The week ahead, the week that was
IBM is going to announce a breakthrough in data storage. A few atoms of a new magnetic material--affectionately termed "pixie dust" by Big Blue's lab rats--will allow hard drives to store 100 billion bits of data per square inch of disk area by 2003. This approximate quadrupling of the data density of hard drive storage is part of a larger trend within the magnetic hard-disk industry. Since 1997, the percentage annual data density increase has doubled annually.
Still looking for a reason to own shares of Amazon? Well, there's a ringside seat at the annual shareholders meeting, which promises to be a fun affair when Jeff Bezos and his board face the heat from investors critical of the way the company reports (or in this case doesn't clearly report) its financial information.
I add my humble voice to those bidding sad farewells to the late, great Douglas Adams, now hitchhiking his way to another galaxy. As a reader pointed out to me, Adams, giving a talk on Internet insanity only a couple of weeks before his untimely demise, was his usual prescient self, noting how a lot of dot-coms were "based on the wonderful mathematical notion that if you multiply zero by a sufficiently large number, you've got something." Amen.
The week that was
While Microsoft's Craig Mundie continued to defend his flank against critics of his statements on open-source licensing, Linux advocates got a boost. For the last year, Microsoft has gone out of its way to raise questions about the viability of open-source operating systems for corporate use. But new database benchmarks published by the Transaction Processing Performance Council seemingly refute that contention. I say "seemingly" because immediately after the publication of the results, Microsoft began screaming "foul" because of differences in the system setup chosen to test the rival OSes.
Microsoft has yet to respond to a report by Merrill Lynch analyst Henry Blodget--yes, that Henry Blodget--who now says the software maker has accustomed itself to reporting "negative" gross margins on Xbox. "This means that the more units Microsoft sells, the more money the company will lose on Xbox" at least in the short run, according to Blodget. Kind of like the business strategy embraced by so many Internet companies that Hammerin' Henry was fond of until recently changing his tune. Anyway, Microsoft announced it will price the Xbox video game console at $299--a hefty price for a toy. Then again, I date back to the days when the "Johnny Seven" (who remembers that one, I wonder?) cost a whopping $25.
Another sign the worst may over? Munder Capital's NetNet mutual fund is opening the doors to new investors, suggesting that the smart-money set again sees (selective) value in the tech sector.
I think there's more to the story. SCI, a big contract-equipment maker, told Wall Street that the company's fiscal Q4 numbers may hit the high end of analyst projections. A little more than one-third of its business comes from orders by PC manufacturers. Earlier in the week, Brocade Communications and Applied Materials said their businesses had bottomed out. Even Oracle's CFO is suggesting that demand might begin to rebound by year-end. It's not necessarily the best of times--and definitely not a return to the bygone days of irrational exuberance--but the worst of times is likely behind us.
Just to prove the point that it's still a dicey environment out there, Palm warned the Street that sales for the quarter will be roughly half of already lowered expectations. When Carl Yankowski came on board more than a year ago as CEO, I said his track record left me underwhelmed and wondered why Palm hired the guy. His performance at Palm, which is now evaluating options that may involve "more or less dramatically changing" its business model, has not changed my mind.
In January, the Secure Digital Music Initiative had expected to put in place an industry standard for anti-piracy by this Christmas. Don't bet on it. After its latest meeting broke up, the group issued a press statement allowing that "there is currently no consensus for adoption of any combination of the proposed technologies."
Apple says it's going to open 25 retail stores across the country by the end of this year, looking to make a go of a strategy that was a big loser for IBM and CompuAdd (in fact, it led to the ultimate bankruptcy of the latter!). The plan is to open an average of one store every 10 days for the remainder of the year. Steve Jobs says that while Apple has 5 percent market share, most of the other 95 percent don't even consider Apple as an alternative when they decide upon a Wintel computer.
With energy prices soaring out of sight, Oracle is looking mighty smart after building generators to supply its buildings with energy. Before this mess is over, my bet is that lots of other companies in Silicon Valley are going to do the same.
A Danish ornithologist says birds are mimicking cell phones. (Have you seen any gray-chested, yellow-haired Nokias recently?) If somebody could get these talented birds to mimic data, who knows: Maybe we can sidestep the transition 3G altogether.
Compaq is offering an interesting wrinkle on PC design. The company's engineers are showing mockup versions of what they describe as a "transformable computer," where its desktop PCs would be designed to transform into notebook systems. Whether it catches on remains open to question, but give Compaq lots of credit for thinking more innovatively about computer design than most of its rivals.
Speaking of PC design, are Japanese computer manufacturers onto something that's eluded their American rivals? Sharp this past week became the sixth Japanese computer maker to announce plans to incorporate Transmeta's chip into its product line, joining a roster that includes NEC, Fujitsu, Sony, Toshiba and Hitachi.
When I interviewed him last summer, PDQuick CEO Dan Frederickson was not shy about explaining why his online grocery service was making it while the likes of Webvan and Kozmo were destined to fall victim to this brutal industry shakeout. So it was that Frederickson's outfit has been acquired by another Web delivery company, WhyRunOut.com. Company employees at PDQ headquarters were locked out of the facilities after the deal got completed. They can now "interview" for their former jobs.
While on the subject of food delivery companies, how about that big meatball of a package delivered to George Shaheen? The former Webvan CEO will collect $375,000 each year for the rest of his life. And when he croaks, Mrs. Shaheen continues to receive the checks. Webvan, whose shares hit a high of $34 on their first day of trading, is now a penny stock. Slightly bizarre, you say? Hey, O.J. Simpson's now offering advice to Robert Blake on how to hunt down his wife's killer. Welcome to the Outer Limits.
Intel registered a nice tech advance, combining a processor core, DSP and memory into a single chip. The upshot: Devices will be able to access the Internet and run applications twice as fast as was previously possible.
CyberRebate is history after the online retailer and rebate Web site filed for bankruptcy protection, yet another victim of the softening economy and the accompanying downturn in online advertising.
As Napster continues to wither on the vine, RealNetworks offered the first public look at MusicNet. The service, which is a joint venture with AOL Time Warner, Bertelsmann and EMI Group, is one approach toward filling the download music void. Sony Music Entertainment and Vivendi Universal are going to offer a service called Duet, which is still awaiting its public debut.
Old rumors about Alcatel making a play for Lucent got a new lease on life this past week. The interesting part of it all is that Lucent's stock barely budged, perhaps a sign that the Street doesn't believe the company won't return to profitability.