It wasn't supposed to happen like this.
Emotiv Systems threw a press conference in San Francisco this week to show the latest enhancements to its futuristic gaming system, which lets players control objects on the screen using only their thoughts.
When it works it can be impressive. The system is based on a "neuroheadset" fitted with about a dozen sensors that read tiny electrical impulses that are emitted by the brain when a person thinks. It learns to recognize the impulses and interpret thoughts like "up," "down" and "rotate" and translate them onto the screen.
On Tuesday evening the lights dimmed in a packed auditorium at the Sony Metreon theater and for a few moments everything went fine. An employee donned the headset and made facial expressions -- smiles, winks -- that were reflected on the face of an animated robot on a large screen. The employee rotated a three-dimensional cube on the screen and moved it forward.
Then he tried to make it disappear. Then he tried again. Feet shuffled uncomfortably in the auditorium. "Can you make it disappear?" CEO Nam Do asked hopefully. Someone in the audience coughed. "Shall we move on?" Do asked. "I think we'll move on to the next thing." Then the cube disappeared. The auditorium erupted into applause, either from excitement or relief.
Then came the demonstration of an actual game. Zachary Drake, Emotiv's game developer, built the crowd's expectations. "This," he said scornfully, brandishing a wireless game controller, "this is a wonderful thing, and it does some things really well ... but lifting an object with your mind just leaves this thing behind."
That's when things went really wrong. The neuroheasdset didn't work, so Drake had to use the wireless controller he had scorned a few moments ago to navigate through the game. (The controller is also part of Emotiv's system, it turns out, and supplements use of the headset.) The controller didn't work very well either, however.
"Can you please switch off any wireless transmitters you may be using because right now we can't even get the wireless controller to work," Do asked the audience. But it was too late.
"Welcome to demo hell, folks," Drake said.
It was an unfortunate night for Emotiv, which has demonstrated the system successfully at the Consumer Electronics Show in January and at other venues. It worked fine during set-up on Tuesday afternoon, Do said.
He said later that the demonstration had been disrupted by the wireless audio-visual equipment used by lighting and sound crews at the event, which operates on the same 2.4GHz frequency as its game system. The AV equipment uses a high-power, frequency-hopping, spread-spectrum technology not found in consumer devices or home wireless set-ups, a spokeswoman added.
Emotiv's system doesn't actually "read" a person's thoughts. Instead it looks at patterns of electrical impulses generated by the various parts of the brain and figures out what they correspond to based on patterns it has learned. It can also gauge a person's mood, according to Emotiv, and adjust the difficulty of a game when a player gets frustrated.
The system will go on sale in time for this year's holiday shopping season for US$299, Do said. The company said it will work with all PC games and console platforms.
The underlying technology is known as non-invasive electroencephalography (EEG) and has been around for many years. An Austrian company called g.tec showed a system at Cebit last year designed mostly for scientific and medical use. It features an ungainly rubber cap with wires protruding from it, and could be used to type words or move a cursor on a screen.
Emotiv's contribution is what it calls "the world's first consumer neuroheadset," which uses its own wireless sensor technology. It has also released a software development kit that it hopes will be used use to build applications. The headset could be used with instant messaging software, for example, to express emotions without needing emoticons, Do said.
"You should come try it at our booth at the Game Developers Conference," he told the audience Tuesday. "Then you'll see it really works and we're not lying."
Thursday, February 21, 2008
Flash memory prices may plummet, analysts say
Prices of NAND flash memory could plummet this year because of weak demand and an oversupply in the market, analysts said on Wednesday.
On this topic
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CES: Samsung shows off 128G-byte solid state drive
Report: Seagate to offer solid-state drives
Get practical tips, IT news, how-tos, and the best in tech humor.
If concerns about the U.S. economy deepen, consumers may reduce spending on phones, MP3 players and the other devices that use NAND flash, weakening demand for the chips and depressing prices, said Nam Hyung Kim, director and chief memory analyst for iSuppli. He predicted that prices could fall by as much as 55 percent this year.
Up to 90 percent of NAND flash is sold as storage for MP3 players and cell phones, or as cards such as the MicroSD that are slotted into digital cameras and other devices.
The reduced price for flash could lead to cheaper products for consumers. Apple already dropped the price of its 1G-byte iPod Shuffle this week, to US$49 from $79, partly because of the falling prices of flash memory, said Shaw Wu, an analyst with American Technology Research.
"Flash pricing definitely has an impact in terms of giving Apple the ammunition to be able to lower price points," Wu said. At the same time, flash pricing was down a lot in the fourth quarter of 2007, so Apple could have dropped its prices sooner, though it would have earned it slimmer margins on its iPods, Wu said.
The concerns about the economy and consumer spending prompted iSuppli to slash its revenue forecast Wednesday for the flash industry this year. It now expects global NAND revenue to climb between 7 percent and 9 percent, down from its earlier projection of 27 percent, Kim said. Global NAND revenue in 2007 was US$13.9 billion, up 12.5 percent from $12.36 billion in 2006, he said.
This year's revenue growth will also be affected by a reduction in NAND flash orders by device makers, Kim said. Apple, one of the largest buyers of NAND flash, ordered $1.2 billion worth of flash memory last year, but has slashed its order forecast for 2008, according to Kim.
Pricing in the NAND business is cyclical and the declines this year wwould not be unique. This year's 55 percent decline will actually be slightly less than the decline last year, when prices dropped about 60 percent, Kim said. Last year, however, Apple's iPhone helped to shore up the market when it was released mid-year. Apple isn't expected to have a new killer product this year that will bolster the market in the same way.
The killer application that will drive NAND flash sales during 2008 will be mobile phones, said Joseph Unsworth, principal analyst at Gartner. Of the 1.2 billion mobile phones expected to be sold this year, about 650 million will have flash card slots, Unsworth said. The sweet spot in NAND flash remains 1G-byte and 2G-byte capacities as many users can't find the need for more, Unsworth said.
The expected drop in demand isn't leading NAND manufacturers to scale back production, Unsworth said. For fear of losing customers and market share, companies are adding production capacity and flooding the market with NAND, he said.
Excess inventory and increased capital spending on new factories may ultimately bite into the suppliers' earnings, Kim said. Companies including Samsung, Toshiba, Intel and Micron are investing in new fabs this year, and if the U.S. economy recovers and consumer spending increases, the companies are willing to bite the bullet this year to see larger revenue growth in 2009 and 2010. NAND flash is a mature market with lots of upside in the long term, Kim said.
Samsung took 42.1 percent of the NAND flash market last year with US$5.86 billion in revenue, a 4.4 percent year-over-year increase, according to data from iSuppli. Toshiba was second place with 27.2 percent and $3.88 billion in revenue, an increase of 20.3 percent year-over-year. Hynix was third with 8.8 percent growth and $2.38 billion in revenue. Micron and Intel, in fourth and fifth place respectively, showed very strong growth of 139.2 percent and 269.6 percent respectively.
On this topic
Flash price drop spurring innovation
CES: Samsung shows off 128G-byte solid state drive
Report: Seagate to offer solid-state drives
Get practical tips, IT news, how-tos, and the best in tech humor.
If concerns about the U.S. economy deepen, consumers may reduce spending on phones, MP3 players and the other devices that use NAND flash, weakening demand for the chips and depressing prices, said Nam Hyung Kim, director and chief memory analyst for iSuppli. He predicted that prices could fall by as much as 55 percent this year.
Up to 90 percent of NAND flash is sold as storage for MP3 players and cell phones, or as cards such as the MicroSD that are slotted into digital cameras and other devices.
The reduced price for flash could lead to cheaper products for consumers. Apple already dropped the price of its 1G-byte iPod Shuffle this week, to US$49 from $79, partly because of the falling prices of flash memory, said Shaw Wu, an analyst with American Technology Research.
"Flash pricing definitely has an impact in terms of giving Apple the ammunition to be able to lower price points," Wu said. At the same time, flash pricing was down a lot in the fourth quarter of 2007, so Apple could have dropped its prices sooner, though it would have earned it slimmer margins on its iPods, Wu said.
The concerns about the economy and consumer spending prompted iSuppli to slash its revenue forecast Wednesday for the flash industry this year. It now expects global NAND revenue to climb between 7 percent and 9 percent, down from its earlier projection of 27 percent, Kim said. Global NAND revenue in 2007 was US$13.9 billion, up 12.5 percent from $12.36 billion in 2006, he said.
This year's revenue growth will also be affected by a reduction in NAND flash orders by device makers, Kim said. Apple, one of the largest buyers of NAND flash, ordered $1.2 billion worth of flash memory last year, but has slashed its order forecast for 2008, according to Kim.
