Friday, 11 March 2005 18:00

News Roundup 11 Mar 2005


Government committee clears way for IBM-Lenovo deal

The US Committee on Foreign Investment in the United States has completed its review of the proposed US$1.75 billion sale of IBM's personal computing division to Chinese company Lenovo, and cleared the way for the deal to be completed, according to a statement by IBM and Lenovo.

"With the review by the US government complete, IBM and Lenovo are moving quickly to integrate the two companies and expect to finalise the transaction in the second quarter, as planned," said Steve Ward, an IBM senior vice president and general manager of IBM's Personal Systems Group, reports The Mercury.

Ward will serve as Lenovo's chief executive.

In January, the committee convened to investigate any national security implications of the proposed sale after three members of Congress raised questions about the sale.

Lenovo is partially owned by the Chinese government.

Only one deal has ever been blocked on national security grounds. In 1990, President George HW Bush stopped the sale of a Seattle aircraft parts manufacturer to China, the paper reports.

IBM, Lenovo aim for big growth

China's Lenovo Group, which is buying IBM's PC business, will use the association with the world's largest computer maker to sell its own products, but rivals see the change in ownership as an opportunity.

"We have structured our company in such a way to grow faster than the industry," Stephen Ward, chief of IBM's PC business, who will become CEO of the new Lenovo, told Reuters in a phone interview in which he reported US legislators would not halt the deal over security concerns, report The New York Times/Reuters.

Dell and Hewlett-Packard, the No. 1 and No. 2 computer makers, said they are ready to capture corporate customers uncertain about the deal, and HP added that its size in the consumer market gives it a big lead over Lenovo there, says Reuters and the NYT.

Ward said the new Lenovo is planning to selectively target product segments and regional markets that offer it rapid growth, such as Asia, rather than trying to offer all things to all customers.

The global PC industry is expected to grow around 5 percent this year. Ward declined to forecast a specific growth target for the new Lenovo, but said the combined market share of Lenovo and the IBM PC business in China will represent nearly one-third of that market. China, the world's second-largest PC market, is growing seven times as fast as the United States, which is still the volume leader, says the Reuters/NYT report.

Ward said the new Lenovo plans to move aggressively in India and Latin America and generally use IBM's global sales reach outside China.

The new Lenovo stands to be highly competitive in the corporate notebook market where IBM ThinkPads have long carried status appeal, analysts said.

Lenovo will also have a range of PC products aimed at consumer and small-business markets that IBM has lacked since it withdrew from such markets seven years ago, although HP said taking share would not be so easy, the paper reports.

Dell told investors at a Morgan Stanley conference on Tuesday that the consolidation of the industry was coming as other PC makers find it hard to match Dell's manufacturing and distribution efficiencies, according to the Reuters/NYT report.

Dell is growing at more than three times the rate of the industry and typically only targets markets where it can sell directly over the web or by phone, and then grows rapidly in those markets, the report says.

All talk is about VoIP

The buzz over VoIP is getting louder and even starting to take centre stage,but at this week's Voice Over Net conference in California, it was clear that companies big and small are barely past the starting gate when it comes to widespread adoption of Voice over Internet Protocol technology, which could one day transform the plain old telephone.

Reporting on the conference, The Mercury News said (9 Mar.) that US Federal Communications Commission Chairman Michael Powell told attendees that the potential of what VoIP can eventually deliver to consumers and businesses -- from a high-tech 911 system to high-quality video communications -- was still relatively unknown, but "holds enormous promise,"

The trade show is expected to bring in more than 6,000 people, almost double last year's attendance.

The Mercury says that start-ups such as Santa Clara's TelTel were excited about the potential of differentiating itself from other VoIP companies and attracting partners that might find something unique in its instant-messaging-like service.

The paper says that the service -- which is available as a free beta download from -- brings the popular IM experience to voice communications by allowing users to place and receive calls over the internet via the ``Buddy List'' window on their computers. For now, the buddy lists are limited to others using the TelTel service, but the company is hoping to integrate other IM services -- such as Yahoo, MSN and AOL -- into its offerings.

The Mercury said there was also a growing number of big names whose presence sent a message that VoIP is here to stay. At the show, America Online announced the launch of an internet voice service that will be offered to its more than 20 million members in about a month. The service will be tightly integrated with some of AOL's other services, such as instant messaging and e-mail.

