tools including online forums, extensive contextual help, and an online knowledge database."We concentrated on both new and existing users when we designed the features and capabilities of this new release," said Mitchell Cipriano, Vice President of Product Management at Connectix.


"New users will find Virtual PC 5.0 an ideal means for running Windows operating systems and applications directly on their Macs, including Windows XP. Existing users will find this a 'must have' upgrade because the new features simplify use and expand capabilities, as well as increase their options, such as continuing to run Virtual PC 5.0 on Mac OS 9 until they're ready to migrate to Mac OS X."nAdditional features in Virtual PC 5.0 include shared Zip, Jaz, CD, and DVD drives, enhanced support for dragging and dropping files directly between virtual machines, and full mapping between the Macintosh keyboard and a standard PC keyboard. Virtual PC 5.0 is currently available in three versions: an upgrade version, a version with Windows 98 pre-installed, and a version with PC-DOS pre-installed. Two other versions, with Windows 2000 and with Windows XP Home pre-installed, will begin shipping in late December and early January respectively. Estimated street prices are $79 for Virtual PC 5.0 Upgrade, $99 for Virtual PC with DOS, and $199 for Virtual PC 5.0 with Windows 98. All three of these products are available from Mac resellers worldwide, including Apple retail locations. Users who have purchased Virtual PC 4.0 anytime since November 1, 2001, are eligible for a free upgrade to Virtual PC 5.0.


Ximian Releases Evolution Email Client

Ximian, long an open-source software company, will do business the proprietary way with a new software package that lets Linux computers connect to Microsoft Exchange e-mail servers. Ximian has supported the open-source Gnome desktop software project for Linux computers for some time; indeed, Ximian co-founder Miguel de Icaza was the founder of Gnome. And in a culmination of its open-source efforts, Ximian on Monday released Evolution 1.0, a clone of Microsoft Outlook that has support for e-mail, contact lists and calendars. However, Ximian is including a bit of secret sauce in the recipe, a move that's increasingly popular as open-source companies look for revenue in unforgiving economic times. In January, Ximian will start selling proprietary software that lets Evolution connect to Microsoft Exchange servers, the company said. In the case of Ximian, the proprietary package is Ximian Connector, which costs $69 for one user, $599 for 10 users or $1,499 for 25 and comes with 90 days of Web-based installation support. Ximian Connector will be available in January for Exchange 2000, said Jon Perr, vice president of marketing at Ximian. A version for Exchange 2000's widely used predecessor, Exchange 5.5, will be available in the first half of 2002, the company said. CNET.com


Start-Up Prepares to Release 3D Chips

A Silicon Valley start-up will try to popularize one of the more intriguing ideas that has been tossed around computer labs for years: three-dimensional semiconductors. Later this year, Santa Clara, Calif.-based Matrix--which has received strategic funding from Sony, Eastman Kodak and Microsoft, among others--will release memory chips that contain many more layers of circuitry than ordinary chips. As a result, Matrix's chips resemble microscopic cubes rather than two-dimensional planes. "There is no wasted space in the silicon," said Tom Lee, one of the company's founders and a professor at Stanford University, who likened the design of Matrix's chips to origami sculptures. Matrix's technique, though, is more than just a research trick. By building up, Matrix can shrink the chip footprint and thus squeeze far more chips out of a single wafer, cutting costs dramatically. Just as significant, the company said it has designed the chips so that they can be made with current manufacturing techniques. The company has also used existing research to a great extent. Matrix, for instance, borrowed many of its concepts for building vertical chips from the flat-panel display industry, which has perfected the art of mass-producing layered silicon films.


