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Week of December 9, 2001 News Archive

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Monday December 10, 2001 Top

ATI Begins Shipping All-In-Wonder Radeon 8500DV

ATI Technologies Inc. today announced that the ALL-IN-WONDER RADEON 8500DV multimedia graphics board is now shipping to retail stores in North America. With a manufacturer's suggested list price of (US) $399, the ALL-IN-WONDER RADEON 8500DV is the latest addition to the award-winning, marketshare-leading ALL-IN-WONDER family. "ALL-IN-WONDER RADEON 8500DV was designed to maximize entertainment and creativity on the PC, complementing home theaters and desktop digital creation projects," said Blair Birmingham, Group Product Manager, TV PC Multimedia Products, ATI Technologies Inc. "Once again, ATI offers customers a single video card for a variety of different multimedia applications - all backed by great ATI graphics and video leadership, plus strong ATI support and quality design." ALL-IN-WONDER RADEON 8500DV offers many new and highly anticipated features: IEEE 1394 standard DV connection, giving digital video enthusiasts the ability to connect digital camcorders and other IEEE 1394 devices; Remote control via RF for quick and easy access to all the cool TV, video, DVD and gaming features of ALL-IN-WONDER RADEON 8500DV from another room in the house (requires USB); ATI Multimedia Center 7.5 that provides a full range of multimedia functions: DVD Player; TV with fully integrated Interactive Program Guide; Video CD Player; File Player; CD Audio Player; and Media Library; and Optional future upgrade to Component output to connect ALL-IN-WONDER RADEON 8500DV to Digital TVs for superior visual quality. ATI All-In-Wonder Radeon 8500DV Preview

Antivirus Software Makers Will Not Make a Loophole for "Magic Lantern"

Antivirus software vendors said Monday they don't want to create a loophole in their security products to let the FBI or other government agencies use a virus to eavesdrop on the computer communications of suspected criminals. Under a project code named "Magic Lantern," the U.S. Federal Bureau of Investigation is creating an e-mail-borne virus or Trojan horse that hides itself on the computer and captures all keystrokes made, including passwords that could be used to read encrypted mail, according to a report on MSNBC in November. Despite subsequent reports to the contrary, officials at Symantec and Network Associates said they had no intention of voluntarily modifying their products to satisfy the FBI. Spokesmen at two other computer security companies, Japan-based Trend Micro and the U.S. subsidiary of U.K.-based Sophos made similar statements. All four antivirus companies said they had not contacted or been contacted by the U.S. government on the matter. The FBI declined to confirm or deny the report about "Magic Lantern," when it was first published by MSNBC and a spokesman was not available for comment Monday.

"We're in the business of providing a virus-free environment for our users and we're not going to do anything to compromise that security," said Tony Thompson of Network Associates. "Symantec's first priority is to protect our customers from malicious and illegal attacks," Symantec Chief Executive John W. Thompson said in a statement. "We have no intention of creating or leaving a hole in our software that might compromise that security." If antivirus vendors were to leave a hole for an FBI-created Trojan horse program, malicious hackers would try to exploit the hole too, experts said. "If you leave the weakness for the FBI, you leave it for everybody," said Fred Cohen, an independent security expert and digital forensics professor at the University of New Haven. From the industry perspective, leaving a hole in antivirus software would erode public confidence and damage the reputation of the vendor, sending customers to competing companies, the vendors said. The government would have to convince all antivirus vendors to cooperate or the plan wouldn't work, since those not cooperating would have a market advantage and since they all share information, a Symantec spokeswoman said.