Pricing in the NAND business is cyclical and the declines this year wwould not be unique. This year's 55 percent decline will actually be slightly less than the decline last year, when prices dropped about 60 percent, Kim said. Last year, however, Apple's iPhone helped to shore up the market when it was released mid-year. Apple isn't expected to have a new killer product this year that will bolster the market in the same way.
The killer application that will drive NAND flash sales during 2008 will be mobile phones, said Joseph Unsworth, principal analyst at Gartner. Of the 1.2 billion mobile phones expected to be sold this year, about 650 million will have flash card slots, Unsworth said. The sweet spot in NAND flash remains 1G-byte and 2G-byte capacities as many users can't find the need for more, Unsworth said.
The expected drop in demand isn't leading NAND manufacturers to scale back production, Unsworth said. For fear of losing customers and market share, companies are adding production capacity and flooding the market with NAND, he said.
Excess inventory and increased capital spending on new factories may ultimately bite into the suppliers' earnings, Kim said. Companies including Samsung, Toshiba, Intel and Micron are investing in new fabs this year, and if the U.S. economy recovers and consumer spending increases, the companies are willing to bite the bullet this year to see larger revenue growth in 2009 and 2010. NAND flash is a mature market with lots of upside in the long term, Kim said.
Samsung took 42.1 percent of the NAND flash market last year with US$5.86 billion in revenue, a 4.4 percent year-over-year increase, according to data from iSuppli. Toshiba was second place with 27.2 percent and $3.88 billion in revenue, an increase of 20.3 percent year-over-year. Hynix was third with 8.8 percent growth and $2.38 billion in revenue. Micron and Intel, in fourth and fifth place respectively, showed very strong growth of 139.2 percent and 269.6 percent respectively.
Lessig considers running for Congress
Lawrence Lessig, the cyberlaw author and advocate for free software and online civil liberties, is considering a run for the U.S. Congress, he announced on his blog Wednesday.
Lessig, author of books such as "Free Culture" and "Code 2.0," would run for the open House of Representatives seat in California created by the death of Representative Tom Lantos, a Democrat, earlier this month. A "draft Lessig" movement has popped up online since Lantos died.
Lessig said he plans to make the decision about whether to run by about March 1. "This is a very difficult decision," he wrote on his blog. "Thank you to everyone who has tried to help -- both through very strong words of encouragement and very, very strong words to dissuade."
Lessig, a self-described progressive, would run as part of his Change Congress campaign. The Stanford University law professor announced in January that he would shift his focus to political corruption and away from free software and free culture.
He called on lawmakers to stop accepting money from political action committees and lobbyists, and to stop adding so-called earmarks for special projects in appropriation legislation. Politicians need to change "how Washington works" and to end a culture of corruption that's based on political contributions, he said in a video at Lessig08.org.
"You know about this corruption in Washington, a corruption that doesn't come from evil people, a corruption that comes from good people working in a bad system," he said in the video. Progressives should work to change the way money influences decisions in Washington, he said, "not because this is, in some sense, the most important problem, but because it is the first problem that has to be solved if we're going to address these more fundamental problems later."
During a Lessig speech at Stanford in January, one audience member challenged him to "do something" about the problems in Washington, he said. Lessig is considering a run for Congress "with lots of fear and uncertainty," he said.
Already in the race for Lantos' seat is Jackie Speier, a former Democratic state senator in California. A primary election in the heavily Democratic Silicon Valley district is scheduled for April 8.
Some visitors to Lessig's blog expressed support for his candidacy, but one said Speier would be a strong candidate as well. "I think that your anti-corruption movement, and your effort to reform Congress, would be more likely to succeed from the outside, and could be damaged by a partisan campaign in which you oppose a good candidate," someone wrote.
Others repeated calls for him to run. "My only hope for the future of the Internet and our digital life in general is that we start electing candidates from this new generation, who think differently about issues like digital freedom and copyright," one person wrote. "Lessig certainly is one of those candidates."
Lessig served as a special master in the U.S. government's antitrust case against Microsoft. He's the founder of the Creative Commons, which attempts to give copyright holders additional options for licensing their work beyond all rights reserved.
Lessig has served on the boards of the Free Software Foundation, the Electronic Frontier Foundation, the Public Library of Science, and Public Knowledge.
Lessig, author of books such as "Free Culture" and "Code 2.0," would run for the open House of Representatives seat in California created by the death of Representative Tom Lantos, a Democrat, earlier this month. A "draft Lessig" movement has popped up online since Lantos died.
Lessig said he plans to make the decision about whether to run by about March 1. "This is a very difficult decision," he wrote on his blog. "Thank you to everyone who has tried to help -- both through very strong words of encouragement and very, very strong words to dissuade."
Lessig, a self-described progressive, would run as part of his Change Congress campaign. The Stanford University law professor announced in January that he would shift his focus to political corruption and away from free software and free culture.
He called on lawmakers to stop accepting money from political action committees and lobbyists, and to stop adding so-called earmarks for special projects in appropriation legislation. Politicians need to change "how Washington works" and to end a culture of corruption that's based on political contributions, he said in a video at Lessig08.org.
"You know about this corruption in Washington, a corruption that doesn't come from evil people, a corruption that comes from good people working in a bad system," he said in the video. Progressives should work to change the way money influences decisions in Washington, he said, "not because this is, in some sense, the most important problem, but because it is the first problem that has to be solved if we're going to address these more fundamental problems later."
During a Lessig speech at Stanford in January, one audience member challenged him to "do something" about the problems in Washington, he said. Lessig is considering a run for Congress "with lots of fear and uncertainty," he said.
Already in the race for Lantos' seat is Jackie Speier, a former Democratic state senator in California. A primary election in the heavily Democratic Silicon Valley district is scheduled for April 8.
Some visitors to Lessig's blog expressed support for his candidacy, but one said Speier would be a strong candidate as well. "I think that your anti-corruption movement, and your effort to reform Congress, would be more likely to succeed from the outside, and could be damaged by a partisan campaign in which you oppose a good candidate," someone wrote.
Others repeated calls for him to run. "My only hope for the future of the Internet and our digital life in general is that we start electing candidates from this new generation, who think differently about issues like digital freedom and copyright," one person wrote. "Lessig certainly is one of those candidates."
Lessig served as a special master in the U.S. government's antitrust case against Microsoft. He's the founder of the Creative Commons, which attempts to give copyright holders additional options for licensing their work beyond all rights reserved.
Lessig has served on the boards of the Free Software Foundation, the Electronic Frontier Foundation, the Public Library of Science, and Public Knowledge.
BlackBerry network down again on Wednesday
BlackBerry users in North America were complaining of service problems again on Wednesday morning.
On this topic
Vodafone's BlackBerries get disaster shield
GPS helps you find your friends
Most analog cellular to fade away on Monday
Public wireless LAN for mobile operators
Wireless# Certification Official Study Guide
Get practical tips, IT news, how-tos, and the best in tech humor.
Users of the BlackBerry outage newsgroup began reporting problems at around 6 a.m. on the East Coast of the U.S. related to scheduled maintenance on Research In Motion's network. The issue appeared to get progressively worse, initially affecting about half of users in the Americas but eventually affecting all users, according to users of the newsgroup.
One user posted a note that he said came from his AT&T representative. The note called it a national BlackBerry outage that could affect e-mail delivery for up to half of new BlackBerry users.
At noon on the East Coast, one user reported that AT&T said the problem was fixed but that e-mail messages might still be delayed until the backup of messages was sent out.
Some users of the newsgroup said that they were able to receive messages all morning, although they were often delayed.
RIM did not immediately comment on the issue.
Messages sent to and from BlackBerry devices pass through network operations centers that are operated by RIM. When RIM's network goes down, so does service to end-users.
The company had an outage just last week that lasted for about three hours and left users unable to send or receive messages or access the Internet. That outage followed one that occurred in January, but that one was due to a problem with AT&T's network, so it affected BlackBerry users as well as iPhone and other AT&T mobile data customers.
RIM's most notorious network problem happened last year, with an outage that lasted overnight for many users in North America.
On this topic
Vodafone's BlackBerries get disaster shield
GPS helps you find your friends
Most analog cellular to fade away on Monday
Public wireless LAN for mobile operators
Wireless# Certification Official Study Guide
Get practical tips, IT news, how-tos, and the best in tech humor.
Users of the BlackBerry outage newsgroup began reporting problems at around 6 a.m. on the East Coast of the U.S. related to scheduled maintenance on Research In Motion's network. The issue appeared to get progressively worse, initially affecting about half of users in the Americas but eventually affecting all users, according to users of the newsgroup.
One user posted a note that he said came from his AT&T representative. The note called it a national BlackBerry outage that could affect e-mail delivery for up to half of new BlackBerry users.
At noon on the East Coast, one user reported that AT&T said the problem was fixed but that e-mail messages might still be delayed until the backup of messages was sent out.
