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Week of September 30, 2001 News Archive

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Monday October 1, 2001 Top

AMD Introduces 1.1 GHz Duron

Advanced Micro Devices is getting October off to a start by releasing a series of processors for desktop PCs. On Monday, the Sunnyvale, Calif.-based chipmaker announced a 1.1GHz Duron processor for the value segment of the PC market. As earlier reported, the chip matches the clock speed of Intel's 1.1GHz Celeron, but benchmark testers have stated that the Duron could be a better overall value. The AMD chip will be priced at $103 in quantities of 1,000. Systems based on the chip should be available in the fourth quarter, the company said. In another week, AMD will come out with its line of Athlon XP processors for performance PCs. Formerly code-named Palomino (and "Corvette" before that), the Athlon XP will be AMD's challenger to the Pentium 4. The new chip, which will run at 1.5GHz, will also feature a new branding scheme. The 1.5GHz chip will actually be known at the Athlon XP 1800, so as to look more sporting on shelves when compared with a 2GHz Pentium 4. The company will then complete the silicon hat trick by revealing the technology behind its "Hammer" processors for servers at the Microprocessor Forum on Oct. 15 in San Jose, Calif. Hammer, slated to come out commercially next year, will compete against Intel's Itanium but will cost less, according to AMD. Because of the slow market and excess supplies, processors are selling at all-time low prices. AMD's 1.4GHz Athlon, for instance, is being advertised as $111 to $125, while the 1GHz Duron can be purchased for less than $80.

NVIDIA Introduces Titanium Series Graphics Chips

NVIDIA Corporation today announced its new GeForce Titanium series of Graphics Processing Units. The GeForce3 Ti and GeForce2 Ti series of GPUs deliver breakthrough graphics technologies, each providing unprecedented levels of performance and visual quality. These new products also utilize NVIDIA's high-performance Detonator XP driver, incorporating special software optimizations that immediately take full advantage of the newest features of the Microsoft Windows XP operating system. "Today's introduction of our GeForce Titanium series of GPUs continues our quest to deliver dramatic advances in 3D technology and cinematic-quality graphics on every PC," stated Jen-Hsun Huang, president and CEO at NVIDIA. "The GeForce Titanium Series is our most aggressive product introduction ever. We are delivering twice the performance at every price point. We are also taking a giant step to drive NVIDIA's 'GeForce Shader Technology' aggressively into the mainstream. The combination of GeForce3, Xbox, and the GeForce Titanium Series will create an installed base of NVIDIA's GeForce Shader Technology exceeding 5 million units by early next year. And with our patented UDA driver architecture, we're bringing our industry recognized driver quality, stability, and application compatibility, to the XP platform. The Geforce Titanium Series will be the unambiguous graphics platform of choice of Windows XP."

The new GeForce Titanium series consists of three new products: GeForce3 Ti 500 - The GeForce3 Ti 500 is the world's fastest, feature rich GPU and the flagship product of NVIDIA's desktop graphics family. The GeForce3 Ti 500 offers unparalleled anti-aliasing performance, 3.8 billion anti-aliased samples per second, and introduces groundbreaking new 3D graphics features to the desktop PC. GeForce3 Ti 200 - The GeForce3 Ti 200 is the first DirectX 8 GPU targeted at the performance mainstream market. By delivering 2.8 billion anti-aliased samples per second, the GeForce3 Ti 200 brings high-performance 3D graphics and state-of-the-art image quality to the performance-minded consumer. GeForce2 Ti - GeForce2 Ti redefines graphics performance for mainstream computers by delivering 1 billion pixels/sec. rendering power and delivering a groundbreaking 6.4GB/sec. of bandwidth for the mainstream consumer. New add-in-cards featuring the GeForce3 Ti 500, 200 and GeForce2 Ti will be available as early as October 12th, 2001.

ATI Begins to Ship Radeon 7500

ATI Technologies Inc. announced that the RADEON 7500 graphics board, an outstanding combination of performance, innovative 3D features and real value, is shipping to retail outlets in North America at a manufacturers' suggested retail price of just (US) $199. "At just $199, the overall value proposition associated with the RADEON 7500 - processor speed, 3D performance and price - is unparalleled," said Deanna Perkins, Product Manager, RADEON 7500, Desktop Marketing, ATI Technologies Inc. "Complemented by the productivity-rich Windows XP operating system on October 25, the RADEON 7500 graphics board is going to be the ideal solution for personal and business computing in the mainstream segment." The RADEON 7500 offers consumers a mainstream solution with a set of standard features typically associated with premium-level graphics boards. It also offers users a level of performance not seen before at this price point, incorporating a core clock speed of 290MHz and a memory clock speed of 230MHz, 64MB DDR and uses ATI's patented HYPER Z technology to boost effective memory bandwidth by 20 percent. As a result, the RADEON 7500 can access up to 8.8GB/sec of effective memory bandwidth.

The RADEON 7500 delivers up to a 60 percent improvement in performance compared to the previous generation of RADEON high-performance processors. The RADEON 7500 also features flexible multiple-display support, enabling users to hook up an additional VGA, digital flat panel (DVI) monitor or send their display out to a TV. ATI's HydraVision software enables users to easily manage their multiple displays to increase productivity. Users can read and write e-mail on one display while working on a document on the other, spread one application (such as a long spreadsheet) across both displays or more effectively use photo and video editing applications. RADEON 7500 also supports Microsoft's Windows 98, Windows Me, Windows 2000 operating system environments as well as DirectX 8.0 and OpenGL 1.2. RADEON 7500 will be available worldwide beginning October 1.
ATI Radeon 7500 Preview

Microsoft Begins Large Advertising Campaign for Office v.X

In a multimillion-dollar advertising campaign making its debut Monday, the Microsoft unit that makes software for the Macintosh operating system is aiming to get itself seen and heard. Not by the general public, mind you, but by hard-core Apple Computer loyalists, who have long had a love/hate relationship with Microsoft. That's no easy task, especially these days. Following the Sept. 11 terrorist attacks, some of the plans that Microsoft's Macintosh group was counting on to promote its new Office software for the Apple Computer operating system were derailed. A media blitz scheduled for Sept. 13 that would have introduced a key piece of the new Office software, dubbed Office v.X, was delayed a week. In addition, a September trade show that the Microsoft unit planned to use as a launchpad for Office v.X was canceled. "We lost our launch platform," says Kevin Browne, general manager of Microsoft's Macintosh group. "So we're attempting to make as much noise as possible now to cut through."

