The week in review: iBook claims Macworld spotlight
Macintosh faithful thrill to the introduction of Apple Computer's iBook, a $1,599 portable that borrows stylistic cues from the company's well-known iMac desktop.
Delivering the keynote address at Macworld, interim CEO Steve Jobs touted the low-priced consumer notebook as an "iMac to go," while claiming Apple's brightly colored consumer desktop "has already become a pervasive part of our culture" despite being on the market for only a year. Widely anticipated, the iBook presentation was delivered with Jobs's customary flair.
iBook
Set to reach consumers in September in blueberry and tangerine models, the iBook also drew notice for its wireless networking technology, which will let users roam up to 150 feet away from a central UFO-shaped transmitter. The feature allows the iBook to connect to the Internet without a telephone cord, at a speedy rate of 11 mbps.
Pre-event speculation had also centered on Apple's joining the so-called free PC movement, but prices won't be reduced by any Internet service subsidies anytime soon, Jobs said this week. Apple will wait and see. Despite offering relatively high-dollar computers, sales are going pretty well, a research firm reported.
On the other hand, Apple still has a long way to go to regain a significant chunk of the market. Its May 1998 retail share was a meager 2 percent, according to a separate report. Apple's desktop share has since doubled to 5 percent.
In other good news for the company, major software developers are becoming interested in the Macintosh operating system again, heartened by sales. Notably, IBM is bringing voice recognition software to the Mac, and IBM subsidiary Lotus Development is releasing a new version of its Notes software, as well.
It's over
The month-long bidding war over telephone companies US West and Frontier Communications reached an amicable end, with one target going to each suitor. Long-distance newcomer Qwest Communications will buy US West for about $36.5 billion, and undersea fiber-optic cable company Global Crossing Global Crossing will purchase Frontier for $11 billion. Global Crossing had originally struck agreements to merge with both Frontier and US West.
Hewlett-Packard, known to groom insiders for its top executive positions, reached outside to name Carleton "Carly" S. Fiorina as president and future chief executive officer. HP skipped over Ann Livermore, a 17-year veteran, to pick Fiorina, from Lucent Technologies. The Silicon Valley institution is trying to shed its lumbering reputation and remake itself as an Internet-savvy company.
Compaq Computer, rumored to be favoring outsiders, chose chief operating officer Michael Capellas to become its new president and chief executive, ending an anxious search that began with the April ouster of Eckhard Pfeiffer. Unlike HP's Fiorina, who won't take up the reins until Lewis Platt retires, Capellas steps in immediately. The former oil and Oracle executive also said he would focus on the Internet.
Microsoft agreed to sell the city guide portion of MSN Sidewalk to Ticketmaster for a combination of Ticketmaster stock and warrants. Microsoft will take an initial 9 percent stake in Ticketmaster Online-CitySearch, and could exercise a warrant to take as much as 13 percent, which would make the software giant the largest outside shareholder excluding USA Networks.
Yahoo said its $5.04 billion acquisition of Internet audio and video streaming company Broadcast.com is a done deal. The leading portal will begin integrating multimedia services throughout its network during the third quarter of 1999.
It's war
Following numerous delays, Microsoft released its instant message software, the giant's answer to America Online's popular Instant Messenger and ICQ offerings. The new MSN Messenger service is designed to integrate MSN Hotmail, the company's free email service, and make it possible for users to employ both MSN Messenger and other instant messaging software. AOL angrily tweaked its systems to rebuff attempts to connect via Microsoft or Yahoo clients.
For its part, AOL signed an agreement with Ameritech for the telco to provide high-speed digital subscriber line (DSL) service for portions of the Midwest, underlining its broadband competition with AT&T. AOL is methodically creating a patchwork of broadband Net access technologies (while carrying on a high-profile campaign to gain access to cable TV connections), while the phone giant has placed all all its eggs--roughly $120 billion in recent acquisitions--in one basket: cable. Both aim to deliver "rich" media content to users.