Some users of the newsgroup said that they were able to receive messages all morning, although they were often delayed.
RIM did not immediately comment on the issue.
Messages sent to and from BlackBerry devices pass through network operations centers that are operated by RIM. When RIM's network goes down, so does service to end-users.
The company had an outage just last week that lasted for about three hours and left users unable to send or receive messages or access the Internet. That outage followed one that occurred in January, but that one was due to a problem with AT&T's network, so it affected BlackBerry users as well as iPhone and other AT&T mobile data customers.
RIM's most notorious network problem happened last year, with an outage that lasted overnight for many users in North America.
ODF standard editor calls for cooperation with OOXML
The teams developing the OpenDocument Format (ODF) and Office Open XML (OOXML) standards should work together, evolving the two in parallel, the editor of the ODF standard said Tuesday in an open letter to the standards-setting community.
The Microsoft-sponsored OOXML document format is just days away from a critical meeting that will influence whether the International Organization for Standardization (ISO) will adopt it as a standard, as its rival ODF was adopted in May 2006. Relations between supporters of the two formats are, for the most part, combative rather than cordial.
Patrick Durusau, ISO project editor for ODF, or ISO/IEC 26300 as it is known there, thinks supporters of the two formats would be more productive if they allowed the formats to co-evolve, he wrote in his open letter. Durusau thoughtfully avoided the ODF and OOXML formats for his letter, choosing instead PDF, itself adopted as an ISO standard in December.
"If we had a co-evolutionary environment, one where the proponents of OpenXML and OpenDocument,
their respective organizations, national bodies and others [sic] interested groups could meet to discuss the
future of those proposals, the future revisions of both would likely be quite different," Durusau wrote.
"Peaceful co-evolution will mean better standards at lower costs in a more timely fashion," he said.
ODF, based on a file format used by Sun Microsystems' StarOffice application and the open-source productivity suite OpenOffice.org, won the support of OASIS, the Organization for the Advancement of Structured Information Standards, which fast-tracked it through the ISO standardization process.
Microsoft offered its OOXML file format to ECMA International, which adopted it as one of its standards before proposing it to ISO for the same fast-track process.
An ISO committee rejected OOXML at a first vote last year. Since then, ECMA has been responding to the objections expressed in that vote, and the ISO committee will consider the revisions it proposed at a so-called ballot resolution meeting next week. There are 1,100 comments to process during the five days of the meeting. National standards bodies will then have one month to decide whether to change their vote in light of the changes made.
ISO accepts recommendations for fast-tracking from industry standards bodies. Specifications that take this route can become standards much more quickly and with less debate than by the regular route.
The two groups need a neutral forum where they can meet and learn from each other, Durusau suggested.
He expects his calls for cooperation to raise eyebrows, given that he is editor of the ODF standard at OASIS and project editor for it at ISO.
"Why am I advocating such cooperation? The answer is fairly simple. The difficulties we face today are the result of not talking to each other in the past and we can't change the past. But we can decide to act differently today," he said.
"Creating such an environment is going to take time and effort," Durusau said, offering a series of concrete steps the two groups can take, including talking to people working on the "other" standard, working toward a common meeting place and sponsoring conferences on multiple standards.
He suggested more companies should follow Novell's example: It participates in both the TC 45 committee working on Office Open XML and the ODF Technical Committee.
The Microsoft-sponsored OOXML document format is just days away from a critical meeting that will influence whether the International Organization for Standardization (ISO) will adopt it as a standard, as its rival ODF was adopted in May 2006. Relations between supporters of the two formats are, for the most part, combative rather than cordial.
Patrick Durusau, ISO project editor for ODF, or ISO/IEC 26300 as it is known there, thinks supporters of the two formats would be more productive if they allowed the formats to co-evolve, he wrote in his open letter. Durusau thoughtfully avoided the ODF and OOXML formats for his letter, choosing instead PDF, itself adopted as an ISO standard in December.
"If we had a co-evolutionary environment, one where the proponents of OpenXML and OpenDocument,
their respective organizations, national bodies and others [sic] interested groups could meet to discuss the
future of those proposals, the future revisions of both would likely be quite different," Durusau wrote.
"Peaceful co-evolution will mean better standards at lower costs in a more timely fashion," he said.
ODF, based on a file format used by Sun Microsystems' StarOffice application and the open-source productivity suite OpenOffice.org, won the support of OASIS, the Organization for the Advancement of Structured Information Standards, which fast-tracked it through the ISO standardization process.
Microsoft offered its OOXML file format to ECMA International, which adopted it as one of its standards before proposing it to ISO for the same fast-track process.
An ISO committee rejected OOXML at a first vote last year. Since then, ECMA has been responding to the objections expressed in that vote, and the ISO committee will consider the revisions it proposed at a so-called ballot resolution meeting next week. There are 1,100 comments to process during the five days of the meeting. National standards bodies will then have one month to decide whether to change their vote in light of the changes made.
ISO accepts recommendations for fast-tracking from industry standards bodies. Specifications that take this route can become standards much more quickly and with less debate than by the regular route.
The two groups need a neutral forum where they can meet and learn from each other, Durusau suggested.
He expects his calls for cooperation to raise eyebrows, given that he is editor of the ODF standard at OASIS and project editor for it at ISO.
"Why am I advocating such cooperation? The answer is fairly simple. The difficulties we face today are the result of not talking to each other in the past and we can't change the past. But we can decide to act differently today," he said.
"Creating such an environment is going to take time and effort," Durusau said, offering a series of concrete steps the two groups can take, including talking to people working on the "other" standard, working toward a common meeting place and sponsoring conferences on multiple standards.
He suggested more companies should follow Novell's example: It participates in both the TC 45 committee working on Office Open XML and the ODF Technical Committee.
Microsoft yanks Vista SP1 update causing endless reboots
Responding to reports of endlessly rebooting PCs that flooded support newsgroups last week, Microsoft Corp. said on Tuesday it had pulled an update designed to prep Windows Vista for Service Pack 1.
Although the update -- actually a pair of prerequisite files that modify Vista's install components -- has been temporarily pulled from Windows Update, Microsoft has not yet produced a fix for users whose machines either won't boot or reboot constantly.
"Immediately after receiving reports of this error, we made the decision to temporarily suspend automatic distribution of the update to avoid further customer impact while we investigate possible causes," said Nick White, a Vista program manager, in a post to the company's blog Tuesday afternoon.
White downplayed the problem. "So far, we've been able to determine that this problem only affects a small number of customers in unique circumstances. We are working to identify possible solutions and will make the update available again shortly after we address the issue."
According to White, Update 937287 was the cause of the problem. In a support document, Microsoft describes that update as one for Vista's installation software, "the component that handles the installation and the removal of software updates, language packs, optional Windows features and service packs." Along with a companion update pushed to users starting Feb. 12 and another that was offered to machines running Vista Ultimate and Vista Business in January, the guilty update is required before Vista can be upgraded to Service Pack 1 (SP1).
Shortly after the two prerequisites hit Windows Update last week, users began reporting problems on Microsoft's support newsgroups. Most said that the update hung as the message "Configuring Updates Step 3 of 3 -- 0% Complete" appeared on the screen. When users rebooted hoping to clear the error, their PCs went into an endless cycle of reboots. A smaller number of users said that their computers refused to boot normally.
Some users have been able to regain control by booting from a Vista install DVD and selecting the "Restore from a previous restore point" option.
What's it doing in there?
It's uncertain whether Microsoft knows exactly why Update 937287 is hammering PCs. Even after White posted the company statement to the Vista blog, Darrell Gorter, a Microsoft employee, was asking users to send him system logs. "I still need more log files for the investigations that we are doing," Gorter said in a message on the support newsgroup. Late last week, Gorter made a similar request on the same message board.
Also unclear is the actual extent of the problem. Although White called the number "small," the traffic on the Vista SP1 newsgroup is heavy. One thread had been viewed more than 35,500 times by late Tuesday.
But the problem is not new. Computerworld has found messages describing the endless reboot problem dated Dec. 13, one day after it first offered a Vista SP1 release candidate to the general public. That build of SP1 also required the prerequisite updates, including 937287.
Microsoft was not available for comment Tuesday night to answer questions about whether, and if so how, the snafu will impact its plans to start offering SP1 to most users next month. Currently, only beta testers, Volume Licensing customers, and subscribers to TechNet Plus and Microsoft Developer Network have been able to download legal versions of the service pack.
That will change in mid-March when SP1 is set to land on Windows Update as an optional update, and again in mid-April when Microsoft said it would start installing SP1 automatically on most PCs running Vista.
Although the update -- actually a pair of prerequisite files that modify Vista's install components -- has been temporarily pulled from Windows Update, Microsoft has not yet produced a fix for users whose machines either won't boot or reboot constantly.