There are other hurdles, too. With Microsoft introducing other flagship products this year, Office v.X could get lost in the shuffle. The big Redmond, Wash., software company is spending around $200 million to launch its next-generation Windows XP software later this month, for example, and also is readying a big-splash introduction of its Xbox game console in November. In contrast, Microsoft's Macintosh group is getting a relatively puny $6 million to market its new Office software. The solution? Focus all efforts on reaching those most primed to hear the marketing message -- in this case, the grass-roots audience of hardy Apple enthusiasts. "We're especially targeting these early adopters," says Browne. "They always want to be kept informed, and they're eager to try new software. So, now we're cranking up our core marketing engine." In the Microsoft ad campaign rolling out Monday, four print ads will appear as full-color, two-page spreads in several Macintosh-specific magazines, including Macworld, MacDirectory and MacAddict. The ads, developed by agency McCann-Erickson, a unit of Interpublic Group, aren't meant to be easily understood by the general public. Instead, they are aimed at those who know the Mac platform well.

Each ad focuses on a specific application inside the Office software, such as the Word, Excel, Entourage and PowerPoint programs. In one ad that highlights the Entourage e-mail and calendar program, for instance, a man in a laboratory is shown carrying around a jar filled with a clear liquid and the letter E (for Entourage). "It's totally re-engineered for the Mac," reads the tagline. Other text in the corner of the ad notes that the new Entourage program features revamped address and calendar functions, among other improvements. "We wanted to get across the message of re-engineering, purity and high technology in the ads," says Browne. He adds that Microsoft also plans to publish Office v.X ads in catalogs that are perused by retailers that sell Apple products.

Imation Sue Quantum Over DLT Drive Tape

Imation said Monday that it has filed a $450 million lawsuit against storage rival Quantum, accusing the company of monopolizing the market for the digital tape used in its DLT drives. The suit, filed in federal court in St. Paul, Minn., charges that Milpitas, Calif.-based Quantum fixed prices on DLT-compatible tape, invited Imation to join an illegal tape cartel, inappropriately extended patents on DLT drives to also apply to tapes for them, and misrepresented DLT-compatible tape as an open standard with competitive pricing. DLTs, or Digital Linear Tape drives, are a decade-old standard used for backing up data from servers and computers. Oakdale, Minn.-based Imation is seeking $150 million in damages, which could be raised to $450 million if a court finds Quantum guilty of violating antitrust law. "Quantum's promise to DLT tape drive buyers has been that the market for DLT-compatible tape is open and competitive," Imation Vice President Frank Russomanno said in a statement. "The purpose of our suit is to bring them back to that promise of an open and fair market."

Quantum CEO Michael Brown denied the accusations, telling CNET that the lawsuit is Imation's response to having repeatedly failed tests to qualify its tapes for use in Quantum drives. Imation is licensed to make tapes for the drives but must first get its tapes certified. In its statement announcing the lawsuit, Imation said its evidence includes a Quantum executive's e-mail, which Imation claims "essentially lays out a 'special arrangement' inviting Imation to join a Quantum-led cartel." "We think it is absolutely preposterous that we'd be behind a tape cartel," Brown said. Brown said that Quantum executives did offer Imation the opportunity to resell Quantum tape as an alternative to manufacturing its media that had failed Quantum's qualification tests. He also noted that two other companies, Maxell and Fuji, manufacture DLTs, and that more than 10 companies resell the tapes, which he said provides plenty of price competition. Moving to the offensive, Brown said the DLTs that Imation is shipping are unauthorized and could void the warranty on a drive if the tape were to damage the drive.

Tuesday October 2, 2001 Top

Intel Introduces 1.2 GHz Celeron Processor

Intel Corporation today released the Intel Celeron processor at 1.20 GHz. The desktop processor, based on 0.13-micron process technology, represents Intel's fastest offering for the price sensitive desktop value PC market segment. The new Intel Celeron processor includes additional design features, such as 256 KB of on-chip, level-two cache with a high-bandwidth interface to the processor core. In 1,000-unit quantities, the desktop Intel Celeron processor at 1.20 GHz is priced at $103. Desktop Intel Celeron processors are now available at 1.20, 1.10 and 1 GHz, and 950, 900, 850 and 800 MHz (all with the 100 MHz system bus).

ATI To Reintroduce Older Radeon Cards With New Names

ATI Technologies Inc. today introduced two new additions to RADEON, the world's most powerful and innovative family of graphics chip and board technologies, the entry-level RADEON 7000 and the value-line RADEON 7200 desktop graphics boards. With manufacturers' suggested retail prices under (US) $100, the new products are designed to offer value-minded customers solid graphics performance. The RADEON 7000 desktop graphics board, based on the RADEON 7000 chip (previously known as the RADEON VE chip), is a 32MB DDR board, providing solid 2D and 3D performance, excellent visual quality and DVD playback. At an MSRP of (US) $79, the RADEON 7000 graphics card offers more features and value than any other graphics card in this price range. The RADEON 7200 is a 64MB SDR graphics board, and offers such features as hardware transformation, clipping and lighting (T&L) geometry, CHARISMA ENGINE, and an on-chip hardware DVD decoder. The RADEON 7200 is based on the RADEON 7200 chip (previously known as the RADEON chip). It has an MSRP of (US) $99. Both the RADEON 7000 and RADEON 7200 are available immediately and will support Microsoft's Windows XP operating system, which will be available on October 25, as well as Windows 2000, Windows Me and Windows 98.

