While the movie studios and consumer electronic majors flock to back the Toshiba Corp-Time Warner Inc digital video disk standard, the threat of hopeless deadlock and two incompatible standards replaying the VHS-Betamax and MiniDisk-Digital Compact Cassette battles to the benefit of nobody and the detriment of the entire industry, begins to look inevitable as manufacturers coming from a computer hardware direction all seem to prefer the Sony Corp-Philips Electronics NV standard: latest to stick its head above that parapet is NEC Corp – NEC Home Electronics will develop and introduce the Sony-Philips format digital videodisks next summer as the next-generation storage devices, NEC Home Electronics announced; attraction for computer companies is compatibility with existing compact disks and CD-ROMs so users of the new system will be able to continue to use existing titles; Mitsumi Electric Co Ltd, Japan’s largest CD-ROM maker which supplies drive parts to IBM Corp, also declared for the Sony-Philips format.
L M Ericsson Telefon AB chief executive Lars Ramqvist is the first manufacturer to break ranks on multimedia technology: There’s too little business for the time being to go on spending all this money on research – we’ll take it a little easier until the market wakes up again, which we expect about 1998, he told the Wall Steet Journal, which quoted another staffer saying cuts in that division would be more drastic and more significant than we’ve seen before as the company embarks on a big migration of jobs from the public telecomunications sector to expanding divisions such as cellular telephones – To ramp up quickly on the cellular side, we need people and new factories immediately – and luckily Ericsson has a lot of factories, Ramqvist added in the interview.
Samsung Electronics Co now has South Korean government approval for its plans to invest $378m for a big stake in AST Research Inc – but approval is conditional on it financing 20%, or $75.6m of the total cost with its own money, and the balance by raising funds abroad, and it says it intends to comply.
America Online Inc, Vienna, Virginia claims that it now has more than 3m subscribers, making it the most widely-used – it says popular – on-line brand in the world: its business has grown 10-fold in the past two years, to 3m from 300,000 subscribers, the company comments.
Lord Weinstock, long-serving managing director of what is essentially his own creation, GEC Plc, is declining to confirm or deny a confident report in yesterday’s Daily Telegraph that he will step down at the defence and electronics group’s annual meeting in 1996: He is not making any statement on this and the only comment is no comment, a GEC spokesman commented to Reuters.
Radius Inc vice-president of operations Matthew Medeiros, declined to offer specifics on prices for the Mac OS machines it is launching, but told Reuters the clones of Apple Computer Inc’s high-end 8100 model could be significantly cheaper – customers could see them 10% to 15% cheaper than Apple’s machines, although they’ll come with slightly different configurations, he said; a Power Macintosh 8100 model now sells for about $4,200, excluding a monitor and keyboard; We’ll probably put more emphasis on large disk format, large memory format and more graphics and digital video solutions, Medeiros said; he declined to give details but did say that if IBM Corp were to meet Radius’ internal goals it would make more than 250,000 to 300,000 systems in the first year.
If we assume a total margin of 33% for distribution and retail, another 33% margin for Radius and $1,200 per machine in component costs, back-of-the-envelope sums suggest that if Radius Inc gets 300,000 of the machines away in the first year, it will represent some $160m of contract business for IBM Corp, plus the PowerPC chip sales.
The US Internal Revenue Service has been auditing IBM Corp to determine whether it improperly paid thousands of workers as independent contractors rather tha
n as employees between 1986 and 1992, the New York Times reports: it says workers involved included some of the thousands of employees laid off during the six-year period, then later rehired as independent contractors; self-employed people are required to pay their own social security taxes, reducing the tax burden on employers but IBM told the Times that the inquiry was routine and that the company was co-operating fully with the investigation; it is IBM, not the contractors, that would bear responsibility for any back taxes found to be owing – and the number of workers rehired in this fashion was conservatively estimated at 2,000, the paper said.
L M Ericsson Telefon AB shares are setting the Stockholm stock exchange alight as deals like the memorandum of understanding with PT Asia Cellular Satellite System and Lockheed Martin Corp for development and deliveries of satellite to ground phones worth an expected $225m continue to flood in: the satellite phone system is to cover India, Bangladesh, Burma, China, Korea, southern Japan, Hong Kong, Taiwan, Indochina and the Association of South East Asian Nations.
Herndon, Virginia-based Performance Systems International Inc is offering Pipeline USA, billing it as a new on-line Internet service for Windows personal computer users that will provide them with unlimited Internet access for a flat $20 monthly fee and no hourly charges.
Kyocera Corp is to sell 16.80m shares, or 19.6%, of its wholly owned US unit AVX Corp in a public offering in the US, Canada and Europe: AVX, a Myrtle Beach, South Carolina-based electronic component manufacturer, will also issue 2.2m new shares through a public offer; Kyocera plans to use the funds for capital investment at AVX, as a further increase in demand for electronic components is expected.
Telefonica de Espana SA says it is in talks with AT&T Corp and other US firms on possible co-operation on growing communications traffic between North and South America.
Mathsoft Inc, Cambridge, Massachusetts warns that it expects to report a net loss for the fourth quarter to June 30 in the range of $650,000 to $750,000, or $0.09 per share or $0.10 per share, down from a $1.4m net loss or $0.20 per share for fiscal 1994’s fourth quarter, but Mathsoft also expects revenues for the fourth quarter to be about $3.9m compared with $5.7m for the same quarter last year, and year-end sales will be $17.3m or so, a crashing fall from $27.5m in 1994.
Correction: although the 48% stake in Smith Corona Corp held by Hanson Plc was to have been included in its US Industries Inc rag-bag spin-off, Hanson ended up stuck with it because Smith Corona’s banks refused to play ball (CI No 2,700).
The proliferation of Union Flags a few years ago on everything from carrier bags to underpants demonstrates that a nation cannot protect its precious heritage from trivialisation and pollution, but one still winces at the news that self-styled members of the Online Community joined together on July 4 to issue the Declaration of an Independent Internet which begins with the preamble We hold these truths to be self-evident, that all information is created equal…
