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October 19, 1995

MINIGRAMS

By CBR Staff Writer

Compaq Computer Corp is diversifying with the acquisition of Thomas-Conrad Corp, a privately-held maker of network interface boards and hubs, on undisclosed terms: the company has also formed an Internetworking Products Group and both actions support its strategy to create end-to-end, easy-to-use computer systems – clients, servers, network interface boards, routers, hubs, and network management, all supplied integrated and tested.

Softbank Corp will hold a news conference first thing this morning UK time on the subject of acquisitions and equity investment but declined to give further details.

In addition to the $1,840m hit IBM Corp took to write off research and development purchased with Lotus Development Corp, the company took $100m last quarter for amortisation of goodwill and other items from the Lotus purchase, and plans to record a similar $100m charge against earnings every quarter for the next two years, and then an about $50m quarterly for another three years after that so that on the Wall Street Journal’s calculations, total Lotus writedowns could approach $3,200m – factor in interest foregone on the cash, and the company is down a full $3,500m – suggesting that Lotus had no value since that’s what it paid for it…

Motorola Inc’s RISC Microprocessor Division set prices for its 100MHz and 120MHz PowerPC 603e microprocessors – $207 for the 100MHz version and $260 for the 120MHz version, when you order 1,000 or more.

Silliest story doing the rounds in London has been that Siemens AG was planning to buy a direct stake in Cable & Wireless Plc’s 80%-owned Mercury Communications Ltd – why a telecommunications equipment manufacturer should want a stake in an operator is beyond us, but for the record, that is definitely not on the cards, we have no plans to extend this partnership into other areas, said Juergen Gehrels, chief executive of Siemens Plc in the UK.

France Telecom has been told it must sell its 98% stake in its Info AG data transmission subsidiary in Germany, to win European Commission approval for its Atlas joint venture with Deutsche Telekom AG.

Novell Inc is mulling options to cut costs, and plans to make an announcement on steps to improve its performance later this year, chief executive Bob Frankenberg has said.

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IBM Corp’s investment in research and development continued to decline in the most recent quarter, coming in at $1,035m – a bare 6.2% of turnover – compared with $1,053m a year ago, but you’d never know it from the accounts, which show it leaping 173% to $2,875m – but that is because IBM has added in the $1,840m it wrote off for purchased research and development at its Lotus Development Corp acquisition.

Amdahl Corp has appealed the Quebec Superior Court ruling that it says allows companies attempting to acquire DMR Group Inc to allow the minority to overrule the majority on acquisition of the company by converting their shares, and has asked the Quebec Court of Appeal to overturn the lower court’s October 10 ruling: Amdahl, BDM International Inc and IBM Corp subsidiary, IBM Canada Ltd have each made bids for the DMR Group, which yesterday changed its recommendation and advised shareholders not tender their shares to the bids from Amdahl and BDM; the two bids expire on October 19 and 20 respectively; no recommendation was made on the IBM bid.

Sharp Corp will triple its optical pickup output to 6m units a month by spring 1996 to meet increasing demand for the component used in digital audio-visual equipment such as compact disk players and CD-ROM drives: the company will be investing an undisclosed sum to install a new production line at its plant in Nara prefecture, western Japan, where it currently does 2m a month.

Chilean telecommunications company Entel SA maintained its number one position in Chile’s multicarrier telephone service in the June to August period, carrying 38% of the national long-distance traffic, followed by Compania de Telecomunicaciones de Chile unit CTC Mundo, with 28%, the Telecommunications Secretariat said: Telex-Chile subsidiary Chilesat had 22% market share, VTR, in which SBC Communications Corp holds a major stake took 9% of national traffic, and BellSouth Corp won just 1.3% of national calls; Entel had 42% of international traffic; CTC Mundo took 20% and Chilesat 18% of the traffic.

Texas Instruments Inc cut prices up to 14% on some Pentium models in its TravelMate 5000 and 80486-based Extensa 450 notebook computer lines, with immediate effect: all but one of the TravelMates includes an active matrix colour display.

The US really is going to try again to create a national soccer league, and AT&T Corp has joined brewer Anheuser-Busch Cos as a top sponsor of Major League Soccer: the two companies have each committed $8m and the 10-team league says that cable channels ESPN and ESPN2 would televise 35 games during the inaugural season with the Capital Cities/ABC Inc ABC network broadcasting the October 20 1996 decider.

Naperville, Illinois-based Spyglass Inc said it entered a licensing agreement that enables AB Software Inc of Salt Lake City to bundle Spyglass Mosaic with its Skyway software suite of products: terms were not disclosed, but AB said their suite of products will be on dealer shelves by the end of November; the products help consumers take advantage of the Internet.

Commenting on its third quarter figures (see page seven) Cypress Semiconductor Corp told Reuters a combination of cost reduction efforts, manufacturing improvements, and continued demand for static RAMs and other chips will help drive gross margins higher and, following the company’s third-quarter earnings announcement, projected strong earnings growth in 1995 and 1996: margins stood at 45.2% of sales last year and in the third quarter to October 2, gross margins were 54.2% of sales; they will improve as Cypress makes more efficient use of silicon as part of its die shrink effort, increases the use of silicon in its 0.5-micron manufacturing process RAM 3, and adds capacity at a new assembly and test facility in the Philippines; it said it was comfortable with analysts’ mean estimate of $3.30 per share for 1996 and expects the semiconductor capacity to remain stretched for another five years.

Naperville, Illinois-based Spyglass Inc has signed a licensing pact with JSB Computer Systems Ltd of Macclesfield, Cheshire for its Mosaic Web-client software which JSB expects to offer by December as part of its MultiView Desktop product: terms were not disclosed.

NEC Corp regards the famous fish tank program – if you forget to feed their fish, they die – as amateurish, and has come up with its idea of a professional virtual fish tank: the fish, 10 varieties to choose from at any time – come off a video disk, and appear on a high-definition television screen that is encased in a plexiglass tank full of water, so realistic that visitors to Telecom 95 have initially thought it was the real thing; jolly clever and all the rest of it, but would you pay $15,000 for such a toy? The Wall Street Journal says 1,000 people or firms have done just that…

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