The paper also reported that San Jose's Covad Communications Group is pitching a VoIP offering for businesses, positioning itself as the all-in-one provider that can control the quality of the internet connection for both voice and data services. That would allow multiple phone calls and access to large data files without overwhelming the connection.

And, reports the paper, AT&T -- which has already launched its CallVantage VoIP service for consumers -- has its eyes on business customers, as well. AT&T Labs, the research and development side of the company, showcased possible future internet-based services for the office -- from Virtual PBX systems to advanced video-conferencing services -- at the show.

But as flashy and futuristic as VoIP technology appears, there are plenty of issues that need to be addressed before it can truly gain widespread adoption.

UK IT market beats Europe

The market for Information and Communication Technology is back to growth across the world. Europe is growing faster than the US and the UK is growing faster than the rest of Europe. But China is growing fastest of all.

The Register reports (9 Mar.) that according to figures from trade association Intellect, the European ICT market will grow by four per cent this year, compared to 3.3 per cent last year and just 0.9 per cent in 2003. There is strong growth in new EU member states as well as in the UK and Ireland. The figures come from Intellect's European Information Technology Observatory (EITO) 2005 edition.

The online IT news publication says the study shows that the UK is doing better that the EU as a whole and the market is expected to grow 4.6 per cent this year. The US is out of the downturn too and is predicted to grow at 3.9 per cent. Japan, however, managed growth of just 2.7 per cent.

According to The Register report, growth in the ICT market for the rest of the world is expected to hit 6.9 per cent, mainly fuelled by China.

Accordingly, Intellect warned that the UK should not rest on its laurels because of rapidly increasing international competition, particularly from China and India, says The Register.

Singapore tops US as best IT User

Singapore has overtaken the United States as the world's best user of information and communications technology, with three Scandinavian nations close behind, according to a survey issued on Wednesday.

The New York Times/Reuters report (9 Mar.) tha the United States dropped to fifth from first behind Iceland, Finland and Denmark in the annual Global Information Technology report by the World Economic Forum (WEF).

According to the paper and Reuters, Singapore ranked top in maths and science teaching, affordability of telephone connection charges, purchasing of information and communications technology (ICT) and the priority given to ICT by governments, the WEF said.

But the United States was still top in business readiness, another of the report's benchmarks, as well as in the excellence of its scientific research and business schools, says the paper and Reuters.

Sweden ranked sixth and Japan and Taiwan entered the top 10 for the first time. Beside the US and Canada (10th), the highest rankings went to Nordic and Asian countries.

The paper reports that Estonia was the top central and eastern European country, at 25th out of the 104 countries surveyed, while Chile was the highest placed Latin American country at 35th.

Tunisia (31) was the best placed country on the African continent and South Africa (35) the highest ranking country in sub-Saharan Africa.

Oracle's bid draws no comment from SAP

SAP has yet to match Oracle's bid for retail software vendor Retek. Oracle this week made a US$525m offer for Retek, topping SAP's US offer from last week.

The Register reports (9 Mar.) that SAP has no further comment at this time, but did want to point out that as a middleware maker it's in a better position to sell Retek's software than, say, a database company.

"SAP believes that integration at the applications level - rather than at the database level - is what will drive competitive advantage for companies looking to align their IT infrastructure in order to respond swiftly to changes in the fast-moving retail market," a company spokesman is reported as saying. Moreover, SAP is committed to openness to all databases in the market, not locking customers out of choices. SAP remains strongly committed to the retail industry," the spokesman added, reports The Register.

Xbox2 2nd version

Microsoft's second version of its Xbox console will feature a CPU with PowerPC cores, according to GameSpy, which claims to have scooped the specifications, reports The Register (9 Mar.).

The Register says that expectations that the console would be formally announced at the Game Developer Conference in San Francisco this week were quashed last month.

Xenon, as it's codenamed, will feature ATI's next-generation graphics card and a 12X dual-layer DVD. The system will also have a camera, to liven up online gaming, while the hard disk is optional.