Apple Blamed for OS X 10.1 Update CD Scarcity

In some areas this weekend, users and resellers found that the distribution of the free Mac OS X 10.1 update did not go as smoothly as they had hoped for, with delays and limited quantities -- or none at all -- at many retail locations. This month, the update is free to registered OS X users, and is being distributed to Apple-authorized retailers and specialists, national chains, and Apple's own retail outlets. (It is also available by mail at a cost of $20.) Supplies of the update ran out quickly at many Apple Stores nationwide, with Apple scurrying to replenish the stores. Users have had mixed results, though many positive, with independent retailers and chains like CompUSA and MicroCenter. Many stores made their own CD copies to distribute to users, according to reports. Some resellers blame the delays and limited quantities on poor planning on Apple's part. "On Saturday, the retailers were blaming FedEx for the mix-up," said one Chicago-based insider describing the situation in his city. "Monday morning, they've changed their tune," he noted, saying that many resellers there are faulting Apple. The update could have been smoother, said an independent Mac reseller, who had only limited quantities on-hand: A common situation Saturday for some similar retailers. However, much of the criticism of Apple for providing only a 6-8 week shipping guarantee for the mailed $20 update may be unfounded. According to a recent special daily report at the Mac Show Live, an Apple representative is quoted saying that the delay would only be a few days, in fact. The less-than-perfect rollout may be due at least in part to the late gold master date of 10.1, delayed by weeks due to problems in finishing the DVD Player. Original development plans were to have 10.1 hit the gold master stage sometime in the early days of September, at the latest.

Sun Unveils StarOffice 6.0

Sun Microsystems on Tuesday unveiled the beta of StarOffice 6.0, a streamlined version of the company's free office software that's aimed to gain ground against Microsoft's Office. The company had already touted the multi-platform software, which runs on machines using the Solaris operating system, Linux or Microsoft Windows, to Linux fans in August. The new version replaces StarOffice 5.2, which was criticized as sluggish and hefty. But with its availability as a free download, the product had some appeal as a competitor against Microsoft's Office software. Sun made the software free just after acquiring StarOffice from Hamburg, Germany-based Star Division in 1999. It then released the source code for the software, so that anyone could modify and distribute it. And a licensing change that Microsoft had set to go into effect Monday could provide further impetus for StarOffice. That change could result in some Microsoft's business customers paying up to 107 percent more for Office XP than they would have under earlier licensing policies. The new version of StarOffice is simplified to make file exchange easier. The software has support for XML file formats; more robust Microsoft Office import and export filters, including support for Office XP; and redesigned dialog boxes, new templates and graphics. Korean, Japanese and Chinese versions are also available.

Microsoft Begins Retirement Process for Windows NT

Microsoft on Monday discontinued the server version of NT because of increased demand for its newer replacement, Windows 2000, and because of the forthcoming release of Windows XP. The software giant is no longer selling NT Server 4.0 via its volume licensing programs, through which businesses can buy the operating system in bulk and with a discount, according to Microsoft's Web site. The software giant, however, will continue to sell individual copies of NT 4.0 through retail stores. Businesses can also still buy NT Server 4.0 in bulk by purchasing Windows 2000 licenses. But analysts don't expect many companies will want to buy the older operating system. Windows NT Server 4.0 was designed to run on corporate servers and on computers that power Web sites. "This is all part of the process Microsoft uses to eliminate a product in their portfolio," said IDC analyst Al Gillen. "It's not a big a surprise because the reality is that 4.0 is just winding down and the demand is diminishing," A Microsoft spokesman said the company will continue to support Windows NT 4.0 products and will announce later this year the company's timeline for ending its support.

Wednesday October 3, 2001 Top

Microsoft Launches Major Security Initiative

Microsoft on Wednesday launched a major security initiative intended to address concerns that its software is prone to security problems and virus attacks. The world's largest software maker is looking to allay fears over ongoing security problems and recent worm attacks from Nimda and Code Red, which have led experts to warn that the company's Internet Information Server Web server software is not secure enough for customers. On Tuesday, Microsoft contacted about 1,000 of its largest customers to outline its program, called the Strategic Technology Protection Program, and address their concerns about recent worm attacks, said analysts and sources close to the company. STPP is supposed to deliver corporations short-term and long-term tools for combating recent devastating virus attacks and preventing future outbreaks. Analysts warn that the damage to the credibility of some Microsoft products may be hard to repair and may cast a shadow over the company's impending move into Web services, with its .Net and .Net My Services initiatives.

"Microsoft has a potential credibility problem as they move into Web services. They place more and more security on these Web mechanisms trying to sell their software as a service," Gartner analyst John Pescatore said. "If you're afraid of these bugs popping up in Microsoft's server software, would you sign up for a Web service that automatically updates the desktop?" Microsoft's reposturing comes about a week after market researcher Gartner recommended that some companies falling victim to the worms should seek out alternatives to IIS. "It wasn't just me writing a research note," Pescatore said. "Following the Code Red and Nimda attacks, Microsoft heard back from users that they were just sick of this." More than anything, "it was the huge impact Code Red had on IIS users. It was horrendous." The first part of STPP, "Get Secure," provides Microsoft customers with a security toolkit that consolidates software patches, "hot fixes" and updates into one place. Microsoft also will offer free technical support for security matters, and through regional account representatives it will work with customers to assure their networks are secure.

Chipmakers Likely To be Hit Hard by PC Sales Slump

The "perfect storm" that sank earnings for Compaq Computer in the past quarter will hit chipmakers Intel and Advanced Micro Devices, analysts said. For Intel and AMD, which sell more than 90 percent of the microprocessors that power PCs, the bruising combination of forces highlighted by Compaq are likely to hit in the fourth quarter, typically the industry's strongest, analysts said. "The question isn't is Intel going to lower numbers, it's by how much," said Lehman Brothers analyst Dan Niles. "And that's for the fourth quarter, not the third." Compaq, the No. 2 PC maker, warned Monday that a range of negative factors converged in September, including the disruption caused by its own merger plans and the chaos in air transportation that followed the Sept. 11 attacks on New York and Washington. Intel, the world's largest chipmaker, is not likely to issue its own sales warning, having already said Sept. 6 that revenue for its third quarter will be at the lower end of a range set in July, analysts said. AMD, for its part, has already warned of an operating loss due to weak sales and bruising price competition with Intel, its far-larger rival. That shifts the risk of a shortfall to the current quarter, analysts said.

"Intel's quarter was pretty much in the bag," said Prudential Securities analyst Hans Mosesmann. "The issue now is the fourth quarter." Analysts on average expect Intel to report third-quarter sales of $6.41 billion and per-share profits of 10 cents, according to First Call. AMD's sales are pegged at $833.3 million and the company is expected to report a loss of 10 cents a share. The second half of the year traditionally has been stronger than the first half in the PC industry, buoyed by back-to-school spending and the holiday shopping season that comes in November and December. But after Compaq's warning, the risk has increased that Intel may have a harder time meeting forecasts for the second half because Compaq will likely be curtailing the chips it will order for the fourth quarter, analysts said. "Our belief was before Sept. 11, Intel would have a hard time making forecasts for the last half of the year anyway, because computing demand was less than expected," Niles said. After Compaq, "this is more of the same with Intel and AMD."