Microsoft and Apple Battle over Civil Suit Settlement

Microsoft finally got its day in court, but so did rival Apple Computer. For weeks, critics have battered the software titan for a controversial settlement that would give $1 billion in software, money, services and training to needy schools over the course of five years. Critics have charged that the settlement, which would dispatch more than 100 civil antitrust lawsuits against Microsoft, is anti-competitive. But on Monday, Tom Burt, Microsoft's deputy general counsel, offered his defense to Judge J. Frederick Motz in the U.S. District Court for the District of Maryland in Baltimore. Burt described the settlement proposal, which would establish an independent foundation to help needy schools, as "very fair and even generous." Later in the day, however, Apple general counsel Nancy Heinen argued that competition in the education market is already "very robust," according to the Associated Press. "Why would you let a monopolist get a better foothold?" she emphasized. The hearing, which was scheduled to conclude Monday, will continue Tuesday to allow plaintiff attorneys another chance to make presentations to the court. Apple, which has sharply criticized the proposed deal, said it would give Microsoft an unfair advantage in a market where Macs are more widely used than PCs. In a Friday legal filing, Apple suggested that Microsoft give the $1 billion to the schools in cash. Under the current plan, Apple said, Microsoft would become the main beneficiary because schools would end up with an estimated $500 million in Microsoft software.

Heinen reiterated on Monday the idea of requiring Microsoft to simply hand over $1 billion to schools. Motz asked Burt why this wouldn't be the best solution, as Microsoft would get to "compete for its own money back." Burt said such action "would deny huge benefits to the schools." He pointed out that Microsoft had gone to great lengths to make the settlement as "platform neutral" as possible and that going any further would penalize schools. Microsoft makes a number of Macintosh titles used by schools, such as Microsoft Office and Magic School Bus. Tim Deal, an analyst with Technology Business Research, said Apple would obviously be against "forking over free software, which is going to grow the Wintel dominion in the schools." Deal added that Apple's proposal "makes more sense to me because it's a real opportunity for Microsoft to be penalized because they hand over the cash. It also offers a real competitive landscape." If Microsoft were to give $1 billion in cash, Apple could greatly benefit because schools that could not previously afford new computers would become potential Mac buyers.

Tuesday December 11, 2001 Top

Intel Plans Quiet Introduction of DDR Based Pentium 4 Chipset

Intel is planning the stealth introduction of a chipset that will let computer makers connect the Pentium 4 to speedy DDR (double data rate) memory. Intel will allow PC makers to quietly begin taking orders for computers fitted with a new version of its 845 chipset Dec. 17, CNET has learned. The official announcement of the chipset and the corresponding fanfare won't come until early January. Intel declined to comment. The new chipset, a variation on the Intel 845 introduced in September, is a significant move for the company. When it came out, 845/SDRAM combination shaved about $100 off the cost of a Pentium 4 computer, allowing PC makers to offer desktop/monitor combinations for about $850. PCs equipped with 845/DDR SDRAM should start around the same price or just a bit higher, sources said. The upcoming 845 chipset will support the two most popular forms of DDR-SDRAM, called PC 1600 and PC 2100. Intel began the shipments a couple of week ago to coordinate PC makers, motherboard makers and other companies that will sell the new chipset, sources said. Intel follows chipset makers such as Via Technologies and Acer Labs in introducing DDR SDRAM for the Pentium 4. The Via chipset, however, is the subject of several lawsuits between Intel and Via.

Microsoft Introduces Support for USB 2.0 and Bluetooth in Windows XP

Microsoft next year plans to update Windows XP to support two technologies left out of the new operating system: USB 2.0 and Bluetooth. Both technologies are used for connecting peripherals to PCs, USB 2.0 at speeds up to 480 megabits per second (mbps) and Bluetooth over the air without wires. USB 2.0 support is expected early next year, and the Bluetooth addition should come by mid-2002. Redmond, Wash.-based Microsoft passed on including the two technologies in the first shipping version of Windows XP in favor of two others: IEEE 1394, also known as FireWire, a standard championed by Apple Computer, and 802.11b, which is used for wireless networking. Consumers craving USB 2.0 might not have to wait until the update is issued. Microsoft has released the "stack" for the connectivity standard to PC makers, which can immediately include it on new Windows XP-based PCs.

"If they've got the devices and want to use our (USB 2.0) stack, they can start to do that in their computers," said Tom Laemell, Windows XP product manager. "By early next year, that should be available by Windows Update to end users," he continued. "We need a little bit more time to package it up for Windows Update, to make sure it's run through all the possible test scenarios--on all possible Windows XP machines out there." Windows Update is Microsoft's online method for updating Windows. On Tuesday, Microsoft laid out its Bluetooth plan during a developers conference in San Francisco. "It's a technology that's coming of age," Laemell said. "By summer of 2002, we will make available a Bluetooth stack for Windows XP. Like USB 2.0, Microsoft will deliver Bluetooth capability using XP's Windows Update feature.

