Aug 31 2002 Modern PC News

Technical, Business and Product News from the Modern Computer World... Updated Once Per Month

Hewlett-Packard reported a net loss of $2 billion for its first quarter of combined operations with Compaq, as the company absorbed $3 billion in expenses related to layoffs and other merger costs. But execs promised better performance for the current quarter as the new HP wrings costs from its money-losing PC and server businesses

...During its third quarter, HP reported $1.6 billion in pretax expenses for restructuring and $1.4 billion in other acquisition costs. HP has said it plans to lay off 10,000 workers this fiscal year, nearly half of which was done in the third quarter. Excluding those items, HP's earnings would have been 14 cents per share. The company also told analysts that it's still comfortable with fourth-quarter earnings estimates of 22 cents a share. HP says it's on track for cost savings of $500 million this year and $2.5 billion in fiscal 2003 as a result of the merger...

Microsoft has introduced its Windows XP Service Pack 1 which, according to Microsoft’s documentation, is “aimed at ensuring licensed customers receive full benefits… product updates and Access to Windows XP Updates.” What Microsoft XP Service Pack 1 (SP1) is really designed to do is “to make it more difficult for those who pirate software to steal these same benefits.”

A summary of SP1’s changes from Service Packs of the past includes:

(1) When XP SP1 installation is attempted, SP1 will not load with previous “well known” pirated product keys, and will further verify the product key against a current product key list

(2) Once a hardware change is made to a PC that requires re-activation of Windows XP, licensed users will have a grace period of 3 days (previously required immediately) to re-activate Windows XP

(3) SP1 includes a Volume License Key (VLK) encryption that is added to unattended setups of Windows XP

(4) A product key used to install Windows XP will become part of the Installation ID for all future activations after SP1

(5) The entire product key will be sent upon Internet log in/activation, while a hash value of the product key will be sent upon telephone installation

(6) “Fixes” to software piracy cracks will be embedded in SP1 to prohibit SP1 activation

(7) Installations of Windows XP that have been repaired/patched by a crack must be completely reactivated upon SP1 installation.

Reports have been coming in from retailers and companies all over the world to us saying that Microsoft (sometimes via the SPA) has been aggressive in auditing (or sending letters threatening to audit) them to make sure that are fully compliant with Microsoft licenses.

This has led to a mad rush for many companies and users to "true up" now or be forced to deal with the consequences later. Many are convinced that this is nothing more than a strong arm harassment tactic by Microsoft to raise their stock price and teach the government a lesson. No matter, Microsoft is going after these missed profits and unhappy or not customers are paying the price to get legal.

Personally, I can't wait to see the expressions on all of the faces of those running illegal copies who happen to have auto updated engaged, if and when they start forcing Service Pack 1 down to all of the XP machines and one by one these systems stop working or need to be reactivated. We are not going to say that we told you so, but when product activation was first announced, we were sure that this was going to be a possibility as soon as the cracks arrived so publicly on the Internet.

Next will be Microsoft's master plan to start to rent the use of software to users on a per term basis. Yep, this is where I think this is headed folks, so don't be surprised if this is the next move in the game.

For complete information on Windows XP SP1 Click Here

America Online, the Internet unit of media behemoth AOL Time Warner Inc. said it plans to launch its new Netscape Web browser on Thursday, marking its latest effort to challenge the dominance of Microsoft Explorer as the standard tool for surfing the Internet.

The software, which has been in user tests since May, promises faster and easier navigation of the Web, although surveys show its market share has been dwarfed by Microsoft Corp.

Research firm WebSideStory issued a study that says that Netscape's global usage share has dropped to 3.4 percent, compared with 96 percent held by Microsoft Explorer, a turnaround from the mid-1990s when Netscape was dominant.

AOL bought Netscape in late 1998, months after it had struck a deal to use Explorer in its online service. The latest version of Netscape is aiming for mainstream users such as AOL's 34-million-plus user base rather than the tech-savvy developers that have gravitated toward Netscape.