"Immediately after receiving reports of this error, we made the decision to temporarily suspend automatic distribution of the update to avoid further customer impact while we investigate possible causes," said Nick White, a Vista program manager, in a post to the company's blog Tuesday afternoon.
White downplayed the problem. "So far, we've been able to determine that this problem only affects a small number of customers in unique circumstances. We are working to identify possible solutions and will make the update available again shortly after we address the issue."
According to White, Update 937287 was the cause of the problem. In a support document, Microsoft describes that update as one for Vista's installation software, "the component that handles the installation and the removal of software updates, language packs, optional Windows features and service packs." Along with a companion update pushed to users starting Feb. 12 and another that was offered to machines running Vista Ultimate and Vista Business in January, the guilty update is required before Vista can be upgraded to Service Pack 1 (SP1).
Shortly after the two prerequisites hit Windows Update last week, users began reporting problems on Microsoft's support newsgroups. Most said that the update hung as the message "Configuring Updates Step 3 of 3 -- 0% Complete" appeared on the screen. When users rebooted hoping to clear the error, their PCs went into an endless cycle of reboots. A smaller number of users said that their computers refused to boot normally.
Some users have been able to regain control by booting from a Vista install DVD and selecting the "Restore from a previous restore point" option.
What's it doing in there?
It's uncertain whether Microsoft knows exactly why Update 937287 is hammering PCs. Even after White posted the company statement to the Vista blog, Darrell Gorter, a Microsoft employee, was asking users to send him system logs. "I still need more log files for the investigations that we are doing," Gorter said in a message on the support newsgroup. Late last week, Gorter made a similar request on the same message board.
Also unclear is the actual extent of the problem. Although White called the number "small," the traffic on the Vista SP1 newsgroup is heavy. One thread had been viewed more than 35,500 times by late Tuesday.
But the problem is not new. Computerworld has found messages describing the endless reboot problem dated Dec. 13, one day after it first offered a Vista SP1 release candidate to the general public. That build of SP1 also required the prerequisite updates, including 937287.
Microsoft was not available for comment Tuesday night to answer questions about whether, and if so how, the snafu will impact its plans to start offering SP1 to most users next month. Currently, only beta testers, Volume Licensing customers, and subscribers to TechNet Plus and Microsoft Developer Network have been able to download legal versions of the service pack.
That will change in mid-March when SP1 is set to land on Windows Update as an optional update, and again in mid-April when Microsoft said it would start installing SP1 automatically on most PCs running Vista.
Microsoft reveals details of new small-business OS
Microsoft on Wednesday revealed details of the next version of its Windows OS for small businesses and formally introduced a new product line aimed at small and mid-size businesses.
Microsoft Windows Small Business Server (SBS) 2008, formally code-named "Cougar," is one of two software bundles in Microsoft's new Windows Essential Server Solutions line; it also includes Windows Essential Business Server 2008, formerly code-named "Centro" and aimed at mid-sized companies. Both products are based on the same code as Windows Server 2008, the next version of Microsoft's enterprise server OS.
The products in the Essential line bundle a server OS with other software products that Microsoft deems necessary to running a business -- such as Microsoft's messaging software, Exchange Server and security products -- to provide what Microsoft describes as an all-in-one, easy-to-install software stack for companies that may only have a small IT support staff.
SBS 2008 is aimed at companies with up to 50 PCs and includes one-year trial subscriptions to Microsoft Forefront Security for Exchange Server Small Business Edition and Windows Live OneCare for Server.
The software also provides integration with Microsoft's Web-based service, Microsoft Office Live Small Business, to help companies set up and manage Web sites and Web-based collaboration workspaces for employees. Support for Windows Mobile devices, so employees can access business information and e-mail remotely, also is bundled in.
According to Microsoft, it designed SBS 2008 for simplified deployment, set-up and administration from one management console that administrators can access remotely. The software also comes in a premium edition for companies that need more heavy lifting from their business software.
SBS 2008 will be demonstrated on hardware from Dell at Microsoft's Feb. 27 event in Los Angeles, in which Microsoft will highlight a triptych of releases -- Windows Server 2008, Visual Studio 2008 and SQL Server 2008. Both SBS 2008 and Windows Essential Business Server 2008 are scheduled to be available in the second half of 2008.
Windows Essential Business Server 2008, which Microsoft has previously discussed, also is intended to make it simpler for businesses with limited IT management resources to install and control critical software tools. The product is aimed at businesses with 25 to 250 PCs and is currently in beta.
Like SBS 2008, Windows Essential Business Server 2008 also has a single management console for administrators. However, unlike SBS 2008, third parties can integrate their products into the console so they can be managed from it as well. In fact, Microsoft has already said that Symantec, Citrix, CA, Trend Micro, FullArmor, McAfee and Quest are among the companies that will integrate products with the software.
"Based on our conversations with customers and partners, we felt the mid-market IT is a much different customer than a small-business owner, so we wanted to respect that in the way we designed the management UI for each product," said Steven VanRoekel, senior director in the server and tools division at Microsoft.
More information about SBS 2008 and Windows Essential Business Server 2008 can be found on Microsoft's Web site.
Microsoft Windows Small Business Server (SBS) 2008, formally code-named "Cougar," is one of two software bundles in Microsoft's new Windows Essential Server Solutions line; it also includes Windows Essential Business Server 2008, formerly code-named "Centro" and aimed at mid-sized companies. Both products are based on the same code as Windows Server 2008, the next version of Microsoft's enterprise server OS.
The products in the Essential line bundle a server OS with other software products that Microsoft deems necessary to running a business -- such as Microsoft's messaging software, Exchange Server and security products -- to provide what Microsoft describes as an all-in-one, easy-to-install software stack for companies that may only have a small IT support staff.
SBS 2008 is aimed at companies with up to 50 PCs and includes one-year trial subscriptions to Microsoft Forefront Security for Exchange Server Small Business Edition and Windows Live OneCare for Server.
The software also provides integration with Microsoft's Web-based service, Microsoft Office Live Small Business, to help companies set up and manage Web sites and Web-based collaboration workspaces for employees. Support for Windows Mobile devices, so employees can access business information and e-mail remotely, also is bundled in.
According to Microsoft, it designed SBS 2008 for simplified deployment, set-up and administration from one management console that administrators can access remotely. The software also comes in a premium edition for companies that need more heavy lifting from their business software.
SBS 2008 will be demonstrated on hardware from Dell at Microsoft's Feb. 27 event in Los Angeles, in which Microsoft will highlight a triptych of releases -- Windows Server 2008, Visual Studio 2008 and SQL Server 2008. Both SBS 2008 and Windows Essential Business Server 2008 are scheduled to be available in the second half of 2008.
Windows Essential Business Server 2008, which Microsoft has previously discussed, also is intended to make it simpler for businesses with limited IT management resources to install and control critical software tools. The product is aimed at businesses with 25 to 250 PCs and is currently in beta.
Like SBS 2008, Windows Essential Business Server 2008 also has a single management console for administrators. However, unlike SBS 2008, third parties can integrate their products into the console so they can be managed from it as well. In fact, Microsoft has already said that Symantec, Citrix, CA, Trend Micro, FullArmor, McAfee and Quest are among the companies that will integrate products with the software.
"Based on our conversations with customers and partners, we felt the mid-market IT is a much different customer than a small-business owner, so we wanted to respect that in the way we designed the management UI for each product," said Steven VanRoekel, senior director in the server and tools division at Microsoft.
More information about SBS 2008 and Windows Essential Business Server 2008 can be found on Microsoft's Web site.
Security issues scuttle Bain/Huawei bid for 3Com
A deal for Bain Capital Partners and China's Huawei Technologies to buy 3Com is on hold because the companies were unable to come to agreement with the U.S. Committee on Foreign Investment in the United States (CFIUS) about security concerns.
The three companies have withdrawn their joint filing with CFIUS, although they remain committed to continued discussions, they announced Wednesday.
The proposed US$2.2 billion deal, announced in September, raised security concerns because of networking giant Huawei's close ties with the Chinese government. Under the proposed deal, Bain would have gotten an 83.5 percent stake in 3Com and Chinese networking giant Huawei Technologies would have gotten the remaining piece. CFIUS, part of the U.S. Department of Treasury, is investigating whether the investment by Huawei poses a risk to U.S. national security after Bain voluntarily submitted the deal for review in October.
"We are very disappointed that we were unable to reach a mitigation agreement with CFIUS for this transaction," Edgar Masri, president and CEO of 3Com, said in a statement. "While we work closely with Bain Capital Partners and Huawei to construct alternatives that would address CFIUS' concerns, we will continue to execute our strategy to build a global networking leader."
