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The week in review: WorldCom's apology

CEO John Sidgmore goes to Washington to apologize and to pledge that financial irregularities are in the company's past. Also: Intel readies its upcoming Itanium 2 built for two speeds.

A week after WorldCom revealed one of the largest accounting scandals in history, CEO John Sidgmore went to Washington to apologize and to pledge that financial irregularities are in the company's past.

In his first public appearance since the announcement of the $3.85 billion accounting scandal, Sidgmore acknowledged that there has been an outpouring of outrage and anger directed at his company and promised to do whatever was necessary to regain the public's trust.

Sidgmore met with Securities and Exchange Commission President Harvey Pitt, who had blasted the company for giving the SEC a "wholly inadequate and incomplete" answer when asked to account for how the intentional accounting error took place.

Meanwhile, WorldCom said it has received notice that it defaulted with some of its creditors. Lenders for its $2.65 billion and $1.6 billion senior unsecured credit facilities may begin asking for immediate payment, the company said. When trading of the stock resumed this week, WorldCom shares fell 92.4 percent, or 77 cents.

In the chips
Intel's upcoming Itanium 2 processor will come out at 900MHz and 1GHz and cost about the same as existing Itanium chips. In all, Intel will release three versions of the 64-bit chip for high-end servers next week: a 1GHz version containing 3MB of level-three cache memory, a 1GHz version containing 1.5MB of cache, and a 900MHz version containing 1.5MB of cache.

Prices will range from about $1,300 for the 900MHz version to $4,200 for the 1GHz version with the 3MB cache. Current Itanium processors sell for between $1,177 and $4,227.

Intel was dealt a setback when Dell Computer, the largest PC maker in the world, said that it had no definite plans for Itanium 2 servers and would not be on hand when Intel unveils the chip next week. "At this point, we are in a bit of a wait-and-see mode with Itanium 2," a Dell representative said.

Dell's reluctance comes down to demand. The company is still in the process of gauging how popular the chip will be with customers. Unlike other Intel chips, the Itanium family requires completely new software, and the software is just now being developed.

Apple's crop
The widely anticipated update to Apple Computer's Mac OS X will appear earlier than expected, which is good news for the company in a tough year. The new version, code-named Jaguar and officially known as Mac OS X 10.2, is now expected to ship in early August, barring unforeseen difficulties. In May, Apple indicated the operating system would ship by the end of summer, which many analysts took to mean the end of September or even October.

Though Jaguar's debut might not make for huge revenue gains, an early release would give Apple a chance to squeeze out additional sales in a year when consumer spending has been flat. The back-to-school season--the second-biggest period of the year for PC sales and one of Apple's busiest seasons historically--runs from late August to the end of September.

Apple also began shipping its Xserve rack-mounted server, which runs Unix-based Mac OS X. Apple says that it has received a healthy crop of early Xserve orders--more than 4,000. Each unit can support up to four 120GB hard drives; the PowerPC processors come with 2MB of level-three cache memory for throughput of up to 4GB per second; memory is expandable to 2GB; and the software package includes the Apache Web Server and QuickTime Streaming Server.

Apple is singing a new tune with the acquisition of Emagic, which makes production software for professional musicians. Emagic's most popular product, an application called Logic, is used by more than 200,000 musicians worldwide.

Apple has significantly beefed up its stable of software for creating multimedia and movie special effects for its Macintosh technology. Last month, the company acquired video graphics software from Prismo Graphics. Earlier in June, it bought digital effects software from Silicon Grail.

Also of note
In a move that could bring Microsoft and the Justice Department closer to an approved settlement deal, a federal judge said that both parties had complied with laws governing antitrust settlements...Gateway refreshed its line of business desktops, adopting a new platinum design scheme introduced in April...Sun Microsystems is preparing a new release of its Java software for cell phones that it hopes will prevent a splintering of the Java market and stave off rivals such as Microsoft...Listen.com announced that it has won rights to distribute music owned by Vivendi Universal's Universal Music Group, the last big label to sign on to its Rhapsody service...Approximately 1 billion PCs have been shipped worldwide since the mid-1970s...A software development project aimed at getting the Linux operating system to run on Microsoft's Xbox is offering a larger incentive for would-be developers--to the tune of $200,000.

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