"We tried to avoid the temptation of the exotic," Lee said Tuesday. "When you first tell people this, the general reaction is, 'That's impossible. Or that's stupid.' When you tell them how it's done, they say, "Then why are you the first one to do it?'" Lee, who is Matrix's director of advanced development, has previously worked for chip companies Rambus, Advanced Micro Devices and Digital Equipment. Rich Wawrzyniak, an analyst at Semico Research, said that although Matrix will have to prove it can mass-produce these chips, the concepts are intriguing. "This bears notice," he said. "If they can make this work for memory, there is not reason they can't do it for other products." The concept of 3D chips has been around for years, driven primarily out of a fear that Moore's Law will hit a wall. Under Moore's Law, chips steadily shrink in size and become more dense with transistors. At some point, though, it won't be physically possible to compress more transistors into a given space, so designers will have to come up with others ways to allow chips to continue to become more powerful. Climbing vertically is one way to add real estate, Lee said. To a certain degree, chip designers already layer circuits. But Matrix extends the concept by adding many more layers. ZDNet.com



Thursday December 6, 2001 Top


Via Wins Court Battle Against Intel

Via Technologies has won another round in court against rival chipmaker Intel, although the trial still hangs by a thread. A judge in the U.S. District Court of Northern California granted Taiwan-based Via a summary judgment on Wednesday in a patent infringement case filed by Intel in 1999. Intel claims that a chipset created by Via to work with Advanced Micro Devices' Athlon processor violates its intellectual property. In the ruling, the court said that Via altered the design of its chipset to get around one of the patents involved in the case before the chipsets were sold in the United States. As a result, Via did not infringe upon Intel's intellectual property. Last month, the court threw out one of Intel's claims. Now, there is only one patent claim left in the case. An Intel spokesman would not comment on whether the two companies might settle the last patent claim but added that he "wouldn't be surprised" if Via changed the design of its chipset to get around the final claim. Via could not be reached for comment. The case was filed in June 1999, and many of the claims originally alleged in the case were settled in July 2000. Although this legal dispute appears to be winding down, the two sides remain far apart in another series of lawsuits. Intel has filed suits in the United States, Europe and Asia over a Via chipset made to work with Pentium 4 processors. Via does not have a license to manufacture these chipsets, according to Intel. For its part, Via has said that the Pentium 4 infringes on the design of its processors. CNET.com


Intel and AMD Seeing Better Than Expected Demand

Intel on Thursday raised the range of its revenue expectations for the fourth quarter, a move that will likely buoy optimism among investors. The Santa Clara, Calif.-based company said it now expects revenue for the fourth quarter to come in between $6.7 billion and $6.9 billion, higher than the previous range of $6.2 billion to $6.8 billion. In anticipation, some analysts inched up expectations in recent days. "Demand for Intel microprocessors has been better than expected, trending in line with normal seasonal patterns," the company said in a statement. "Intel's communications businesses have been tracking to the company's overall expectations at the beginning of the quarter." Last quarter, the company reported $6.6 billion in sales and $655 million in net income. Rival AMD, meanwhile, said microprocessor sales are better than earlier forecasts. The company will ship a record number of microprocessors this quarter, besting the mark of 7.8 million shipped last quarter, and achieve more than $661 million in processor revenue, the record set in the first quarter. In all, total revenue will likely be 10 percent or more greater than the $766 million in revenue from the third quarter, AMD said.


The uptick comes amid speculation that demand is picking up, or at least that the worst of the decline may be in the past. In August 2000, chipmakers and PC manufacturers admitted that sales were not hitting expectations. Declines in sales and prices followed. Intel, among other companies, had to lower expectations on more than one occasion. Signs of stabilization began to appear in November, with chip dealers and other reporting that some Intel and AMD chips were becoming more scarce, a sign of declining inventories. Memory prices also began to rise. "On the logic (processor manufacturing) side, our factories are approaching full," said Andy Bryant, Intel's CFO, on a confrence call. "The transition to the Pentium 4 is happening quicker than we thought it would." "Coupled with a highly promotional environment and lowered expectations," wrote Ashok Kumar, an analyst at US Bancorp Piper Jaffray in a note on Dec. 4, "most of the participants in the PC food chain are expected to post results at or above the high end of guidance. So December quarter results have little bearing on demand in the March quarter and beyond. CNET.com