Among the critics of the deal was U.S. Representative Thaddeus McCotter, a Michigan Republican. Huawei's stake in 3Com, which markets intrusion detection systems, would "gravely compromise" U.S. national security, he said in a House floor speech in October. The U.S. Department of Defense uses 3Com intrusion detection products, and Chinese hackers have targeted the agency, McCotter said.
The companies had argued that Bain Capital, based in Boston, would have a controlling interest in 3Com. "Bain Capital will be able to make all operational decisions for the company, to set budgets, to spend money, to make investments, and to hire and fire personnel," 3Com said in an October filing with the U.S. Securities and Exchange Commission. "Huawei will not have any control over the operation of the business."
The companies could still put together a new proposal and take it back to CFIUS, said Christopher Wall, a partner in the international trade practice at the Pillsbury Winthrop Shaw Pittman law firm who is based in Washington, D.C. With cases like the 3Com one, there are often concerns about technology transfer to other countries, but Bain, Huawei and 3Com could come back with a proposal to limit tech transfer, said Wall. Neither Wall nor his firm is involved in this case.
The companies could also work out a deal with less Huawei involvement, he added.
Wall wasn't surprised about the security concerns surrounding the deal, given that the U.S. Department of Defense uses 3Com networking products, and U.S. officials have accused Chinese hackers of attacking U.S. government sites. "People are obviously going to be on high alert when it comes to China and computer security issues," he said. "I can easily see why people would be very concerned about any Chinese role in a transaction involving that kind of technology."
The three companies have withdrawn their joint filing with CFIUS, although they remain committed to continued discussions, they announced Wednesday.
The proposed US$2.2 billion deal, announced in September, raised security concerns because of networking giant Huawei's close ties with the Chinese government. Under the proposed deal, Bain would have gotten an 83.5 percent stake in 3Com and Chinese networking giant Huawei Technologies would have gotten the remaining piece. CFIUS, part of the U.S. Department of Treasury, is investigating whether the investment by Huawei poses a risk to U.S. national security after Bain voluntarily submitted the deal for review in October.
"We are very disappointed that we were unable to reach a mitigation agreement with CFIUS for this transaction," Edgar Masri, president and CEO of 3Com, said in a statement. "While we work closely with Bain Capital Partners and Huawei to construct alternatives that would address CFIUS' concerns, we will continue to execute our strategy to build a global networking leader."
Among the critics of the deal was U.S. Representative Thaddeus McCotter, a Michigan Republican. Huawei's stake in 3Com, which markets intrusion detection systems, would "gravely compromise" U.S. national security, he said in a House floor speech in October. The U.S. Department of Defense uses 3Com intrusion detection products, and Chinese hackers have targeted the agency, McCotter said.
The companies had argued that Bain Capital, based in Boston, would have a controlling interest in 3Com. "Bain Capital will be able to make all operational decisions for the company, to set budgets, to spend money, to make investments, and to hire and fire personnel," 3Com said in an October filing with the U.S. Securities and Exchange Commission. "Huawei will not have any control over the operation of the business."
The companies could still put together a new proposal and take it back to CFIUS, said Christopher Wall, a partner in the international trade practice at the Pillsbury Winthrop Shaw Pittman law firm who is based in Washington, D.C. With cases like the 3Com one, there are often concerns about technology transfer to other countries, but Bain, Huawei and 3Com could come back with a proposal to limit tech transfer, said Wall. Neither Wall nor his firm is involved in this case.
The companies could also work out a deal with less Huawei involvement, he added.
Wall wasn't surprised about the security concerns surrounding the deal, given that the U.S. Department of Defense uses 3Com networking products, and U.S. officials have accused Chinese hackers of attacking U.S. government sites. "People are obviously going to be on high alert when it comes to China and computer security issues," he said. "I can easily see why people would be very concerned about any Chinese role in a transaction involving that kind of technology."
Top technology companies form gaming alliance
Some of the top technology companies, including Intel, Microsoft, Dell and Advanced Micro Devices joined forces Tuesday to form the PC Gaming Alliance, which will try to promote the PC as a gaming platform.
The alliance will bring hardware makers, software companies and game publishers under one roof to "accelerate innovation, improve the gaming experience for consumers and serve as a collective source of market information and expertise on PC gaming," the alliance said in a statement.
The companies will work together on challenges facing the PC gaming industry, including piracy and the establishment of hardware requirements for PC games, the alliance said. PCGA also hopes to accelerate growth of the PC gaming industry and standardize the development of gaming PCs and software by developing and promoting guidelines.
The alliance comes at a time when PC video game sales are falling. PC games sales in the U.S. were US$910.7 million in 2007, down from $970 million in 2006, according to research from NPD Techworld. PC game sales in 2007 dwarfed in comparison to the sale of software for video game consoles like Sony's PlayStation and Nintendo's Wii, which were $6.6 billion.
Unit shipments of PC game software totaled 36.4 million in 2007, compared to video game software unit shipments of 153.9 million, according to NPD.
The U.S. gaming industry already has the Entertainment Software Association, which represents vendors that publish games for both computers and consoles. About 90 percent of the $7.4 billion revenue of PC and console gaming software in 2006 belonged to ESA members, giving the association a dominant presence.
Other PCGA members include Acer, Epic, Nvidia and Razer USA.
The announcement comes during the Game Developers Conference, which is being held in San Francisco. During the show PCGA member Intel launched a new gaming platform formerly code-named "Skulltrail." The Intel Dual Socket Extreme Desktop Platform includes two quad-core microprocessors, totaling eight-processing engines, and supports graphics cards from ATI or Nvidia.
The alliance will bring hardware makers, software companies and game publishers under one roof to "accelerate innovation, improve the gaming experience for consumers and serve as a collective source of market information and expertise on PC gaming," the alliance said in a statement.
The companies will work together on challenges facing the PC gaming industry, including piracy and the establishment of hardware requirements for PC games, the alliance said. PCGA also hopes to accelerate growth of the PC gaming industry and standardize the development of gaming PCs and software by developing and promoting guidelines.
The alliance comes at a time when PC video game sales are falling. PC games sales in the U.S. were US$910.7 million in 2007, down from $970 million in 2006, according to research from NPD Techworld. PC game sales in 2007 dwarfed in comparison to the sale of software for video game consoles like Sony's PlayStation and Nintendo's Wii, which were $6.6 billion.
Unit shipments of PC game software totaled 36.4 million in 2007, compared to video game software unit shipments of 153.9 million, according to NPD.
The U.S. gaming industry already has the Entertainment Software Association, which represents vendors that publish games for both computers and consoles. About 90 percent of the $7.4 billion revenue of PC and console gaming software in 2006 belonged to ESA members, giving the association a dominant presence.
Other PCGA members include Acer, Epic, Nvidia and Razer USA.
The announcement comes during the Game Developers Conference, which is being held in San Francisco. During the show PCGA member Intel launched a new gaming platform formerly code-named "Skulltrail." The Intel Dual Socket Extreme Desktop Platform includes two quad-core microprocessors, totaling eight-processing engines, and supports graphics cards from ATI or Nvidia.
Microsoft: HD DVD demise won't hurt Xbox 360
Toshiba's announcement to end production of HD DVD players and recorders will not affect the Xbox 360, even though Microsoft offers an optional stand-alone HD DVD drive for the game console, Microsoft said in a statement Tuesday.
"We do not believe Toshiba's announcement about HD DVD will have any material impact on the Xbox 360 platform or our position in the marketplace," Microsoft said. The gaming function of the console is its main attraction, the company added.
The company did not say whether or not it will stop manufacturing the HD DVD drive for the Xbox 360.
Earlier Tuesday, Toshiba formally announced an end to its support of HD DVD, a high-definition optical disc format meant to replace DVDs. Toshiba was the developer and main backer of HD DVD, and its capitulation handed victory to rival format Blu-ray Disc, which has been championed by Sony.
Toshiba said its decision came after careful analysis of the long-term impact of continuing the format war, and said a swift decision was called for to help the high-definition market develop.
For game consoles, high-definition discs are growing in importance. Sony put Blu-ray Disc drives in the PlayStation 3 as a way to spread popularity of the high-definition discs. PlayStation 3 owners can play HD movies on the drives as well as advanced games. Blu-ray discs can hold far more data than conventional DVDs, and give players high definition graphics on games.
At a recent game show in Taipei, Sony showed off a display of over 100 game titles created using Blu-ray Disc. A nearby Xbox 360 booth displayed the HD DVD logo and showed movies and just a few games made for the format.
Recent changes in the market prompted Toshiba's decision to phase out HD DVD. Early this year, Warner Bros. said it would stop issuing movies on HD DVD in the coming months and rely exclusively on Blu-ray Disc. The Hollywood studio was one of three major studios remaining in the HD DVD camp, and its defection created widespread belief that the battle between HD DVD and Blu-ray Disc was now over.