Security Flaw Found In Mac OS x 10.1 iDisk Implementation

If you're using iDisk, the Internet hard drive feature of Apple's iTools service that runs under Mac OS X 10.1, be warned: the latest version of the next generation operating system appears to be less secure than previous versions of Mac OS X. iDisk support is now based on the Internet-standard HTTP Web server extension WebDAV, a multiplatform networking protocol that works on various flavors of Windows and Linux. In fact, Apple says that versions of Windows and Linux running a WebDAV client can access iDisks the same way Mac users can. Previously, if you mounted your iDisk on your desktop but didn't actively use it, Apple's servers would log you off after a period of inactivity. That changes with iDisk under 10.1 -- now you can have your iDisk mounted indefinitely. All that sounds good. However, according to a message at the Open Door Networks Web site, in Mac OS X 10.1 your iDisk is usually accessed using the WebDAV protocol rather than the Apple Filing Protocol (AFP) used previously. Like AFP, WebDAV isn't supposed to send your password over the Internet, which means it should be as secure as AFP. However the implementation of WebDAV in Mac OS X 10.1, as used with iDisk, violates the WebDAV specification and sends your password in a way that makes it is easy for hackers to discover, according to the folks at Open Door Networks, which specializes in Mac Internet security and file sharing.

Using iDisk under Mac OS X 10.1 could easily result in disclosure of your password and full access to your iDisk by others, they say. "Any hacker who can see the data being sent between your machine and the iDisk server can easily extract your password and other information needed to access your iDisk," Open Door Networks says. "The hacker would then have complete read/write access to your iDisk, including your personal Web site pages and any other files and information you've placed there. And since your iDisk password is also used for your e-mail account, the hacker would also have access to that account as well. If you select 'iDisk' from the 'Go' menu or click on the iDisk icon in the Finder, your iDisk will be vulnerable." There is a workaround, though it's a bit awkward. To connect to iDisk the old (and secure) way under Mac OS X 10.1, you should use "Connect to Server" under the "Go" menu and enter the address: afp:// "Doing so is highly recommended until Apple comes out with a fix for this problem (of which they're well aware)," Open Door Networks says.

High-Profile Online Anonymity Service Shuts Down

The company that pushed encryption and networking technology to the limits to enhance people's privacy said Thursday that it has decided to close its flagship anonymity network and focus on security software for home users. Security software maker Zero-Knowledge Systems announced that it would shut down the premium service component of its Freedom Network, which let people surf the Internet and send e-mail with almost complete privacy by using pseudonyms. Although more than 70,000 people signed on to the free test of the service two years ago, the swell of interest didn't wash up more than a small number of paying subscribers, said Austin Hill, co-founder and vice president of the company. "Scaling the network, the price of bandwidth--there's a significant cost with running an overlay network, and we didn't get enough interest to be able to offer the service with that price tag," he said. After announcing the service in 1998 at the Def Con hacking convention, it took the company almost 18 months to release the first version of the product. Encryption experts designed the service so that the identity of the Internet surfer could be hidden by hopping through several computers, each jump increasing the difficulty of matching up a Web user's online identity with that person's real one. The network was designed so that even a court order could not reveal a Web user's identity because even the company did not know who used which identities and the information was not stored on the system.

Quantum Files Countersuit Against Imation

Legal challenges are inflaming the otherwise staid tape backup industry, with Quantum filing a countersuit Wednesday accusing Imation of misappropriating trade secrets. In the lawsuit, filed in California Superior Court in Santa Clara County, Quantum also requested a preliminary restraining order to stop Imation from selling tapes in a format called DLT (Digital Linear Tape) that haven't been certified by Quantum. However, the judge denied the request, Quantum and Imation representatives said. The legal action comes two days after Imation accused Quantum of monopolizing the DLT market, fixing prices and inviting Imation to join a cartel. Imation also began selling its own DLT cartridges, saying they're compatible with DLT tape drives. Imation was unable to pass qualification tests and decided to sell its DLT tape on its own without paying Quantum royalties, Quantum Chief Executive Michael Brown said in an interview. Quantum, which sells DLT drives and has patents to the technology, shared its DLT technology with Imation, he said. Brad Allen, Imation's vice president of corporate communications, said Imation developed the tapes with its own expertise and didn't use intellectual property from Quantum. "We know how to design and develop cartridges," he said. "It's Imation's intellectual property and know-how in DLT." Key to Imation's case is a June 14 e-mail message from Phil Ritti, Quantum's DLT media division general manager, to Frank Russomanno, Imation's general manager for data storage media and services.

In the e-mail, Ritti suggested an arrangement under which existing DLT licensees Fuji and Maxell would provide Imation with DLT cartridges at a lower cost. To accomplish this, Quantum "may be willing to modify its business agreements" with Maxell and Fuji, Ritti said. "In exchange, we would want Imation to suspend plans to manufacture Tape IV (DLT cartridges) and all related qualification activities," Ritti said. The agreement would cover a specific number of cartridges per quarter, approximating how much tape Imation already was purchasing, he said. Allen pointed to this memo as evidence that Quantum has influence over the price of tape that Imation buys from third parties and that through this influence Quantum was trying to "limit the amount of tape that we would resell." He further argued that Quantum was controlling supply by getting Imation to suspend manufacturing. Not so, said Brown. In fact, the memo is evidence that Quantum was willing to reduce its own revenue to help Imation: "We'll try to work out another commercially viable arrangement at Quantum's expense to enable you to have a business that makes some money," Brown said.

