Prices of memory chips have turned and appear to be starting to come down abruptly, SoundView Financial analyst Richard Whittington tells Barrons after he dropped his buy ratings on Micron Technology Inc and Texas Instruments Inc, sending their share prices down: he reckons that major personal computer makers double-ordered in May for November delivery to be sure of supply, and don’t now need the extra chips and the result is that the spot price for 4M-bit parts is now $13 or less, down from $17 and up in May; he reckons that with evidence of prices softening in the busy run-up to Christmas, the first quarter outlook for memory prices is weak.
They can’t both be right, we said back in the summer as widely divergent forecasts for Windows95 shipments started appearing, and now Dataquest Inc has blinked: it has reduced its 1995 forecast by 3.6m shipments, to 26.4m from 30m, but not too many lay readers realised that its original forecast included – as it now claims – an enormous number of copies sitting on dealers’ shelves rather than in home computers; of the estimated 26.4m shipments of Windows95 from Microsoft this year, about 10m will remain in the distribution channel at year-end, it says, so that Dataquest estimates that 16.4m copies of Windows95 will be in consumers’ hands at year-end; its original forecast placed 20m copies of the thing in the hands of consumers.
Ahead of the bloodbath in the boardroom, the Cable & Wireless Plc share price was whooped up yesterday by a story in the Independent suggesting that US celullar mogul Craig McCaw might be planning a bid: the paper reported that McCaw had been holding discussions with bankers about a possible bid, but we take these bid stories with a pinch of salt, because many of Cable & Wireless’s investments, most notably in Hong Kong, must be sold if the company falls to a hostile bidder, and to get the position with the Chinese government that Cable & Wireless enjoys, you have to have started some 15 years go.
Smith Corona Corp said it has terminated the October 24 agreement to sell its business to a group led by Empire Capital Corp because Empire did not fulfill the contractual requirements necessary for the sale: Smith Corona, which filed for bankruptcy protection under Chapter 11 of the US code on July 5, says it is still continuing its discussions with other interested parties.
Milpitas, California-based Quantum Corp has restated results for the second quarter ended October 1, reducing previously reported turnover by $32m to $1,033m, because it had counted on $32m in revenues from a customer who bought drives from the company and later returned them: on October 26, Quantum had reported sales of about $1,064m and a net profit of about $25.6m or $0.43 per share.
Dell Computer Corp’s third quarter revenues were constrained by component shortages for its products, due to strong demand for high-speed semiconductor chips, which shows no sign of letting up in the fourth quarter, Dell said: the company reported a 56% rise in turnover to $1,400m for its third quarter, but said it could have had more without the shortages; asked about its Lithium ion battery supplies from the Sony Corp factory in Japan which suffered a fire, Dell said the lead time for shipping notebook computers has been unaffected, and it would be premature to assume that this would affect the company’s earnings.
The US Office of Thrift Supervision has formed a task force to look at the impact of new technologies in electronic banking on banking institutions, customers and regulators: it said this was not to impede use of the new technologies but to make sure banking firms use them prudently; it’s looking at the the whole range of electronic banking from Internet to Smart Cards.
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Japanese semiconductor component maker Kyocera Corp unveiled its strongest first-half profits in a decade, but its shares fell due to a difficult period domestically, it said, although strong sales overseas, in Asia in particular, boosted profits: electrical machinery was the firm’s best performing product line, up largely due to booming demand in the Asian economies; despite the strong rise in profits, the company chose to leave its interim dividend unchanged at $0.25.
When it comes to silicon foundries, it seems a little odd not to concentrate your investments at home, but Taiwan Semiconductor Manufacturing Corp is going where the customers are and will invest $1,200m to build its next wafer fab somewhere in the US: Altera Corp has committed $248m and it will get a 16% stake in the fab for its money.
For those that raise an eyebrow over Bill Gates resorting to plain old print medium for his book The Road Ahead – hey, man, snappy title! – the $30 hardback book does include a CD-ROM with video clips of Gates’s speeches and other multimedia stuff, including a simulated tour of the fabled home he seems to have been building almost for ever.
