Comdex Show in Las Vegas

Shrinking
Comdex has plenty of excitement left.

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.

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.

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.”

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.

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.

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.

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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