Thursday October 4, 2001 Top

Chances of Microsoft Settlement Continue to be Slim

As settlement talks get underway yet again in the Microsoft Corp. antitrust case, legal experts are still doubtful about whether the company will reach a compromise with the government. Despite strong exhortations to settle from U.S. District Court Judge Colleen Kollar-Kotelly, Microsoft executives may still conclude they are better off holding out for a final ruling from the judge than making major concessions to the government, antitrust attorneys said in interviews this week. "I would be surprised if we saw a settlement in short order," said Andrew Gavil, a professor of antitrust law at Howard University in Washington. "(Microsoft) will only settle if it's in their interest to settle." The two sides were ordered into intensive settlement talks last Friday by Kollar-Kotelly in an effort to resolve the case before she opens hearings to determine what sanctions will be imposed on the company. Kollar-Kotelly ordered the talks to continue until Nov. 2. If no settlement emerges by then, the two sides will start gearing up for remedy hearings scheduled to start on March 11.

"It's pretty clear that she's not going to be happy unless they've made a gargantuan effort to settle," said Jonathan Zuck, director of the pro-Microsoft trade group the Association for Competitive Technology. "They're going to be (fearful) about accepting blame for settlement talks falling apart." Government lawyers have a clear incentive to settle the case and get sanctions imposed on Microsoft as quickly as possible, Gavil said. "They don't want to litigate, and there's been no remedy in place even though we have an adjudicated monopolist." Government attorneys have dropped the idea of a Microsoft break-up, and will instead ask the judge to impose broad restrictions on Microsoft's business tactics that would be modeled after a set of interim sanctions handed down last year by Judge Thomas Penfield Jackson, who was the trial court judge in the case at that time. In the wake of last Friday's status hearing, Microsoft also has more incentive to settle, said Washington antitrust lawyer Mark Schechter. That's because at the hearing, the company suffered a setback when Kollar-Kotelly rejected the company's request to narrow the scope of the possible remedies.

Mac Retailers Worried About Apple Store's Impact

As Apple Computer prepares to open its ninth store--this one in its own back yard--existing Mac dealers across the country say they view the company's outlets with both trepidation and anticipation. Several dealers nearby existing or future Apple stores are expressing fears that they will lose business in the short term, but the consensus seems to be that the stores are necessary if Apple is to regain market share in the brutally competitive PC market. Among resellers' fears is that customers will opt to buy at the Apple-owned stores because of their sleek looks or because Mac fans believe that by giving business directly to Apple, they can best help the Mac community. "It's going to hurt us, but it's a necessary evil," said Scott Grenz, general manager of Capitol Mac in Richmond, Va. Apple has plans to launch a total of 25 stores this year, including the Palo Alto, Calif., shop that will open Saturday. The company opened its first store in May in McLean, Va.--about 100 miles away from Grenz's shop. Grenz said he believes Apple has plans to open another one near his store. An Apple representative declined to comment.

Although Apple has not released any recent sales figures, the Virginia store appears to be doing a brisk business. One saleswoman there said the store is busy nearly all day, with the exception of dinnertime. And a source familiar with operations said the store moves an average of 500 software titles each week. The strategy of using retail outlets to sell computers is not new. Gateway has based a large part of its strategy in recent years around a nationwide network of stores, only to admit earlier this year that it built too many stores and needed to scale back. And although many industry watchers have lauded Apple's attempt to use the stores to draw in new consumers, Apple has a challenge that Gateway did not: trying to avoid stepping on its dealers' toes. It is difficult to separate the impact of the new stores from that of a weak economy and the recent terrorist attacks, but some Mac resellers situated near the Apple-owned stores say the new shops are eating into business. Larry Moon, vice president of Di-No Computers in Pasadena, Calif., said his store has lost 20 percent of its business since May, when Apple opened its retail outlet in Glendale, the next town over in suburban Los Angeles.

Still, Moon said, the Apple store is trying to be a good neighbor, sending customers his way when they need service or products that the company-owned stores don't offer. Apple is also offering nearby dealers an advance peek at new stores before they open and is trying to assuage fears that it is looking to put its dealers out of business. And although the new stores pose a threat to the consumer business of existing stores, many dealers already get most of their profits from Apple's professional-oriented products--especially considering the razor-thin margins on iMacs and other consumer-oriented products. "We've had to," Grenz said. "The money isn't made selling iMacs." One of the dealers' biggest concerns is whether Apple will play fair by ensuring that independent dealers get new products as quickly and in as much volume as the Apple stores. Tom Santos, president of Macadam computers in San Francisco, said that at one point the Apple stores had the iBooks with the combination CD-rewritable/DVD drive, while he was still unable to secure any of those models. The playing field "does not seem to be level at all," Santos said.

Open Standard for MPEG-4 Streaming Video Introduced

A standards body comprising such tech heavyweights as Apple Computer and Cisco Systems has released a specification for streaming MPEG-4 video and audio via the Web. The Internet Streaming Media Alliance (ISMA) announced this week that it has developed and published its first specification. ISMA 1.0 will let consumers install one plug-in for streaming audio and video, rather than a raft of programs each specific to a single format, on devices ranging from cell phones to personal computers. For ISMA, the specification is the latest effort to create open standards in streaming media. Microsoft's Windows Media, RealNetworks' RealPlayer and Apple's QuickTime each hold a piece of the market. Although Apple joined Cisco, IBM, Kasenna, Philips Electronics, Sun Microsystems and other tech companies in founding the nonprofit group last year, market leaders RealNetworks and Microsoft have yet to join. "For streaming to be really broadly embraced, broadly accepted, both on the PC as well as the non-PC platform by the content industry and by the consumer, what needs to take place is the creation of an open standard," said Hans-Peter Baumeister, a board member of the ISMA and vice president of strategic alliances at Philips.

ISMA hopes MPEG-4 will eventually replace the MP3 audio format, which inadvertently became a household name through the popularity of file-swapping service Napster. But the new format's video applications and interactive features have drawn the most interest so far. ISMA 1.0 has two versions. Profile 0 helps wireless and narrowband networks stream audio and video content to devices, such as cell phones or PDAs (personal digital assistants), for limited viewing and listening. Profile 1 is devised for broadband networks and targeted to more powerful devices such as set-top boxes and personal computers. Apple is hoping the standard will help its QuickTime, which trails Windows Media and RealPlayer, gain popularity. The PC maker is expected to release a new version of QuickTime based on the MPEG-4 format. According to Baumeister, ISMA 1.0 could shorten these gaps by freeing content creators and distributors from depending on a single vendor for streaming media technology. Without an overarching standard, companies must choose one format or encode the same audio and video for several players. With ISMA 1.0, he said, companies would only need to encode the content once to stream it over all compliant players. Microsoft, however, says it is unimpressed with the quality and application of MPEG-4; rather than join ISMA, the software giant has chosen to focus on an upgrade of its own technology.