IBM Corp’s Lotus Development Corp plans to announce on December 11 restructured Notes pricing and its Lotus Communications Architecture strategy for the intranet market, US PC Week reports: the company plans to slash the price of its $275 client-server groupware to a level comparable to Internet browsers, sources close to the company told the paper – and browsers currently range from free tryouts to about $40 in most cases; Lotus currently sells a Notes Desktop run-time version for $155; it currently has an installed base of about 3m.
Mountain View, California-based Drexler Technology Corp’s LaserCard optical memory card, will be used in the Philippines as an admission pass into the duty-free Clark Special Economic Zone in Pampanga province: Drexler has already received an order for 50,000 memory cards, 20 card reader-writers, and 10 full-colour, visual-image printers, for delivery this quarter; issue and use of the credit card-sized card that holds 4Mb of data is expected to begin next month; all adults of 18+ can buy the card for admission to the economic zone; it will also be used for recording and tallying individuals’ purchases of duty-free goods to ensure that the amounts are within the government-designated monetary limits.
San Jose-based Diamond Multimedia Systems Inc has now completed its acquisition of Spea Software AG.
IBM Corp says Meuhedet, a health maintenance organisation serving one in 10 Israelis, bought 60 IBM AS/400 computers in a move to client-server working: Tel Aviv-based Meuhedet chose the AS/400 over bids from Digital Equipment Corp and Data General Corp, IBM declared.
Sun Microsystems Inc is able to get its 200MHz Ultra 2 workstations up to 332 SPECint92 and 505 SPECfp92 – versus Digital Equipment Corp’s 300MHz Alpha 21164-based 600 5/300 ZLXp-L2 at 338 SPECint92 and 503 SPECfp92 – by using 1Mb of second-level cache rather than the 512Kb that is used in lower-end Ultra 1s.
As promised, France’s former minister of telecommunications and information technology Francois Fillon, who was recently demoted to junior minister of post, telecommunications and space, has sent legislation to parliament to change the law and allow for experimentation on the information superhighway: it’s a practical law because it allows us to test the technology and evaluate the demand before launching into any massive investments, said Fillon; the law will provide the legal sanction strictly for the already approved group of information superhighway experiments and will authorise, for example, Lyonnaise des Eaux SA to offer telephone service to users of its interactive cable service; this is not any general lifting of regulations, Fillon said, the experiments will occur in a limited number of areas and for a limited time; the move towards deregulation of the market in 1998 will be done gradually in order to enable France Telecom to prepare properly he added; he expects the Assemblee Nationale to debate the text before Christmas, so that it can be applied at the first of the year.
Australia’s state-owned telecommunications company, Telstra Corp, said it invested $2,070m in local industry during the year to June 30, taking total industry investment under its five-year plan to more than $7,900m: the company said two years ahead of schedule, its five-year Industry Development Plan which guides investment in telecommunications and information technology industries, has already resulted in investments of more than $7,900m; it expects to reach $14,770m by 1997, the company said.
Excalibur Technologies Corp, San Diego, California, said it expects to report break-even to $100,000 net for the third quarter to October 31, compared with a $1.1m loss a year earlier: it expects to report third-quarter turnover in December of about $5.0m, up 61% from $3.1m a year earlier; the company said its financial results for all prior periods were restated to include the results of ConQuest Software Inc, which it acquired in July.
Reston, Virginia-based Sterling Software Inc’s VM Software Division has bought three VM systems management products from Syncsort Inc, Woodcliff Lake, New Jersey, one of which, Syncsort/Backup, offers a high-performance back-up and restore utility for the VM operating system; terms were not disclosed.
Away from the numbers: Sun Microsystems Inc has decided that telling the industry how many computers it ships every quarter has been putting it at a competitive disadvantage, and it has abandoned the practice; Sun was the the only major vendor providing unit ship data.
