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Comdex Show in Las Vegas

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DQI Bureau
New Update

Shrinking

Comdex has plenty of excitement left.

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Despite

few attendees and exhibitors, the 20th Comdex show in Las Vegas

produced enough new products and technology trends to clear the

way for another exciting year in computer, internet and communications

industries. But attendance was well below the expected 200,000 and

the number of exhibitors was down by several hundred companies.

One of the two giant exhibit halls at the Sands Convention Center,

which traditionally houses hundreds of mostly smaller exhibitors,

was completely empty.



In a move to change the character of Comdex, this year’s show presented

a number of vertical pavilions featuring a specific class of products

or technology. By far the most successful and heavily attended was

the Linux Business Pavilion where some 100 companies displayed hardware,

software and networking products built around the Linux operating

system. An estimated 75,000 people visited the Linux Pavilion.

Comdex certainly got off to a blast

when Bill Gates, as he has for the past four years, opened Comdex

with a 90-minute Sunday evening keynote speech. It was watched by

a record crowd of 15,000 people stuffed in several giant ballrooms

at the just-completed Venetia Hotel that is surrounded by water

and tourist-ferrying gondolas.

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The centerpiece of Gates’ speech was

the demonstration of a new Microsoft web appliance just for accessing

the internet. The device is part of a new class of ‘Web Companion’

systems. The Microsoft device is code-named ‘Mariner’. It is a textbook-size

device that runs Microsoft’s Windows CE software, and connects instantly

to the internet, using Microsoft’s MSN internet service. The Web

Companion is among a new generation of personal digital assistants,

a class of products that, with the exception of the Palm Pilot from

3Com, has had a hard time gaining acceptance.

Few

PCs offer features that truly distinguishes one from another. But

each year, there are some machines that do attract a crowd. This

year, KryoTech put its new Super G system on display, the first

PC with a 1GHz microprocessor. The Super G is powered by a 700MHz

Athlon processor from Advanced Micro Devices that is encased in

a hermetically enclosed cooling system. This brings the temperatures

around the chip down to 40 degrees below Celcius. As a result, the

system operates at clock speeds averaging more than 1,000MHz.

Veridicom (www.veridicom.com)

showed off its ‘5th Sense’ personal authentication peripheral for

fingerprint-based authentication. The device is about the size of

a computer mouse. It will enable computer users to grant access

to a computer system or individual files based on matching the user’s

fingerprint with one stored in memory.

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The Financial Literacy Center made

a big splash with a replica of the Edison Universal Stock Ticker.

 The $3,500 working replica can connect to the internet and

print stock prices.

The

WizCom (
www.wizcomtech.com)

and Sweden’s C Technologies (
www.cpen.com)

launched pen-like scanners. The scanners allow users to move the

tip of the pen-like devices over lines of text on a page. These

are then scanned into memory and converted to text via a built-in

OCR. The C-Pen 200 and QuickLink Pen from Wizcom will retail for

around $150 in the United States. The QuickLink Pen can store up

to 1,000 pages worth of text.

Does ‘NT’ want your

money




“Scott McNealy Doesn’t Want Your Money,” read the giant banner,
which covered the entire side of the parking garage across the Las

Vegas Convention Center. At least until the final day of Comdex,

when someone pulled a prank and overnight covered up the letters

“n’t” in “doesn’t.”

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McNealy

and his Sun Microsystems company have not had much of a presence

at any previous Comdex show. McNealy raised a lot of eyebrows for

stepping into the 'lion’s den’ with a heavy doze of anti-Microsoft

messages and hype prooting Sun’s StarOffice software suite which

is available free from Sun’s website. Sun also gave away tens of

thousands of CDs with the StarOffice suite of business productivity

applications for the Windows, Linux and Unix platforms.






McNealy gave a keynote address on the third day of Comdex in which
he blasted Bill Gates and Microsoft in no uncertain terms and with

a harshness that clearly brought out his deep resentment of Microsoft

and its predatory business model. But McNealy also incorporated

some humor into his comments regarding the competition. “I don’t

hate Windows PCs ... they keep people off the streets and off drugs.”