Korean Companies Seek Injunction to Block Windows XP Sale

South Korea's largest Internet portal, Daum Communications, said Thursday it was seeking a court injunction to block the sale of Microsoft's Windows XP operating system in Korea. Daum has led a move by some Korean software companies against the sale of Windows XP, the latest version of Microsoft's flagship product, which is scheduled for widespread retail release Oct. 25. "We have filed a complaint against the sale of Windows XP with the Seoul District Court this morning," the company said in a statement. In the complaint, Daum said Microsoft's bundling of a variety of application software, including instant messaging, with Windows XP would constitute an unfair business practice. Microsoft "is infringing upon users' privacy by demanding excessive user information when installing Windows XP in the computers," Daum said in the statement. "We are considering collective action to counter it, with other companies." The initiative follows a similar complaint filed in early September by Daum with the Korea Fair Trade Commission over the bundling issue. The commission has not acted on the matter.

Microsoft said it would not act until the court or the FTC issued a ruling. "We don't feel the need to officially respond unless the court or the FTC makes a decision," a Microsoft Korea representative said. "But as we have said earlier, we are willing to talk with Daum and other companies if they want." Daum, which controls 20 percent of Korea's instant-messaging market, and 17 other software companies said late last month they would take joint action against the planned release of Windows XP. Daum had said possible actions included a ban on the sale of Windows XP on the 18 companies' Internet shopping malls. A Daum representative said on Thursday that the 18 companies would meet early next week to discuss their next move. The row over Windows XP comes less than two weeks before Microsoft Chairman Bill Gates is due to visit Korea to promote the release of the new operating system. He is scheduled to arrive in Seoul on Oct. 16 for a two-day stay before heading to the Asia-Pacific Economic Cooperation forum in Shanghai on Oct. 20, the Microsoft Korea representative said.

IBM Releases Flat-Panel Monitor on Crane-Like Arm

IBM has released a flat-panel monitor that rests on a cranelike arm, allowing it be positioned--like a desktop lamp--in nearly any direction or angle. The 15-inch T560 display can tilt backward as far as 145 degrees or flip over to allow a person sitting on the opposite side of a desk to view the screen. The display can also tilt forward, swivel onto its side to present a portrait view, move up and down, or be compressed into tablet form for transport. Although flat panels that pivot have been around for some time--both at IBM and elsewhere--the T560 uses the crane-like articulating arm that made its debut in IBM's Netvista PC. An articulating arm is also used in Netvista X Series PCs, first introduced last year, to hold and pivot the PC in space. IBM, which offers T Series displays in sizes from 15 inches to 20.8 inches, said the T560 is also its lightest and thinnest flat panel to date. It is 50 percent thinner and 10 percent lighter than previous models. The T560 is priced at $559, about $60 more than the company's T540, a regular 15-inch flat-panel display.

Friday October 5, 2001 Top

Possible Prices for AMD Athlon XP's Announced

Dealers and computer makers have begun to list prices on Advanced Micro Devices' upcoming Athlon XP processor, which officially goes on sale next week. The Athlon XP 1800+, which sources say will be released Tuesday, is currently being advertised by resellers for $254 and $255 on Price Watch, a shopping site dedicated to computers. Atacom, a California-based reseller, won't ship the part until after the chip comes out, company representatives said. Advertisements are also popping up for an Athlon XP 1500+ computer from Fujitsu-Siemens for 1,022 euros, or $939. Athlon XP is the latest version of AMD's flagship processor. The upcoming chips feature improvements that allow the processor to run on less power and thus produce less heat. Additionally, AMD will try to popularize a new naming convention that does not feature megahertz, the typical way of designating a chip's speed. The Athlon XP 1800, for example, will run at 1.5GHz. The new naming convention is justified by AMD under the principle that the 1.5GHz Athlon stacks up with a 1.8GHz Pentium 4 in terms of performance on typical computing tasks. The "XP" part is also new. The posted prices closely match the price of the 1.8GHz Pentium 4, which sells for around $256. An AMD representative declined to comment on unannounced products, but the company has said that the XP chips come out next week.

Microsoft Eases Up on New Licensing Scheme

Bowing to customer pressure, Microsoft has backed off a controversial licensing provision that forced some customers to pay twice for the software they purchased. Microsoft quietly introduced the change on Oct. 1 in conjunction with another sweeping licensing revision that, according to research firm Gartner, raised software costs for many customers from 33 percent to 107 percent. "The message here is customer pressure works, and the government scrutiny helped," said Gartner analyst Neil MacDonald. But the change, while technically a victory for Microsoft customers, may not be logistically feasible for many of those affected. A provision affecting Windows XP could compel some companies to subscribe to a higher-level volume-licensing program than the one they use today. A Microsoft representative confirmed the company had relaxed the restrictions on "reimaging" but could not immediately offer additional comment.

Under the old licensing provision, Microsoft could force customers buying PCs installed with Windows 98, NT or 2000 to pay for a second copy of the operating system. To more efficiently manage their systems, many companies erase the copy of Windows installed on their PCs and replace the OS with an identical version that also includes the appropriate hardware drivers and software applications for their work environment and corporate network. But the software giant started telling companies last year that the practice, known as reimaging, violated their licensing agreements. Microsoft's solution: Pay twice for Windows. The charges had applied to companies subscribing to Microsoft's Open, Select and Enterprise volume-licensing plans, although it had little effect on Enterprise subscribers. Because companies typically used software media supplied with the plans to reimage their PCs, Microsoft argued this technically violated the license.

While the copies of Windows supplied with the PC and volume program might be identical, they were separate licenses: one from the computer maker and the other from Microsoft. "Reimaging is relatively standard in the industry and every single customer has a custom image of some type," said Mark Romanowski, a senior vice president with New York-based technology consultant AMC. "For somebody to say 'pay them twice because I have to reimage,' that's nuts." Stiff customer resistance to the licensing policy compelled Microsoft to back down to a degree, but many small- and medium-size businesses still had to pay twice for Windows if they reimaged their PCs. In the first revision made in September 2000, Microsoft agreed to let Select customers reimage without paying a second time but did not extend the privilege to Open customers, which typically are small- or medium-size businesses.