More recently, major U.S. retail chain Wal-Mart announced it would phase out the sale of HD DVD products, moving to exclusivity with Blu-ray Disc. Electronics retailer Best Buy also said it would back Blu-ray Disc, but it did not say it would stop offering HD DVD.
"We do not believe Toshiba's announcement about HD DVD will have any material impact on the Xbox 360 platform or our position in the marketplace," Microsoft said. The gaming function of the console is its main attraction, the company added.
The company did not say whether or not it will stop manufacturing the HD DVD drive for the Xbox 360.
Earlier Tuesday, Toshiba formally announced an end to its support of HD DVD, a high-definition optical disc format meant to replace DVDs. Toshiba was the developer and main backer of HD DVD, and its capitulation handed victory to rival format Blu-ray Disc, which has been championed by Sony.
Toshiba said its decision came after careful analysis of the long-term impact of continuing the format war, and said a swift decision was called for to help the high-definition market develop.
For game consoles, high-definition discs are growing in importance. Sony put Blu-ray Disc drives in the PlayStation 3 as a way to spread popularity of the high-definition discs. PlayStation 3 owners can play HD movies on the drives as well as advanced games. Blu-ray discs can hold far more data than conventional DVDs, and give players high definition graphics on games.
At a recent game show in Taipei, Sony showed off a display of over 100 game titles created using Blu-ray Disc. A nearby Xbox 360 booth displayed the HD DVD logo and showed movies and just a few games made for the format.
Recent changes in the market prompted Toshiba's decision to phase out HD DVD. Early this year, Warner Bros. said it would stop issuing movies on HD DVD in the coming months and rely exclusively on Blu-ray Disc. The Hollywood studio was one of three major studios remaining in the HD DVD camp, and its defection created widespread belief that the battle between HD DVD and Blu-ray Disc was now over.
More recently, major U.S. retail chain Wal-Mart announced it would phase out the sale of HD DVD products, moving to exclusivity with Blu-ray Disc. Electronics retailer Best Buy also said it would back Blu-ray Disc, but it did not say it would stop offering HD DVD.
DoS attack prevents access to WordPress.com blogs
The WordPress.com blog-hosting service suffered a denial-of-service (DoS) attack that began Saturday and was still preventing users from logging in or posting to their blogs on Tuesday.
Matt Mullenweg, spokesman for Automattic, confirmed that the service experienced a DoS attack with spikes of up to 6 gigabits of incoming traffic, which was making some blogs inaccessible for about five to 15 minutes on Tuesday. Though service had mostly been restored, Automattic, which maintains WordPress.com, was still working on returning service to normal levels on Tuesday afternoon, he said.
"Obviously that [is not good] and is pretty unusual for our service," he said in an e-mail. "All our people who can are working on the issue."
However, an employee at a New York-based company that has blogs hosted by WordPress.com suggested that some users were experiencing outages for longer than 15 minutes. The source, who asked not to be identified, said on Tuesday afternoon that users there were unable to log in to their blogs and post comments for "most of the day." However, the blogs were still able to be viewed publicly.
"It's starting to come back to life now, slowly," said the source on Tuesday afternoon.
WordPress.com users were notified via e-mail about the DoS attack. In the e-mail, the service provider said that the attack was affecting user log-in and causing some forums to be offline.
Mullenweg said that the main Wordpress.com page was down longer than some blogs because "we sacrificed it in order to keep blogs and our users up." However, the site's home page and Web site were up and running on Tuesday.
He also provided a link to a graph that shows the traffic spikes to WordPress.com on the graph, where the service's traffic is displayed in a brown line.
A DoS attack is an attempt to make a Web site or service unavailable to intended users by flooding the service or site with incoming data requests, such as e-mails. Motives for DoS attacks vary, but perpetrators mostly target companies with high-profile, highly trafficked Web sites.
Joris Evers, a spokesman for security research and software company McAfee, said DoS attacks are still fairly common, although they have tapered off in recent years because technology has been developed that can head off such attacks before they affect service.
Though he had not heard specifically of the WordPress attack, Evers said that it's possible the attack was mounted by someone "who was upset about something that was written on a WordPress blog, and they decided to take action against that."
Matt Mullenweg, spokesman for Automattic, confirmed that the service experienced a DoS attack with spikes of up to 6 gigabits of incoming traffic, which was making some blogs inaccessible for about five to 15 minutes on Tuesday. Though service had mostly been restored, Automattic, which maintains WordPress.com, was still working on returning service to normal levels on Tuesday afternoon, he said.
"Obviously that [is not good] and is pretty unusual for our service," he said in an e-mail. "All our people who can are working on the issue."
However, an employee at a New York-based company that has blogs hosted by WordPress.com suggested that some users were experiencing outages for longer than 15 minutes. The source, who asked not to be identified, said on Tuesday afternoon that users there were unable to log in to their blogs and post comments for "most of the day." However, the blogs were still able to be viewed publicly.
"It's starting to come back to life now, slowly," said the source on Tuesday afternoon.
WordPress.com users were notified via e-mail about the DoS attack. In the e-mail, the service provider said that the attack was affecting user log-in and causing some forums to be offline.
Mullenweg said that the main Wordpress.com page was down longer than some blogs because "we sacrificed it in order to keep blogs and our users up." However, the site's home page and Web site were up and running on Tuesday.
He also provided a link to a graph that shows the traffic spikes to WordPress.com on the graph, where the service's traffic is displayed in a brown line.
A DoS attack is an attempt to make a Web site or service unavailable to intended users by flooding the service or site with incoming data requests, such as e-mails. Motives for DoS attacks vary, but perpetrators mostly target companies with high-profile, highly trafficked Web sites.
Joris Evers, a spokesman for security research and software company McAfee, said DoS attacks are still fairly common, although they have tapered off in recent years because technology has been developed that can head off such attacks before they affect service.
Though he had not heard specifically of the WordPress attack, Evers said that it's possible the attack was mounted by someone "who was upset about something that was written on a WordPress blog, and they decided to take action against that."
HP reports strong results on PC, enterprise sales
Hewlett-Packard reported solid financial results for its fiscal first quarter, driven by growth in PCs and enterprise hardware. The results prompted HP to raise its forecast for the year ahead.
Revenue for the quarter, which ended Jan. 31, was $28.5 billion, up 13 percent from a year earlier, HP announced Tuesday. Pro forma net income was $2.3 billion, or $0.86 per share, up from $1.8 billion, or $0.65 per share, a year earlier.
The figures beat the expectations of financial analysts, who had forecast revenue of $27.6 billion and pro forma earnings per share of $0.81, according to Thomson Financial. The pro forma figure excludes one-time items that slightly inflated the results. Using generally accepted accounting principles, HP's profit was $2.1 billion, or $0.80 per share.
HP's Personal Systems Group, which produces its laptop and desktop PCs, grew its revenue 24 percent from the same period a year earlier, to $10.8 billion, with unit shipments up 27 percent. Notebook sales climbed fastest, up 37 percent, while desktop sales climbed 15 percent.
The division had already been doing well. HP extended its lead over Dell in PC sales last year, according to figures from Gartner. HP ended the year with 18.2 percent of the market, compared with 14.3 percent for Dell. The PC market overall grew 13.4 percent.
HP may find it hard to sustain that growth rate, in part because it has to make comparisons with increasingly successful quarters in the year before, CEO Mark Hurd said on a conference call. Still, Hurd said, "when you look at 24 percent growth, I think that's pretty darned strong."
HP's imaging and printing group performed slightly less well, with revenue climbing 4 percent to $7.3 billion. Printer unit sales declined by 1 percent from a year earlier, thanks to weakness in the consumer market. Revenue from supplies, which includes HP's profitable ink business, climbed 6 percent, however.
Revenue from the servers and storage group climbed 9 percent to $4.8 billion. Sales of blades and industry-standard servers were strong, while HP's PA-RISC and Alpha chip businesses continued to shrink. Services revenue climbed 11 percent year-over-year to $4.4 billion, while software sales climbed 11 percent to $666 million, HP said.
Hurd said he was pleased with the results overall. He attributed them to successful cost-cutting efforts, the addition of 2,000 new HP sales staff in the past year, and a diverse product portfolio.
HP generates an increasing amount of its business overseas, he said. Its biggest market continued to be Europe, the Middle East and Africa, where revenue grew 15 percent to $12.3 billion. Asia-Pacific revenue climbed 22 percent to $4.9 billion. Growth in the Americas was a sluggish 8 percent, generating $11.2 billion.
"We generated 69 percent of our revenue outside the U.S., with emerging markets driving significant growth," Hurd said.