Minor Update Released For OmniWeb

The Omni Group today announced the release of a new version of its Mac OS X-native Cocoa Web browser, OmniWeb. The new version, 4.0.6, fixes issues with Mac OS X 10.1, and adds support for Norwegian, as well as Simplified and Traditional Chinese. OmniWeb 4.0.6 sports a variety of bug fixes and other enhancements, as well. Highlights include improvements to stability, corrections to font problems, security improvements and other changes. The Omni Group director of engineering Ken Case also provided details about the forthcoming release of OmniWeb 4.1. "We were hoping to ship OmniWeb 4.1 by now, but ran into issues incorporating our new JavaScript engine (it's now based on the "SpiderMonkey" code from Mozilla/Netscape)," said Case. "We decided that waiting and shipping a complete and solid version of 4.1 was the best thing to do but in the meantime 4.0.6 fixes some key compatibility issues with Mac OS X 10.1." The Omni Group anticipates the release of OmniWeb 4.1 by Macworld Expo in San Francisco, which happens in early January. Said Case, "With OmniWeb 4.1 you should see some major improvements in compatibility and speed. Our goal is that OmniWeb can be your Mac OS X browser of choice for 100 percent of the web sites you visit." OmniWeb is free to download and use, but if you keep it, you're encouraged to pay a US$29.95 licensing fee. MacCentral.com



Friday December 7, 2001 Top


Apple Accidently Gave Away Full Version of OS X

Apple Computer has been turned into an unwitting Santa Claus after some Mac diehards discovered a way to turn a complimentary Mac OS X upgrade CD into a free copy of the operating system itself. In October, Apple gave away thousands of free CDs that offered owners of Mac OS X a free upgrade to version 10.1--the first major update to the new OS and a key enabler for tasks such as playing DVD movies and burning files onto DVDs. However, what was designed to be a nice perk for early adopters of the new OS turned out to be a way for holdouts to get a free version of Mac OS X, which normally costs $129. Last week, Mac site Macfixit.com posted details that could be used to provide a complete installation of Mac OS X, even for those who did not have a copy of an earlier version. Macfixit later took down the posting after receiving a cease-and-desist letter from Apple. "Whenever we find information that contributes to the theft of our products, we will take swift action to prevent the use of that information," Apple said in a statement."In this instance, information was provided by Macfixit that might contribute to the theft of Mac OS X software."


For its part, Macfixit claims on its site that its posting helped solve a legitimate technical issue--reverting to Mac OS X version 10.1 after later updating to OS X 10.1.1. Without the technique, reverting back is not possible for people who upgraded using the version 10.1 update disc. "Although we believe the information provides a legitimate method for dealing with certain troubleshooting issues (as explained in the original article) and that we were not advocating anything illegal, we understand Apple's concern and have thus cooperated," Macfixit said in a posting on its Web site dated Nov. 28. Of course, taking down the instructions from Macfixit won't prevent them from circulating in darker corners of the Internet. Apple said anyone who uses the upgrade CD without owning a copy of the Mac OS is violating the terms of its license. "We trust our users to do the right thing, and we have a license that we expect people to respect," an Apple representative said. CNET.com


States Detail Proposal for Microsoft Antitrust Remedy

Nine states and the District of Columbia want Microsoft to open its software source code should the company fail to comply with proposed restrictions on its business practices. In a remedy proposal submitted Friday, state trustbusters asked U.S. District Judge Colleen Kollar-Kotelly to accept the harsh penalty, in antitrust parlance typically referred to as a "crown jewel" provision. The proposed remedy would force Microsoft to open up the source code to its Internet Explorer Web browser and possibly to the Windows operating system. Microsoft would only be forced to reveal the code if the company failed to comply with the other terms of the proposed remedy, according to Glenn Manishin, an antitrust lawyer with Vienna, Va.-based Kelley Drye & Warren. In addition, only the source code for software found in violation of the remedy would be subject to this penalty, meaning the stipulation could apply to Windows or other Microsoft products.