Microsoft Plans to Introduce First Piece of .Net Service Next Week

Microsoft will announce next week a new business Internet service, tied to its .Net strategy, that will allow eBay and other Web sites to contact and send messages to customers via PCs, cell phones and other handheld devices. Microsoft plans to say that it has signed 20 companies to a new Web-based service, called .Net Alerts, according to sources close to the company. The service will notify subscribers of everything from updated sports scores to the shipping status of goods they've bought online. In the case of eBay, the online auction site can send buyers messages about the status of items they've bid on. The new service is an element in Microsoft's forthcoming package of Web-based services, called .Net My Services. The company next year plans to offer content, shopping, banking, entertainment and other Internet services through a variety of devices, all linked to Microsoft's Passport authentication service, which houses a host of Web surfer information. It's part of the company's larger .Net strategy for shifting computing tasks online.

The alerts service will be the first .Net service that a computer user will be able to see and use. While many of the .Net My Services features are aimed at consumers, .Net Alerts is expected to be the first of many Web services aimed at businesses, sources said. "Microsoft's aim is to be in as many places and touch as many people's lives as they can," Forrester Research analyst Kyle Johnson said. A Microsoft representative declined to comment. The 20 participating companies will either announce plans to implement the service or are currently adding the new .Net service to their sites. News of the technology has been hinted at for some time as part of Microsoft's .Net thrust and associated alliances with the likes of eBay. The alerts have also been demonstrated in conjunction with previews of the Windows XP operating system.

AOL Changes Privacy Policy To Allow for Web Bugs

A recent addition to America Online's privacy policy clears the way for the company to use online tracking tools, including cookies and Web bugs, to compile anonymous data about its members and measure the effectiveness of advertising. "AOL and its advertisers may use cookie technology to determine on an anonymous basis which advertisements members have seen and how members responded to them," the policy reads following an Aug. 28 amendment. "AOL and its advertisers may also use small pieces of code called 'Web beacons' or 'clear GIFs' to collect anonymous and aggregate advertising metrics, such as counting page views, promotion views, or advertising responses. "AOL does not allow advertisers or their advertising networks to use these technologies on AOL to compile profiles about the different Web sites that a particular member visits." Company spokesman Andrew Weinstein said the AOL Time Warner division has not yet begun using cookies or Web bugs but could do so. He added that the company would not use the technology to track user behavior. Rather, the cookies and bugs would only be used to figure out how many people viewed a certain type of advertisement. "We do not allow these technologies to track what members are doing on the Web or on the service, nor do we allow any organization to build profiles about our members," he said. The presence of cookies and beacons, also known as Web bugs and clear GIFs, would be a first for AOL, but remains a common element around the Web.

Iomega Releases New Version of QuikSync for Mac OS X

Iomega has released a new version (3.1) of QuikSync, its backup/synchronization software for Zip and Jaz drives. The new version is Carbonized, so it'll run natively on Mac OS X. The update (a 11.4 MB file) also supports Iomega's new Peerless drives and adds support to all mounted drives including network drives (does not include CDRW or DVD-RW). QuikSync 3.1 is designed to protect you from data loss caused by disasters such as viruses, power outages, computer crashes and accidental deletion. Files saved to specified folders on a local hard drive or mapped network drive are automatically copied to a separate drive designated as the "sync location." You can grab an updater at the Iomega update site. QuikSync 3.1 runs on Mac OS 8.x and higher (with the CarbonLib extensions installed), including Mac OS X.

Weekend October 6, 2001 Top

AMD Revenues Likely to Drop Due to Strong Competition

Advanced Micro Devices said Friday that fierce price competition from Intel took its toll on AMD's third quarter, which will fall well below analysts' expectations. Price wars aren't anything new between AMD and Intel as the two chipmakers race to make faster--and cheaper--semiconductors. But Intel seems to have inflicted some body blows on AMD this quarter. For the third quarter ending Sept. 30, AMD said it will report a pro forma loss between $90 million and $110 million, or 26 cents a share and 31 cents a share. That projected loss doesn't include restructuring and other charges, expected to be between $80 million and $110 million. AMD said last month it would lay off 15 percent of its work force. According to First Call, AMD was expected to report a loss of 12 cents a share. Analysts have been trimming their estimates on AMD in light of profit warnings from PC makers such as Compaq Computer, Gateway and the price war with Intel. Unlike other tech companies that have issued profit warnings, AMD didn't blame the Sept. 11 terrorist attacks or a weak economy. Instead, it blamed Intel. "Intel resorted to aggressive pricing and large, cash-backed marketing programs, which had the effect of driving down ASPs (average selling prices) on PC processors," said CEO W.J. Sanders. AMD said it held or gained market share in the quarter, but the price war hurt AMD as unit sales of processors stayed at record levels hit in the second quarter. AMD sold more than 7.7 million chips in the second quarter, but it has lost key customers, including Gateway and IBM, as PC makers look to cut costs.

Intel Releases More Consumer Products

Intel wants you in pictures. The company, best known for its Pentium PC processors, this week launched a trio of PC-related consumer devices intended to further its strategy of using gadgets to push PC demand. The new products from Intel's Connected Products Division include an updated Intel Pocket Digital PC Camera, a new MP3 player dubbed Personal Audio Player 3000 and the new Intel Play Digital Movie Creator, a children's video camera. All three use universal serial bus (USB) connections to hook up with a PC and will ship this month. The new cameras and MP3 player join a host of PC-related products, gadgets generally priced under $200, that allow consumers to create, store and then share personal multimedia files, such as pictures or short videos, using a PC. The devices serve to help Intel promote its consumer brand and evangelize its vision of the PC as the center of the home-computing universe. The devices, which aim at fairly processor-intensive tasks, such as editing video, also encourage upgrades, analysts say. "There's a definite synergy between these products and the PC," said Brian Ma, an analyst with IDC. "Even more so, it helps drive demand for the PC, and ultimately it helps to create an environment that helps shore up (Intel's) primary market."