HP is about halfway through a project to consolidate its own applications and IT systems, said Chief Financial Officer Cathie Lesjak. The goal is to cut $1 billion per year in IT expenses starting in fiscal 2009. HP is also trying to sell the same process to customers.
"It starts with business process changes, then we do application modernization, then that allows us to consolidate infrastructure and close data centers," he said.
So far the company has consolidated 6,000 applications worldwide down to about 3,000, he said. HP used to have 75 customer service applications, for example -- one for each of its major countries -- and it now has just one. That allows the company to make a change to the application once and push it out worldwide, which makes HP "more nimble," he said.
One slight cloud on the horizon may be component prices. "We're thinking about the fact that memory will be a bit tougher than in the past couple of quarters," Lesjak said. "LCD prices as well have started to tick up a bit."
HP also has a significant shortage of sales people, Hurd said. "We have 144,000 resellers and partners, but at the end of the day ... we are dramatically undercovered, and we're not off by 10 or 20 percent, we're off by more than that," he said.
The company now expects second-quarter revenue of $27.7 billion to $27.9 billion, and pro forma earnings per share of $0.83 or $0.84. That's above what analysts polled by Thomson had been estimating: pro forma profit of $0.82 and revenue of $27.4 billion.
Investors applauded the results. HP's shares were trading 5 percent higher in after-hours trading, at $46.12 at the time of this report. They ended the regular day's trading at $43.95, level with Friday's close. (Monday was a national holiday in the U.S.)
Revenue for the quarter, which ended Jan. 31, was $28.5 billion, up 13 percent from a year earlier, HP announced Tuesday. Pro forma net income was $2.3 billion, or $0.86 per share, up from $1.8 billion, or $0.65 per share, a year earlier.
The figures beat the expectations of financial analysts, who had forecast revenue of $27.6 billion and pro forma earnings per share of $0.81, according to Thomson Financial. The pro forma figure excludes one-time items that slightly inflated the results. Using generally accepted accounting principles, HP's profit was $2.1 billion, or $0.80 per share.
HP's Personal Systems Group, which produces its laptop and desktop PCs, grew its revenue 24 percent from the same period a year earlier, to $10.8 billion, with unit shipments up 27 percent. Notebook sales climbed fastest, up 37 percent, while desktop sales climbed 15 percent.
The division had already been doing well. HP extended its lead over Dell in PC sales last year, according to figures from Gartner. HP ended the year with 18.2 percent of the market, compared with 14.3 percent for Dell. The PC market overall grew 13.4 percent.
HP may find it hard to sustain that growth rate, in part because it has to make comparisons with increasingly successful quarters in the year before, CEO Mark Hurd said on a conference call. Still, Hurd said, "when you look at 24 percent growth, I think that's pretty darned strong."
HP's imaging and printing group performed slightly less well, with revenue climbing 4 percent to $7.3 billion. Printer unit sales declined by 1 percent from a year earlier, thanks to weakness in the consumer market. Revenue from supplies, which includes HP's profitable ink business, climbed 6 percent, however.
Revenue from the servers and storage group climbed 9 percent to $4.8 billion. Sales of blades and industry-standard servers were strong, while HP's PA-RISC and Alpha chip businesses continued to shrink. Services revenue climbed 11 percent year-over-year to $4.4 billion, while software sales climbed 11 percent to $666 million, HP said.
Hurd said he was pleased with the results overall. He attributed them to successful cost-cutting efforts, the addition of 2,000 new HP sales staff in the past year, and a diverse product portfolio.
HP generates an increasing amount of its business overseas, he said. Its biggest market continued to be Europe, the Middle East and Africa, where revenue grew 15 percent to $12.3 billion. Asia-Pacific revenue climbed 22 percent to $4.9 billion. Growth in the Americas was a sluggish 8 percent, generating $11.2 billion.
"We generated 69 percent of our revenue outside the U.S., with emerging markets driving significant growth," Hurd said.
HP is about halfway through a project to consolidate its own applications and IT systems, said Chief Financial Officer Cathie Lesjak. The goal is to cut $1 billion per year in IT expenses starting in fiscal 2009. HP is also trying to sell the same process to customers.
"It starts with business process changes, then we do application modernization, then that allows us to consolidate infrastructure and close data centers," he said.
So far the company has consolidated 6,000 applications worldwide down to about 3,000, he said. HP used to have 75 customer service applications, for example -- one for each of its major countries -- and it now has just one. That allows the company to make a change to the application once and push it out worldwide, which makes HP "more nimble," he said.
One slight cloud on the horizon may be component prices. "We're thinking about the fact that memory will be a bit tougher than in the past couple of quarters," Lesjak said. "LCD prices as well have started to tick up a bit."
HP also has a significant shortage of sales people, Hurd said. "We have 144,000 resellers and partners, but at the end of the day ... we are dramatically undercovered, and we're not off by 10 or 20 percent, we're off by more than that," he said.
The company now expects second-quarter revenue of $27.7 billion to $27.9 billion, and pro forma earnings per share of $0.83 or $0.84. That's above what analysts polled by Thomson had been estimating: pro forma profit of $0.82 and revenue of $27.4 billion.
Investors applauded the results. HP's shares were trading 5 percent higher in after-hours trading, at $46.12 at the time of this report. They ended the regular day's trading at $43.95, level with Friday's close. (Monday was a national holiday in the U.S.)
Yahoo protects employees in case of Microsoft takeover
Yahoo has introduced two new severance plans that will protect its employees if Microsoft's unsolicited takeover bid is successful, it said in filings with the U.S. Securities and Exchange Commission (SEC) on Tuesday.
The new plans filed make all full-time employees eligible for severance pay equal to base salary for four months to 24 months, depending on the employee's job level. Health and dental coverage is also included.
The maximum protection of 24 months' salary will be offered to CEO Jerry Yang, Chief Financial Officer Blake Jorgensen, and certain other executives still employed by the company and named in the SEC proxy filing for Yahoo's 2007 annual general meeting. That list includes former CFO Susan Decker, now president of the company,
and Executive Vice President, General Counsel and Secretary Michael Callahan. Others listed in the proxy filing have already left the company, including former Chairman Terry Semel, former Chief Operating Officer Daniel Rosensweig and former Chief Technology Officer Farzad Nazem.
The benefits take effect if an employee's contract is terminated without cause by Microsoft -- or another acquirer -- or if the employee leaves with good reason within two years of a change of ownership.
The severance plans are designed to help retain employees, help maintain a stable work environment and provide certain economic benefits to the employees in the event their employment is terminated, according to Yahoo.
Yahoo's filing came the same day that news reports suggested Microsoft is preparing a campaign to win shareholder support for changes to Yahoo's board.
The new plans filed make all full-time employees eligible for severance pay equal to base salary for four months to 24 months, depending on the employee's job level. Health and dental coverage is also included.
The maximum protection of 24 months' salary will be offered to CEO Jerry Yang, Chief Financial Officer Blake Jorgensen, and certain other executives still employed by the company and named in the SEC proxy filing for Yahoo's 2007 annual general meeting. That list includes former CFO Susan Decker, now president of the company,
and Executive Vice President, General Counsel and Secretary Michael Callahan. Others listed in the proxy filing have already left the company, including former Chairman Terry Semel, former Chief Operating Officer Daniel Rosensweig and former Chief Technology Officer Farzad Nazem.
The benefits take effect if an employee's contract is terminated without cause by Microsoft -- or another acquirer -- or if the employee leaves with good reason within two years of a change of ownership.
The severance plans are designed to help retain employees, help maintain a stable work environment and provide certain economic benefits to the employees in the event their employment is terminated, according to Yahoo.
Yahoo's filing came the same day that news reports suggested Microsoft is preparing a campaign to win shareholder support for changes to Yahoo's board.
Microsoft looking for ways to converge Windows Mobile, Zune
Microsoft appears to be looking for new ways to tie Windows Mobile phones and Zune media players together, although a Zune phone remains unlikely.
Over the weekend, Microsoft developer "Mel" asked an open question on the Windows Mobile blog: "What are some ways the Zune player and a Windows Mobile device can work better together?"
Since then, over 50 commenters have suggested ways that Microsoft might converge the two devices. The most common idea is to essentially replace the Windows Media Player on Windows Mobile devices with Zune software.
"I proposed that WMP should be fazed out in favor of a combined WMP/Zune player which will synch with both Windows Media AND Zune, instead of having to have two separate apps with two different libraries for each device," wrote one commenter using the name Colin Walker.
Peter Henning, another commenter, also suggested making just one media player that works on both devices. "Currently you are just making our lives much more difficult with this parallel development and incompatibilities," he wrote.
A single media player would solve some of the problems that other users complained about in synching music between a Windows Mobile phone and a Zune. Another commenter going by the name Charlie Quidnunc noted that he has to create new playlists once he transfers music from Zune to his phone because Windows Media Player can't read Zune playlists.
