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November 13, 1995

MINIGRAMS

By CBR Staff Writer

Further calling into question the value of the franchises built up by the proprietary on-line services, Naperville, Illinois-based Spyglass Inc is to license its Mosaic Web server software to a joint venture formed between Knight-Ridder Inc and Landmark Communications Inc called InfiNet Co, which is intended to help newspaper publishers and other media firms to create their own services on the Internet.

It appears that the high-end disk drive business that Quantum Corp acquired from Digital Equipment Corp was in a pretty ropey state: at all events, the Milpitas company is embarking on a root-and-branch restructuring of it that will cost it $35m to $40m pre-tax in non-recurring costs; Quantum will speed up closure of the high capacity manufacturing facility in Colorado Springs from March 31 to December 3, close the production launch line in Shrewsbury, Massachusetts and in future launch products in volume production facilities; cancel the Empire II development programme in favour of a more cost-effective product also in development; and hold a fire sale of what is left of less cost-effective product lines.

In what looks like bad news for all the big US computer companies that have been relying on Europe to dig them out of a hole in recent years, the semiconductor industry’s preliminary European book-to-bill ratio for October plunged to 1.05 from a revised September figure of 1.14, which was revised up from a reported 1.13: unlike the US figures, the European figure are not seasonally adjusted so any revisions should be of no more than a tick; average orders for the three months to October fell 3.7% to $2,600m – and the fall is particularly ominous because October is usually stronger than July, the month that drops out to make way for October.

Compaq Computer Corp has reduced the prices of the Contura 420 and 430 personal computer models and the memory and communications options also, by as much as 17%: starting prices are from $2,200.

Bellevue, Washington-based Sierra On-Line Inc has acquired the flight simulation games software business of SubLogic Inc on undisclosed terms: it says the products generated almost $80m of sales in the first nine months of 1995, and Sierra plans to release a series of civilian aviation simulations that will use its Windows95-based three-dimensional terrain technology.

The Belgian government has accepted Tele Danmark A/S and Singapore Telecom Ltd as potential bidders for a stake in Belgacom NV; each is negotiating with Ameritech Corp, one of the two candidates still in the running to buy a 49.9% stake in Belgacom and the company that would lead any consortium formed: the other candidate is the Telesource, consortium of Koninklijke PTT Nederland NV and Swiss Telecom; the Belgian Economic Affiars and Telecommunications minister said that the government expected to choose Belgacom’s partner very shortly.

Alcatel NV is stomping all over the world looking for a partner or partners to add the skills where it is weak, particularly in the cellular arena, and has lighted on Mitsubishi Electric Corp as one possibility: the two are to hold high-level talks by year-end on colloboration in communications equipment and chips for use in such kit, and also factory automation equipment; the new Personal Handyphone System in Japan is generating enormous demand for portable telephone sets.

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Microsoft Corp provides most of the software that takes care of business on most of the world’s desktops, but it does not want to look after those desktops even in its own shop, and it has hired Entex Information Services Inc, Rye Brook, New York to oversee management of 16,000 of its computers and networks under a three-year deal that will keep 275 Entex employees busy and is estimated at $40m; it will even be responsible for handling user problems with Microsoft programs such as Word and Excel.

Siebe Plc reported on Friday that it had been awarded contracts for water heater and automotive controls worth more than ú100m: Siebe company Robertshaw Controls Grayson Division has a five-year contract worth over ú50m to provide over 4m residential gas-fired water heater controls to the American Water Heater Group in Tennessee, and Robertshaw Tennessee Division has a multi-year contract from General Motors Corp worth ú15m to ú20m a year to supply a specially-developed exhaust bellows component for its new generation of diesel and petrol light truck vehicles.

GTE Corp, says it expects that the planned move to commercial rather than utility accounting will cost it a $4,700m net non-cash charge against figures for this quarter.

Nyah nyah na nyah yah! Compaq Computer Corp sues Packard Bell Electronics Inc alleging that some of its computers sold as new may be slightly less than new, now Packard Bell is suing Compaq alleging that it falsely labels shipping cartons on some of its notebook models with Made in USA when the machines were actually manufactured overseas.

Turns out that the reason there are only about 5,000 albums on MCI Communications Corp’s 1-800 Music Now service is that the only company that is so far playing ball is MCA Inc, the weakest of the Big Six record companies, with the Geffen catalogue the most exploitable of its assets – and which 20 to 30 seconds do you get to hear? The hook or whatever bit is catchiest.

Siemens AG expects annual sales of $2,100m to $2,600m at its new semiconductor plant in Dresden, once full production is under way, the company said at the official opening on Friday: volume production does not begin until October 1996.

Coda Group Plc said it expects turnover for the year to October 31 to exceed ú30m, up 30% on last year: the increase is entirely down to growth in Coda-OAS, marketed as the client-server version of Coda-Financials, Coda’s single largest product line, doing some ú12m a year; Coda estimates that profit before tax for the financial year will not be less than ú1.0m after fully financing over ú6.0m of research and developing costs; the Leeds company has increased expenditure in the second half of the year for a marketing campaign and also increased staff in the US by 20% to strengthen its sales and support services capability there.

Dell Computer Corp confirms that it is a customer for the Sony Corp Lithium ion batteries made in the plant that burned down, but says it is too early to assess what impact, if any, it may have on its profits.

Japanese games machine maker Sega Enterprises Ltd blamed poor first half figures (see page seven) on poor sales of video games hardware and software in the US and Europe, where it says interest is turning to 32-bit from 16-bit games; Sega launched the 32-bit Saturn in the US in June, (CI No 2,688), and has already reduced the price in order to compete better with Sony Corp’s 32-bit offering; despite the low profits in the first half, Sega is bullish about full-year earnings because of expected large profits from its amusement park business.

Cruel – Out of work in Salt Lake City? asks the PC Week gossip column – now, there’s a scary thought for you ex-WordPerfectians: you can’t even drown your sorrows…

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