June 24, 2000 7:00 AM PDT

The week in review: Chip competition mounts

Intel introduced new processors to head off upstart Transmeta, only to find long-time rival Advanced Micro Devices stealing a march.

With corporate buying shifting away from desktops, the giant released five notebook chips, including a 750-MHz Pentium III and two low-voltage products. Transmeta, eyeing ultraportables and "information appliances," is set to debut its much-anticipated Crusoe next week.

Two fronts
But while Intel's track record puts the onus on Transmeta to prove its technology, AMD's new Duron chips may outperform comparable Intel Celeron processors because of a faster system bus and more integrated cache memory. The low-cost chip certainly builds on momentum that has been growing since the August 1999 release of AMD?s Athlon.

Some of the competition facing Intel owes to the giant's recent stumbles. In addition to shortages, the company this week said it would take a charge of $200 million to cover a recall of circuit boards.

Still, Intel will counter AMD with new Celerons next week, and to guard against sudden demand for low-power chips, all of its new notebook products are made on the same assembly lines as standard mobile processors. Also this week, Intel said it plans to expand an Irish plant that produces desktop Pentium IIIs and Celerons.

Looking out the window
Microsoft introduced its strategy for delivering Windows-based software via the Web. Microsoft.Net will be designed for mobile devices as well as traditional desktop systems, but is at least two years from fruition. A Java-like programming language for writing Web software is expected next week.

MP3.com sketched plans to provide technology services built directly into a new generation of music software and hardware. The company hopes to be ?an operating system for music."

Digital music companies are pushing to make wireless connections one of the standard ways to receive online music. But the idea runs squarely into the reality of sluggish phone networks and the differing priorities of phone companies, sidelining the promise of wireless music for several years--an eternity in the fast-moving Net world.

Dell Computer unveiled an MP3 home stereo component to be co-marketed with digital music specialist S3. Ordinarily one of the more conservative PC manufacturers, Dell has been gradually moving into the market for Internet appliances and consumer electronics. The company also markets Palm handhelds and Research in Motion email pagers.

IBM revamped its voice-recognition technology strategy to focus on delivering core technologies rather than individual products. The shift recognizes that computing is moving toward smaller devices such as handheld computers, cell phones and wearable PCs. Separately, IBM plans to ship a 1GB ?microdrive? for handhelds and digital cameras.

Taking a page from Apple Computer's marketing playbook, Compaq introduced PCs and notebooks with design accents in translucent colors. The move is the first major redesign of its consumer line in almost four years and an attempt to recapture the retail sales crown Hewlett-Packard claimed in February.

Bad timing?
Amazon.com is quietly quadrupling its merchant rates, enraging many who say they can no longer afford to offer their goods on the leading auction service. The increase comes as Amazon increasingly focuses on business-to-consumer auctions.

Kozmo.com is delaying plans for a public offering and has laid off 24 workers at its New York headquarters. The online convenience store filed for the IPO in March and had wanted to go public this month but will wait until market conditions improve.

Victims of the recent dot-com die-off are losing something other than stock options and steady paychecks: health coverage. COBRA does not cover employees when a company has gone out of business.

Rising power
Vivendi and its Canal Plus television subsidiary will merge with Seagram in a $34 billion stock transaction. A key step in the French company?s ambition to become a major media power, the agreement creates a rival for AOL Time Warner. Also this week Vivendi and Vodafone launched a portal offering Net access and online services to some 80 million European mobile-phone users and pay-TV customers.

Handspring shares jumped 35 percent in their first day of trading. The gain pales in comparison to Palm?s first-day surge but may signal investors are regaining confidence in high-tech IPOs. Separately, Handspring?s Visor was the second-best-selling handheld two months in a row this spring, accounting for 18 percent of April?s sales and 25 percent of May?s figures. Palm claimed two-thirds of the growing market last month.

Emachines said it would post a much wider-than-expected loss and slashed prices on its substantial inventory of already assembled computers. Prompted by cooling demand, the warning suggests more PC price wars may be around the corner.

End game
Microsoft's antitrust appeal moved one step closer to the Supreme Court as the Clinton administration asked the Supreme Court to accept a direct appeal of the landmark antitrust case. Earlier this week, U.S. District Judge Thomas Penfield Jackson certified the case as worthy of the high court?s immediate attention.

A federal appeals court ruled that AT&T won't have to let rivals tap into its high-speed cable Internet networks, reversing a closely watched lower-court decision. Portland officials didn't have jurisdiction over AT&T's cable Internet business, the court said, giving AT&T at least a short-term win in the battle over ?open access.?

Also of note
Microsoft?s Windows and Internet Explorer will incorporate a technology that controls how much information Web users reveal, boosting the momentum of Platform for Privacy Preferences (P3P) ? Odigo will connect its service with Yahoo Messenger, continuing the push for interoperability between rival instant messaging products ? Intel debuted a Linux-based countertop terminal that can surf the Web, exchange emails and make phone calls ? Two days after receiving $27 million in private funding, Furniture.com laid off 80 of its 195 employees, slashing its work force by 41 percent ? A modest increase in the Nasdaq pushed the tech-heavy index past 4,000 for the first time in more than two months.

 

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