Another complained that he can't transfer music that he downloaded under his Zune subscription plan to his Windows Mobile device because of DRM (digital rights management) restrictions.
Offering Zune software on Windows Mobile phones could be one simple way for Microsoft to converge the two, said Michael Gartenberg, a research director with Jupiter Research. "There are any number of ways that Microsoft could go about Zune integration. We might see a Zune application for Windows Mobile devices."
But what we most likely won't see is a Zune phone, despite many Zune phone rumors. "On one hand the Zune is a closed proprietary system not built around a partner ecosystem," Gartenberg noted. "On the other hand the phone business is built on a partner ecosystem." Microsoft develops the Windows Mobile software but hardware makers build the phones. By contrast, Microsoft develops the hardware and software for the Zune.
If Microsoft started making a Zune phone, it would compete with its phone hardware partners. "It's the same reason we don't see a Microsoft branded PC," he said.
On the Windows Mobile blog, "Mel" emphasized that wasn't looking for more suggestions of a Zune phone. "I'm not referring to an imaginary 'Zune phone,' and I'm certainly not hinting or speculating about a converged device," he wrote.
Building a better music playing experience into Windows Mobile will be important for Microsoft, which is increasingly trying to make Windows Mobile phones appeal to consumers and not just business users. "For the most part, Windows Mobile has ignored consumers," Gartenberg said.
Microsoft recently announced plans to buy Danger, the developer of mobile phone software that runs the youth-oriented Sidekick device from T-Mobile. Microsoft has also made some executive changes in the Windows Mobile group designed to better focus on consumers.
Over the weekend, Microsoft developer "Mel" asked an open question on the Windows Mobile blog: "What are some ways the Zune player and a Windows Mobile device can work better together?"
Since then, over 50 commenters have suggested ways that Microsoft might converge the two devices. The most common idea is to essentially replace the Windows Media Player on Windows Mobile devices with Zune software.
"I proposed that WMP should be fazed out in favor of a combined WMP/Zune player which will synch with both Windows Media AND Zune, instead of having to have two separate apps with two different libraries for each device," wrote one commenter using the name Colin Walker.
Peter Henning, another commenter, also suggested making just one media player that works on both devices. "Currently you are just making our lives much more difficult with this parallel development and incompatibilities," he wrote.
A single media player would solve some of the problems that other users complained about in synching music between a Windows Mobile phone and a Zune. Another commenter going by the name Charlie Quidnunc noted that he has to create new playlists once he transfers music from Zune to his phone because Windows Media Player can't read Zune playlists.
Another complained that he can't transfer music that he downloaded under his Zune subscription plan to his Windows Mobile device because of DRM (digital rights management) restrictions.
Offering Zune software on Windows Mobile phones could be one simple way for Microsoft to converge the two, said Michael Gartenberg, a research director with Jupiter Research. "There are any number of ways that Microsoft could go about Zune integration. We might see a Zune application for Windows Mobile devices."
But what we most likely won't see is a Zune phone, despite many Zune phone rumors. "On one hand the Zune is a closed proprietary system not built around a partner ecosystem," Gartenberg noted. "On the other hand the phone business is built on a partner ecosystem." Microsoft develops the Windows Mobile software but hardware makers build the phones. By contrast, Microsoft develops the hardware and software for the Zune.
If Microsoft started making a Zune phone, it would compete with its phone hardware partners. "It's the same reason we don't see a Microsoft branded PC," he said.
On the Windows Mobile blog, "Mel" emphasized that wasn't looking for more suggestions of a Zune phone. "I'm not referring to an imaginary 'Zune phone,' and I'm certainly not hinting or speculating about a converged device," he wrote.
Building a better music playing experience into Windows Mobile will be important for Microsoft, which is increasingly trying to make Windows Mobile phones appeal to consumers and not just business users. "For the most part, Windows Mobile has ignored consumers," Gartenberg said.
Microsoft recently announced plans to buy Danger, the developer of mobile phone software that runs the youth-oriented Sidekick device from T-Mobile. Microsoft has also made some executive changes in the Windows Mobile group designed to better focus on consumers.
Tuesday, February 19, 2008
'DVD Jon' offers content sharing Facebook app
After cracking the encryption system that protected DVDs in order to play the discs he had bought on a PC running Linux, Jon Lech Johansen has his sights set on liberating other audiovisual content from the format in which it is sold.
DoubleTwist, a company he co-founded in March 2007 with Monique Farantzos, on Tuesday released beta versions of a Facebook application and a PC desktop application for unlocking and managing music and video files.
Johansen achieved notoriety as 'DVD Jon' when he ended up in court for co-writing the DeCSS software that cracked the encryption on DVDs and allowed them to play on PCs running open-source media player software on Linux. Until then, they could only be watched using authorized hardware or proprietary software because their content was encrypted using the Content Scrambling System (CSS).
He followed that up by breaking a series of other DRM (digital rights management) encryption systems including FairPlay, Apple's proprietary DRM wrapper around the open AAC format music files it sells via its iTunes Store.
While Apple's iPod is not the only portable device that can play AAC files -- many Nokia phones do too -- it is the only one that can play the encrypted AAC files Apple sells. There are ways to work around Apple's DRM, including burning the files to a CD and then ripping them back into the computer in another format, but they are time-consuming.
DoubleTwist's tools, Twist me and doubleTwist desktop, are intended to make it easier to move music and video files, including those locked by Apple's DRM, from one device to another, or to share them with family and friends, the company said.
Twist me, the Facebook application, lets users of the social network site put music and video on their profile pages to share with friends.
DoubleTwist desktop runs on Windows PCs alongside Apple's iTunes, and can take legally purchased iTunes files in the DRM-protected AAC format and, on the machine authorized to play them, turn them into MP3 files that will then play almost anywhere, the company said.
The desktop software also includes tools for sharing audio and video playlists and photo albums, and synchronizing them with Nokia's NSeries, Sony Ericsson's Walkman and Cybershot phones, the Sony PSP game console and the Amazon Kindle e-reader, among other devices. In addition to AAC and MP3, it handles WMA (Windows Media Audio) and WAV audio formats, and video in MPEG2, MPEG4, WMV (Windows Media Video), AVI and the 3GP format used by mobile phones.
DoubleTwist's software may soon be obsolete, though. Digital music retailers are beginning to realize that DRM just irritates customers, and Apple now offers almost half the encrypted music in its iTunes Store in higher-quality versions without DRM, at the same price. Amazon.com, meanwhile, sells all its digital music in MP3 format without DRM, as do independent online music stores such as EMusic.
DoubleTwist, a company he co-founded in March 2007 with Monique Farantzos, on Tuesday released beta versions of a Facebook application and a PC desktop application for unlocking and managing music and video files.
Johansen achieved notoriety as 'DVD Jon' when he ended up in court for co-writing the DeCSS software that cracked the encryption on DVDs and allowed them to play on PCs running open-source media player software on Linux. Until then, they could only be watched using authorized hardware or proprietary software because their content was encrypted using the Content Scrambling System (CSS).
He followed that up by breaking a series of other DRM (digital rights management) encryption systems including FairPlay, Apple's proprietary DRM wrapper around the open AAC format music files it sells via its iTunes Store.
While Apple's iPod is not the only portable device that can play AAC files -- many Nokia phones do too -- it is the only one that can play the encrypted AAC files Apple sells. There are ways to work around Apple's DRM, including burning the files to a CD and then ripping them back into the computer in another format, but they are time-consuming.
DoubleTwist's tools, Twist me and doubleTwist desktop, are intended to make it easier to move music and video files, including those locked by Apple's DRM, from one device to another, or to share them with family and friends, the company said.
Twist me, the Facebook application, lets users of the social network site put music and video on their profile pages to share with friends.
DoubleTwist desktop runs on Windows PCs alongside Apple's iTunes, and can take legally purchased iTunes files in the DRM-protected AAC format and, on the machine authorized to play them, turn them into MP3 files that will then play almost anywhere, the company said.
The desktop software also includes tools for sharing audio and video playlists and photo albums, and synchronizing them with Nokia's NSeries, Sony Ericsson's Walkman and Cybershot phones, the Sony PSP game console and the Amazon Kindle e-reader, among other devices. In addition to AAC and MP3, it handles WMA (Windows Media Audio) and WAV audio formats, and video in MPEG2, MPEG4, WMV (Windows Media Video), AVI and the 3GP format used by mobile phones.
DoubleTwist's software may soon be obsolete, though. Digital music retailers are beginning to realize that DRM just irritates customers, and Apple now offers almost half the encrypted music in its iTunes Store in higher-quality versions without DRM, at the same price. Amazon.com, meanwhile, sells all its digital music in MP3 format without DRM, as do independent online music stores such as EMusic.
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