Research company ARS, which keeps a "score card" for retail presence for devices like digital cameras, shows Intel as having carved out a sizable chunk of the PC camera market. Intel was second only to Logitech in retail shelf space for cameras in September. Logitech, the maker of PC cameras as well as keyboards and mice, garnered 25 percent of retail shelf space for cameras in September. Intel followed with 21 percent. The rest of the field, including Creative, IBM and Kensington, each had nine percent. The results are similar for previous months. Because the cameras require a fair amount of horsepower to process images, they're seen as a good motivator to get PC users to upgrade. "Most importantly, Intel is to stimulate the next wave of buying, and these devices require a fairly well-equipped PC," said Dwaine Smith, research analyst at ARS.

Email Celebrates its 30th Anniversary

As great inventions go, e-mail had a rather ho-hum beginning back in 1971. In fact, Ray Tomlinson, the American engineer considered the "father of e-mail," can't quite recall when the first message was sent, what it said, or even who the recipient was. "I have no idea what the first one was," he told Reuters. "It might have been the first line from Lincoln's Gettysburg Address for all I know. The only thing I know was it was all in upper case." Tomlinson, principal engineer at Cambridge, Mass.-based BBN Technologies, finds himself in the spotlight again after all these years, having to answer questions about the computer program he designed as it reaches its 30th birthday in the coming weeks. He modestly calls his baby "no major tour de force." It was just 200 lines of code, he says. And the inspiration--one computer program to enable file transfers and a second crude messaging program -- already existed, he said. But the programs had their flaws. For example, the message program at first only enabled a user to send a communique to a colleague's mailbox as long as that mailbox was located on the same computer as the sender's. Tomlinson got around this by creating remote personal mailboxes that could send and receive messages via a computer network. He also conceived the now-ubiquitous "at" symbol, the small letter "a" inside a circle, to ensure a message was sent to a designated recipient.

The end product, he said, was simply the combination of the two existing programs, enabling a person to send a message for the first time to a specified computer user on any computer hooked up to the ARPA Net, the predecessor to today's Internet, developed by the U.S. Department of Defense. But back in the autumn of 1971--Tomlinson says he can't recall which month--e-mail was a relatively small success. That is, he added, simply because there were just a few hundred users of the ARPA Net that could put it to use. But as the Internet grew from a small coterie of academics and government workers, it created a linked a vast network of personal computer users tapping e-mails to one another. And, the top-of-the-line modem connection at the time operated at a snail-like 300 baud, roughly 200 times slower than the speed of today's standard 56.6 kbps modem. It made only the most concise message practical. "Reliance took a few years to happen," said Tomlinson. It wasn't until the personal computer boom in the mid-1980s that e-mail trickled into the lives of computer enthusiasts and university students.

Consumers Worried About Loss of High-Speed Net Service

When Excite@Home filed for bankruptcy protection Friday, visions of excruciatingly slow dial-up service popped into Tim Joiner's mind. Joiner has been using Comcast's Excite@Home high-speed Internet access service since it was introduced to the Little Rock, Ark., area less than six months ago. "I have been worried and discussing it with several friends," Joiner said. "We just got it, and now what is going to happen? Will they take it away?" Like Joiner, many Excite@Home users across the country are concerned. Some are aware that the company is backed by several large corporations, such as AT&T, Comcast and Cox Communications, and are hoping for uninterrupted service, while others are worried about losing their high-speed service. With less competition in the high-speed Internet access market, people also worry about increasing fees. AT&T relies on Excite@Home to provide Net access to AT&T Broadband subscribers, and Comcast has more than 675,000 subscribers to the broadband access service. The companies said they are trying to assuage any consumer concerns that their service will be interrupted.

Comcast sent an e-mail Saturday to its subscribers explaining how it "views high-speed Internet as one of the most important products" in its portfolio. "We remain committed to this business and to our customers," the e-mail read. With DSL (digital subscriber line) service providers such as Rhythms NetConnections and Northpoint Communications dropping dead in the past year, consumers are also worried about seeing bigger bills for existing broadband services. Just Friday, Comcast sent its subscribers another e-mail alerting them to an imminent fee increase. Analysts see other rate increases in the future. "Consumers have to worry that the avenues and ways to get high-speed access are narrower and they really need competition to get the best prices," said Howard Horowitz, president of Horowitz Associates, a consulting firm that specializes in the cable and broadband market. "Companies are going to raise prices because they are finding themselves in the fortuitous circumstance of not having any real competition."

Record Industry Brings Suits Against File-Trading Networks

Adding a new challenge to their list of legal attacks, the record industry and Hollywood studios have joined forces to sue MusicCity, Kazaa and Grokster, which together form one of the most popular file-trading networks to spring up in Napster's wake. The suit marks the fourth major legal action the copyright holders have filed in their attempt to restrain millions of people from trading copies of songs and movies online. So far they have been successful, shutting down Scour, stopping trades on Napster, and putting smaller outfit Aimster on the financial ropes. But the new lawsuit marks the first overseas defendants, as well as the first legal test of a new generation of technology, which may prove a harder beast to pen than have the previous file-swapping services. Unlike Napster, the file-swapping services sued Tuesday don't require a central company to create an index of downloadable files. The companies involved have said that even if they disappear, the network of file swapping can survive as people continue to distribute the software unofficially. That's not stopping the Recording Industry Association of America (RIAA) and the Motion Picture Association of America (MPAA) from targeting the network, dubbing it a "21st century piratical bazaar."

"We cannot sit idly by while these services continue to operate illegally, especially at a time when new legitimate services are being launched," RIAA Chief Executive Hilary Rosen said in a statement. The big music labels themselves are on the verge of launching online music subscription plans this fall and are leery of seeing competition from free services like MusicCity. Perhaps more than any previous legal action, the latest lawsuit will test the ability of courts and one nation's system of law to reach across international borders for an online issue--and over technological hurdles that many techno-libertarians have deemed all but impassable. Play clip The source of the software for all three services is a company alternately called FastTrack or Consumer Empowerment, based in Amsterdam. A self-described "virtual organization" of programmers from Sweden, Denmark and the Netherlands, the company has licensed its file-swapping software to MusicCity--incorporated in Oregon, but headquartered in Tennessee--and the Nevis, West Indies-based Grokster. FastTrack CEO Niklas Zennstrom also manages Kazaa. The lawsuit targets just these companies. But the RIAA also said that it isn't ruling out action against Timberline Venture Partners, a venture capital firm associated with Draper Fisher Jurvetson, which funded MusicCity, also known as StreamCast Networks.

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