The Register says Sony's third-generation PlayStation will use the 4Ghz Cell processor jointly developed by IBM, Toshiba and Sony's microprocessor division. Sony is expected to unveil its killer handheld PSP in May.
Microsoft's entertainment division turned in its first profit in the most recent quarter, thanks to sales of the game Halo 2 - but executives don't expect it to be consistently profitable until 2007, The Register also reports.

PlayStation goes mobile

The imminent arrival in the market of Sony Playstation's Portable, a hand-held video game,is a leading topic of conversation this week in San Francisco at the Game Developers Conference, an annual industry event, reports The New York Times (9 Mar.)

The NYT reports that more than 100 game developers and publishers, large and small, from Electronic Arts to Planet Moon Studios, are planning to make special content for the device. Sony promises that 24 games, most of them US$40 to US$50, will be ready when the PlayStation Portable goes on sale on 24 March with one million devices available to retailers that day.

The paper says some "early adopter" users of the Sony Playstation traveled to Japan to buy theirs when they were released in December. Others paid resellers premium prices - sometimes more than twice their US$250 retail price - to call them their own before their arrival in stores in North America in two weeks.

The NYT says Sony's PlayStation Portable is aimed at redefining entertainment on the go - and not just for young gamers.

For Sony, which has faltered in recent years in some electronics categories it once dominated, it is a big bet, says the paper. The company often refers to the PlayStation Portable, the descendant of the original PlayStation, born 10 years ago, as the first truly integrated portable entertainment system.

Besides playing a new class of interactive 3-D games on its 4.3-inch liquid-crystal-display screen, the PlayStation Portable can play full-length movies, music videos, home movies and digital snapshots with startling clarity, reports the NYT.

The paper reported that Warren Wall of Electronic Arts said the company quickly realised the potential of the device, and two years ago created a 200-member group called Team Fusion, which he leads in Vancouver, British Columbia, to develop games exclusively for the new Sony device. He said Electronic Arts would offer five new titles at the outset. All the games, he said, have been painstakingly reworked to take advantage of the device's PlayStation-like controls and its screen - capable of 16.7 million colors - which he described as amazingly brilliant.

David Cole, president of DFC Intelligence, a research firm in San Diego that focuses on interactive entertainment, said that with the new device Sony was clearly hoping to lock in an older consumer than the typical teenage and young adult gamer, reports the NYT.

His company forecasts the portable gaming market will expand to an estimated US$11.1 billion in 2007 from US$4 billion last year, the paper reports.

Lucent getting into storage

There will soon be a new and unlikely storage company in town - Lucent, reports The Register, revealing that
the networking company has confirmed that it has a hosted storage service pilot program underway.

The Register says that Lucent has set up a data centre in tandem with EMC that provides storage systems and networking gear to customers. The pilot could go live as an actual service within two months.

The online IT news service says that Lucent first revealed word of this storage service at CeBIT where an IDG News Service reporter caught wind of the plan. At this time, Lucent is reluctant to provide much more detail other than to say EMC will supply the storage gear, and it will supply some optical networking hardware. Customers will basically tap into a Lucent-run SAN and have Lucent manage their applications, reveals The Register.

"It's generic storage," John Meyer, president of Lucent's worldwide services division told IDG. "We are linking the customer's applications to the storage center and back. Our intention is to take this and expand it to multiple clients," reports The Register.

Lucent already provides managed services in the areas of VoIP, networking and security.

The Register says that storage would seem to be a "weird extension" for Lucent in some ways. The market for managed storage is already quite full and companies such as Sun Microsystems and IBM - with more direct ties to storage kit - have made hosted storage a priority of late, observes The Register.

Lucent's networking expertise, however, could come in handy as storage systems, servers and switches start to blend together. The company is also in need of new business, due to the painfully shrinking telco equipment market, says The Register.

eBay fraudster faces possible jail

A 17-year-old teenager who admitted ripping off people by selling them non-existent goods via eBay could be jailed, reports The Register (9 Mar.).

The Register reports that Judge Roderick Denyer told the teenager at a hearing at Cardiff Crown Court in Wales yesterday: "I take an extremely serious view of defrauding on the eBay and it clearly raises the possibility of a custodial sentence."

The teenager - who cannot be named for legal reasons - admitted 21 fraud charges and asked for a further 64 offences to be taken into consideration, The Register reports.

