The week in review: Party crashers
Product delays, executive departures, declining prices, and even debunked rumors add a bit of life to an otherwise dull August week in high technology.
Among the notable disappointments, chipmaker Intel surprised the industry by postponing the release of its Pentium III processor for notebooks until October or November, cutting into high-volume holiday sales. Meanwhile, Alan Baratz unexpectedly stepped down as president of Sun Microsystems' software division.
Devastating?
Manufacturers had expected the portable Pentium chip, code-named Coppermine, to appear next month. "We are all shocked that Intel has done this, pushing it back that much," said one maker. "We had heard rumors of a delay, but a month is pretty significant." The delay is the latest in a string, notably including Intel's first 64-bit chip.
Baratz, principally charged with advancing Sun's Java technology in a wide range of initiatives, is leaving at a time when the company's core software projects are either fueling sales or on the brink of pulling in significant revenue. At the same time, Java has yet to turn a profit and remains caught in several thorny licensing and standards issues that have lingered for years.
Microsoft said it's considering low- or no-cost Internet access that would compete for customers of America Online and other services. The software giant's MSN Internet service is a distant second to AOL, which boasts nearly 18 million subscribers who pay $21.95 per month, but the latter's stock nonetheless took a dip on the news.
For its part, AOL enlisted help in its messaging war with Microsoft by inking deals with fellow Internet service providers EarthLink and MindSpring. The two prominent ISPs will distribute a cobranded version of AOL Instant Messenger (AIM).
Sui generis
SGI is paring several development projects and eliminating jobs, laying off dozens of advanced graphics division engineers who were working on high-end computers used for visualizing complex graphics (such as models of planes). The moves seem destined to make the company more profit-oriented, but also more generic.
Upstart PC maker Emachines, which has grabbed headlines and market share by offering ultracheap computers, is training its sights on Apple with a system that resembles the iMac. The success of Apple's desktop has largely owed to its unconventional look, which is why PC makers have begun eyeing different designs.
EarthLink filed suit against troubled low-cost computer maker Microworkz, less than a week after breaking off its agreement to provide Net access for machines sold by the sub-$300 PC pioneer. Earthlink claims it hasn't received fees. Undaunted, AT&T promptly stepped in to fill Earthlink's role.
The price of color-screen handhelds based on Microsoft's Windows CE operating system has dramatically fallen, shortly after appearing on store shelves. Cuts reflect intensified competition, relatively low sales, and expectations of upcoming products, not to mention consumer confusion.
Debunked
Excite@Home president George Bell flatly denied a report that his Internet services company is in talks to merge with Yahoo.
Federal communications officials are holding up critical operating licenses for Globalstar and a handful of smaller satellite phone services while they negotiate with the FBI over wiretapping issues. The bureau and other U.S. law enforcement agencies are worried that new space-based telephone systems, which theoretically allow a person to use a wireless phone from virtually anywhere on Earth, will undermine their ability to wiretap telephone calls and trace criminals through cell phones.
Dell Computer moved a step ahead in the Windows NT-based workstation race, taking first place from rival Hewlett-Packard in both shipments and revenues in the United States. But HP retains worldwide leadership, and Dell still has to contend with workstations based on the Unix operating system.
With the holiday shopping season creeping up fast, several laggard retailers that missed last year's online rush expected to be selling soon. The newcomers include home furnishing company Pier 1, apparel retailer Banana Republic, and upscale home-product company Williams-Sonoma. Retail giant Wal-Mart, which is selling a limited number of items online, is also expected to expand its e-commerce store later this year.
Fast paced
Intel announced its fastest Pentium III and Celeron processors yet, and PC makers followed with a deluge of new systems that will be some of the cheapest and most robust PCs to debut at this price.
The rapid growth in Internet banking services has left U.S. regulators scrambling to keep up, according to the General Accounting Office. The number of U.S. banks, thrifts, and credit unions that allow customers to perform transactions such as paying bills and transferring funds online has leapt from just one in December 1995 to 2,100 by June this year.
Bell Atlantic, Pacific Bell, US West, and other so-called Baby Bells are readying multimillion-dollar media blitzes, scheduled to hit later this summer or early fall, advertising their high-speed Internet services. The telcos hope to rework their consumer image, fashioning themselves as high-tech gateways to the Net.
Also of note
IBM and 3Com signed a cross-licensing agreement valued at more than $1 billion, covering an extensive portfolio of networking and communications technologies ...
The music industry settled its federal lawsuit against Diamond Multimedia, formally ending a campaign to block the company from selling its Rio portable music players ... Lycos acquired Net music software Sonique ... Microsoft and Palm Computing don't agree on much, but separately announced support for a messaging standard for wireless devices ... Microsoft continues working on a patch for a widely publicized security hole in its Office 97 software suite that could allow malicious code to take over a user's PC ... Road Runner formed an advertising and e-commerce sales unit, its first serious attempt to sell online ads.