"The purpose of a crown jewel provision is to coerce compliance by making the alternative so onerous that the defendant has a great incentive to do what they're supposed to do," Manishin explained. "If there's really a gun to their head, then they'll definitely comply." The other terms of the proposed remedy would compel the company to sell a stripped-down version of Windows, license Office to a third party to be ported to competing operating systems such as Linux, and include Sun Microsystems' Java with Windows XP. Microsoft has until Wednesday to respond to the proposal. A Microsoft representative criticized the proposal. "The proposed remedies submitted today by the nine holdout states are extreme and not commensurate with what is left of the case," said Microsoft spokesman Jim Desler. "The settlement we reached with the Department of Justice and nine of the plaintiff states is a fair and reasonable compromise that is good for consumers and will be good for the economy. We are committed to complying fully with the proposed decree and remain hopeful that we can resolve any outstanding issues as quickly as possible in the interest of consumers and the industry," Desler said. CNET.com


Microsoft Releases Retirement Schedule for NT Server 4.0

Microsoft on Friday released its retirement schedule for NT Server 4.0 operating system. All sales will end by July 2003, and companies will start having to pay for support. The company stopped selling Windows NT Server 4.0 volume licences for both the Standard and Enterprise editions on 1 October this year. Client versions of NT 4.0 were also discontinued in October. On 1 July 2002, the packaged Standard and Enterprise versions of Windows NT Server 4.0 will disappear from the retail channels and PC manufacturers will stop selling these versions together with Terminal Server Edition, which lets users log in through thin terminals. On 1 July 2003, the System Builder channel (value added resellers) will also stop selling the operating system. Volume licensees will still be able to buy extra NT Server 4.0 licenses, by "downgrading" from Windows 2000. To do this, companies have to buy a Windows 2000 license for every NT 4.0 licence they want; Microsoft says they can later upgrade to Windows 2000 at no extra cost.


As sales of Windows NT Server 4.0 are restricted, support will also be gradually downgraded. From 1 January 2003, Microsoft will start charging for hot fixes. Hot fixes will be discontinued altogether 12 months later on 1 January 2004, at which time pay-per-incident and Premier support will also be axed. Online support is due to be stopped on 1 January 2005. Microsoft caused something of a storm among certified engineers when it originally announced the retirement of Windows NT Server 4.0: the company said engineers would lose their MCSE titles gained under the Windows NT 4.0 track. Following intense lobbying from customers, Microsoft said it would change the certification title to include versions, so that engineers will now be designated as MCSE on Windows NT 4.0, or MCSE on Windows 2000. ZDNet.com



Weekend December 8 & 9, 2001 Top


HP Takeover of Compaq Faces Trouble From Founders Family's

In a blow that could derail Hewlett-Packard's proposed $25 billion takeover of Compaq Computer, the David and Lucile Packard Foundation reached a preliminary decision Friday to oppose the deal. "The board of trustees understands the strategic considerations being addressed by management, but after thorough study and analysis the board has preliminarily decided, on balance, that the best interests of the foundation would be better served by Hewlett-Packard not proceeding with the proposed transaction," Packard Foundation Chairman Susan Packard Orr said in a statement. The foundation holds a roughly 10 percent stake in HP, meaning that 18 percent of HP shares have now been pledged against the merger. Walter Hewlett, an HP board member and the son of co-founder William Hewlett, and David W. Packard, son of HP co-founder David Packard, previously said they will oppose the deal. In total, family members opposing the deal hold nearly 8 percent of HP's shares. Despite the setback, HP and Compaq reaffirmed their commitment to completing the merger.


