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The week's news: Technicolor iMac

Justifying his reputation, Steve Jobs introduced five new models of Apple's hot-selling iMac: strawberry, blueberry, tangerine, grape, and lime.

Justifying his reputation for the unorthodox and the dramatic, interim chief executive Steve Jobs used the Macworld trade show to introduce five new models of Apple Computer's hot-selling iMac: strawberry, blueberry, tangerine, grape, and lime.

The maverick computer maker is emphasizing style, rather than hardware features. "People don't care about that stuff," he told the audience at a keynote speech. "What they care about is, 'I want to express myself.'"

iMac blossoms
The new iMacs come with a 266-MHz PowerPC processor, a 15-inch built-in monitor, 32MB of memory, and a 6GB hard drive for $1,199. The iMac debuted in August with a 233-MHz chip and a 4GB hard drive for $1,299. These older models are to be discounted to $1,049.

Also in his Macworld address, Jobs introduced more powerful G3 desktops and Mac OS X, a server operating system. The Apple cofounder further said the company's pending earnings report will likely show its first year-over-year quarterly revenue growth since 1996, and certainly show a fifth consecutive quarterly profit.

The run of good news has encourage software developers to write to the Macintosh platform, Jobs was at pains to point out. News of an upcoming version of the growingly popular Linux operating system for Mac (specifically, for the PowerPC chip architecture) underscored the point.

Cellular craziness
The cellular industry began the week early, with confirmation last weekend that Bell Atlantic and AirTouch are discussing a possible stock merger valued at close to $45 billion. On Tuesday, Britain's Vodafone jumped in, upping the ante with an offer for $55 billion.

Then it was reported the MCI Worldcom would enter the sweepstakes, but the long distance telco eventually declared it would not seek to acquire AirTouch. Still, it was a heady week for the San Francisco firm, whose rocketing stock valuation puts some of the hype over Internet issues into perspective.

All told, the bidding marks a new step forward in the international wireless phone market, and is a possible precursor to growing overseas interest in U.S. firms.

Merging
AT&T gave details of its plans to merge with Tele-Communications Incorporated and offer local phone service through cable wire. In advance of closing the $48 billion deal, the company has retreated from its intention to create a broad cable and voice consumer services division. But the new company will spend $2 billion more than anticipated in upgrading TCI's cable network for local voice phone traffic.

AT&T also inked telephony agreements with Bresnan Communications, Falcon Cable, Insight Communications, InterMedia Partners, and Peak Cablevision, all TCI cable partners.

A grassroots political movement to regulate cable-based Internet service at the local level continued to gain steam. Based on back fees and taxes TCI apparently owes the city, the cable regulatory staff of Oakland, California, recommended that the city council deny the transfer of franchise licenses to AT&T. More important, the resolution leaves open the possibility for Oakland to deny the transfers if TCI does not open its broadband pipes to competitors--one of the key sticking points for a growing number of cities and consumer groups.

The California Public Utilities Commission voted to adopt a disputed agreement between Pacific Bell and a competitor, in effect deciding not to force the local phone company to share the copper lines it uses for voice service with others. Rival PDO had hoped to use the same line to offer DSL service.

Next destination
Internet portals and television networks may be headed for a new round of mergers driven by technological evolution, according to executives and analysts at the Consumer Electronics Show in Las Vegas. The trade show's buzz word has been "destination" site, as Web sites move away from simple content aggregation and feature stockpiling. "Destinations" will look to replace content aggregation with familiar media content brands to attract Web surfers and TV viewers.

America Online said CBS will be the exclusive provider of broadcast news on both AOL's proprietary online service and CompuServe, and will be a featured news provider on the AOL.com portal site. CBS programming will supplant ABC News, which has been providing content to AOL since 1995.

Oracle postponed shipment of Oracle 8i until the end of February so it can perform final tests and complete the integration of software and development tools with the Internet-centric database.

A new email attachment making its way around the spam circuit is swiping recipients' user names and passwords and sending them to a Chinese email address. The Trojan horse, named "picture.exe," is collecting Web browser histories as well as America Online user names and passwords from hard drives.

Microsoft's Excel spreadsheet can make computers susceptible to "booby-trapped" Web sites that download codes destroying data.

Marketing chips
Intel released two new and faster Celeron processors and cut prices on existing processors. The chips, running at 366 MHz and 400 MHz, are intended for low-end PCs. Smaller, cheaper PCs will follow--indeed, some have already arrived.

A next-generation Intel processor code-named Katmai will be christened Pentium III. Sources close to the company confirmed a marketing decision that allows Intel to use its most successful brand name a fifth time.

Next week, Advanced Micro Devices is expected to roll out its first K6-2 microprocessor specifically designed for notebook computers next week. Tuesday the company cut prices on existing chips, matching Intel price drops.

Cisco Systems and Hitachi were to demonstrate a $500 TV set-top box offering high-speed Internet access and a host of Web and video features at the Consumer Electronics Show in Las Vegas. The reference design for a device capable of offering video-on-demand, voice-over-cable, high-speed Web surfing, and digital cable would take the high-end networking giant far afield.

Also at CES, the company announced that it would join Sony and Samsung in selling cable modems that offer high-speed data, voice, and video connections.

In a bid to dominate the low end of the printer market without risking its brand name, Hewlett-Packard announced Apollo, a new subsidiary charged with developing and marketing stylish and colorful peripherals for under $100.

Also of note
A U.S. judge ordered Sun Microsystems and Microsoft to begin settlement talks on how Java interacts with code written in the native language of a computer ? Microsoft has overcharged consumers worldwide $10 billion even as prices in the computer industry generally have declined, a consumer report said ? A Florida abortion clinic filed a federal lawsuit against CompuServe and another online service, charging that antiabortion activists obtained access to private patient information through the Internet companies ... Charles Schwab, the largest U.S. online brokerage, said its Web site was overwhelmed by customers suffering long delays ? MindSpring Enterprises will acquire Netcom's customer base from telecommunications firm ICG Communications for about $245 million.