Mac OS X Version of America Online Completed

America Online said Tuesday that it has readied a Mac OS X version of its flagship software, marking another key program that has been reworked for Apple Computer's new operating system. The arrival of AOL for Mac OS X, which had been available only in a beta, or test, version follows the delivery last month of Microsoft Office v. X for Mac OS X, perhaps the most eagerly awaited Mac OS X program. Although older Macintosh programs work in the so-called classic environment of Mac OS X, programs must be tweaked to take advantage of the operating system's new features such as improved stability and its Aqua user interface. In addition to adding Mac OS X support, the new version of AOL's software allows members to sort e-mail messages by sender, subject, date or type. It also includes the latest versions of Microsoft's Internet Explorer and Macromedia's Flash software. AOL and Apple have been working together on several projects in recent months. In November, Apple introduced a new version of its AirPort wireless networking software that allows Mac owners to share an AOL connection within a wireless home network. "We'll continue to look for opportunities to extend the AOL experience to the Mac community by programming the AOL service in ways that enhance the Macintosh user's experience," Peter Ashkin, president of product strategy for AOL, said in a statement.

Wednesday December 12, 2001 Top

LCD Display Supply Looks to be Stabilizing

Prices and supplies of large liquid-crystal displays are starting to stabilize after more than a year of product gluts and steep price drops, according to a report released Tuesday. The worldwide surplus of large LCDs--screens with at least a 10-inch diagonal, used mainly in laptops and flat-panel desktop monitors--dropped from 16 percent in the second quarter to 8 percent in the third quarter, according to market researcher DisplaySearch's quarterly report. That surplus is expected to drop to just 2 percent this quarter, DisplaySearch predicted. The glut had caused prices for LCDs to drop 50 percent this year. Ross Young, president of Austin, Texas-based DisplaySearch, said the improved supply balance was due mainly to increased sales of flat-panel monitors for PCs, prompted by falling prices. "We had expected LCD monitor shipments to be around 14 million this year...and it looks like it's going to be more like 15.5 million," he said. "The market is really responding to more attractive price points."

LCD models will account for 13 percent to 14 percent of desktop monitor sales this year--double their 2000 share of the market. Such growth should continue even as prices stabilize, Young said. "We think people want LCD monitors. We think the price is right. And we think people will continue to buy them," he said. LCDs have been one of the most volatile segments of the turbulent market for components in PCs and other high-tech devices. A shortage of LCD glass, partly driven by growing demand for notebooks and handheld devices in the late 1990s, prompted manufacturers to invest in glass plants in Taiwan and Korea in 1998 and 1999. Those factories turned a shortage into a glut in late 2000. But the slowing economy and weak PC sales later that year exacerbated a serious oversupply, leading some LCD monitor makers to cut their losses by slashing prices. Although that has hurt manufacturers, it's been grand for consumers, who have seen prices drop rapidly on notebooks. Some manufacturers, such as Gateway, have also offered flat panels with desktop computers at low prices.

Young expects LCD makers to react more cautiously to changing demand this time, with spending on capital improvements dropping 22 percent this year and 26 percent in 2002, as screen makers wait for profitability to return before investing in manufacturing capacity. But he doesn't expect a return to the situation of two years ago, when component makers determined the fate of end products. "We're in a period of very limited expansion," he said. "That's going to cause supplies to be very tight and prices to inch upward. But we don't think they're going to squeeze the markets they sell to. We think they're going to be cautious and not increase prices to the point where it chokes growth."