McNealy said he wants the computer

industry to follow the same model as in the telephone industry where

consumers and business users don’t know, or care what operating

system runs the telephone. They just expect them to work. “We buy

into the notion that information ought to be a utility that is just

as easy to operate as water or power.”

HP’s new CEO intends

to “rock the boat”




While Gates’ speech was fairly light-hearted, Hewlett-Packard’s
new Chief Executive Carly Fiorina arrived in Las Vegas on a mission.

She came to light a fire under the company which has seen market

opportunities go by because it has been too slow to respond.

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Fiorina made it clear she intends to

“rock the boat” as she wants HP to transform itself from being re-active

to pro-active and leveraging HP’s tradition of invention and innovation.

“We will be preserving the best and reinventing the rest. This is

a company founded by two men who were pretty radical thinkers. Somehow,

along the way, we stopped talking about invention. We’re going to

start talking about it again.”



One of the first major inventions, she said will be a JV with Switzerland’s
Swatch company to develop a Buck Rogers-like wristwatch that can

access the web. At the core of HP’s new strategy is the internet

and Fiorina’s belief that unless the internet changes from being

“cold and impersonal to become pervasive, friendly, warm and personal,”

it will not live up to its potential to create an entire new global

economy in the next decade. “We are at a critical juncture in the

net.

Ericsson answers the

call for MP3




Swedish Communications major Ericsson has developed a module with
Bluetooth technology that works with a wireless headset. Backed

by a wide range of high-tech companies, Bluetooth radio technology

is designed to link mobile phones, portable PCs and digital organizers,

among other devices.

The company faces some potential stumbling

blocks, however. Each module works with a separate phone model,

so the devices are not really interchangeable. The lack of interoperability

may add to the hassle of picking out a cell phone and a compatible

service plan, a headache most phone users know well. In addition,

the company says it eventually may end up integrating all the functionality

back into the phone.

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Movie trade group tries

to block DVD cracking tool




In a major test of a new copyright law, the Motion Picture Association
of America (MPAA) is hunting down and eliminating from the net a

program that cracks the security on DVDs. The program enables removal

of anti-copying features from DVD versions of hundreds of copyrighted

works.

MPAA, which lobbies for the major US

studios’ political and financial interests, appears to be succeeding

in convincing websites to remove the utility. Called DeCSS, the

program can crack the encryption code in the DVD Content Scrambling

System, allowing people to make unauthorized copies of digital movies

to play on their computers or television sets.

The MPAA has sent cease and desist

letters to numerous websites, citing the Digital Millennium Copyright

Act, which passed last October. The DMCA made it a crime to create,

sell or distribute any technology that could be used to break copyright-protection

devices.

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NEC shifts PC production

to Taiwan




Forced to reduce production costs in an increasingly competitive
domestic PC market, NEC is shifting about half of its annual production

of three million PCs from plants in Japan to contract manufacturers

in Taiwan.

NEC earlier moved production of key

notebook components to Taiwan. It is now expanding that to include

production of desktop models. The first Taiwan-produced NEC PCs

will hit the Japanese market this coming spring.

CenterBeam, Microsoft

to buy back PCs




CenterBeam, a start-up, is offering to buy back companies’ PCs for
$500 in exchange for an agreement to use CenterBeam’s business applications

and services, which cost $165 each month per user.

CenterBeam, which was founded earlier

this year, has teamed with Microsoft to launch the buyback program.

The company is targeting small businesses with the hope of locking

them into longer contracts, which are potentially more profitable.

At $165 per user, this comes to approximately $2,000 per single

'seat'.

CenterBeam’s service is built on Microsoft’s

forthcoming Windows 2000 operating system. The company says it will

provide small businesses with replacement ‘name brand’ PCs, high-speed

digital subscriber line internet access, customer support, daily

backups of all data and access to business and process applications

developed specifically for the internet. The offer is valid till

the launch of Windows 2000.