Google inspires new products from competitors

Google has so firmly staked out its place as the internet search-engine leader that it has even earned a place as a verb in the English lexicon and, Google's success has forced competitors like Yahoo, MSN Search and Ask Jeeves to hustle with releasing new product features, search controls and improved behind-the-scenes programming. The resulting bonanza of tools brings more search capabilities, presented more intuitively than the web has ever seen, reports The New York Times (9 Mar.).

The paper says, however, that despite the advances, it may be users' search habits that present the biggest barrier to improving the search experience.

According to the NYT., the pressure to produce isn't just coming from Google. In April 2003, Ask Jeeves added "Smart Search" to its engine, which tops search results for definitive queries like "Who is George Washington?" with answers - like an encyclopedia citation and a photograph - in addition to web links.

That same month, says the paper, Yahoo provided shortcuts to its own topic pages on popular subjects. The top result for "weather in New York," for instance, leads to Yahoo's New York City weather page, with current conditions and a five-day outlook.

The NYT says associating database content with queries caught on. AOL Search now provides information from partners' content and its own; these "snapshots" in fields like entertainment, sports and shopping link to editor-selected information from publications within the Time Warner media universe, including Entertainment Weekly and Sports Illustrated. Likewise, MSN Search returns links to information from its own specialized databases, like MSN Music, and Microsoft's Encarta encyclopedia.

The paper also reports that Ask Jeeves will introduce technology this spring (US) that will further the question-and-answer abilities of its engine. The new feature, Direct Answers From Search, will search across the entire web, rather than simply from its own database, to find answers to natural-language queries (that is, those phrased as questions rather than mere search terms).

Other Google rivals are focusing their improvements on offerings that try to bring simplicity and relevance to the search experience, says the NYT.

Microsoft's updated MSN Search tries to make searching easier by complementing Boolean terms like "and," "or" and "not" with slide controls (under "results ranking" in Search Builder) that can be adjusted to determine how broadly or narrowly to search. In addition, a "NearMe" button can return results based on proximity to your location; the company says about a quarter of all searches make reference to geographic information, says the paper.

The NYT says that also of recent note, Amazon's A9 search engine builds on the ability to search by supplementing web data with its own information. For example, the A9 Yellow Pages service, introduced in late January, not only searches for and provides directions to local businesses, but with the "Block View" feature actually displays a photo of the business in the context of its neighborhood, with millions of images up and down the streets of a dozen cities including New York, Atlanta, San Francisco and Seattle.

According to another recent report on search conducted by the Pew Internet and American Life Project, it is human behavior that may need to change most before the average internet user can take advantage of all that search has to offer, reports the NYT.

AMD launches Turion chip - rival to Intel's Centrino

Advanced Micro Devices (AMD) has just announced that it has begun selling a notebook computer chip called Turion 64, designed to compete with Intel's Centrino brand and give the company a foothold in the fastest-growing segment of the PC market.

The New York Times/Reuters report (9 Mar.) that the Turion brand, designed for the thin-and-light notebook market, will be used in PCs built by Acer, Fujitsu Siemens, and Packard Bell. Hewlett-Packard, the number-two PC maker and a key partner of AMD, was not on the initial list of PC vendors using the chip.

The paper says that AMD also sells notebook PCs under the Athlon and Sempron brands. It first announced the Turion name in January, choosing it for its closeness to "tour" and the evocation of the open road.

California-based AMD sold less than 9 percent of all notebook computer microprocessors last year, according to research firm IDC. Intel, the world's largest chip maker, has a commanding 86 percent market share. Sales of notebook PCs are growing faster than desktop PC sales, analysts say, as reported by the NYT/Reuters

The paper says that while clearly matched up against Intel's Centrino, the two brands are based upon significantly different strategies.The Centrino brand includes three chips -- a microprocessor, an auxiliary chip set, and a wireless chip, all made by Intel. PC makers must buy all three chips from Intel to be able to use the Centrino name.

Turion 64, however, is the name of just a microprocessor. AMD allows PC makers to select wireless cards and chip sets from other suppliers, a decision it says gives customers flexibility to design systems as they prefer.

The NYT/Reuters report that seven models of Turion 64 are available for sale immediately, according to AMD, at prices ranging from US$189 to US$354 each in 1,000-unit quantities. Intel charges between US$209 and US$637 for Pentium M, the microprocessor component of the Centrino brand.