AMD Continues to Increases Market Share

Advanced Micro Devices is moving up in the world. The chipmaker, citing a new quarterly report from Dataquest on PC chip market share for the third quarter, said Wednesday that it has more than doubled its market share in certain geographic and market segments. The market share gains, AMD suggested, show that it is weathering 2001's difficult times. The year has been defined in the technology world, so far, by a slowing economy and a sagging PC market. On top of that, rival Intel has quickly reduced the prices of its new Pentium 4, setting off a price war between the two companies. AMD's largest gains in the third quarter came in consumer PC markets outside of North America. The chipmaker's share of the Japanese consumer PC market jumped to 54 percent from 24 percent in 2000. AMD increased its market share in Western Europe in the quarter to 49 percent from 25 percent in 2000, according to the company.

The chipmaker's gains in the overall U.S. desktop market were smaller, although the company said it moved up to 27 percent from 17 percent in the third quarter of 2000, citing the report. AMD's strengths in the United States came in small business PCs, where it claimed 40 percent of the market, and in the government sector, where it had 33 percent of the market, according to Dataquest. AMD's share of the small business PC market suggests it is doing well in the so-called white box segment, where price is a major consideration both for smaller PC manufacturers and bargain-conscious customers. "AMD's strategy is paying off," Ed Ellett, AMD's vice president of marketing, said in a statement Wednesday. "We are maintaining our traditionally strong presence in the consumer market, while simultaneously gaining acceptance as a serious commercial player."

Microsoft Rebuts Remedy Proposal by States

In a widely anticipated move, Microsoft filed a remedy proposal in its antitrust case Wednesday that closely matches a settlement cut with federal and state trustbusters last month. The Redmond, Wash.-based company also delivered a harsh rebuttal to a remedy proposal filed Friday by nine states and the District of Columbia, which refused to sign the settlement agreement forged by the government. "It is readily apparent (both from the terms of their proposal and from their comments to the press) that the non-settling States seek to punish Microsoft and to advance the commercial interests of powerful corporate constituents--Microsoft competitors such as Sun Microsystems, Oracle, Apple and Palm. Neither objective is appropriate under the antitrust laws," according to the Microsoft statement. Rather than craft a new remedy proposal, Microsoft submitted the Justice Department settlement plus the harsh rebuttal to the litigating states' proposal. In the 20-page brief, Microsoft urges U.S. District Judge Colleen Kollar-Kotelly to reject the states' proposed remedy and to accept the settlement cut with state and federal trustbusters in November. Microsoft's position of no compromise is hardly surprising, say legal experts. "They've never really budged or made any material concessions from what's already been offered from what I have ever seen," said Robert Christopher, a managing partner with Coudert Brothers in San Jose, Calif.

Thursday December 13, 2001 Top

Microsoft Releases Free Entertainment Enhancements for Windows XP

Microsoft released a number of free entertainment enhancements to its Windows XP operating system Thursday, as the software maker continues to advance its digital media strategy. Dubbed Windows Media Bonus Pack for Windows XP, the free download includes tools for getting more out of the new operating system's built-in media player. Microsoft's holiday goodie bag includes new visualizations and skins, a playlist-to-spreadsheet export utility, and extra tools for amateur moviemakers. But one of the free enhancements may benefit Microsoft more than it will digital music consumers. Microsoft is giving away a slimmed-down version of its MP3 Audio Converter utility found in its separate Plus for Windows XP add-on pack. Running the conversion utility transforms MP3 files into Microsoft's Windows Media Audio (WMA) file format. That's great for Microsoft's goal of building support for WMA, but consumers may find little benefit in converting to a less popular file format, analysts said.

The download includes a version of Microsoft's popular PowerToys utility for Windows Media Player. Microsoft has offered PowerToys since Windows 95, giving people ways to tweak and enhance the operating system's interface or to access hidden features. Microsoft also offers a version of the utility for Pocket PC handhelds. Among other things, the media player version of Power Toys offers tray control from the XP taskbar, a way to automatically organize and update song libraries, and the ability to export playlists to Excel spreadsheets. Windows Media Bonus Pack also delivers new visualizations and skins. Visualizations include the MSN Photos picture viewer, holiday fireplace, and visuals from "Dungeon Siege," an upcoming Microsoft game. A stars-and-stripes skin joins others designed by Microsoft also is targeting amateur moviemakers, offering them new sound effects, music clips and title images provided by As part of its effort to woo content providers, the bonus pack also serves up special offers from CinemaNow, Intertainer and Ifilm.