US Congress... backs

e-signature law




Are business contracts transmitted over the internet with digital
signatures as legally binding as printed contracts with hand-written

signatures? With a resounding 356-66 vote, the US House of Representatives

say they do.

The legislation, if signed into law

by President Clinton will give equal weight to digitally-signed

contracts. The strong support for the bill vote came after three

weeks of bitter partisan debate, with Republicans and Democrats

taking opposite sides over the issue of consumer protection. Democrats

with support of major consumer interest groups, charged that the

law would hurt consumers by overriding state and federal laws that

require notices associated with contracts be provided on paper.

In a compromise, both parties agreed

on language stipulating that companies and individuals will continue

to be required to send paper notices about any issues dealing with

consumer’s ‘health or safety’ products and services. And consumers

must agree to receive their records electronically, forcing companies

to give consumers a choice to demand a written contract.

...to spend $100 billion

fighting Y2K




US government agencies and organizations will spend more than $100
billion fighting the Y2K problem, much less than many earlier forecasts,

according to a government report–The Economics of Y2K and the Impact

on the United States.

The report concludes that the single

largest effect of Y2K on the economy may be the diversion of these

funds from other uses, but the technology glitch will not harm the

nation’s economy.

The study, conducted by William Daley–Secretary

of Commerce–and other administration officials, estimates that from

1995 through 2001, US businesses and government agencies will have

spent about $100 billion to identify, test and correct error-prone

technologies. This is equal to about $365 for every American.

“The greatest cost to our economy is

behind us, with billions of dollars diverted from other sources

to fix the problem,” Daley says. “Any glitches that pop up next

year should not hurt our economic growth.”

SGI may sell Cray to

tech acquisition firm




Computer maker Silicon Graphics (SGI) is in talks to sell Cray Research–once
one of the technological gems of the United States–to a little-known

technology acquisition group called Gores Technology Group, industry

sources say.

One industry source says that Gores,

with operations in both Los Angeles and Boulder, Colorado, originally

offered $100 million for the struggling supercomputer maker. But

since doing due diligence on Cray, it has lowered its offer, the

source says.

Amazon rises on hint

of profitability




Shares of Amazon.com surged as much as 7.65% after the net-retailing
giant said its US books business would turn profitable in Q4, 1999.


The retailer, which has been mired

in losses as it continues to expand its leading position on the

internet, said that profitability is near in its US books division

in its 10-Q filing with the Securities and Exchange Commission.

The US book division is the most mature

part of Amazon’s business. “If they can show people that they can

turn these businesses profitable–without it always getting lost

in the growth–then people will feel more comfortable on the long-term

prospects of the stock,” says Andrea Williams, Analyst.

Intel won’t stock up

for Y2K




Intel has no plans for boosting production to create a stockpile
of Pentium processors and other chips. The stockpile may have compensated

for any temporary breakdown in vital utility resources.

Intel’s refusal to stockpile products

was revealed in a required report filed with the Securities and

Exchange Commission. Instead, Intel says it has been working with

the infrastructure suppliers for its various manufacturing sites

to ensure continuity of services.

“Contingency planning regarding major

infrastructure failure may include considering increases in inventory

levels above normal reserve stocks or evaluating the need to relocate

inventory geographically,” Intel says in the SEC filing. “The company

currently believes that it will not be necessary and therefore does

not intend to maintain a buffer of additional finished goods inventory.”

Windows NT update carries

bug




A software update for Microsoft’s corporate-use operating system
has introduced a bug that could potentially cripple Lotus Notes

unless companies compromise network security.

The bug in Windows NT Service Pack

6 prevents users from accessing Lotus Notes without administrator

rights–the highest and broadest level of network access typically

reserved for network managers. Companies generally restrict user

access to prevent security breaches or catastrophic accidental changes

to PCs or servers. Microsoft says it has posted a patch.

The bug puts companies that have installed

the service pack in a bind, possibly forcing them to grant users

temporary administrator privileges in order to use Lotus Notes.