A handful of service providers and Internet portal companies aiming at the wireless phone market are toying with the idea of subsidizing portal-like cell phone services with highly targeted advertising. In return for having advertisements beamed straight into a standard digital phone--or pager, PalmPilot, or other wireless device--a consumer would get inexpensive or free access to information services like maps, calendars, personal messaging systems, and even entertainment functions like horoscopes or chat lines.
MTV will join forces with Diamond Multimedia subsidiary RioPort to expand its online offerings to include secure music downloads. MTV Networks will get a cut of revenues from the sales of music downloads, and will take a minority stake in RioPort.
Frontier is teaming up with Lucent to design and build an IP telephony network that could carry all of Frontier's voice traffic by the year 2002. The goal is to develop new software services and messaging products that can be used over networks previously limited to data.
Unexpected
High-profile religious leaders and former Education Secretary William Bennett unveiled a child-safe Net access service, promising to weed out "poisonous" content, but the company's own Web site is a potential gateway to pornography. This.com's embarrassment reflects the difficulty of curbing young Net surfers' access to adult content.
Software maker Red Hat plans to create a full-fledged Linux news service for its Web site, as part of its effort to increase market appeal and potential profitability.
The option to rent online access to enterprise resource planning software instead of buying it is expected to explode among mid-sized firms because they can save money and avoid managing complex systems themselves. SAP, Baan, and Oracle have long been searching for a way to reach the smaller companies that cannot afford to buy their software, which can cost millions of dollars.
Microsoft and consulting giant EDS have partnered again, agreeing to offer Windows NT and BackOffice services to business customers and train as many as 7,000 consultants in Microsoft technology. EDS says the commitment to Microsoft training is the largest to date by any company worldwide. Separately, Microsoft tapped E-Stamp as the postage-at-home application of its Office Update Web site.
Rambus seemed to lose its exclusive claim on Intel's plans for computer memory, as the chipmaking giant bowed to requests from PC makers and memory manufacturers and said it may release a chipset in the first half of 2000 that will function with a faster version of the memory currently found in most computers. Intel has maintained that it would jump from supporting the current memory standard to the more costly and somewhat controversial memory designed around the Rambus architecture, without an intervening step. The chipset serves as a communication bridge between the processor and memory; chipsets determine the kind of memory a given PC can handle.
High stakes
A highly charged House subcommittee hearing convened to scrutinize the nonprofit taking over administration of the critical Internet infrastructure ended up taking the dominant registrar to task as well. The House Commerce Subcommittee on Oversight and Investigations convened to address allegations that the Internet Corporation for Assigned Names and Numbers (ICANN) had overstepped its authority. But members quickly turned their attention toward Network Solutions (NSI), its domain name monopoly, and its alleged resistance to the transition to ICANN control.
The Federal Communications Commission plans to go to court to say regulation of cable Internet access is a national issue, not a local one--a position that essentially supports AT&T's stance against cable "open access." After months on the sidelines, the Washington agency finally jumped into the high-stakes battle over opening high-speed cable lines to competing phone-based ISPs. FCC chairman William Kennard said his agency would file a brief in a recent Portland, Oregon court case that has opened the door for local regulation of cable networks.
Separately, as the final decision on the merger between SBC Communications and Ameritech draws near, Kennard encouraged state regulators to weigh in with conditions on the deal, to feel free to impose their own new requirements on the corporate marriage.
Legislation that will limit lawsuits sparked by the Year 2000 technology bug was finally signed into law by the president, who had fought the measure.
Also of note
June PC retail sales climbed 35 percent as hardware makers and ISPs teamed up to offer rebates for those who agreed to three-year contracts for Internet access ... IBM is supplying Apple with a special PowerPC chip for its new iBook consumer portable, indicating that Big Blue is still interested in the mainstream processor market ... Palm Computing introduced the Palm IIIe, a lower-priced device targeted at families and consumers and its fourth new product this year ... Executives from computer hardware companies urged lawmakers to keep e-tailers free of tax-collecting responsibilities ... SGI vaulted over dire expectations of a loss-making quarter, posting a profit of 12 cents per share that far outstripped analyst predictions of a 5-cent loss.