New Gokar Worm Spreads Without Damaging Systems

Security experts warned Thursday of a new mass-mailing computer worm that has the potential to swamp corporate e-mail systems as it spreads. The Gokar worm--full name: "W32.Gokar.A@mm"--spreads as an attachment to an e-mail. The subject line and text of the message can be any combination of more than two dozen options, according to antivirus software maker Symantec. The attachment is named with a seemingly random collection of letters and numbers ending in one of the following extensions: .pif, .scr, .exe, .com or .bat. The worm does no damage to an infected PC, but Symantec rated the Gokar threat as moderate because of its multi-pronged ability to replicate itself and its arrival at several major corporations. "We had some big corporate customers who had gotten it, but it does not seem to have spread wildly," said Steve Trilling, director of researcher for Symantec Security Response.

"If it gets inside a large organization, it can create enough e-mail traffic to really slow down their network...But at this point, I would say there's no evidence it's going to take off in a big way." The worm sends itself to all addresses in the infected PC's Microsoft Outlook address book and also creates a script file that attempts to spread the worm via mIRC, a popular program for using the IRC chat service. In rare circumstances, Gokar can also modify Web pages on infected servers running Microsoft's Internet Information Server software to direct Web surfers to an infected site. As with similar outbreaks, security experts advise PC users to update their antivirus software and not open unsolicited e-mail attachments.

Via and Intel Settle Suit over Chipset

Via Technologies has settled one of its lawsuits with Intel, although several other suits remain pending. The Taipei, Taiwan-based chipset maker and Intel have settled the final claim in a suit Intel had filed in June 1999. Via will not pay a royalty for the dismissal, the company said. The case involved chipsets that Via developed to work with Intel's Pentium III processor and Advanced Micro Devices' Athlon chip, also known as the K7. Intel alleged that Via's chipsets violated a number of its patents. After a war of words between the companies, many of the claims originally alleged in the case were settled in July 2000. Intel, however, continued to pursue its claims that Via's Athlon chipset violated Intel's intellectual property. Since then, the suit has gradually been chipped away at. In November, the U.S. District Court of Northern California threw out one of Intel's claims. Another claim was dismissed earlier this month after the court found that Via had changed the design of its products to get around Intel's patents.

A summary judgment hearing for Intel's final claim in the suit was slated for December 13. On Tuesday, however, Intel dismissed the claim, thereby terminating the suit. The trial date had been scheduled for January 22. "We could not be more delighted with this result," Via CEO Wen-Chi Chen said in a statement. "We believed from the outset that Intel's claims against our K7 chipsets were driven by marketing concerns rather than legal issues. Our engineering and legal teams did a great job so that we remain free to continue our thriving K7 chipset business." Intel called the result a settlement. Earlier this month, an Intel representative indicated that the suit would likely be resolved before the trial.

Friday December 14, 2001 Top

Microsoft Releases Patch for IE 5.5 & 6.0

Microsoft released a security patch to plug a hole in its Web browser that could allow hackers to steal passwords and trick people into downloading virulent files. Microsoft said customers using Internet Explorer versions 5.5 and 6.0 should install the patch immediately. The patch, released Thursday, can be found on Microsoft's Web site. The Redmond, Wash.-based software giant, which in recent months has patched a wide range of security holes in its Web browser and Web server software, said the patch eliminates all previously known security problems affecting the two versions of IE and plugs three new holes. The problems were first reported Nov. 19 to Microsoft by Jouko Pynnonen at Finland-based security firm Oy Online Solutions, according to Pynnonen. By Nov. 27, Pynnonen said he informed the company of more serious flaws. Microsoft then released a patch Dec. 13 and acknowledged Pynnonen in its security bulletin for reporting the security holes.