The Redmond, Washington-based software maker is advising customers

using Lotus Notes not to apply Service Pack 6 until a fix is released.

Sony, Palm to team on

handhelds




Sony and Palm Computing will collaborate to develop a ‘next generation’
handheld platform that uses memory storage technology from Sony

and the Palm operating system.

The new handhelds will have audio-visual

capabilities and will focus on providing wireless communications.

The deal between Sony and Palm Computing, a division of 3Com, came

on the same day that Microsoft announced plans to expand connectivity

for handheld devices based on its scaled-down Windows CE operating

system. The move is aimed at closing the still-wide gap between

adoption of CE and Palm devices. Palm accounts for 75% of the market,

according to research from International Data Corporation.

The Sony deal is likely to help bolster

Palm’s position even more in the handheld arena.

Pentium IIIs in short

supply, confirms Intel



Intel has confirmed that

supplies of new Pentium III chips have been limited, but the chip

giant says it is taking steps to meet demand.

Computer makers have had a hard time

getting Pentium IIIs in the recent past, but Intel says it is still

on track to ship ‘millions’ of its newest chips this quarter.



“PC demand is very strong, and what we are doing is working to ramp
up production to meet orders over and above what we’ve already committed

to for the quarter,” says Michael Sullivan, an Intel spokesman.

PC demand has exceeded expectations, he says, leading to an inability

to fill all the orders beyond what the company’s original commitments

were.

Microsoft backs off

messaging war with AOL




After months of wrangling, Microsoft has announced that the latest
version of its MSN Messenger service will not communicate with America

Online’s AOL Instant Messenger.




Microsoft says the decision, which

coincided with the launch of its redesigned MSN web portal, was

based on an AOL software bug that could pose a security risk for

MSN users.

“We have now reached a point where

an interim solution is no longer possible,” Microsoft says. “With

the release of MSN Messenger Service 2.0, Microsoft has decided

it is more important to protect the security of MSN Messenger users

while remaining focused on driving toward an industry standard.”

AMD to regain chip speed

crown




AMD will regain the speed crown from rival chipmaker Intel with
its 750MHz Athlon chips and follow it up with a raft of speedier

chips in 2000. Revenues will be above $800 million, stronger than

expected for Q4, says Jerry Sanders, CEO, AMD, on the strength of

its microprocessor sales and sales of flash memory. Break-even for

the company is $850 million.

"The 750MHz Athlon systems should

be available from top-tier computer makers by year’s end, a quarter

ahead of schedule,” Sanders says. “There is no question we are moving

up the food chain. We’re experiencing a strong quarter. Demand for

all our products is robust.”

With a 750MHz processor, AMD will take

away the performance crown from Intel, which has put out a 733MHz

and isn’t slated to speed up its processors until an 800MHz Pentium

III next year.

Games are most popular

office break activity: survey




Rather than take a coffee break or hang out at the water cooler,
more adults are spending their downtime at work either surfing the

net or playing online games, according to a survey.

Some 66% chose surfing the net as the

number one way to take a break from work, according to a NabiscoWorld.com

survey of more than 1,000 men and women over age 19. Of that group,

44% chose to spend their time playing net-based games. Released

by NabiscoWorld.com in conjunction with the launch of its website.

NabiscoWorld is a gaming and entertainment site developed by food

retailer Nabisco.

CMGI surges on CEO’s

revenue forecast




Shares of Anover, Massachusetts-based CMGI blasted more than 20%
high after the company’s chief executive said he expects it to become

the second-largest internet firm in terms of revenues by the end

of its fiscal year in July 2000.

The stock also got a boost after influential

investment bank Goldman Sachs initiated coverage of the company

with a ‘market outperform’, setting its 12-month target price at

$150 per share.

Prudential Securities also reiterated

the stock as a ‘strong buy’ with a 12-month target price of $186

per share. Currently, the number one and number two revenue generators

on the internet are America Online and Yahoo.


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