"Over the coming weeks, we'll continue to provide additional information to shareowners about the merger, and we believe they will increasingly understand its benefits," an HP representative said. The Packard Foundation's move also doesn't bode well for HP CEO Carly Fiorina. Some analysts have said they don't expect Fiorina to remain as CEO if the deal fails. Fiorina has been outspoken in support of the merger, and in a recent letter to employees, she lashed out at the media and at analysts who oppose it. If the Compaq acquisition does not go through it would be the second failed deal for Fiorina. HP had been in talks to acquire the consulting business of PricewaterhouseCoopers, but later abandoned the plan. ZDNet.com


Bluetooth Adoption Continues to Rise

Three separate market reports are giving encouraging news for Bluetooth, suggesting that the wireless technology is at last beginning to catch on. Analysts projected that chipset shipments of Bluetooth, the short-range radio technology for connecting PCs, consumer gadgets and peripherals, will push above 5 million this year, with some estimates topping 13 million units. While the numbers are a fraction of what Bluetooth is eventually expected to achieve, analysts said they show the technology is on track to becoming ubiquitous. Micrologic, with the most conservative estimate, projected that Bluetooth chipset shipments will come near to 5 million this year. IMS estimated unit shipments at 10 million, while Cahners projected 13.4 million. The Bluetooth industry has come under attack for promising more than it can deliver, but these latest figures indicate that the promises are about to be met. The technology was inaugurated several years ago amid great fanfare by mobile phone companies like Nokia and Ericsson, but its arrival as a mass-market product was delayed several times by difficulties in implementing a complicated standard. In the second half of this year, though, Bluetooth has appeared either built-in or as an add-on for mobile phones, laptops, headsets, handheld computers and other devices.


"This is the beginning of a substantial ramp up, with all kinds of products adopting Bluetooth," said Alan Woolhouse, vice president of communications for Cambridge Silicon Radio, which designs Bluetooth chips. Woolhouse noted that Bluetooth chipsets are already outselling more expensive wireless LAN (WLAN) chipsets, despite wireless LAN's growing popularity and the fact that has been shipping in volume since 1997. WLAN has been pitched as a competitor to Bluetooth, but CSR said the figures demonstrate that the two technologies serve different purposes. "Bluetooth is much smaller, lower-cost and has lower power consumption. It is more efficient for an ad hoc connection, but isn't ideal for a wireless network in an office. It is primarily for cell phones, wireless Internet gateways and PDAs," he said. Bluetooth may be just entering mass-production territory, but it is expected to ultimately ship in the billions. "We see Bluetooth chipset unit growth from 524,000 in 2000 to 13.4 million this year, versus our April 2001 forecast of 13.6 million," said Joyce Putscher, principal Bluetooth analyst for Cahners In-Stat Group, in a statement. "That will result in Bluetooth chipsets overtaking 802.11x shipments of all flavors by almost a factor of two. This is a dramatic comparison to the flat 802.11b shipments this year. We expect a compound annual growth rate of over 300 percent in sales of Bluetooth chipsets over the next 5 years." ZDNet.com


Napster Goes Back to Court

Napster and the U.S. record industry will be back in court Monday, arguing over how much initiative the once-popular song-swapping service can take in order to comply with a court-ordered injunction that it stop trade in copyright-protected music. The once-popular service has been idle since July due to technical glitches it faced while complying with the injunction, which bars the trade of any copyrighted material. Both sides to the lawsuit, which remains widely watched as a defining case on intellectual property on the Internet, will go before a federal appeals court in Pasadena, Calif., on Monday, to argue over how to share the burden for patrolling the Web site and pulling any copyright-protected songs. The injunction against Napster was issued by Judge Marilyn Hall Patel of the U.S. District Court in San Francisco in March after she refined it in response to comments from a three-judge panel from the 9th Circuit Court of Appeals in California. The panel found an earlier injunction by Patel to be overly broad by placing too much responsibility for enforcement on Napster rather than the labels that sued for copyright infringement. CNET.com


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