"Since the attacker could run any program on the victim system, they can do anything a malicious program can do on a system--possibly read or destroy files (including temporary internet files and cookie files), sniff network traffic, find passwords, install backdoors...or viruses," Pynnonen said. One problem, affecting only IE 6.0, allows an attacker to alter HTML information in a way as to trick IE to open a damaging executable file without asking the person for confirmation. Two other problems affect both IE 5.5 and 6.0. The first problem is a variation of a previous security glitch that allows a hacker to open two browser windows: one in the Web site's own domain and the other on an unknowing computer user's system. This could allow the hacker to gather personal information from the local system. A hacker could read, but not change, any file on the computer user's system that can be opened in a browser window.

The second security breach can involve a flaw related to how file names are displayed in the "file download" dialogue box. A hacker could misrepresent the name of a file in the dialogue window when a person tries to download a file. The attacker could fool people into accepting tainted files from a trusted Web site. Left unpatched, computer users could face security breaches that may not become apparent for some time. "Opening an e-mail attachment or accepting any download isn't required," Pynnonen said. "The victim user doesn't necessarily notice anything out of ordinary when reading a malicious e-mail message or visiting a malicious Web site."

Microsoft Release First Service Pack of Office XP

Microsoft on Thursday released the first major collection of bug fixes for its Office XP business software. Service Pack 1, a 17MB download, is supposed to enhance Office XP's performance, security and stability, while fixing a wide range of glitches, Microsoft said. The download for system administrators, which includes additional tools, is 40MB. Both files are expected to be posted to Microsoft's Web site later on Thursday. The service pack also consolidates other separately released enhancements and fixes, such as Outlook 2002 security updates. The release of the first service pack typically signals to businesses that the product is ready for prime time. "Service Pack 1 is always a milestone for any product, certainly Office XP, especially as a lot of enterprises accelerate Windows 2000/XP deployments into next year," Gartner analyst Michael Silver said. "Doing both of those deployments at once adds some efficiencies to the process." David Jaffe, Office XP lead product manager, said Microsoft hopes the service pack release will help nudge companies to install the software. "We see this as a key driver for organizations that recently purchased Windows XP and Office XP that haven't deployed yet."

The security fixes close vulnerabilities that would allow hackers to run malicious code in Word, Excel and PowerPoint. Another security patch prevents hackers from remotely manipulating files or data. The service pack resolves a problem with Outlook not notifying users when their main data file had reached its size limit. It also handles problems sending e-mail when instant messaging is running and crashes caused when using custom bullets in PowerPoint. Office XP's "Error Reporting" tool proved instrumental in developing bug fixes, Jaffe said. Microsoft also uses the tool in other products, such as Internet Explorer and Windows XP, to collect data following a program's crash. Following a crash, people are prompted to send an error report to Microsoft, a feature that can be overridden.

ATI Introducing Mac Version of 8500 Card at Macworld

Since ATI Technologies, Inc.'s introduction last summer of its Radeon 8500 graphics chip and card, a question has rested heavily on many Mac users' minds: When will ATI announce a Mac version of the technology? That question has at last been answered: The Radeon 8500 Mac Edition card will debut at next month's Macworld Conference & Expo in San Francisco. ATI has made no secret of its plans to continue support for the Macintosh with the new hardware; the question has never been "if" but rather, "when?" The answer finally came in the pages of the Macworld Expo Web site. On the site, ATI's booth exhibitor information includes this tantalizing tidbit: "The pioneer, innovator and market leader in the graphics industry, ATI will be demonstrating the high performance Radeon 8500 and Radeon 7000 Mac Edition graphics cards and the Xclaim TV USB external TV tuner at its booth." ATI Technologies spokesperson Stan Ossias confirmed with MacCentral that the company plans to debut the Radeon 8500 Mac Edition at next month's Expo. The company will also show off the Radeon 7000 and Xclaim TV USB device as promised, as well. Ossius indicated that specific details about the Radeon 8500 and 7000 Mac Edition cards will have to remain under wraps until the show gets started, however.

