The week in review: Intel hits a speed bump

The chipmaker recalled its fastest chip--the 1.13-GHz Pentium III--saying the chip could cause system errors when running certain programs and at a particular temperature. The problem is with circuits of the chip that have been shown to malfunction in laboratory tests under certain conditions.

While Intel worked in its labs to isolate problems with its 1.13-GHz Pentium III, it also worked with reviewers at several hardware sites who noticed problems during initial reviews a month ago. One site published a harsh review of the chip July 31, the day the processor was released.

As Intel struggled to speed up its Pentium III, Advanced Micro Devices cranked up its Athlon processors again with the 1.1-GHz Athlon. Compaq Computer, Fujitsu Siemens, Gateway, Hewlett-Packard and IBM are among the computer makers expected to adopt the chip.

Intel's pain is not necessarily Advanced Micro Devices' gain, however. Competition from AMD contributed to Intel's recent production problems, but analysts said AMD's limited chipmaking capacity will prevent it from cashing in on the embarrassing mistakes.

In an unrelated move, Intel cut prices on its products by as much as 34 percent. The company dropped the price of 933-MHz Pentium III Xeons used in server computers to $558 from $719 each in volume purchases after introducing a speedier, 1-GHz Xeon.

Patently on the offensive
Intel filed a federal patent infringement suit against Broadcom, charging the communications chip company is building its business on Intel's know-how. In the suit, Intel alleges Broadcom has violated five Intel patents, one relating to networking, one to chip packaging and three to video compression. Intel is seeking an injunction preventing further infringement, plus unspecified damages and court costs.

Intel also updated its legal action against Taiwanese chipmaker Via Technologies to include new claims of patent infringement. The two companies settled many of their differences last month, but Intel is still pursuing charges that a Via chipset supporting AMD processors violates Intel patents.

Memory chipmaker Micron Technology filed a lawsuit against Rambus, resisting the company's efforts to collect royalties on some of the most popular PC memory technologies. Micron accused Rambus of enforcing patents that are invalid. Micron further asserted that it has not infringed any Rambus patents, declaring them unenforceable. Rambus said that before Micron filed the suit, Rambus had initiated negotiations with Micron over the intellectual property dispute.

Hyundai Micron Technology is going to court to challenge Rambus patents on memory chip technology. The Korean chipmaker, like Micron, filed suit to pre-empt any legal action from Rambus. Rambus, which developed a high-speed memory interface and has a variety of patents on memory chip technology, has sought to force memory chipmakers to pay a license fee, not only for the Rambus memory standard but also for standard memory.

Unclenched Palm
Sony and Palm unveiled the Clie, the first fruit of their alliance and the Japanese electronics giant's much-anticipated entry into the handheld computing market. The basic, monochrome personal digital assistant (PDA) is the first product from Sony since it licensed Palm's operating system last year. Far from a unique take on the basic PDA, the Clie resembles a narrowed Palm V with the addition of a Memory Stick slot and a jog dial for navigation.

A software programmer created the first known Trojan horse for a Palm, raising questions about a possible downside to the company's legions of loyal software developers. A malicious program masquerading as an illegal, but free, version of the popular gaming application Liberty has been making the rounds of Palm newsgroups and chat rooms since late last week. The arrival of the software, which has the potential to wipe out all the programs stored on the device, is believed to be the first Trojan horse for the Palm.

The lockup period for Palm expired--an event that had raised fears among some investors of a potential sell-off but actually passed quietly. Fears were heightened as a result of incorrect information that circulated on some Web sites stating that 530 million shares, or 90 percent to 95 percent of Palm's outstanding shares, were coming out of lockup. The expiration affected fewer than 5 million Palm shares, or about 1 percent of the 570 million shares outstanding.

Palm, Handspring, Sony and other makers of handheld computers may have trouble filling orders this holiday season because of the ongoing parts shortage. Supplies are lagging in part because of a scarcity of components such as liquid crystal displays, color screens and flash-memory chips.

End of the music for MP3.com?
Lawyers for MP3.com tried and failed to turn the tables on Seagram's Universal Music Group in court, countering charges of copyright infringement with accusations of anti-competitive tactics by the record label. MP3.com's legal team drilled Seagram's chief executive, who took the stand in the trial aimed at determining how much money the online music company must pay Universal for unauthorized use of its songs. The move to portray Seagram's music division as anti-competitive mostly backfired, with the judge criticizing the legal team for promoting a "publicity circus."

The judge is expected to rule Wednesday on whether MP3.com willfully violated copyrights and must pay millions in damages to Universal.

Depsite its legal woes, MP3.com unveiled a service that will email Net music fans radio-edited songs. Instead of tuning in to the radio to hear a new single, people will be able to pull "single-serve" songs from their email in-boxes. People will be targeted based on musical preference and location, and the recipients will also be able to email the song to friends.

One of the most popular meeting spots for trading MP3 songs and information on the underground Internet Relay Chat network closed its virtual doors. MP3Cafe had been a place where hundreds of people at a time would gather to download music, chat about bands, and trade information about other file-swapping nodes on the Net. While the activity was minor compared with the activity on Napster and similar services, it was a tight and active community.

See you in court
Federal law enforcement authorities arrested a 23-year-old Southern California student in the stock manipulation case of technology company Emulex, which saw its stock plunge more than 50 percent as investors reacted to a fake news announcement. Mark Simeon Jakob is accused of wire fraud, acting with intent to defraud, participating in a scheme to defraud and securities fraud. Jakob worked at Internet Wire, the corporate news service that distributed the faux press release, until Aug. 18.

Apple Computer identified an employee it believes leaked trade secrets about unannounced products on an Internet chat board. The company amended its Aug. 2 lawsuit to name a company worker as the "Doe 1" accused in court documents of posting confidential details on Apple products on the Web using the pseudonym "worker bee."

Federal regulators filed civil and criminal charges against a former Nvidia engineer, alleging he gained nearly half a million dollars in profits from insider trading. The San Jose, Calif., resident is accused of receiving $446,724 in profits after he purchased call option contracts last March. He allegedly purchased the contracts a day the company entered a contract to provide 3D computer graphics and multimedia systems for Microsoft's Xbox video game console.

A judge allowed a class-action suit to proceed against Microsoft on allegations that the software giant's monopoly harmed California consumers. This is the first such class-action case against Microsoft to go to trial, despite dozens lingering nationwide.

So far, Microsoft has knocked off cases in seven states--Hawaii, Iowa, Kentucky, Nevada, Oregon, Rhode Island and Texas--using a technicality. But that precedent does not apply in California, making private lawsuits there the first to be potentially tried on their merits. But the odds still favor Microsoft.

Also of note
Microsoft is fine-tuning an overhaul of its MSN Internet service that imitates numerous features from arch rival America Online...California lawmakers are hoping to send a bill to the state's governor next week that would require businesses to add sales taxes to online purchases made by state residents...Apple plans to release a public test version of its OS X, one of the most significant revisions to the Mac operating system, on Sept. 13...VoiceStream Wireless, which was recently bought by German communications giant Deutsche Telekom, said it will buy U.S. cell phone company Powertel for $5.75 billion...In what will be the second-biggest merger in semiconductor history, Applied Micro Circuits said it will buy MMC Networks for about $4.5 billion in stock.