Motorola's more versatile camera phones

Motorola is just unveiling several new phones that it says make it easier for consumers to store, share and print pictures, betting that cameras in handsets are no longer just a clever gimmick.

The Reuters/New York Times reports (10 Mar.) that the No. 2 maker of mobile phones behind Finland's Nokia is banking on technology to enhance consumers' experience with digital imaging, according to a company spokesmanits senior director of North American product operations.

The report says that Motorola expects consumers will want more traditional camera capabilities from their phones, and it hopes to win partnerships with companies such as those that make digital printers or the kiosks used in retail stores where consumers process and print photos.

Motorola is set to announce a relationship with Avvenu, a California company that offers consumers remote access to digital images on a computer from a cell phone. Motorola's venture capital arm announced an investment of undisclosed size in Avvenu,reports Reuters/NYT.

Analysts said the company's plans are line with the industry, as Nokia, Samsung and other big handset makers are all taking steps toward improving ease of use for technologies initially seen as novelties in handsets.

Siemens launches first own 3G mobile phone

The loss-making mobile phones unit of German engineering conglomerate Siemens launched its first self-made third-generation mobile phone this week, the first of two expected this year.

The New York Times/Reuters report (9 Mar.) that the SXG75, with built-in GPS navigation system made by Siemens's VDO division, will go on sale in the third quarter of this year and will retail at 500 to 700 euros when not sold with an operator contract discount.

A company spokesman in charge of bringing new Siemens's UMTS mobile phones to market, said he expected to sell at least 1 million of the phones over the model's lifetime of about a year. Third-generation phones, which have picture, video and internet capabilities, have been on the market in Europe for two years. The first models failed to sell in large numbers as they were perceived to be clumsy and their battery life was short.

The Reuters/NYT report says that the SXG75, launched at CeBIT, the world's biggest electronics trade fair, will compete with such models as Motorola's own E1000 multi-media phone and is built on a Qualcomm chipset.

Samsung's new 7 - megapixel camera phone

Samsung Electronics has this week unveiled the world's first mobile phone with a powerful 7-megapixel camera, providing a potential competitive threat to manufacturers of digital cameras.

The New York Times/Reuters report (9 Mar.) that Samsung has been stepping up development of increasingly sophisticated phones for high-end users looking to access games, music and movies on their handsets. It launched the world's first 5-megapixel phone in October.

But while top digital camera makers such as Japan's Canon and Sony are likely to see the model as a new threat, its popularity may depend on how much of an improvement the camera can deliver over existing units, says the Reuters/NYT report.

The report says that there is a growing consensus among consumers that 3 or 4 megapixels, the measure of how many million picture elements are captured in a digital snapshot, are enough for a decent shot.Some of the best-selling digital cameras feature 4 or 5 megapixels.

Reuters and the NYT report that Samsung has said that the new phone, which also has an MP3 player and business card reader, would go on sale as early as the first half, though a price had yet to be set.

Samsung aims to sell 100 million mobile phones this year, up 16 percent from 86 million sold last year.

Samsung, Asia's most valuable technology company, has a market value of US$81 billion, reports the paper.

Cell phones: more than making calls

The mobile phone is a phone no more. The new models unveiled at the CeBIT technology show this week let users do far more than just call a friend to catch up. How about sending them a brief film clip of you standing by a fountain in Rome? Or perhaps a photo of the Eiffel Tower with an image quality so fine it could be blown up and placed in a 10x14-inch frame.

The Mercury News/AP says in a 9 March report that between a new Samsung handset that sports a seven-megapixel camera - better resolution than most nonprofessional digital cameras - and a wide range of mobiles that download and stream music like an MP3 player, cell "phones" are now a lot more than just a keypad and three hours of talk time.

The paper says the slew of new features on phones is an astounding leap from just two years ago, when an integrated camera that took fuzzy images was an attention-getter. And since 2002, music and mobiles has meant much more than just ringtones.

According to The Mercury and AP, Samsung didn't disclose a price on the new SCH-V770, whose camera delivers quality on par, or better, than most non-phone consumer cameras, which typically offer four to six megapixels in quality. The camera sports a flash and can be manually focused. The screen can display as many as 16 million colors, compared with 65,000 on most of today's upscale phones.