Weekend December 15 & 16, 2001 Top

Sun Readying Version 6 of StarOffice for Release

Sun Microsystems will cut off downloads of the StarOffice 6 beta software on Dec. 31 as the company prepares for a final release in the first half of 2002, the company said Wednesday. "We've got all the feedback we can handle here," spokesman Russ Castronovo said. "We are at saturation point. I think we've satisfied the requirements of the program." The new version 6 drops an e-mail program, moves to open XML file formats and separates the remaining components--word processing, spreadsheets, presentations, graphics and other packages--into standalone programs. The open-source site that hosts development is called OpenOffice. Even after Sun cancels its download program, the software can be downloaded from OpenOffice or purchased in several CD-ROM versions. Sun and other StarOffice fans hope their product will become more popular as customers balk at the cost of running Microsoft Office, which has by far the largest chunk of the market. The cost of developing the software is steep, though; Sun decided earlier this year to leave development of a Macintosh version up to the open-source community. Sun started offering glimpses of the new version 6 earlier this year.

Microsoft Receives Patent for Anti-Piracy OS

Microsoft has won a patent for an anti-piracy operating system. The U.S. Patent and Trademark Office issued the patent Tuesday. Analysts said the significance of the patent was unclear, given the complexities of intellectual property law. But some downplayed the patent's importance, noting that many of the claims appear related to technology from rival InterTrust Technologies--a company that has sued Microsoft for patent infringement over its so-called digital rights management software. "I'm assuming it's...posturing," Jupiter Media Metrix analyst Aram Sinnreich said about the patent. "There are a lot of references to InterTrust technology in the documentation." Microsoft could not immediately be reached for comment. Microsoft has bet heavily on digital rights management in its battle for dominance in digital media, a market the company sees as crucial to extending its Windows operating system from PCs to servers. An InterTrust spokesman Thursday said there appears to be nothing new in Microsoft's patent, but it raised concerns about the software company's growing sway over a key new digital technology. "While new, this patent is relatively limited and relatively late," InterTrust spokesman Ed Fish said. "Companies need to be careful about who they trust as a gatekeeper...If Microsoft owns the locks to Viacom content, it's like Sumner Redstone giving Bill Gates his front door key."

Company Developing FED Display Technology Falters

Candescent Technologies, once a lavishly funded start-up with plans to revolutionize the market for PC monitors and other displays, has scrapped its manufacturing aspirations and will cut its work force, the company has confirmed. The San Jose, Calif.-based company, which received more than $600 million in funding from venture capital firms and corporate backers including Sony and Hewlett-Packard, has abandoned plans to manufacture screens based on field emission display (FED) technology, said Dawn Morse, the company's director of investor relations. Instead, Morse said Friday, Candescent will license its technology to other companies looking to manufacture thin, high-resolution screens based on the FED system. The change will involve an unspecified number of layoffs, Morse said. "The focus is going to go to a licensing model, so we won't need the same level of staff," she said.

Candescent began operations in 1991 as one of a handful of companies hoping to capitalize on FED, an emerging technology touted for producing flat-panel screens with exceptional brightness and color depth. The company came close to manufacturing several times, going so far as to build a 340,000-square-foot plant in San Jose in the late 1990s. But continued challenges with FED technology and market conditions prevented it from ever creating a product. Candescent filed for an initial public offering in February, planning to sell 150 million shares at an undetermined price. The company withdrew the IPO plan in May, citing market conditions. David Mentley, senior vice president of Stanford Resources, a research firm specializing in display technology, said FED screens have turned out to be more expensive and more difficult to produce than many expected in the early 1990s.

"It's stuck in the laboratory, basically," he said. "A few runs at manufacturing just didn't take hold. Motorola had a big line set up, but it hasn't gone anywhere and there's basically been zero product sales." Major backers of Candescent included HP, whose $25 million investment made it the biggest single shareholder in the company, with a 13.4 percent ownership stake, according to the regulatory filing. Sony owned a 5.4 percent stake and signed an extensive licensing agreement with Candescent set to expire at the end of this year. Morse said the companies were still negotiating renewal of the agreement. Young said FED technology still shows promise for some large-scale applications. "For large-size panels, like for hang-on-the-wall TVs, FED still seems to have potential," he said. Added Mentley: "I wouldn't say FED is dead--there are some interesting variations being developed. But the near-term future for FED certainly does not look good."

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