The company has not yet decided to replace Explorer with Netscape in its new version of AOL set to be launched this fall, Netscape spokesman Marty Gordon said.

It is currently being tested in some versions of its service and launched a version of its discount Internet service CompuServe with Netscape technology. "We've been testing the browser and it's been gaining great momentum," he said. "We feel we have the wind in our sales. Netscape is alive as well."

...Microsoft has since said that upcoming updates of its operating system (in Windows 2000 SP3 and Windows XP SP1) will allow computer makers and consumers to add and remove access to features like Explorer and others, in an effort to comply with a settlement of the antitrust case.

Apple ( Nasdaq: AAPL - news) Computer's new Jaguar operating system opened like a hit summer movie, drawing more than 50,000 people to Friday night's opening events and selling more than 100,000 copies in its first weekend.

...According to both IDC and Giga estimates, Apple's share of the operating system market is now below 4 percent, down from an estimated 16 percent before the introduction of Windows 95.

Apple has been all but forced out of the business and educational markets, Giga's Enderle told NewsFactor, and if it disappears completely from those markets, it is likely to lose its consumer market share too. Noting that most people do not want computers for their homes that their families would never encounter at school or work, he said, "It becomes hard to justify the Apple purchase."

...Most important is that Apple operating systems lock buyers in to Apple hardware. In contrast, Windows is available on a wide variety of hardware platforms. Although the company says that its control over hardware, the operating system and major applications allows it to produce a better, more integrated product, IDC analyst Gillen argued that buyers would prefer to have a choice of hardware.

If Apple insists on using its operating systems to sell hardware, Enderle said, it probably would be better off bundling the OS with the hardware. At the very least, he added, the company should lower the price of its operating system and allow free or low-cost upgrades.

Indeed, Apple's policy of offering a low upgrade price only to users who purchased the previous version of the software since July 17th angered many users. In a typical comment on a user forum, one potential buyer asked: "Why would I buy a Mac with OS X 10.2 when they're just going to release a newer version in a few months and expect me to pay the full price for it?"

Apple has also suffered because not all applications have been ported to the OS X operating system. The Unix ( news - web sites)-based OS X is very different from its predecessor, and migration is relatively difficult. "They didn't do a good enough job of backward compatibility," Enderle told NewsFactor. "Quark never came across for OS X, and they desperately need Quark. At the very least, they have to build a better Windows emulator."

Finally, according to Enderle, Apple has paid too little attention to system administration in the business environment. Management tools are inadequate, and remote administration is impossible. In the future, he said, PCs are likely to be centrally managed by service providers, but Apple has done nothing to prepare its products for such a development.

Unless Apple can address these issues, according to analysts, it has little chance of gaining ground against Windows. In fact, Giga has predicted that OS X is helping to drive Apple's market share further downward, toward 2 percent. "And then," Enderle noted, "it becomes hard to take them as a serious vendor."

Like researchers at other companies, scientists at the chipmaking giant are experimenting with one of the dominant trends in microprocessor design: putting two chip cores, or "brains," into the same piece of silicon--an approach that promises to improve performance and reduce power consumption over the next decade. But Intel's people are pushing the basic concept into new directions that will, the company asserts, increase such benefits even further.

In "core hopping," for example, a stream of calculations will jump from one microprocessor core to another. Localized heat generated by transistors during intense number crunching can create "hot spots" that place a ceiling on performance, said Wilf Pinfold, technical director of microprocessor research at Intel labs. By rotating application processing, key transistors will stay cooler, heat will be more geographically spread and overall performance will climb.

Other areas of research involve specialization, where small chips within a chip perform specific jobs such as encryption or compression, improving processing prioritization...

Nortel had previously announced plans to cut its workforce to 42,000 by the end of September, and now plans an additional 7,000 job cuts, said Nortel spokesperson Ben Atherton. Nortel expects the restructuring activity to be substantially completed by the end of 2002, at which point the company will have a work force of about 35,000, according to the statement.

A Nortel spokesperson in Canada said the company is not commenting on what jobs will be cut, and the company was also unable to say which locations will be affected.