The handset is expected to go on sale by June, at least in Asia, but there's no launch date set for Europe and the United States, says The Mercury.

The report says Germany's Siemens hopes to transform text messages from boring print to a more interactive experience, with the company unveiling its new Animated Instant Voice Messages. The software converts the text in a wireless message into speech that can be synchronised to play with moving animated lips superimposed on one of the user's own photographs. European users will get the first chance to see it, likely later this year.

Also reported was that Sony Ericsson, a joint venture between Sweden's LM Ericsson and Sony, is touting its new "Walkman" phone, breathing new life into a name associated with music on the go since the late 1970s - but radically advanced compared to the analog cassettes of the 1980s.

The paper and AP report that Sony Ericsson's W800i contains a two-megapixel camera and a digital music player that can hold up to 30 hours of songs. Because it's tri-band, it can be used in Europe, Asia and the Americas. It's expected to be released sometime after July.

The report quotes Australian analyst, Paul Budde, as saying that while operators like to hype the new phones, users are sometimes cautious. He said consumers have been bombarded with pricey and complex offerings, and that feature-packed phones are no substitute for a video game console or a television set.

Data broker: 32,000 personal records of US citizens vulnerable

Using stolen passwords from legitimate customers, intruders accessed personal information on as many as 32,000 US citizens in a database owned by the information broker LexisNexis, the company has just announced.

The Mercury News/AP reports (9 Mar.) that the announcement comes on the heels of a series of similar high-profile breaches, the most serious affecting another large data broker, ChoicePoint, in which scores of identities were stolen.

The ChoicePoint case, as well as other data losses including one affecting some 1.2 million federal employees with Bank of America charge cards, have prompted an outcry for federal oversight of a loosely regulated commercial sector. In the data-brokering business, sensitive data about nearly every adult American is bought and sold, says the paper.

The Mercury reports that at LexisNexis, criminals found a way to compromise the logins and passwords of a handful of legitimate customers to get access to the database, the company's chief executive, told The Associated Press.

The database that was breached, called Accurint, sells reports for US$4.50 each that include an individual's Social Security number, past addresses, date of birth and voter registration information, including party affiliation.

No credit history, medical records or financial information were accessed in the breach, LexisNexis parent company Reed Elsevier Group PLC said in a statement, the paper and AP report.

The Accurint database is part of the Seisint unit, which LexisNexis bought in August.

Seisint stores millions of personal records, including information on bankruptcies, corporate affiliation, drivers licenses, neighbors and criminal records. Customers include police, lawyers and businesses, says the paper.

LexisNexis paid US$775 million for Seisint, which also provides data for Matrix, a crime and terrorism database project created in 2002 and funded by the US government. Thirteen states originally participated but most later pulled out, citing citizen privacy and other concerns. Seisint was founded by a millionaire, Hank Asher, who stepped down from its board of directors last year after revelations of past ties to Bahamian drug smugglers, report The Mercury/AP.

TV, computers 'full-time' activity for US Youth

Using computers, watching television and listening to music are nearly a full-time activity for most US children, with the average 8- to 18-year-old taking in 6 1/2 hours a day, a report published on Wednesday said, reports The New York Times (9 Mar.).

The paper says the study by the Kaiser Family Foundation was one of the few national efforts to attempt to verify how much time children spend with television and other media. It was based on classroom questionnaires given to more than 2,000 US schoolchildren in the third to 12th grades.

Just over half said their families had no rules on watching television. Sixty-eight percent said they had a television in their bedroom, half had a VCR or DVD player and 31 percent had a computer in the bedroom.

The youngest children watched the most television, with 8- to 10-year olds watching more than four hours a day on average, including videos. Overall the children watched three hours and 51 minutes of television on average, says the paper.

Over a seven-day week the children spent 6 1/2 hours a day with "media" such as television, video games, music and computers, two hours with their parents, just over an hour a day in physical exercise or play, 50 minutes doing homework and half an hour doing chores.


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Stan Beer


Stan Beer co-founded iTWire in 2005. With 30 plus years of experience working in IT and Australian technology media, Beer has published articles in most of the IT publications that have mattered, including the AFR, The Australian, SMH, The Age, as well as a multitude of trade publications.



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